CO2 FREE (Realization of a Carbon-neutral Society)
In October 2020, the Japanese government declared its target of achieving carbon neutrality by 2050, to this end raising its fiscal 2030 reduction target for CO2 emissions from 26% to 46% (both compared with the fiscal 2013 level) in April 2021. This is but one example of decisions made by countries around the globe amid the accelerating trend toward across-the-board decarbonization and the realization of a low-carbon society.
Toward achieving the CO2-free target set out in the Kawasaki Global Environmental Vision 2050, the Kawasaki Group is not only actively engaged in realizing carbon neutrality at its plants (Scope 1 and 2) but also throughout its supply chain (Scope 3).
Efforts to Achieve Zero CO2 Emissions—Carbon Neutrality Targets (Medium- to Long-term Targets)
Toward achieving the CO2-free target set out in the Kawasaki Global Environmental Vision 2050, the following CO2 emission reduction targets have been set for the years 2030 and 2040.
|Target year||Scope no.||Corresponding companies||Target|
|2030||Scope 1 and 2||Kawasaki Heavy Industries, Kawasaki Railcar Manufacturing, Kawasaki Motors + Affiliated companies in Japan||The Group aims to achieve carbon neutrality at its domestic business sites through the further advance of energy saving, the expanded use of renewable energies, and the expansion of waste-to-energy power generation, as well as independent initiatives focusing on hydrogen power generation.
Of the approximate 400,000 tons of emissions recorded under Scope 1and 2 as of 2021 (consolidated basis), the target is to reduce the 300,000 tons of emissions, which include those of the domestic group, to a net zero by focusing on in-house hydrogen power generation domestically.
|2040||Scope 3||Kawasaki Heavy Industries, Kawasaki Railcar Manufacturing, Kawasaki Motors||Zero-Carbon Ready
Category (i): Reduce CO2 emissions by 80% (compared to fiscal 2021)
Category (xi): Develop a lineup of CO2-free standard solutions, and further facilitate global CO2 reductions through the carbon capture, utilization, and storage (CCUS) business, etc.
|2050||Scope 1 to 3||Consolidated basis||Achieve net zero CO2 emissions at the Kawasaki Group and throughout its supply chain|
Scope 1 and 2
Toward the Realization of Independent Carbon Neutrality by 2030 through Initiatives Focusing on Hydrogen Power Generation
To reduce Scope 1 and 2 CO2 emissions, the Kawasaki Group will first create zero-emissions plants in Japan, which accounts for three-quarters of the Group’s total annual emissions of 400,000 tons, by combining power generation from waste, renewable energy, and other sources with a focus on in-house hydrogen-fueled power generation facilities, as described below. We will then expand implementation to overseas subsidiaries and promote the introduction of hydrogen energy to existing power generation facilities previously delivered to customers and other facilities.
The natural gas-fired gas turbine facilities previously delivered by the company that are in operation as of 2022 have a total capacity of about 1,000 MW. If we make proposals for the introduction of hydrogen energy and are able to transition these facilities to mixed hydrogen or exclusive hydrogen firing, it will be possible to shift to hydrogen energy without making substantial changes to existing facilities.
Hydrogen power generation is currently advancing from the verification stage to the commercial application stage, and one urban area that can serve as a model, we have already achieved supply of heat and electric power generated exclusively from hydrogen using gas turbines manufactured by Kawasaki Heavy Industries.
Leading Society by Advancing Toward Zero-Carbon Ready
Scope 3 Net Zero can only be achieved when all parties in the value chain including trading partners and clients become Zero-Carbon Ready. The Company will implement the maximum possible measures concerning Scope 3 to become Zero-Carbon Ready by 2040. Specifically, for category (i), we will slash CO2 emissions by suppliers of materials and parts by 80%, and for category (xi), we will develop a lineup of CO2-free standard solutions in all businesses. Moreover, we will reduce CO2 emissions by more than the Company’s own Scope 3 emissions by working toward achieving a hydrogen-based society and engaging in the CCUS business, thereby contributing to the early achievement of carbon neutrality around the world.
Scope 3 Breakdown by Categories
Scope 3 Category (i) Procurement of materials and parts
Support industrial initiatives with hydrogen and CCUS solutions to further accelerate reductions
It is anticipated that many industries and companies will tackle the reduction of CO2 emissions through various measures, including the utilization of renewables and efficient energy use.
The Company will deepen its partnerships, including sharing emissions data with business partners, offering support for CO2 reductions and striving for early achievement of zero emissions. This will be achieved by means not limited to in-company utilization by the Group of solutions such as hydrogen power, hydrogen fuel, and other alternative fuels, as well as CCUS, but also by providing these solutions to business partners that supply materials and parts.
Scope 3 Category (i) (CO2 reductions scenarios)
Scope 3 Category (xi) Providing customer solutions
Provide CO2-free solutions to all customers
The Group will actively further three major initiatives. The first will be the provision of CO2-free fuels and electrical power to society, with a focus on its hydrogen business. The second will be to make a selection of choices for electrification and CO2-free fuels available to customers utilizing our various solutions including mobility and robots. The third will be to undertake initiatives to provide CCUS solutions to capture CO2 emitted into the atmosphere, and subsequently store underground or use this CO2.
With these three pillars, the Group will make choices available to our customers of products and services (excluding defense and related; emergency products business) that contribute to the achievement of carbon neutrality by 2040, and promote global reductions in CO2.
Direction of Transitions by Business
Envisioned Scale of Business by Future Solution
A CO2-recycling Society
Information Disclosure in Line with the TCFD Recommendations (Scenario Analysis)
Climate change-related information based on TCFD recommendations is reported in the Kawasaki Report.
Environmental Management Activities Plan 2022 (Short-term Target and Plan)
Aiming to achieve its carbon neutrality target (medium- to long-term target), in the short-term, while the Company will step up efforts to introduce in-house hydrogen power generation by 2030 to achieve carbon neutrality at its plants (Scope 1 and 2), it will continue its ongoing efforts to scale the introduction of renewable energy and to save energy. Furthermore, the Company will accelerate these efforts with the introduction of internal carbon pricing.
To achieve carbon neutrality of its supply chain (Scope 3), the Company aims to realize Zero-Carbon Ready by 2040 by advancing its provision of CO2-free solutions to its business partners and customers. At the same time as Scope 3 reductions, the Company will also publish its CO2 emissions through product-based contributions (= calculation of avoided CO2 emissions through the selling of products and services that generate less CO2 emissions than previous products and services).
The Environmental Management Activities Plan 2023 (Key Strategies)
|Key Strategies of the Environmental Plan 2023|
(a) Reduction of CO2 emissions in entire supply chain
(b) Expanded introduction of decarbonized energy
(c) Promotion of energy-saving activities
(d) Fuel conversion
Scope 1 and 2 Efforts
Utilizing Renewable Energy
The Kawasaki Group is advancing the use of renewable energy to reduce the CO2 emissions from its plants. To this end, we are installing solar power generating systems at our plants. We have a total solar power generation capacity of 10,139 kW including Group companies.
In fiscal 2022, these systems generated 12,258 MWh, of which 8,955 MWh was used in-house. Electric power used in-house is equivalent to 0.77% of the electricity consumed throughout the entire Group.
The Kawasaki Group’s Solar Power Generation Capacity
|Iwaoka Photovoltaic Power Generation Station1*1||Sold via FIT*2||1,505|
|Nagoya Works 1||Used in-house||750|
|Seishin Works||Used in-house via PPA||1,444|
|Seishin Photovoltaic Power Generation Station*1||Sold via FIT||701|
|Nishi-Kobe Works||Used in-house||627|
|Nishi-Kobe Photovoltaic Power Generation Station*1||Sold via FIT||422|
|Akashi Works||Used in-house||230|
|Sakaide Works||Used in-house||50|
|Kakogawa Photovoltaic Power Generation Station*1||Sold via FIT||48|
|Kobe Head Office of Kawasaki Railcar Manufacturing Co., Ltd||Used in-house||25|
|Kobe Works||Used in-house||20|
|Kawasaki Thermal Engineering Co., Ltd.||Used in-house||7|
|Harima Works||Used in-house||5|
|Kawasaki Motors Enterprise (Thailand) Co., Ltd.||Used in-house via PPA||5,000|
Photovoltaic output (including power sold via FIT)
Systematic Investment in Energy-Saving Equipment
As a measure to promote energy-saving activities, in 2022, the Company introduced an initiative to set reference values for the CO2 reduction efficiency of energy-saving investment projects as criteria for determining the investment in such projects and to increase the equipment budget allocation for projects in which the reduction efficiency meets the criteria. Through this initiative, the Company will continue to reduce its CO2 emissions by advancing its investments in equipment with a focus on projects with a high CO2 reduction efficiency. Such equipment investment projects include upgrading production equipment, switching air conditioning systems to those that run on electricity, and changing to LED lighting.
Internal Carbon Pricing
To promote investment in carbon neutrality efforts such as the introduction of future hydrogen equipment and renewable energy and to change behavior within the Company, in fiscal 2022, the Company introduced internal carbon pricing.
The outline of the program is to charge a carbon surcharge for the emissions of Scope 1 and 2 of the previous fiscal year by Kawasaki Heavy Industries, Kawasaki Railcar Manufacturing, and Kawasaki Motors by calculating the surcharges of each company using a CO2 unit price. The aim is to make concentrated investments in carbon neutrality efforts based on the funds generated from internal surcharges of the internal carbon pricing program.
The CO2 unit price is set at 2,000 yen/t-CO2.
Reducing CO2 Emissions through Product-Based Contributions
Nearly 90% of CO2 emitted during the life cycles of our products is released during the period of their use after they are sold. Therefore, the Company seeks to realize a carbon-neutral society by providing products that produce only low CO2 emissions during their use. To reduce products’ post-sale CO2 emissions, in addition to increasing product energy efficiency, we are advancing electrification and modal shifts when replacing existing products in our product lineup and expanding our lineup of products that utilize exhaust heat, waste, and renewable energy. Key products that help reduce CO2 emissions are listed below. In fiscal 2017, we revised our rules for calculating CO2 emissions reductions through product-based contributions in order to better quantify the contributions of such products to the mitigation of global warming.
Calculations based on these rules showed that the CO2 emissions reduction* through products we sold in fiscal 2022 was about 24.37 million tons. Large contributions were made mainly by the M7A Series gas turbines for power generation, which boast excellent reliability, economy, and environmental friendliness and are certified under the Kawasaki Ecological Frontiers system, an internal certification program for environmentally conscious products, and the KC-MB-20, a controller for use in construction machinery to improve its fuel efficiency via the application of superior controlling technologies.
Key Products That Contribute to Reducing CO2 Emissions During Use (by Segment)
- Products to be assessed: Kawasaki Ecological Frontiers system, products that use waste, waste heat, and renewable energy, as well as cogeneration systems and rolling stock pertaining to modal shifts, etc., were selected for assessment
- Period of assessment: Until fiscal 2016, we used a one-year period of assessment. However, in line with the revision of the calculation rules, since fiscal 2017, we have adopted a flow-based approach* in which the period of assessment is the estimated useful life of products sold in the fiscal year, because the estimated useful lives of our products are long. This allows us to better calculate the difference in CO2 emissions between our products and industry standard class products over the entire period of use.
- The calculation method expressed as a calculation formula is as follows: CO2 emissions through product-based contributions = (annual CO2 emissions from conventional products - annual CO2 emissions from new products) x (assumed number of usage years)
In order to quantify the contributions of highly energy efficient products to the mitigation of global warming, products included in the calculation of CO2 emissions reduction through product-based contributions include power generated through waste heat, waste, renewable energy, and so forth. As a result, some of the products included differ from those included in the calculation of Scope 3, category (xi), which covers only energy-derived CO2 emissions.
CO2 emission reductions for the past five years are shown in the graph below. Particularly notable products that have had a large cumulative effect are shown below.
For details on the Kawasaki Ecological Frontiers certification system for environmentally conscious products, please refer to environmentally conscious products.
Supply Chain Contribution to Carbon Neutrality
Participation in the Development of the Methodology to Assess GHG Emissions of Hydrogen at IPHE
In order to promote low-carbon hydrogen utilization in society toward the realization of a carbon-neutral society, it is necessary to evaluate the hydrogen to show that it is low-carbon, and it is ideal that the evaluation criteria are standardized internationally. The methodology for determining greenhouse gas (GHG) emissions of hydrogen is discussed in IPHE (International Partnership for Hydrogen and Fuel Cells in the Economy), an international inter-governmental partnership whose objective is to facilitate and accelerate the transition to clean and efficient energy and mobility systems using fuel cells and hydrogen technologies. Our company has participated in this discussion as an expert supporting the Ministry of Economy, Trade and Industry, Japanese government, and has made a significant contribution, including providing technical advice, particularly about liquefied hydrogen supply chain.
Active Contribution to Climate Change Organization
As a member of HySTRA (CO2-free Hydrogen Energy Supply-chain Technology Research Association), the Company participates in efforts to build a CO2-free hydrogen supply chain consisting of hydrogen production, transport/storage, and usage using lignite effectively, and works to establish and verify the relevant technologies to be commercialized by around 2030.
The Company's role at HySTRA is to engage in building liquefied hydrogen carriers and constructing liquefied hydrogen unloading equipment and bulk storage facilities by utilizing the ultra-low temperature technologies it has developed such as for LNG carriers, LNG storage tanks, and liquefied hydrogen tanks for rocket fuel.