CO2 FREE (Realization of a Carbon-neutral, Low-carbon 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.
In response, Kawasaki is striving to utilize hydrogen-fired power generation and natural energy resources while promoting products and manufacturing practices that efficiently use energy, with the aim of contributing to the transition to decarbonization and realization of a low-carbon society.

Target of the 10th Plan (FY2019–2021)
Reduce fiscal 2021 CO2 emissions per unit of net sales by 20% from the fiscal 2013 level (non-consolidated*).
  • * Fiscal 2021 figures are the total of Kawasaki Heavy Industries, Kawasaki Motors, and Kawasaki Railcar Manufacturing.
Key strategies of the 10th Plan

Proactive use of onsite power generation facilities

Consider energy supply and demand for each plant and draft concrete plans to adopt onsite power generation facilities. Consider both purchasing such facilities as internal capital expenditure and selling products for such facilities to energy supply companies and then using their power generation services.

Utilize renewable energy

Purchase electricity from solar power generation facilities on the roofs of our plants.

Energy-saving activities

Promote energy saving by utilizing energy visualization systems and replacing aging equipment.

Expand the CO2-reducing effects of Kawasaki Ecological Frontiers and other products

The results of activities in fiscal 2021 to achieve the above targets are reported below.


Reducing CO2 Emissions from Production Activities

Kawasaki has designated the target of reducing fiscal 2021 CO2 emissions from production activities per unit of net sales by 20% from the fiscal 2013 level (CO2 emissions per unit of net sales: 233 t-CO2/billion yen). To achieve this target, we are advancing the key strategies of proactively utilizing onsite power generation facilities and utilizing renewable energy while continuing to implement ongoing energy-saving activities.
In fiscal 2021, CO2 emissions per unit of net sales came to approximately 225 t-CO2/billion yen, down 22.7% from the fiscal 2013 level, and thus, we achieved our target for fiscal 2021 (see graph below). CO2 emissions and CO2 emissions per unit of net sales both decreased from the previous year as a result of declines in energy usage due to energy-saving activities and in CO2 emissions factors for purchased electricity.

CO2 Emissions from Production Activities and CO2 Emissions per Unit of Net Sales (Non-consolidated)

Notes: 1. Per unit of net sales figures are obtained by dividing CO2 emissions by net sales.

2. The fuel and heat CO2 emission factors used are values published by the Agency for Natural Resources and Energy.

3. The electricity CO2 emission factors used are values published by Japan’s Ministry of Environment for each power provider in each fiscal year.

4. Fiscal 2021 figures are the total of Kawasaki Heavy Industries, Kawasaki Motors, and Kawasaki Railcar Manufacturing.


Estimating Supply Chain CO2 Emissions

The Kawasaki Group’s CO2 emissions and energy consumption attributable to production activities are shown in the graph below. Also, the supply chain CO2 emissions* are shown in the tables under “Fiscal 2021—the Kawasaki Group’s Scope 1 and Scope 2 Calculation Results” and “Fiscal 2021—Scope 3 Calculation Results for Kawasaki Heavy Industries, Kawasaki Motors, and Kawasaki Railcar Manufacturing.” The scope that Kawasaki is required to cover in tracking CO2 emissions is expanding toward the inclusion of not only its own operations but also those of its supply chain. Within the entire supply chain, the greenhouse gas (GHG) effect accompanying the use of Kawasaki-sold products is extremely high. We have been making progress in reducing CO2 emissions through product-based contributions, but, going forward, we will take an even more proactive approach.

* The standards for calculating emissions along our supply chain include the Corporate Value Chain (Scope 3) Accounting and Reporting Standard, established by the Greenhouse Gas Protocol, an internationally accepted set of GHG calculation and reporting guidelines. In Japan, the Basic Guidelines on Accounting for Greenhouse Gas Emissions Throughout the Supply Chain—a Japanese version of Scope 3—were prepared by the Research/Study Committee on Standards for Accounting and Reporting Organizations’ GHG Emissions throughout the Supply Chain, established jointly by the Ministry of Economy, Trade and Industry and the Ministry of the Environment. Using these basic guidelines, Kawasaki calculates CO2 emissions along its supply chain.

CO2 Emissions from Kawasaki Group Production Activities (by company)

Notes: 1. The CO2 emission factors are the figures published by Japan’s Ministry of the Environment for each power provider in each fiscal year.

2. For overseas sites, the CO2 emission factors are the figures published by the Greenhouse Gas Protocol.

(Unit: kt- CO2)


2017*1 2018*1 2019*2 2020*3 2021*4
Kawasaki Heavy Industries*5 328 301 285 249 244
Domestic consolidated subsidiaries 36 36 35 33 33
Overseas consolidated subsidiaries 138 137 138 113 126
Total 502 474 459 395 403

*1 Total of Kawasaki Heavy Industries, 20 domestic consolidated subsidiaries, and 24 overseas consolidated subsidiaries

*2 Total of Kawasaki Heavy Industries, 24 domestic consolidated subsidiaries, and 24 overseas consolidated subsidiaries

*3 Total of Kawasaki Heavy Industries, 26 domestic consolidated subsidiaries, and 24 overseas consolidated subsidiaries

*4 Total of Kawasaki Heavy Industries, 37 domestic consolidated subsidiaries, and 23 overseas consolidated subsidiaries

*5 Fiscal 2021 figures are the total of Kawasaki Heavy Industries, Kawasaki Motors, and Kawasaki Railcar Manufacturing.

CO2 Emissions from Kawasaki Group Production Activities (Scopes 1 and 2)

(Unit: kt- CO2)


2017*1 2018*1 2019*2 2020*3 2021*4
Scope 1 176 162 169 140 135
Scope 2 326 311 290 255 267
Total 502 474 459 395 402

*1 Total of Kawasaki Heavy Industries, 20 domestic consolidated subsidiaries, and 24 overseas consolidated subsidiaries

*2 Total of Kawasaki Heavy Industries, 24 domestic consolidated subsidiaries, and 24 overseas consolidated subsidiaries

*3 Total of Kawasaki Heavy Industries, 26 domestic consolidated subsidiaries, and 24 overseas consolidated subsidiaries

*4 Total of Kawasaki Heavy Industries, 37 domestic consolidated subsidiaries, and 23 overseas consolidated subsidiaries

Energy Consumption in Kawasaki Group Production Activities (by company)

(Unit: TJ)


2017*1 2018*1 2019*2 2020*3 2021*4
Kawasaki Heavy Industries*5 6,020 6,300 6,410 5,820 5,780
Domestic consolidated subsidiaries 680 690 700 680 700
Overseas consolidated subsidiaries 2,200 2,220 2,230 1,860 2,270
Total 8,900 9,210 9,340 8,360 8,750

*1 Total of Kawasaki Heavy Industries, 20 domestic consolidated subsidiaries, and 24 overseas consolidated subsidiaries

*2 Total of Kawasaki Heavy Industries, 24 domestic consolidated subsidiaries, and 24 overseas consolidated subsidiaries

*3 Total of Kawasaki Heavy Industries, 26 domestic consolidated subsidiaries, and 24 overseas consolidated subsidiaries

*4 Total of Kawasaki Heavy Industries, 37 domestic consolidated subsidiaries, and 23 overseas consolidated subsidiaries

*5 Fiscal 2021 figures are the total of Kawasaki Heavy Industries, Kawasaki Motors, and Kawasaki Railcar Manufacturing.

Fiscal 2021—the Kawasaki Group’s Scope 1 and Scope 2 Calculation Results

Category Calculation Targets FY2020 Calculation
Results
(kt-CO2/year)
FY2021 Calculation
Results
(kt-CO2/year)
Scope 1
Direct emissions Direct emissions through use of fuel at Kawasaki and associated industrial processes 140 135
Scope 2
Indirect emissions from the generation of purchased energy Indirect emissions accompanying use of electricity and heat purchased by Kawasaki 255 267

* Total of Kawasaki Heavy Industries, 37 domestic consolidated subsidiaries, and 23 overseas consolidated subsidiaries

Fiscal 2021—Scope 3 Calculation Results of Kawasaki Heavy Industries, Kawasaki Motors, and Kawasaki Railcar Manufacturing

Category Calculation Targets FY2020 Calculation
Results
(kt-CO2/year)
FY2021 Calculation
Results
(kt-CO2/year)
Scope 3 (Other indirect emissions): Upstream
① Purchased goods and services Emissions associated with activities up to production of raw materials, parts, purchased goods, and sales-related materials 1,465
(1.2%)
2,394
(9.7%)
② Capital goods Emissions from construction and production of Kawasaki’s capital goods 128
(0.1%)
180
(0.7%)
③ Fuel- and energy-related activities not included under Scope 1 or Scope 2 Emissions associated with procurement of fuel from other providers and procurement of fuel required to generate power, such as electricity and heat 35
(0.0%)
31
(0.1%)
④ Upstream transportation and distribution Emissions associated with logistics of raw materials, parts, purchased goods, and sales-related materials up to delivery to Kawasaki 9
(0.0%)
8
(0.0%)
⑤ Waste generated in operations Emissions associated with transportation and processing of waste generated by Kawasaki 11
(0.0%)
8
(0.0%)
⑥ Business travel Emissions associated with business travel by employees 5
(0.0%)
7
(0.0%)
⑦ Employee commuting Emissions associated with transportation of employees between their homes and their worksites 7
(0.0%)
7
(0.0%)
⑧ Upstream leased assets Emissions associated with operation of assets leased by Kawasaki (excluding those included in Scope 1 or Scope 2 calculations) 0
(0.0%)
0
(0.0%)
Scope 3 (Other indirect emissions): Downstream
⑨ Downstream transportation and distribution Emissions associated with transportation, storage, cargo handling, and retail sales of products 0
(0.0%)
1
(0.0%)
⑩ Processing of sold products Emissions associated with processing of intermediate products by companies Excluded*1 Excluded*1
⑪ Use of sold products Emissions associated with use of products by consumers and companies*3 121,814*3
(98.5%)
21,871*3
(88.7%)
⑫ End-of-life treatment of sold products Emissions associated with transportation and treatment of products upon disposal by consumers and companies Excluded*1 Excluded*1
⑬ Downstream leased assets Emissions associated with operation of assets leased to other companies Excluded*2 Excluded*2
⑭ Franchises Emissions by franchisees Excluded*2 Excluded*2
⑮ Investments Emissions related to operation of investments 146
(0.1%)
158
(0.6%)
Total 123,616*3
(100%)
24,664*3
(100%)

*1 Excluded from calculation target because Kawasaki is unable to confirm reference data at this time.

*2 Excluded from calculation target because it is outside of the scope of our business.

*3 To more accurately determine emissions in Scope 3, Category 11, the calculation method was revised in fiscal 2021. Previously, calculations for products manufactured as parts incorporated into finished products such as hydraulic machinery were performed using the CO2 emissions for finished products such as construction machinery, but as of fiscal 2021, the calculations are performed by taking into consideration to the degree of contribution to finished products, the weight ratios, and other factors. Total Scope 3 emissions in fiscal 2020 calculated according to the new method were 31.531 million tons (of which Category 11 accounted for 29.726 million tons).


Reduction of CO2 Emissions in Logistics Processes

Kawasaki takes steps to pinpoint CO2 emissions and promote energy-saving activities in its logistics processes, which cover some of its supply chain (Scope 3, Category 4 “Upstream transportation and distribution”), to realize continuous reduction in CO2 emissions.
In fiscal 2021, CO2 emissions decreased by 8.2% year on year, to approximately 4,000 t-CO2 (energy used was approximately 60,000 GJ), due to higher efficiency in truck transportation. Amounts for the past five years are shown in the graph below.

CO2 Emissions from Logistics Processes and CO2 Emissions Per Unit of Net Sales (Non-consolidated)

Notes: 1. Per unit of net sales figures are obtained by dividing CO2 emissions by net sales.

2. The CO2 emissions factors used are values published by the Agency for Natural Resources and Energy.

3. Fiscal 2021 figures are the total of Kawasaki Heavy Industries, Kawasaki Motors, and Kawasaki Railcar Manufacturing.

Energy Consumption in Logistic Processes (Non-consolidated)

Notes: 1. Fiscal 2021 figures are the total of Kawasaki Heavy Industries, Kawasaki Motors, and Kawasaki Railcar Manufacturing.


Proactive use of onsite power generation facilities

Kawasaki uses onsite power generating facilities that employ gas turbines and gas engines and efficiently uses energy at its plants. Under the 10th Plan, we have worked to reduce CO2 emissions by introducing high-efficiency gas turbines and gas engines and increasing the use of waste heat.
Our goal is to reduce CO2 emissions at all domestic business sites, currently approximately 300,000 tons annually, to zero by 2030 through voluntary initiatives centered on hydrogen power generation, thereby achieving carbon neutrality. In fiscal 2021, we began investigating 100MW of hydrogen power generation using gas turbines, hydrogenation of fuel in gas engines, and other measures.
In addition, we began a verification test for a battery storage hybrid system at our Akashi Works, combining the plant’s distributed power generation system equipped with Kawasaki’s M1A-17D high-efficiency gas turbine, lithium-ion storage batteries, and photovoltaic (PV) panels. The system is designed to optimize energy supply for a user’s variable heat and power needs, by recovering waste heat generated during gas turbine power generation, supplying power generated by the PV system and gas turbine, and by optimized charging and discharging of the lithium-ion storage batteries.

An M1A-17D gas turbine at the Akashi Works
PV panels at the Akashi Works

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 4,996 kW including Group companies.
In fiscal 2021, these systems generated 5,629 MWh, of which 2,405 MWh was used in-house.*1

*1 Equivalent to 0.5% of Kawasaki’s total energy consumption.

The Kawasaki Group’s Solar Power Generation Capacity

Name Power Usage Generation
Capacity (kW)
Iwaoka Photovoltaic Power Generation Station1*1 Sold via FIT*2 1,505
Nagoya Works Used in-house 750
Seishin Works Used in-house via PPA 728
Seishin Photovoltaic Power Generation Station*1 Sold via FIT 701
Nishi-Kobe Works Used in-house 505
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 6.6
Harima Works Used in-house 5
Total 4,996

*1 Power generation facility operated by Kawasaki Trading Co., Ltd.

*2 FIT: Feed-in tariff; a program in which renewable energy is bought back at a fixed rate

Photovoltaic output (including power sold via FIT) (Non-consolidated)

Notes: 1. Fiscal 2021 figures are the total of Kawasaki Heavy Industries, Kawasaki Motors, and Kawasaki Railcar Manufacturing.

Nagoya Works: 750-kW power generation facility
Seishin Works: 728-kW power generation facility

Measures to Improve Energy Costs

The Company has established energy-saving promotion structures for each business segment and implements various Company-wide energy cost improvement initiatives including energy conservation measures.
One example of energy cost improvement measures in fiscal 2021, the use of onsite power generating capacity at the Akashi Works and Kobe Works for demand response (DR)*1 and to respond to power generation requests from electric power companies, is presented below. In both instances, the compensation that we received from these improvements is compensation for responding to the electric power shortage throughout society by using our energy-related facilities, and therefore is the effect of our energy cost improvement initiatives.

Akashi Works
The Akashi Works had a gas turbine generator that was out of operation due to both aging and operating costs. Methods of use for this gas turbine generator were investigated, and a decision was made in fiscal 2021 to participate in DR by internally using the electric power obtained from the additional operation of the gas turbine generator, lowering our demand for power from the electric power company.

The amount of compensation received for participating in DR varies depending on the aggregator company*2 with which a DR contract is entered into, so we investigated and compared multiple aggregator companies and concluded a DR contract with the aggregator that provided the greatest benefits.
Preparation work was necessary to bring the idle gas turbine generator back into operation. We reviewed manuals and established an implementation system to ensure that the gas turbine generator could be operated without delay when DR is initiated once the preparation work was completed.

After completing this work, we began participating in DR in October 2020. As a result, we received the corresponding compensation from the aggregator company and made social contributions by supporting the coordination of electric power demand and supply.

*1 Demand response (DR) is a framework for creating the ability to adjust electric power by controlling power supply and demand based on requests from aggregator companies2 when there is a shortage of electric power. Specific adjustment methods include suppressing or ceasing the output of load equipment, increasing the output of generators or starting up additional generators, and discharging storage batteries. Participating companies enter into DR contracts with an aggregator company and receive compensation from the aggregator with which they concluded a DR contract.

*2 A company that aggregates users of electric power. By participating in DR, a user receives request to conserve power and accepts compensation for responding and standby compensation from the aggregator company.

Kobe Works
In January 2021, the onsite power generation facility at the Kobe Works had excess power generating capacity when electric power supplies in the Kansai Region were tight due to an increase in demand. By increasing electric power generation over normal levels in response to a request to provide electric power from the electric power company, we contributed to eliminating the power shortage in the Kansai Region and received compensation corresponding to the requests for power, thereby improving energy costs.

Onsite power generation facility at the Kobe Works

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 2021 was about 17.39 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)

*1 CK Mill: Named after the companies that jointly developed it, Chichibu Cement Co., Ltd. (now Taiheiyo Cement Corporation) and Kawasaki.

*2 Developed with a focus on three Es: energy saving, easy maintenance, and environmentally friendly.

*3 Ship Operation and Performance analysis support system

*4 Environmentally Friendly Advanced Commuter & Express train

Calculation Rules

  • 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.

* Please refer to the “Guideline for Quantifying Greenhouse Gas Emission Reduction Contribution” (Ministry of Economy, Trade and Industry, March 2018)

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 11, 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.

Notes: 1. Kawasaki uses CO2 emissions factors provided in the list of calculation methods and emissions factors published by Japan’s Ministry of the Environment.

2. The CO2 emission reduction effect through product-based contributions achieved through the higher energy efficiency of products is based on a comparison using industry standard products.

3. The application of waste heat, waste, and renewable energy is counted toward the CO2 emissions reduction effect through product-based contributions.

Particularly notable products that contribute to reducing CO2 emissions during use

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