#Japan #Tokyo #ENEOS #SAF Utilization #Environmental Value

Successful Completion of SAF Utilization Promotion Project

The project aimed at enhancing the use of Sustainable Aviation Fuel (SAF) officially commenced in August 2024. This initiative seeks to structure a new scheme for trading Scope 3 environmental values associated with SAF. As of now, the first phase of a verification trial has successfully concluded, demonstrating the validity of the trading scheme among participating companies.

During this verification trial, companies have gained insights into transactions of Scope 3 environmental values and identified various challenges. Looking ahead, the second phase is set to expand the participant companies involved, aiming to elevate awareness of Scope 3 environmental values and stimulate trading, as preparations for a comprehensive societal implementation continue.

Overview of the First Phase Results

Participating Companies:

• - Itochu Corporation
• - ENEOS Corporation
• - Nippon Express Holdings, Inc.
• - Japan Airlines Co., Ltd.
• - Mizuho Bank, Ltd.
• - Mizuho Research & Technologies
• - Narita International Airport Corporation

Trial Duration:
August 2024 to March 2025 (8 months)

Key Outcomes:

• - Both sellers and buyers of Scope 3 environmental values registered transaction details on the platform, leading to successful trade through matching and contracting processes.
• - The establishment of a platform allowing multiple companies interested in Scope 3 environmental value transactions was confirmed.
• - The entire process, from registration to matching and contracts, was carried out effectively, ensuring transparency and appropriateness as verified by a third-party organization, the Japan Maritime Safety Agency (ClassNK).

A detailed report on the first phase of the SAF Utilization Promotion Project is available as an attachment titled 'Scope 3 Environmental Value Trading Verification Report.'

Company Insights and Comments

Itochu Corporation
Headquartered in Minato, Tokyo, with President and COO Keita Ishii, Itochu acknowledges its role in promoting SAF and trading Scope 3 environmental values, prioritizing contributions towards a sustainable society. The validation received through this trial underscores a significant advancement in this endeavor.

ENEOS Corporation
Located in Chiyoda, Tokyo, and led by President and Executive Officer Atsuharu Yamaguchi, ENEOS is progressing towards an integrated system involving SAF raw material procurement, in-house manufacturing, and sales. Through participation in this project, the effectiveness of Scope 3 environmental value trading has been confirmed, which will contribute to greenhouse gas reduction in the aviation industry.

Nippon Express Holdings, Inc.
Based in Chiyoda, Tokyo under President Tomohiro Horikiri, NX views the confirmation of the platform's role from various business perspectives as a meaningful outcome for SAF proliferation. As a group, NX is dedicated to tackling climate change through business operations to foster a better quality of life and sustainable societal development.

Japan Airlines Co., Ltd.
Headquartered in Shinagawa, Tokyo, with President and Executive Officer Mitsuko Tottori, JAL recognizes the mechanisms through which environmental value trading contributes to aviation decarbonization as confirmed by this trial among the seven companies.

Mizuho Bank, Ltd.
Mizuho Bank, under the leadership of President Katsuhiko Kato in Chiyoda, Tokyo, offered its expertise in SAF during the first phase and supported operational management. The bank aims to further invigorate Scope 3 environmental value trading in the second phase with next-generation aviation networks in mind.

Mizuho Research & Technologies
Located in Chiyoda, Tokyo and led by CEO Masatoku Yoshihara, Mizuho Research has been pivotal in providing knowledge about environmental values for establishing and confirming transaction frameworks, with a commitment to further the decarbonization efforts in aviation and airports.

Narita International Airport Corporation
With Naoki Fujii as President in Narita, Chiba, NAA sees trading Scope 3 environmental values as a novel tool for driving decarbonization across the entire aviation transport supply chain, continuing to advocate for SAF promotion within the industry.

Third-Party Institution Commentary

ClassNK (Japan Maritime Safety Agency)
Based in Chiyoda, Tokyo, represented by Chairman Yuuto Sugahara, ClassNK asserts that trading Scope 3 environmental values can be exceptionally effective for promoting SAF. This approach generates incentives for SAF adoption and promises to activate the market. ClassNK is committed to ensuring the reliability of these environmental value transactions through third-party verifications, supporting efforts towards achieving a sustainable society.

ENEOS SAF Environmental Value Sales Initiative

This initiative involves promoting SAF for corporations involved in passenger flights and cargo transport and providing Scope 3 environmental values. Through Avelia, ENEOS aims to enhance access to SAF in Japan, facilitating stakeholder engagement in the aviation sector to bolster SAF utilization despite existing cost and supply chain challenges.

In doing so, ENEOS is committed to achieving net-zero CO2 emissions in the aviation sector and helping clients meet their sustainability goals.