Mitsubishi Materials Corporation

Strengthening Measures to Address Global Environmental Issues

Strengthening Initiatives to Achieve Carbon Neutrality

Climate Change Strategy

Basic Approach

On the issue of climate change, the IPCC 6th Assessment Report in 2023 noted that there is “no room for doubt” that human activities have caused global warming, emphasizing the urgent need to reduce GHG*1. The world has been pursuing initiatives since 2020 under the Paris Agreement, and in response to the Glasgow Climate Pact established at the 2021 United Nations Climate Change Conference (COP26), the international community has made a significant change in direction toward the 1.5ºC goal – namely to achieve carbon neutrality by 2050.
At the Mitsubishi Materials Group, we also take the issue of climate change seriously, in keeping with our Corporate Philosophy of “For People, Society and the Earth.” We have set our target year for achieving carbon neutrality to the fiscal year ending March 2046, five years ahead of Japan’s national target year of the fiscal yaer ending March 2051. Additionally, by the fiscal year ending March 2051 we aim to achieve renewable energy generation comparable to the power we consume internally, resulting in an effective 100% self-sufficiency rate for renewable energy. In these ways, we will continue to pursue business activities aimed at realizing a decarbonized society.

  • *1 GHG: Greenhouse gas

Information Disclosure

In March 2020, the Group decided to endorse the recommendations of the TCFD*2 and participate in the TCFD Consortium, which consists of companies, financial institutions and other organizations which support those recommendations. We will appropriately disclose the impact (risks and opportunities) of climate change on the Group’s business operations and the results of analyzing that impact in line with the TCFD recommendations.
The Group answers questionnaires for the CDP (a non-profit organization) on a yearly basis. On an 8-step scoring from A to D-, in the fiscal year ended March 2024, we have achieved an "A-" in the CDP Climate Change assessment and CDP Water Security assessment. We have also been recognized the "Supplier Engagement Leader" in CDP Supplier Engagement Rating. For details, please see the following link.

  • *2 TCFD: Task Force on Climate-related Financial Disclosures. The TCFD was established in 2016 by the Financial Stability Board, an international organization that seeks to stabilize financial systems.

Governance

We have appointed an Executive Officer (CSuO) to segregate our management strategies, including responding to the issue of Sustainability issues, including addressing climate change. We have also established a Global Environment Affairs Department of the Corporate to plan and promote the Group’s strategic initiatives for risks and opportunities related to climate change. The Global Environment Committee, for which the Global Environment Affairs Department serves as secretariat, Department conducts scenario analyses based on the TCFD recommendations, evaluates and manages risks and opportunities related to climate change, formulates and manages action plans to reduce GHGs, and engages in other discussion and information sharing concerning climate change. In addition, activities are reported to the Strategic Management Committee and the Board of Directors for appropriate monitoring. (Matters for deliberation by and reporting to the Strategic Management Committee and Board of Directors)

  • Greenhouse gas emission reduction target setting and reduction plans
  • Climate change-related information for disclosure
  • Assessment of climate change-related risks and opportunities for each business

The Board of Directors goes beyond the monitoring of sustainability initiatives. The Sustainability Committee, an advisory body to the Board of Directors, was established to actively consider the direction of sustainability efforts from different perspectives and present its findings internally. The committee monitors the Company’s action related to climate change, considers the methods and issues involved, and reports its findings to the Board of Directors.

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Strategy

In March 2021, based on the recommendations of the TCFD, we conducted scenario analyses to ascertain the impact (risks and opportunities) that climate change has on the Group’s business operations and consider measures aimed at mitigating the risks and capitalizing on the opportunities.
With regard to transition risks and opportunities, in February 2023 we updated our scenario analyses while maintaining consistency with the Medium-term Management Strategy FY2031, and set business indicators and targets. Setting 1.5ºC and 4ºC scenarios, we estimated the financial impact on the Group in the event that policies and legislation on climate change were stepped up, and carbon pricing was introduced and strengthened. We also analyzed the impact on our business operations in terms of risks and opportunities with regard to the shift in EV demand, changing forms of energy use, and changing demand for the recycling business due to the shift to a recycling-oriented society. Further, in terms of physical risks, in our Group-wide risk management activities we also manage water risks including damage from acute and chronic risks including torrential rain, flooding, storm surges and droughts thought to have materialized in relation to climate change.
For details about our scenario analysis results, please refer to the section on Climate Change-related Risks and Opportunities.
In addition, an ICP system has been introduced since the fiscal year ending March 2025 to raise awareness of GHG emissions within the company and to further promote decarbonization efforts.

Risk Management

Results of climate change scenario analysis, the Mitsubishi Materials Group recognizes that climate change risks are one of the key risks that could have a significant impact on the Group’s business performance and financial condition, and drives initiatives to address these risks within its risk management activities.
The implementation of risk measures is discussed and monitored by the SCQ Promotion Division and the Strategic Management Committee.
At these meeting bodies, the CSuO is responsible for implementation and operates independently of the Audit Committee. The Board of Directors also verifies and reviews the effectiveness of the risk management process and comprehensively oversees risk management.
For more details about the Group’s risk management system, operating status and the selection process for major risks, please refer to the section on Enhancing internal control through Group governance.

Indicators and Targets

The Group has revised its GHG emissions (Scope1 + Scope2) reduction target to be set for emissions excluding GHG emissions from resource recycling efforts.
With the start of periodic reporting in the fiscal year ended March 2024 based on the revised Act on Rationalization of Energy Use and Shift to Non-fossil Energy (hereinafter referred to as "Energy Conservation Act") and the Act on Promotion of Global Warming Countermeasures (hereinafter referred to as "Global Warming Prevention Act"), both of which were revised in 2022, we have reorganized our GHG emissions based on these laws and regulations, and added GHG emissions from the combustion of plastic contained in E-Scrap and CO2 generated from the chemical reaction of limestone used in the manufacturing process, which were previously excluded from the scope of calculation and reporting, have been added to the scope of reporting under both laws and regulations*5.
Since we have set "For people, society and the earth, circulating resource for a stainable future" as Our Commitment and have made strengthening resource recycling by leveraging the strengths of our business a pillar of our Medium-term Management Strategy, we have set a new GHG reduction target of GHG emissions from our resource recycling efforts of emissions*4 excluding GHG emissions from resource recycling efforts, we have set a new GHG reduction target of a 47% reduction*5 from the fiscal year ended March 2021 level by the fiscal year ending March 2031.

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  • *3 Our GHG emissions are approximately 230kt-CO2e more in the fiscal year ended March 2021, the base year of the reduction target, and approximately 350kt-CO2e more in the fiscal year ending March 2031, the target year of reduction, compared to those who reported before the change in the operation of the Act on Promotion of Global.
  • *4 GHG emissions excluding GHG emissions from resource recycling efforts are calculated based on Act on Promotion of Global Warming Countermeasures.
  • *5 The contents of our efforts to reduce GHG emissions are the same as for the previous 45% reduction target, which was set for GHG emissions excluding GHG emissions from E-Scrap and limestone. Including GHG emissions derived from E-Scrap and limestone, the reduction rate is 29%.

In addition to the GHG emissions reduction target, we have also set the goals of achieving 100% utilization of renewable energy for electricity by the fiscal year ending March 2036 and 100% self-sufficiency in renewable energy for electricity by the fiscal year ending March 2051 by promoting the development and expansion of utilization of renewable energy sources such as geothermal power generation, in which the Group has strengths. In order to achieve these targets, we are working to achieve the following goals.
To achieve these goals, we will invest \10.5 billion in energy-saving measures and facility improvements, mainly at manufacturing sites, and \30 billion in renewable energy projects by the fiscal year ending March 2031.
We also aim to achieve carbon neutrality including GHG emissions from resource recycling efforts by the fiscal year ending March 2046 with conserving energy and reducing the use of fossil fuels at manufacturing sites, promoting the development of products that contribute to a carbon-neutral society and technologies such as CO2 capture and CO2 treatment, and utilize applicable technologies.
From the viewpoint that reduction of GHG emissions in our business supply chain is essential to achieve a CN society in 2050, we have set a target to reduce Scope3 (emissions of other companies related to business activities other than Scope1 and Scope2) by at least 22% by 2030 compared to the fiscal year ended March 2022 (The reduction targets are for Categories 1, 3, and 15).

GHG reduction target

Carbon Neutrality Road Map

Participation in JMIA’s Carbon Neutrality Action Plan

Ahead of adoption of the Kyoto Protocol in 1997, the Japan Mining Industry Association (of which Mitsubishi Materials is a member) formulated a Voluntary Environmental Action Plan to solve the issue of climate change. A further refinement of this plan was formulated starting in 2013 as the Action Plan for Low-Carbon Society, as part of continuing efforts to reduce CO2 emissions from non-ferrous smelting in Japan. Interests and expectations for the realization of carbon neutrality had been growing since the government had set a target of carbon neutrality by 2050 and to reduce GHG emissions by 46% (the industrial sector’s target is 38%) from the fiscal year ended March 2014 levels by the fiscal year ending March 2031. So, JMIA revised the "Commitment to a Low Carbon Society" to the "Carbon Neutrality Action Plan" in the fiscal year ended March 2021.
In the fiscal year ended March 2021, JMIA was almost able to achieve its target of reducing CO2 emissions per unit of production by 26% from the fiscal year ended March 1991 levels by the fiscal year ending March 2031. Therefore, JMIA reviewed the target with advice from the Industrial Structure Council in 2022. The latest target is below.

a. Target Assumptions:
  • 2030 production volume of 2.8 million tons (2.407 million tons in FYE March 2023)
  • Target indicator will be CO2 emissions, and the base year will be FYE March 2014)
  • Electricity CO2 emission factor (kg-CO2/kWh) will be used as the adjusted emission factor (receiving end).
b. Target:
  • Reduce CO2 emissions by 38% from FYE March 2014 levels by FYE March 2031.

As JMIA’s CO2 reduction target is consistent with the target advocated by the Japanese government, we will continue to take part in initiatives to achieve the association’s targets.

Details of non-financial evaluation items for annual bonuses (short-term incentive remuneration) for Executive Officers(excluding CEO) (FYE March 2025)

For non-financial evaluation, each Executive Officer is required to set three target items, one of which is a sustainability issue. Each item is broken down into two or three sub-items. The table below summarizes details of non-financial sub-items set for the fiscal year ending March 2025 in accordance with the Sustainability Policy, etc. In the fiscal year ending March 2025, we have set targets for five executive officers with respect to "Proactive Engagement for the Global Environment," which includes climate change performance.

Items in line with the Sustainability Policy Executive Officer
A B C D E F G
Build a Work Environment that puts Safety and Health First          
Respect for Human Rights            
Promote Diversity, Equity & Inclusion
Cultivate Mutual Prosperity with Stakeholders              
Strengthen Corporate Governance and Risk Management        
Engage in Fair Business Transactions and Responsible Sourcing          
Ensure Stable Provision of Safe, Secure, and High Value Added Products              
Proactive Engagement for the Global Environment    

Sustainable Finance

The Company established the Transition-Linked Finance Framework in November 2023 (Revised in August 2024 due to changes in setting GHG emission reduction targets) to promote our efforts to achieve carbon neutrality. Based on the framework, we are issuing Transition-Linked Bonds and executing Transition-Linked Loans.
We will promote our efforts to achieve carbon neutrality by utilizing the funds raised.
For more information, see 「Sustainable Finance」.

Direction of Carbon Footprint of Products (hereinafter referred to as "CFP") initiatives

CFP*6 calculations are attracting increasing interest from various sectors, such as governments and industry associations in Japan and abroad, exploring calculation and utilization methods.
Under these circumstances, we will promote our CFP activities in accordance with the following directions.

Deployment

We will sequentially promote the calculation of CFP for the main products we manufacture.
We will start building a system to ensure data reliability.

Verification and disclosure

We will promote verification and disclosure of products for which CFP quantification has been completed by a third-party organization as necessary.

Reduction

We will systematically implement our GHG reduction measures to reduce CFP.
We will promote engagement with suppliers and promote consistent GHG reduction efforts from upstream to downstream.

Results of the initiatives

  • *6  Calculation and disclosure of greenhouse gas emissions throughout the product and service lifecycle.

Introduction of Internal Carbon Pricing (ICP) system

Introduction of Internal Carbon Pricing (ICP) System MMC introduced an internal carbon pricing (ICP) system in April 2024 in order to raise awareness about GHG emissions and further promote its decarbonization efforts. Under the ICP system, the Company sets its own hypothetical price for GHG emissions and uses it for investment decisions.
The internal carbon price is set at ¥10,000 per t-CO2e and is used in investment decisions for capital expenditures that contribute to reductions in our own GHG emissions (Scope1 + 2). We will actively promote the reduction of GHG emissions by promoting investments that contribute to decarbonization through the introduction of the ICP system.

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MMC

Risks and Opportunities Related to Climate Change

The financial impact on the Group will be in the form of additional costs incurred in depending on the amount of greenhouse gas emissions, such as when policies and legal regulations on climate change are toughened, and carbon pricing systems (the emissions trading system and carbon tax) are introduced and strengthened. With the global shift to decarbonized societies, certain product markets in which the Group has traditionally been participating are expected to shrink. Any delay in taking action in new expanding markets could adversely affect the Group's results and financial position. The world is currently transitioning rapidly toward a carbon-neutral society based on the Paris Agreement. We believe we need to provide new value by responding quickly to these changes in the social environment.

Specifically, we will continue to steadily reduce greenhouse gas emissions from Group business activities by setting greenhouse gas reduction targets, introducing energy-saving equipment, and expanding the use of renewable energy. Furthermore, in order to improve the market competitiveness of Group products, we are enhancing our production processes and developing environmentally friendly products.
Physical risks - including damage from intensified acute water risks thought to be related to climate change such as superstorms, floods, storm surges, or drought, as well as chronic risks - are covered by Group-wide risk management activities.
Meanwhile, opportunities arising due to climate change include an expected increase in demand for technologies, products and services that contribute to energy saving and the reduction of greenhouse gas emissions due to the toughening of climate change policies and other measures. The Group takes initiatives such as the manufacturing of materials and products that contribute to decarbonization, the recycling of nonferrous metal resources, the development and promotion of the use of renewable energy such as geothermal power, the development of technologies related to CO2 capture and effective utilization, and conservation activities for the forest land we own. Through these initiatives, we aim to create both economic and social value.

Scenario Analysis

In March 2021, the Group established and analyzed scenarios to ascertain the impact of climate change on the Group's business operations (risks and opportunities) and consider measures for reducing risks and securing opportunities. In February 2023, we updated the scenario analysis and set indicators and targets, while ensuring consistency between transition risks and opportunities and the Medium-term Management Strategy FY2031. We will monitor the situation based on the indicators and targets. We are updating the analysis of physical risks and examining indicators and targets.

Process for identifying risks, opportunities and response measures

Identify risks and opportunities Identify transition risks and opportunities and physical risks as climate change risks and opportunities relating to business operations
Identify key risk and opportunity factors Consider the impact of identified risks and opportunities on business operations, their relationship to business strategies and their level of interest to stakeholders, etc., and identify risks and opportunities with a high degree of importance
Analyze impact on business operations Analyze the degree of impact of key risks and opportunities on business operations
In analyses and evaluations, we use a 1.5℃ scenario and a 4℃ scenario.
  • [Reference scenarios] International Energy Agency (IEA): Net Zero Emissions by 2050 Scenario (NZE), Stated Policies Scenario (STEPS)
    Intergovernmental Panel on Climate Change (IPCC): Shared Socioeconomic Pathways (SSP), Representative Concentration Pathways (RCP), etc.
Examine measures, indicators and targets Consider measures to reduce risks and secure opportunities
Set the indicators and targets (such as GHG emissions reduction targets) to be monitored

Scenario Analysis – World as Envisaged in 2030–2050

World as envisioned in analysis

1.5℃ Scenario (the world moving toward carbon neutrality in 2050) 4℃ Scenario (the world as it is and the world in which things are allowed to take their course)
A scenario that charts out a path for the world's energy sector to follow to achieve net zero CO2 emissions by 2050. The scenario envisages the world where the social changes necessary for the establishment of a carbon free society and holding the rise in the global average temperature to 1.5℃ or less until the end of this century will impact business operations. A scenario reflecting present the policies formulated based on an evaluating specific policies being implemented and policies announced by governments around the world by country or by sector. The scenario envisages the world as described below where the achievement of targets is not required and the global average temperature will rise about 4℃ by the end of the this century.
[World as envisaged]
  • The setting of a carbon price and the rise of prices globally
  • Progress in the transition from fossil fuels to renewable energy
  • Progress in the modal shift and the shift to EVs
  • Increase in demand for the use of public transportation and vehicle sharing
  • Preferential selection of decarbonized products by users
  • Transition to a recycling-oriented society and an increase in waste recycling rates
[World as envisaged]
  • Dependency on fossil fuels, increased energy costs
  • Remarkable economic growth of emerging and developing countries
  • Slowdown of the shift to modes of mobility with low CO2 emissions
  • Limited demand for renewable energy
  • Intensification of wind and water-related disasters and increase in disaster-related waste
  • Increased severity of water stress and heat stress

Overview of MMC’s Scenario Analysis Based on TCFD Recommendations

With regard to transition risks and opportunities related to climate change, we conducted scenario analysis for one theme across the Company and for three major themes for each business (total of nine minor themes). The external and internal data used in the analysis were updated.

Changes in Carbon Tax, Energy Costs, etc. (Common to all Businesses)

【1.5℃】Risk factor: Introduction/strengthening of carbon price tax system (increase in operation costs)
【4℃】Riskl factor:Introduction of a Carbon Pricing Systems

Anticipated world and business impact

【1.5℃】Increase in production costs due to introduction/strengthening of carbon price system

  • Higher taxation on GHG emissions and increased energy costs due to higher electricity prices
  • Increased green power certificate procurement amounts and emissions trading costs
  • Unit prices of fossil fuels decline due to the advance of decarbonization

【4℃】Introduction of a Carbon Pricing Systems and Increased Production Costs due to Higher Unit Prices of Fuel

  • Decarbonization efforts do not proceed beyond current policies, and unit prices of fuel increase due to rising demand for fossil fuels up to 2030
  • Carbon prices rise moderately on a unit basis
Impact analysis

【1.5℃】If the Group achieves its GHG emission target, the CP burden in FYE March 2031 is estimated to be approximately \16.6 billion, and the rise in energy costs from FYE March 2021 is estimated to be \7.1 billion. Carbon pricing will be a factor contributing to cost increases for the Company While the impact of carbon pricing will extend to society overall, but if there are delays in reducing GHG emissions or the passing on of these costs to the price of Company products does not progress, then there is a risk that it may lead to a decrease in earnings.

【4℃】If the Group achieves its GHG emission target, the CP burden in FYE March 2031 is estimated to be approximately \8.3 billion, and the rise in energy costs from FYE March 2021 is estimated to be \7.5 billion. Compared with the 1.5°C scenario, the impact attributable to carbon prices is small, but combined with the increase in energy costs due to higher unit prices for fuel, it will be a factor increasing the Company's production costs.

Indicator
Group GHG emissions (Scope1 + 2)
Target
  • 47% reduction in emissions by FYE March 2031 (compared to FYE March 2021)
    (excluding GHG emitted due to resource recycling efforts)
  • Achieve carbon neutrality by FYE March 2046
    (including GHG emitted due to resource recycling efforts)
Future Strategy and Response Toward a 1.5℃ World
  • Formulate a plan to reduce GHG emissions by FYE March 2031, reduce energy consumption by improving the efficiency of facilities and processes, electrify processes and switch fuels, and switch to electricity derived from renewable energy sources (renewable energies).
  • Switch 100% of our Group's electricity use to renewable energy-derived electricity by FYE March 2036
  • Accelerate the long-term use of CN fuels and the development of innovative technologies such as the capture and utilization of CO2

Fiscal year ended March 2024 performance against target

Group GHG emissions (Scope1,2)

Total greenhouse gas emissions (Scope1 + Scope2) declined by 2% compared with the fiscal year ended March 2023 to 887 thousand t-CO2e, as a result of progress switching to electricity from renewable energy sources.

Group GHG emissions (Scope1 + 2)

graph

  • GHG emissions excluding those from the use of recycled resources.
  • Excluding businesses and subsidiaries that have been or are planned to be removed from the scope of consolidation due to business portfolio adjustment as of the fiscal year ended March 2024.

Changes in Demand for Copper Due to Progress in Responding to Climate Change (Smelting and Resource Recycling Business)

【1.5℃】Opportunity factor: Increase in xEV sales volume
【4℃】Opportunity factor: Increase in the Automobile Units Sold

Anticipated world and business impact

【1.5℃】Rapid growth in copper demand due to increased EV sales aimed at decarbonization

  • Overall automobile sales volume will increase toward FYE March 2031, and worldwide demand for copper for use in automobile applications will increase by a factor of around 3.3 times by FYE March 2031 and 4.6 times by FYE March 2051 compared with FYE March 2021 levels.
  • Sales volume of xEVs is expected to increase approximately 24-fold by FYE March 2031 compared to FYE March 2021.

【4℃】Despite a low percentage of xEVs, demand for copper rises due to an increase in the total automobile units sold

  • As overall automobile sales volume increases despite a low ratio of xEVs, the global volume of copper needed for the automotive sector will expand to about 2.1 times FYE March 2021 levels in FYE March 2031, and around 2.7 times FYE March 2021 levels by FYE March 2051.
  • Total worldwide automobile sales volume in FYE March 2031 is predicted to increase to roughly 1.8 times that of FYE March 2021 levels.
Impact analysis

In the 1.5℃ scenario due to a significant increase in the sales volume of xEVs which use more copper than conventional automobiles, and in the 4℃ scenario due to an increase in total automobile sales volume, worldwide copper demand for automotive applications is predicted to significantly increase. This will be an opportunity to expand sales by strengthening production of copper cathode and capturing demand.

Indicator
Copper cathode sales volume
Target
End of FYE March 2031
830,000t/year
Future Strategy and Response Toward a 1.5℃ World
  • To meet growing copper demand, we will invest in facilities at our domestic bases and increase our copper ore processing volume by 1.3 times (Naoshima) and copper cathode sales volume by 1.4 times (overall business) from the current levels by FYE March 2031. This stable supply of copper cathode will contribute to realizing a decarbonized society.

Fiscal year ended March 2024 performance against target

Copper cathode sales volume

Sales volume for copper cathode in FYE March 2024 increased to 650,000 tons after Onahama Smelting and Refining Co., Ltd. was made a wholly owned subsidiary.

Copper cathode sales volume

graph

Changes in Demand Related to Automobile Recycling (Smelting and Resource Recycling Business)

【1.5℃,4℃】Risk factor: Decrease in the number of scrapped vehicles

Anticipated world and business impact

【1.5℃】Decrease in the number of scrapped vehicles due to the decline in the Japanese population and the advance of car sharing in a decarbonized society

  • Due to the declining population in Japan and the decrease in sales volume resulting from the advance of car sharing, the number of scrapped automobiles in Japan will remain almost flat in FYE March 2031 compared to FYE March 2021, and will decrease by about 0.85 times by FYE March 2051.
  • The overall number of vehicles processed will decrease, but the percentage of next-generation vehicles will increase (18% by FYE March 2031 and 78% by FYE March 2051).

【4℃】Decrease in the number of end-of-life vehicles generated due to Japan's declining population

  • In connection with a decline in automobile sales volume due to a decline in the Japanese population, the number of end-of-life vehicles in Japan will remain largely flat in FYE March 2031 compared with FYE March 2021 levels, and declined by around 0.89 times by FYE March 2051.
Impact analysis

1.5℃ and 4℃ scenarios also, the number of vehicles processed in Japan is expected to decline, and there is a risk that automobile recycling sales will decline. However, in the 1.5℃ scenario, the trend in market size contraction will be moderated by the sharp rise in prices of valuable metals.

Indicator
Annual number of vehicles processed (thousand units/year)
Target
End of FYE March 2031
70,000 units/year
Future Strategy and Response Toward a 1.5℃ World
  • Aim to increase sales by expanding our market share, on the strength of our efficient processing technology for next-generation automobiles utilizing technology accumulated in the home appliance recycling business
  • As a processing base for next-generation automobile recycling, we will increase our processing capacity by utilizing alliances in current technology demonstrations, etc., and expanding the number of sites to a total of three.
  • Contribute to the realization of a recycling-oriented society by meeting resource recycling needs through automobile recycling

Fiscal year ended March 2024 performance against target

Annual number of vehicles processed

The annual number of vehicles processed in the fiscal year ended March 2024 was 9,100 units, around the same number as the fiscal year ended March 2023, reflecting the ongoing impact of sharply rising prices of second-hand vehicles and a reduction in vehicles delivered from dealerships.

Annual number of vehicles processed

graph

Changes in Product Demand Due to EV Shift (Copper & Copper Alloy Business)

【1.5℃】Opportunity factor: Increase in xEV sales volume
【4℃】Opportunity factor: Increase in Automobile sales volume

Anticipated world and business impact

【1.5℃】Rapid growth in demand for EV-related products for decarbonization

  • Overall automobile sales will increase toward FYE March 2031, and demand for connectors and bus bars for automobiles will increase 2.6 times by FYE March 2031 and 3.1 times by FYE March 2051 compared to FYE March 2021.
  • Sales volume of xEVs is expected to increase approximately 24-fold by FYE March 2031 compared to FYE March 2021.

【4℃】Despite a low percentage of xEVs, demand for products rises due to an increase in the total automobile units sold

  • As overall automobile sales volume increases despite a low ratio of xEVs, the demand for connectors and busbars for the automotive sector will expand to about 2.2 times FYE March 2021 levels in FYE March 2031, and around 2.4 times FYE March 2021 levels by FYE March 2051
  • Total automobile sales volume in FYE March 2031 is predicted to increase to roughly 1.8 times that of FYE March 2021 levels.
Impact analysis

In the 1.5℃ scenario, given a significant increase in the sales volume of xEVs which use more copper products than conventional automobiles, and in the 4℃ scenario due to an increase in total automobile sales volume, a significant expansion of demand for the Company's rolled copper products is predicted.  This will be an opportunity to expand sales by strengthening production of related products and capturing demand.

Indicator
Sales volume of pure copper strips for vehicles (Compared to FYE March 2021)
Target
End of FYE March 2031
Double (compared to FYE March 2021)
Future Strategy and Response Toward a 1.5℃ World
  • In order to build a supply system that can meet the rapidly growing demand for products for EVs, increase our production capacity of copper components by at least 1.3 times by FYE March 2031 compared to FYE March  2021 (Production capacity is being increased at Japanese production sites)
  • Contribute to the realizing a decarbonized society by developing products with higher performance and lower environmental impact

Fiscal year ended March 2024 performance against target

Sales volume of pure copper strips for vehicles

Sales volume of pure copper strips for vehicles in the fiscal year ended March 2024 increased 2.5% from the fiscal year ended March 2023, reflecting an increase and scaling-up of bus bars for batteries and electronic equipment for automotive component manufacturers driven by increased electric vehicle production by auto manufacturers.

Sales of pure copper strips for vehicles
(Compared to FYE March 2021)

graph

Changes in Demand Related to Modal Shift and EV Shift (Metalworking Solutions Business)

【1.5℃】Risk factors: Rapid change in market for processed products due to modal shift, etc.
【4℃】Opportunity factor: Increased production volume of engine-powered vehicles and aircraft

Anticipated world and business impact

【1.5℃】Decrease in demand for cutting tools for engines due to increase in EV ratio

  • Significant increase in xEV sales and increased use of lightweight materials
  • Production volume of engine-powered vehicles is expected from fall to around 0.59 times the FYE March 2021 level in FYE March 2031, and to around 0.01 times by FYE March 2051. As a result, sales of cutting tools used to work on engines and transmissions will decrease.
  • Production volume of engine-powered aircraft is expected to be approximately 1.18 times the FYE March 2021 level by FYE March 2031, and about 1.61 times by FYE March 2051. As a result, sales of cutting tools used to work on aircraft components will increase.

【4℃】Increased demand for cutting tools due to higher production volume of engine-powered vehicles and aircraft

  • Production volume of engine-powered vehicles is expected to be approximately 1.44 times the FYE March 2021 level in FYE March 2031, and about 1.32 times by FYE March 2051. As a result, sales of cutting tools used to work on engines and transmissions will decrease.
  • Production volume of engine-powered aircraft is expected to be approximately 1.48 times the FYE March 2021 level by FYE March 2031, and about 2.60 times by FYE March 2051. As a result, sales of cutting tools used to work on aircraft components will increase.
Impact analysis

【1.5℃】As there is an accelerating shift toward electric motors and lighter weights in the automotive industry and demand for the cutting tools used in the machining of difficult-to-cut materials is predicted to increase, there could be an opportunity for the Company to expand sales by revising its product mix and capture this demand. However, there is a risk that sales of cutting tools for the machining of engines and transmissions, currently mainstay products, will decrease, falling to 0.996 times that of FYE March 2021 levels by FYE March 2031 and to 0.718 times FYE March 2021 levels by FYE March 2051.
In the aerospace industry, since aircraft production volume is expected to increase, sales of cutting tools for the industry are expected to increase to 1.18 times that of FYE March 2021 levels by FYE March 2031, and to 1.61 times FYE March 2021 levels by FYE March 2051.

【4℃】As production volume of engine-powered vehicles and aircraft is predicted to rise due to a lack of progress in modal shift and EV shift, there will be an opportunity to increase sales of cutting tools for the automotive and aerospace industries, which are key products. Compared with FYE March 2021 levels, net sales of cutting tools for the automotive industry are expected to increase by 1.71 times by FYE March 2031 and by 1.65 times by FYE March 2051, and net sales of cutting tools for the aerospace industry are expected to rise by 1.48 times by FYE March 2031 and 2.60 times by FYE March 2051.

Indicator
Sales of cutting tools (Compared to FYE March 2021)
Target
End of FYE March 2031
2.3 times (compared to FYE March 2021)
Future Strategy and Response Toward a 1.5℃ World
  • Contribute to the realizing a decarbonized society by developing and supplying products such as tools for machining difficult-to-machine materials to meet growing demand in the 1.5°C scenario, and expanding our global market share.
  • In the automotive product market, we will closely monitor the trend toward EVs and develop tools for processing EV parts as necessary. In the new markets that will replace the automotive industry, we also aim to increase sales of cutting tools by targeting the small precision machining field (robots, semiconductor manufacturing equipment, telecommunications, etc.) as a strategic market.

Fiscal year ended March 2024 performance against target

Sales of cutting tools

The increase in sales of cutting tools in the fiscal year ended March 2024 was limited to 2.5% due to a delayed recovery in demand in Japan and China.

Sales of cutting tools
(Compared to FYE March 2021)

graph

Changes in Demand Related to LIB-R and PV-R (Smelting and Resource Recycling Business)

【1.5℃,4℃】Opportunity factor: Increase in demand for automotive LIB and solar panel(PV) recycling

Anticipated world and business impact

【1.5℃】Recycling demand will expand for automotive LIBs and PV waste generated on rapidly increased

  • The volume of used LIBs recycled (with reuse in mind) in Japan due to the disposal of xEVs is expected to expand to around 50 times FYE March 2021 levels by FYE March 2031, and to 350 times FYE March 2021 levels by FYE March 2051.
  • The volume of used PV equipment recycled (with reuse in mind) in Japan is expected to expand to around 8.3 times FYE March 2021 levels by FYE March 2031, and to over 300 times FYE March 2021 levels by FYE March 2051.

【4℃】Recycling demand will expand for automotive LIBs and PV waste generated on increased

  • The volume of used LIBs recycled (with reuse in mind) in Japan due to the disposal of xEVs is expected to expand to around 14 times FYE March 2021 levels by FYE March 2031, and to 92 times FYE March 2021 levels by FYE March 2051.
  • The volume of used PV equipment recycled (with reuse in mind) in Japan is expected to expand to around 7.8 times FYE March 2021 levels by FYE March 2031, and to over 120 times FYE March 2021 levels by FYE March 2051.
Impact analysis

1.5℃ and 4℃ scenarios also, due to increased demand for EVs and solar power generation, it is anticipated that the emissions of automotive LIBs and PVs will increase at Japan in the future, and that the demand for recycling will increase accordingly. This will be an opportunity to increase sales by promoting commercialization based on demonstration tests currently underway.

Indicator

Amount of automotive LIBs recycled*7

Target
End of FYE March 2031
870t-LIB/year
Future Strategy and Response Toward a 1.5℃ World
  • Commercialize PV recycling to broaden the scope of target items at home appliance recycling sites
  • Contribute to the realization of a recycling-oriented society by developing automobile and LIB recycling sites in each region, and by working to upgrade and streamline recycling technologies
  • *7 Up to the point of black mass production (including LIB removal, discharging, dismantling, pyrolysis, crushing, and sorting).

Fiscal year ended March 2024 performance against target

State of development of LIB recycling technologies

We have continued to develop technologies aimed at building the business infrastructure for LIB dismantlement and the production of black mass, including the use of robots to automate the LIB unit dismantlement process. Going forward we will continue to explore ways in which we can help realization of a recycling-oriented society by establishing technologies to safely and efficiently perform the proper processing of automotive LIB units, whose waste volume is expected to increase.

Changes in Demand Related to Batteries (Metalworking Solutions Business)

【1.5℃,4℃】Opportunity factor: Increase in demand for EV batteries and storage batteries

Anticipated world and business impact

【1.5℃】Growing demand for tungsten powder due to rapidly increase in EV batteries and stationary storage batteries

  • Demand for EV batteries is projected to grow 21-fold by FYE March 2031 and 30-fold by FYE March 2051 compared to FYE March 2021 due to increased sales of BEVs and PHEVs.
  • Growing demand for renewable energy is expected to lead to an approximately 20-fold increase in stationary storage battery installations by FYE March 2031 and a 22-fold increase by FYE March 2051, compared to FYE March 2021.

【4℃】Growing demand for tungsten powder due to increase in EV batteries and stationary storage batteries

  • Demand for EV batteries is projected to grow 6.7-fold by FYE March 2031 and 12-fold by FYE March 2051 compared to FYE March 2021 due to increased sales of BEVs and PHEVs.
  • Growing demand for renewable energy is expected to lead to an approximately 5.2-fold increase in stationary storage battery installations by FYE March 2031 and a 10-fold increase by FYE March 2051, compared to FYE March 2021.
Impact analysis

In the 1.5℃ scenario, the growing demand for EVs and the rapid increase in demand for storage batteries are expected to significantly increase demand for high-performance powders for rechargeable batteries.  Even in the 4℃ scenario, EV demand and storage battery demand will increase, albeit to a small extent. 1.5℃ and 4℃ scenarios also, this will be an opportunity to increase sales by capturing demand through the expansion of our production capacity for tungsten-based high-performance powder. Sales of high-performance powder is expected to increase to 1.9 times FYE March 2021 levels by FYE March 2031 and to 3.8 times FYE March 2021 levels by FYE March 2051, due to the Company achieving its manufacturing plans.

Indicator
Production of high-functional powder for rechargeable batteries
Target
End of FYE March 2031
1.9 times (compared to FYE March 2021)
Future Strategy and Response Toward a 1.5℃ World
  • Contribute to the realizing a decarbonized society by developing and supplying products to meet growing demand in the 1.5°C scenario, such as tungsten powder products for LIBs for EVs and LIBs for solar power generation equipment.
  • Expand our tungsten powder product business in cooperation with Masan High-Tech Materials.
  • Contribute to the realization of a recycling-oriented society by promoting tungsten recycling

Fiscal year ended March 2024 performance against target

Production of high-functional powder for rechargeable batteries

The manufacturing volume of high-performance powders for rechargeable batteries in the fiscal year ended March 2024 recovered to pre-pandemic levels, but the increase from the fiscal year ended March 2023 was limited to 2.9% due to a sluggish expansion of the rechargeable battery market.

Production volume of high-functional powder for rechargeable batteries (Compared to FYE March 2021)

graph

Changes in Demand for Renewable Energy (Renewable Energy Business)

【1.5℃,4℃】Opportunity factor: Increase in spread and demand for renewable energy

Anticipated world and business impact

【1.5℃】Medium- and long-term expansion of the renewable energy market toward a net-zero society

  • Demand for renewable energy is expected to keep growing, with Japan's geothermal and wind power generation projected to increase 4.7-fold and 9.8-fold, respectively, by FYE March 2031 and 15-fold and 48-fold, respectively, by FYE March 2051, compared to FYE March 2021.
  • Given the status of renewable energy uptake and the relationship between supply and demand, environmental value is set at between 1.3-4 yen per kWh, with unit prices for FIT/FIP declining by 10% over three years.

【4℃】Renewable energy demand will expand due to the implementation of current policies, but to a limited extent.

  • Demand for renewable energy is expected to keep growing, with Japan's geothermal and wind power generation projected to increase 2.3-fold and 5.0-fold, respectively, by FYE March 2031 and 4-fold and 7.5-fold, respectively, by FYE March 2051, compared to FYE March 2021.
  • Assuming limited demand for renewable energy, environmental value is set at 0.3 yen, with unit prices for FIT/FIP declining by 5% over three years to encourage demand.
Impact analysis

While the unit price of electricity sold and environmental value will fluctuate due to environmental policies and the advance of technology, under both the 1.5℃ and 4℃ scenarios renewable energy demand itself will expand, and in particular the growth rate of demand for wind power generation and geothermal power generation will be higher than other renewable energy sources. Researching and developing new power generation sites represents an opportunity for the Company to expand its renewable energy business. By achieving its plans for retained power generating capacity, the Company expects to increase sales by \5,240 million by FYE March 2031 and \23,668 million by FYE March 2051 compared with FYE March 2021 levels under the 1.5℃ scenario, and by \5,046 million by FYE March 2031 and \20,185 million by FYE March 2051 compared with FYE March 2021 levels under the 4℃ scenario.

Indicator
Our share of renewable energy sales volume
Target
End of FYE March 2031
575GWh
Future Strategy and Response Toward a 1.5℃ World
  • Work to improve profitability through stable operation of existing power plants and utilization of environmental values, etc.
  • Focus on investigation and development of new power generation sites (development of new geothermal projects in the Hachimantai district and other regions, and entry into wind power generation)
  • Aim to expand the scale of power generation and related businesses through collaboration with other companies

Fiscal year ended March 2024 performance against target

Our share of renewable energy sales

With the Komatagawa New Power Plant entering commercial operation in December 2022 and the Appi Geothermal Power Plant commencing commercial operation in March 2024, in the fiscal year ended March 2024 power generation volume was 107% compared with the fiscal year ended March 2023.

Our share of renewable energy sales (GWh)

graph

  • The amount of electricity sent from each power plant is totaled as the amount of equity power purchase.
  • Including power consumed within the Company for the construction of the new Komatagawa Power Plant from the FYE March 2021 to the FYE March 2023.

Changes in Demand for E-Scrap Recycling Business Due to Shift to Recycling-Oriented Society (Smelting and Resource Recycling Business)

【1.5℃,4℃】Opportunity factor: Increase in demand for E-Scrap recycling

Anticipated world and business impact

【1.5℃】Increase in demand for recycling waste electronic equipment in line with economic growth in each country

  • This is a world in which there is comparatively steady progress toward the development of a sustainable society, and with the elimination of worldwide economic inequalities, etc. and growth of the global economy, E-Scrap generation is expected to increase.
  • Estimated worldwide E-Scrap generation is expected to by 1.4 times FYE March 2021 levels by FYE March 2031 and 2.5 times FYE March 2021 levels by FYE March 2051, due to regional growth rates and population trends.
    (*results of estimates when FYE March 2023 analysis was performed)
  • Despite the risk of a decrease in the amount of valuable metals recovered due to a decline in the grade of valuable metals in E-Scrap, the amount of valuable metals recovered when we process 240,000 tons of E-Scrap will be 1.9 times the FYE March 2021 level.

【4℃】Increase in demand for recycling waste electronic equipment in line with economic growth in each country

  • This is a world in which little progress has been made in eliminating the reliance on fossil fuels and the speed of economic growth is slow, but due to worldwide population growth, the amount of E-Scrap generated is expected to increase.
  • Estimated worldwide E-Scrap generation is expected to by 1.3 times FYE March 2021 levels by FYE March 2031 and 1.6 times FYE March 2021 levels by FYE March 2051, due to regional growth rates and population trends.
    (*results of estimates when FYE March 2023 analysis was performed)
Impact analysis

Due to economic growth in each country and worldwide population growth under the 1.5°C scenario, and due to worldwide population growth under the 4℃ scenario, global E-scrap generation in FYE March 2031 will increase. There is a risk of a decline in the grade of valuable metals in E-Scrap leading to a decrease in the amount recovered, and a risk of difficulties in collecting E-Scrap due to successive entries into the E-Scrap market by competitors and international moves to lock in resources. However, increasing our recycling capacity will increase our E-Scrap processing volume and provide an opportunity to increase our sales.

Indicator
E-Scrap processing capacity
Target
End of FYE March 2031
240,000t/year
Future Strategy and Response Toward a 1.5℃ World
  • To meet the growing demand for recycling due to the increased amount of E-Scrap generated, enhance E-Scrap processing capacity by constructing a recycling yard and strengthening the system for efficiently recovering the trace elements in E-Scrap.
  • Enhance the functions of the Mitsubishi Materials E-Scrap EXchange (MEX) platform for E-Scrap trading to improve customer convenience and increase E-Scrap collection, thereby contributing to the creation of a recycling-oriented society.

Fiscal year ended March 2024 performance against target

E-Scrap processing capacity

E-scrap processing capacity in the fiscal year ending March 2024 remained unchanged from the fiscal year ended March 2021 level at 160,000 tons. To reach our target processing capacity of 240,000 tons by the fiscal year ended March 2031, we constructed a new recycling yard at Onahama in the fiscal year ended March 2024 to increase receiving capacity. We plan to carry out construction to expand processing capacity at Naoshima in the fiscal year ending March 2027.

E-Scrap processing capacity (kt/year)

graph

Changes in Demand Related to Home Appliance Recycling (Smelting and Resource Recycling Business)

【1.5℃,4℃】Opportunity factor: Increase in demand for home appliance recycling

Anticipated world and business impact

【1.5℃】The amount of home appliance waste processed will increase due to the rising frequency of energy-efficient home appliance upgrades in response to global warming and rising energy costs

  • In FYE March 2031, while the Japanese population will decline, the number of households will increase due to each household comprising fewer people. As a result, there will be an increase in the volume of home appliances owned. By FYE March 2051, however, further declines in the population will also reduce the outright number of households, and the volume of home appliances owned will decline accordingly.
  • As people become more energy efficiency-oriented in response to low-carbon regulations and rising fuel prices, replacement purchases of top tier items will increase in frequency.
  • The home appliance recovery rate will improve on the way to FYE March 2051 due to recycling regulations and other factors.

【4℃】Slight increase in waste home appliance disposal weight due to increase in air conditioner ownership linked to rising temperatures and a higher frequency of breakdowns and replacement

  • With a lower birthrate than the 1.5°C scenario and further declines in the population and number of households in Japan, home appliance ownership will decline.
  • The frequency of air conditioner replacements will increase due to breakdowns caused by rising temperatures.
  • Replacements of home appliances will increase with the rise in wind and flood disasters. As a result, total home appliance waste generation in Japan will increase slightly by both FYE March 2031 and FYE March 2051 compared with FYE March 2021 levels.
Impact analysis

【1.5℃】Given fluctuations in home appliance ownership due to changes in the number of households in Japan, and an increase in the home appliance recovery rate attributable to recycling regulations and other factors, it is estimated that the total volume of disposed home appliances across Japan will increase by 6% compared with FYE March 2021 levels by FYE March 2031, and by 10% compared with FYE March 2021 levels by FYE March 2051. There is an opportunity to increase sales by scaling up the Company's home appliance disposal business.

【4℃】With increased air conditioner ownership linked to rising temperatures and a higher frequency of breakdowns and replacements due to wind and flood damage, it is estimated that the total volume of disposed home appliances across Japan will increase by 2% compared with FYE March 2021 levels by FYE March 2031, and by 1% compared with FYE March 2021 levels by FYE March 2051. There is an opportunity to increase sales by scaling up the Company's home appliance disposal business.

Indicator
Annual number of home appliances processed
Target
End of FYE March 2031
5.9 million units/year
Future Strategy and Response Toward a 1.5℃ World
  • Contribute to building a recycling-oriented society by expanding business through M&A of existing plants and establishment of new recycling plants.
  • In addition to automation and labor saving, we will differentiate ourselves by strengthening management through a cloud-based operation management system, and visualizing environmental value through LCA evaluations.

Fiscal year ended March 2024 performance against target

Annual number of home appliances processed

In the fiscal year ended March 2024 we had expected to see post-pandemic replacement demand, but due to a shift in consumption behavior away from the consumption of goods towards the consumption of experiences, the number of units received declined to 3.51 million units, a 3.6% decline.

Annual number of home appliances processed (thousand units/year)

graph

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MMC

GHG Emission Results and Initiatives

FYE March 2024 GHG Reduction Activities

GHG emissions (breakdown of non-consolidated, domestic Group companies, and overseas Group companies)

The GHG emissions (Scope1 + 2) for the entire Group in the fiscal year ended March 2024 were 887 thousand t-CO2e. As a result of the switch to electricity derived from renewable energy sources, GHG emissions decreased by 15 thousand t-CO2e from the fiscal year ended March 2023.
The breakdown of GHG emissions was 42% by the parent company, 48% by domestic Group companies, and 10% by overseas Group companies.

graph

  • GHG emissions excluding those from the use of recycled resources.
  • Excluding businesses and subsidiaries that have been or are planned to be removed from the scope of consolidation due to business portfolio adjustment as of the fiscal year ended March 2024.

GHG emissions (breakdown by business)

In the fiscal year ended March 2024, GHG emissions by business segment were 66% in Metals business, 9% in Metalworking Solutions business, 24% in Advanced Products business, and 1% in Other business.

graph

  • GHG emissions excluding those from the use of recycled resources.
  • Excluding businesses and subsidiaries that have been or are planned to be removed from the scope of consolidation due to business portfolio adjustment as of the fiscal year ended March 2024.

Breakdown of Total Emissions for FYE March 2024 [kt-CO2e]

Total GHG emissions for the fiscal year ended March 2024 was 1,671 t-CO2e, including GHG emissions from resource circulation initiatives (422,000 t-CO2e) and GHG emissions from businesses and subsidiaries that have been decided to be removed from the scope of consolidation due to business transfers, etc. (363,000 t-CO2e).
GHG emissions from energy sources accounted for 24% of total GHG emissions, and GHG emissions from resource circulation initiatives accounted for 25%.

Category Non-consolidated Domestic Group companies Overseas Group companies Total
Scope1 From energy sources
(fuel, etc.)
108
181 117
406
From non-energy sources 47
66
21
134
GHG emissions from resource recycling efforts 170
252
0
422
Scope1 total 324
499
138
962
Scope2 221
176
312 709
Total 545
675
450
1,671
  • Includes GHG emissions from resource recycling initiatives and includes consolidated subsidiaries as of March 31, 2024.
  • “Group companies” includes 84 consolidated subsidiaries (35 domestic, 49 overseas).
  • As emission factors, the adjusted emission factor of power companies was used for power in Japan, the emission factor published by the International Energy Agency (IEA) was used for power in other countries, and values based on the Act on Promotion of Global Warming Countermeasures were used for fuels and steam.
  • Scope2 (Indirect) emissions are market-based emissions. Location-based Scope2 emissions are 760 kt-CO2e.

Scope3 Emissions for FYE March 2024[kt-CO2e]

Item Object Non-consolidated Group Total Approach to determining the amount of activity
Category 1 Purchased goods and services Same as organizations covered by environmental data other than greenhouse gas emissions 921 2,402 3,323 The use of raw materials accepted from outside the Group (excluding waste as raw materials and by-products as raw materials) and water intake in terms of physical quantity
Category 2 Capital goods Same as consolidated financial statements 102 204 305 Capital expenditure in the reportable fiscal year
Category 3 Fuel and energy-related activities not included in Scopes 1 and 2 Same as organizations covered by data on greenhouse gas emissions 54 108 162 Fuel consumption by type and volume of electric power and steam purchased from outside the Group
Category 4 Upstream Transportation and Distribution Same as organizations covered by environmental data other than greenhouse gas emissions 231 512 743 1) Emissions from the physical distribution of products and services, which were purchased in the reportable fiscal year, from suppliers to the company
・A transportation scenario was set for each major raw material (excluding waste as raw materials and by-products as raw materials).
・Distances between countries were set using the IDEA database on distances between countries, and other distances were set using a distance search site (with distance given by an in-house Company in a questionnaire adopted in some cases).
2) Emissions from the physical distribution of products that were shipped and transported in the reportable fiscal year at the expense of the company 
・A transportation scenario was set for each major shipped product. 
・Distances between countries were set using the IDEA database on distances between countries, and other distances were set using a distance search site.
Category 5 Waste generated from operations Same as organizations covered by environmental data other than greenhouse gas emissions 4 18 22 The amount of industrial waste (waste recycled into resources and landfilled waste) was included.
Category 6 Business Travel Consolidated 0 2 2 For non-consolidated the number of employees at each base (plants and offices). 
For consolidated subsidiaries, the number of employees of each in-house Company from human resources information given in the securities report.
Category 7 Employee commuting Consolidated 2 5 7 For Mitsubishi Materials (non-consolidated), the number of employees at each base (plants and offices) was used for the calculation. 
For consolidated subsidiaries, the number of employees of each in-house company from human resources information given in the securities report was used for the calculation.
Category 8 Upstream Leased Assets While there are leased assets, they were excluded from the calculation because they are included in Scope1 and Scope2.
Category 9 Downstream Transportation and Distribution Same as organizations covered by environmental data other than greenhouse gas emissions 42 134 176 Emissions from physical distribution of products that were shipped and transported to sales destinations at the expense of other companies
Transportation from sales destinations to final consumers was excluded.
Distances between countries were set by using the IDEA database on distances between countries, and other distances were set by using a distance search site (with the distance given by an in-house company in a questionnaire adopted in some cases).
Category 10 Processing of sold products Same as organizations covered by environmental data other than greenhouse gas emissions 107 415 522 For products sold, the value for the amount of products shipped by each in-house Company to companies other than group companies was regarded as the value for the amount of activity.
Emissions from processing were calculated by setting the primary processing assumed for each product.
Category 11 Use of sold products


Products sold were excluded from the calculation because they are materials and parts that are used by a wide range of users and it is therefore difficult to follow their paths to final products.
Category 12 End-of-Life Treatment of Sold Products Same as organizations covered by environmental data other than greenhouse gas emissions 2 5 8 For products sold, the value for the amount of products shipped by each in-house Company to companies other than Group companies was regarded as the value for the amount of activity.
Emissions from disposal were calculated by setting a disposal method assumed for each product.
Category 13 Downstream Leased Assets


Leased assets were excluded because virtually no such asset is owned. 
Category 14 Franchises


Franchising business was excluded because the company does not operate such a business.
Category 15 Investments

Affiliates accounted for by the equity method



5,465 0 5,465 Scope1 + 2 emissions and share of Scope1 + 2 emissions of equity method affiliates in the reporting year
Total 6,931 3,803 10,734  
  • Raw material procurement, transportation, and product shipment scenarios were set based on the fiscal year ended March 2022 results.
  • The calculation was made by referring to the Basic Guidelines on Accounting for Greenhouse Gas Emissions Throughout the Supply Chain Ver. 2.6 from the Ministry of the Environment and the Ministry of Economy, Trade and Industry. Greenhouse gas emissions per unit was calculated by referring to the emission intensity database for calculating greenhouse gas emissions of an organization through the supply chain (Ver. 3.4) and National Institute of Advanced Industrial Science and Technology IDEA Ver. 3.4 from the above ministries.
  • Scope3 emissions for the fiscal year ended March 2024 reflect data on Mitsubishi Materials Corporation and 46 consolidated subsidiaries as of March 31, 2024.

Principal Initiatives at Each Business

We regard it as a top priority to save energy wherever possible at our manufacturing facilities and plants. That is why we are so committed to energy saving activities. Specific activities include switching fuels, making effective use of untapped energy, upgrading processes and equipment, installing high-efficiency equipment, optimizing device specifications, and reviewing equipment controls and operating practices. We are constantly working to save energy at smaller facilities, too, including Head Office, branches, sales offices and research facilities, through measures such as installing LED lighting.

Initiatives for Climate Change for Supplier Engagement

We have set a reduction target for Scope3 (Categories 1, 3, and 15) of GHG emissions of 22% below the fiscal year ended March 2021 level by the fiscal year ending March 2031. We are building elationships with our suppliers to reduce GHG emissions throughout our supply chain. Specifically, engagement letters are sent to copper concentrate suppliers related to category 1, which accounts for approximately 30% of Scope3 emissions, information is shared on the status of efforts to address global environmental issues, GHG emissions reduction targets and reduction plans from both the Group and copper concentrate suppliers, and opinions are exchanged through discussions and other means. The Company plans to continue these efforts and expand the suppliers that they apply to.
Among copper concentrate suppliers, we have also signed a Memorandum of Understanding (MOU) with Anglo American plc, a multinational mining company headquartered in London, UK, to promote collaboration for providing sustainable and responsible products throughout the copper-related products supply chain. As global demand for copper increases, there is a desire that those supplies be greener and more sustainable. The Company and Anglo American plc will work together to meet these market demands.

For more information on our efforts with suppliers in procurement through the Logistics and Materials Division, please refer to "Consideration of human rights in the supply chain ".

Initiatives for Scope3 Emissions Reduction
MUCC’s Efforts Towards Carbon Neutrality

Mitsubishi UBE Cement Corporation (MUCC) is an equity method affiliate, and the Company counts and reports 50% (shareholding ratio of MUCC) of MUCC’s Scope1 and 2 emissions as the Group’s Scope3 category 15 emissions. As these emissions account for approximately 60% of Scope3 emissions (as of the fiscal year ended March 2021), reducing MUCC’s emissions will contribute significantly to the Group’s Scope 3 emissions reduction. MUCC has taken the “promotion of global warming countermeasures” as one of its top priorities in its Medium-term Management Strategy, “Infinity with Will 2025: MUCC Sustainable Plan 1st Step,” announced in April 2023. It established the Carbon-neutral Technology Promotion Office and the Carbon-neutral Promotion Committee in the fiscal year ended March 2024, to strengthen the implementation structure by improving its organizational structure.
Through various efforts, it is aiming to achieve its interim goal of a 40% reduction in CO2 emissions by 2030 (compared to 2013 levels) and carbon neutrality by 2050.
Regarding the reduction of CO2, MUCC has jointly developed an eco-friendly concrete with Shimizu Corporation, which substitutes approximately 80% of the cement with blast-furnace slag. In addition, it has launched the world’s first demonstration test of ammonia co-combustion in the cement manufacturing process.
Regarding the utilization of CO2, MUCC has participated in the Kitakyushu Circular Economy Vision Promotion Council’s subcommittee on the mineralization of concrete waste and its application, with the aim of building a business model to apply CO2 fixed recycled products using CO2 emitted from cement plants and concrete waste to construction projects.
Regarding the storage of CO2, it has begun a joint study with MITSUI & CO., LTD. on carbon dioxide capture and storage (CCS) between Malaysia and Japan, aiming to achieve carbon neutrality in the cement manufacturing process. It has also initiated a joint study on carbon dioxide capture, utilization and storage (CCUS) with Osaka Gas Co., Ltd.
The Company will continue to promote communication with MUCC for Scope3 emissions reduction.

figure

Significantly Accelerating the Switch to Electricity Derived from Renewable Sources at Sites in the Metals Business
- Fully introduced at 80% of the sites in FYE March 2025 -

We have set a new GHG emissions reduction target (Scope1 + 2) of 47% from levels of the fiscal year ended March 2021 by the fiscal year ending March 2031. This target excludes GHG emissions from resource recycling efforts. To achieve this goal, we are promoting energy saving and shifting to fuels that contribute to CO2 emissions reduction, as well as switching to electricity derived from renewable sources.
Electricity-origin emissions account for 38% (as of FYE March 2021) of the Group's total GHG emissions (excluding GHG emissions from resource recycling efforts).The Metals business, which accounts for approximately 60% of the Group's domestic electricity consumption, will further accelerate the switch to electricity derived from renewable energy sources among its purchased electricity, moving the completion of this plan forward by up to 11 years to the fiscal year ending March 2025 at 80% of its plants, and by 7 years to the fiscal year ending March 2029 at the Naoshima Smelter & Refinery and Onahama Smelter & Refinery.

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Logistics Initiatives

CO2 emissions from transportation in the fiscal year ended March 2024 were 18,610 tons (up 500 tons from the fiscal year ended March 2023) on a non-consolidated basis and 5,074 tons (down 7,490 tons from the fiscal year ended March 2023) for Group companies due to a change in the scope of calculation. The total CO2 emissions of the parent Company and Group companies amounted to 23,684 tons (down 6,990 tons from the fiscal year ended March 2023). On the other hand, unit energy consumption* for the parent Company was 23.05 kℓ/million ton-kilometer (aggravation approximately 2.6% from the fiscal year ended March 2023), while the combined total of the parent Company and Group companies was 23.03 kℓ/million ton-kilometer (up approximately 12.5% from the fiscal year ended March 2023). We will continue to strive to save energy in transportation by promoting modal shifts and improving loading rates, and through Group-wide logistics optimization, we aim to build a logistics system that reduces environmental impact through the use of non-fossil energy.

CO2 Emissions According to Mode of Transport (Unit: Tons CO2)

 FYE March 2023FYE March 2024
Mitsubishi MaterialsGroup companiesTotalMitsubishi MaterialsGroup companiesTotal
CO2
emissions
from
logistics
Total18,10912,56430,67318,6105,07423,684
BreakdownTracks11,1034,93616,03911,7593,41615,175
Ships6,9607,62514,5856,8001,6558,455
Rail12315437
Air3503547047
  • Value obtained by converting energy consumption into crude oil (㎘) and dividing it by transportation in ton-kilometers (million ton-kilometers)

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Initiatives to Build a Decarbonized Society

Products and Services that Contribute to Building a Decarbonized Society

For the Group, tackling climate change has been one of its most important management issues for building a decarbonized society. Reflecting this, the Group has been approaching manufacturing with a view to reducing the environmental impact and has developed and promoted the use of renewable sources of energy, such as geothermal energy.

Construction of a Pilot Plant for the Establishment of Lithium-Ion Battery Recycling Technology
- Next Step to Commercialization of Rare Metal Refining from Black Mass -

Rare metals such as lithium, cobalt, and nickel, which are the materials used in LIBs, are expected to be in short supply in the near future, making them an important issue for growth strategies in the industry as a whole. To address the issue, in addition to the development of underground resources, measures are being taken to recycle materials and to develop alternative materials.
We have been developing technologies through small-scale tests to commercialize the recovery and refinement of rare metals such as lithium, cobalt, and nickel from Black Mass *8. Having achieved certain results, as a next step, we will build a pilot plant at Onahama Smelter & Refinery of Onahama Smelting and Refining Co., Ltd. in Iwaki City, Fukushima Prefecture to further develop technologies for the commercialization of high-efficiency recovery of rare metals from Black Mass.
The technical development associated with the construction of the pilot plant will be supported by a grant from the Ministry of Economy, Trade and Industry, which is related to its stable supply plan of critical minerals.

Overview of the Pilot Plant

Raw materials:LIB derived Black Mass
Products:Battery-grade lithium carbonate, nickel sulfate, cobalt sulfate
Commencement of operation:2025
Location:On the site of Onahama Smelter & Refinery, Onahama Smelting and Refining Co., Ltd.
  • *8 Concentrated residue of lithium, cobalt and nickel sorted from LIBs that have been discharged, dried and crushed.
Developed a New Manufacturing Technology for a Material Used in All-Solid-State Batteries for xEV

Sulfide-based solid electrolytes (SBSEs) have high ionic conductivity among solid electrolytes for all-solid-state batteries, and their high input-output characteristics are expected to extend the driving range of automobiles and shorten charging time. For this reason, they are considered as a promising material for all-solid-state batteries for xEV. However, their low mass-producibility and difficulty in handling have been major barriers to their practical application in all-solid-state batteries.
MMC has successfully developed a simple and new manufacturing process to synthesize SBSEs by mixing sulfur-containing raw materials and calcinating them in a furnace. This new process is expected to increase the scale of production, and MMC will proceed with studies toward the commercialization of SBSEs. Currently, we are providing samples of the SBSEs synthesized in the process to specific customers for commercialization evaluation.

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Developed a New Titanium Electrode with a Double-Layer Structure Using 3D Printer Technology
- Novel Material That Supports Efficient Hydrogen Production At High Current Densities -

In a joint research and development project, Mitsubishi Materials Corporation and Yokohama National University's Shigenori Mitsushima (Professor at the Faculty of Engineering and Director of the Advanced Chemical Energy Research Center, Institute of Advanced Sciences) and his colleagues have developed a new titanium water electrolysis electrode capable of operating with high efficiency even under high current density conditions.
For realization of a decarbonized society, hydrogen is in high demand as a clean energy source that does not generate carbon dioxide. One hydrogen production technology that is attracting attention is polymer electrolyte membrane (PEM) water electrolysis, an efficient hydrogen production technology with low environmental impact. This electrolysis technology can produce highly pure hydrogen with pure water at temperatures below 100°C and electricity. However, the system cost is high, and this has generated a need to reduce the consumption of precious metal catalysts such as iridium oxide that have a high cost burden.
Against this background, Yokohama National University, which has been entrusted with the Advancement of Hydrogen Technologies and Utilization Project by the NEDO *9 and has cutting-edge electrode evaluation technology, and MMC, which has highly complex titanium material sintering technology, worked on the development of a new water electrolysis electrode made from titanium.
Using an evaluation technique that analyzes the performance of an electrolytic cell based on the division into different factors such as the resistance polarization of the electrolyte membrane, activation polarization of the electrode catalyst and the current collecting resistance and diffusion overpotential of the electrode, which is a result of the NEDO project, we have found that an elaborate double-layer structure with different functions is effective in improving the efficiency of water electrolysis electrodes. However, electrodes consisting of two layers with different structures cannot be manufactured in an integrated manner by conventional manufacturing methods because the scale of spatial design required for each electrode layer is different. Accordingly, MMC adopted a binder-jet *10 3D printer, which offers a high resolution and degree of freedom, and conducted research and development on the new titanium sintering technology needed for manufacturing elaborate double-layer electrodes, enabling the manufacturing of electrodes with a double-layer structure.
By utilizing this newly developed titanium electrode for water electrolysis, a water electrolysis system can be operated with high efficiency even under high current density conditions. It also contributes to the reduction of hydrogen production costs by reducing the consumption of materials such as precious metal catalysts.
In the future, we will continue to develop and improve electrode structures for practical use.

  • *9 New Energy and Industrial Technology Development Organization
  • *10 Method of manufacturing parts by laminating a thin spread of powder while coating it with a binder, solidifying it as a compact in a drying oven and sintering it

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