environmental policy and environmental sustainability ... · note: qualitative indicators with no...

Environmental Policy and Environmental SustainabilityGuidelines

The Tokyo Gas Group pursues environmental management through a concerted effort and hasestablished its Environmental Principle based on its Management Philosophy and Corporate ActionPhilosophy, and its Environmental Sustainability Guidelines to define concrete initiatives andquantitative targets.The president of Tokyo Gas releases a message every June, timed to coincide with JapanʼsEnvironment Month, to remind all Group employees of the need to continuously addressenvironmental issues and strive for a sustainable society as part of an enterprise that leads inenvironmentally friendly corporate management through the Environmental Philosophy.

Links▶ Contribution to the Environment Targets and Performance▶ Supply Chain Management Basic Policy

Chronology of Environmental Activities

Tokyo Gas has supplied energy to customers since its founding in 1895. It introduced eco-friendlyLNG (liquefied natural gas) to Japan for the first time in 1969 and now uses it for city gas as well aspower generation. In 2005, it obtained Group-wide certification for the ISO 14001 internationalstandard and is actively engaging in environmental protection. The company will continue topromote eco-friendly corporate management toward creating a low-carbon society and a recycling-based society and developing a society that coexists with nature.

Contribution to the Environment

*1

*2

ESCO (Energy service company): service to provide a package of necessary solutions to save energy, such as technologies, equipment,human resources and funds.SRIMS: Tokyo Gas original waste collection and recycling system, which collects waste during the delivery of gas appliances and partsand piping materials to partner companies.

Note: Lawsʼ enactment years are shown.

Links▶ Chronology of Environmental Activities（PDF︓192KB）▶ Benefits of LNG (Liquefied Natural Gas) as Feedstock for City Gas▶ Environmental Advantages of City Gas in Terms of Lifecycle CO2 Emissions

FY2017 Targets and Performance

Why Is this Materiality?

Climate Change Countermeasures

To fulfill our responsibility as an energy company that minimizes impact of climate change inresponse to growing demand for low-carbon solutions in the wake of the Paris Agreement. In thecity gas business, we have set targets prioritizing reductions in CO2 emissions at customer sites,which release greater volumes of CO2 emissions than the Tokyo Gas Group.

Promotion of Resource Saving

To help create a recycling-based society by practicing the 3Rs of reduction, reuse, and recycling ofwaste to encourage resource recycling and thereby mitigate the social impact of waste andexcavated soil generated by our business activities and at customer sites.

Promotion of Biodiversity Conservation

To promote biodiversity conservation by reducing the impact of our business operations on theecosystem and by engaging in social contribution activities based on our awareness that creatingthriving ecosystems is an important foundation of our business.

Promotion of Environmental Technologies Development

To address global environmental issues for the future as a total energy enterprise.

FY2017 Performance and EvaluationCriteria for evaluating KPIs

Target achieved (100% or above)Target not achieved but improved performance from the previous fiscal yearTarget not achieved

Note: Qualitative indicators with no evaluation axis are assessed on the basis of whether progress has been made since the previous fiscal

year.

EnvironmentalProtection Guidelines Materiality Target

(CSR KPIs) FY2017 Results Evaluation

Climate changecountermeasures

○

Customer sites:Reduction of CO2

emissions atcustomer sites by 3.9million tons (fromFY2011 levels)

■Reduction in CO2

emissions at customersites: 4.04 million tons.

○

Electric powerbusiness:Reduction of CO2

■Promoted theprocurement ofelectricity generated by


emission factor attheelectricity retail level

high efficiency thermalpower and renewableenergy sources.

○

Business activities1:Energy usageintensity at LNGterminals: 220GJ/million m3 *1

■Energy usage intensityat LNG terminals:209GJ/million m3

○

Business activities2:Heat sales intensityfor district heatingand cooling centers:1.33 GJ/GJ*2

■Heat sales intensity fordistrict heating andcooling centers: 1.22GJ/GJ

○

Business activities3:Energy usage atTokyo Gas offices,etc.: 920 thousandGJ

■Energy usage at TokyoGas offices, etc.: 902thousand GJ

○

Promotion of a wideruse of renewableenergy

■Continued to makemaximum use ofrenewable and unusedenergy sources invarious Smart Energyprojects.

■485 thousand m3 ofbiogas derived fromfood waste was fed tocity gas distributionpipes.

Promotion of resourcesaving

○

Industrial waste 1:Maintenance of zeroemissions atproduction plants(final disposal rate ofless than 0.1%)

■Final waste disposalrate at productionplants: 0.6%

△

○

Industrial waste 2:Maintenance ofconstruction wasterecycling rate at 98%or higher

■Recycling rate ofconstruction waste:97.7% △

○

Industrial waste 3:Recycling rate forindustrial wastegenerated at offices:88% or above

■Recycling rate forindustrial wastegenerated at offices:86.5%

△

―

General waste 1:Recycling rate forgeneral waste: 75%or above

■Recycling rate forgeneral waste: 74.2%

✕

―

General waste 2:Reduction in copypaper usage by 8%to 1.32 million sheetsor less than FY2012

■Copy paper usage: 1.21million sheets

levels

○

Pipelineconstruction:Soil excavated duringgas pipelineconstruction:maintain at 16% orlower

■Soil excavated duringgas pipelineconstruction: limitedbelow 21% ✕

Promotion ofbiodiversityconservation

○

Promotion ofbiodiversityconservationactivities along theLNG value chain

・Surveyed the status ofbiodiversityconsideration at sourcegas fields andconfirmed that therewere no problems.

・Managed ballast waterdischarged during LNGtransport, conductedhabitat surveys atgreen areas inside thethree LNG terminals,and implementedconservation activities.

・Practiced the 3Rs(reduction, reuse, andrecycling) on soildischarged when layinggas pipes to reduce theimpact caused byexcavation of pit sandon the ecosystem.

・Implemented forestconservation activitiesand habitat surveys atthe Nagano Tokyo GasForest.

○

Promotion ofenvironmentalcommunication

ー

・Provided information onthe Groupʼs activitiesand suggested ways tosave energy ineveryday life through avariety of channels,including participationin environmental eventsorganized by localgovernments,organizing lectures andtours, and sharinginformation at ourmuseums and on ourwebsite.

・Activities to supportschool education (totalattendance: 1,102,087,as of March 31, 2018)

・Activities thatcontribute to theenvironment andsociety, includingneighborhood cleanupactivities at each siteand the “Mori Sato Umi

○

Tsunagu” (ConnectingForests, Villages andOcean) Project

・Development ofenvironmentalawareness throughinternal educationalprograms such as astudy group onenvironmentalregulations andpresentation of theEnvironmental ProgramPromotion Award

Promotion ofenvironmentaltechnologiesdevelopment

○

Promotion ofdevelopment of low-carbon technologies

・Operated threehydrogen stations.

・Applied technologicalinnovation to combinedheat and power (CHP)systems*3 to achievethe highest powergeneration efficiency of42.5% in our 1,000kW-class systems andtotal efficiency of80.1%.

・Began investing inventure capital firmsand venture businessesspecializing in energytechnologies in order toincorporate innovativetechnologies fromaround the world.

○

*1 Energy consumed per unit of gas produced.

*2 Energy consumed per unit of gas sold.

*3 CHP systems generate electricity and recover waste heat generated as a by-product.

Link▶ Environmental Policy and Environmental Sustainability Guidelines

Key Initiatives for FY2018 and Beyond

We reviewed the Tokyo Gas Groupʼs key CSR activities and materiality in fiscal 2017. Please visit therelated link to view the latest information on our materiality and CSR KPIs.

Link▶ Identifying New Materiality

Continual Improvement to the Environmental ManagementSystem

The Tokyo Gas Group has practiced effective and efficient environmental management under theleadership of top management since establishing its Group-wide environmental management system(EMS) in 2005 to comply with the ISO 14001. In fiscal 2017, we started operating an EMS thatmeets the revised ISO 14001:2015. Precisely following the PDCA cycle in the EMS allows us toensure legal compliance and reduce environmental impact, preserve biodiversity and strengthenenvironmental partnerships, making our environmental protection activities both systematic andsubstantive.We operate Group company environment management systems, as described below, to strengthenthe Tokyo Gas Groupʼs environmental governance and steadily and efficiently pursue environmentalmanagement as a concerted effort.Additionally, 95% of all EMSʼs in the Group have obtained ISO 14001 certification for sales.

Environmental Management Structure

EnvironmentalCommittee

Chairperson: Executive Officer in charge of the environmentMembers: General managers of related divisionsObjective: The committee is stipulated in environmental managementrules. It primarily discusses the Groupʼs environmental policy andenvironmental protection plans for their concerted and effectiveimplementation.

Status of Tokyo Gas Group Operations Related to Environmental Management Systems (as of August2018)

Name of Organization Type of Management System

Tokyo Gas Co., Ltd. ISO14001


Residential Sales andService Division

Capty Co., Ltd. ISO14001

Tokyo Gas Living Line Co., Ltd.Living Engineering Co., Ltd.Tokyo Gas Remodeling Co., Ltd.Tokyo Gas Lease Co., Ltd.Tokyo Gas Customer Support Co., Ltd.Tokyo Gas Lifeval Nishi-Ota Co., Ltd.Tokyo Gas Lifeval Chiba Co., Ltd.Tokyo Gas ST Comunet Co., Ltd.

Other environmentalmanagement system*1

Energy Solution Division Tachikawa Toshi-Center Co., Ltd. Other environmentalmanagement system

Regional DevelopmentDivision

Nagano Toshi Gas Co., Ltd. ISO14001

Tokyo Gas Yamanashi Co., Ltd.Washinomiya Gas Co., Ltd.Shoei Gas Co., Ltd.Showa Unyu Co., Ltd.

Other environmentalmanagement system

Pipeline Network Division

Capty Tech Co., Ltd.*2

Kawasaki Gas Pipeline Co., Ltd.*3 ISO14001

Tokyo Gas Pipeline Co., Ltd. Other environmentalmanagement system

Gas Resources & EnergyProduction Division

Tokyo Gas Baypower Co., Ltd.(Sodegaura Power Station)*3

Tokyo LNG Tanker Co., Ltd.*3ISO14001

Tokyo Gas Yokosuka Power Co., Ltd.Ohgishima Power Co., Ltd.


Power Business Division Nijio Co., Ltd.*3 ISO14001

IT Division Tokyo Gas i Net Corp Other environmentalmanagement system

Others

Tokyo Gas Urban Development Co.,Ltd.*4

Tokyo Gas Facility Service Co., Ltd.*5ISO14001

Tokyo Gas Liquid Holdings Co., Ltd.Tokyo Gas Real Estate Holdings Co.,Ltd.Tokyo Gas Site Development Co., Ltd.Tokyo Gas Living Holdings Co.,Ltd.Tokyo Gas Engineering SolutionsCorporationTokyo Gas Communications, Inc.Tokyo Gas Chemicals Co., Ltd.Tokyo Oxygen And Nitrogen Co., Ltd.Tokyo Carbonic Co., Ltd.Tokyo Rare Gases Co., Ltd.Park Tower Hotel Co., Ltd.Tokyo Gas Energy Co., Ltd.Enelife Carrier Co., Ltd.Tokyo Auto Gas Co., Ltd.Tokyo Gas LPG Terminal Co., Ltd.


*1 Tokyo Gas developed its own EMS for subsidiaries

*2 Included in the EMS activities of Capty Co., Ltd.

*3 Included in the EMS activities of Tokyo Gas Co., Ltd.

*4 ISO registration covers business activities related to a building rental at Shinjuku Park Tower (excluding the hotel).

*5 ISO registration covers the head office and management division of the Park Tower.

Internal Audit ResultsThe internal audit in fiscal 2017 found that the EMSʼs in all our sections complied with therequirements specified by the ISO 14001: 2015 and that the EMSʼs were effectively operated.

Compliance with Environmental Laws, and Imposed FinesThe Group was not cited for any violations or fines with respect to environmental laws andregulations in fiscal 2017.

Management of Chemical Substances

While the Group uses only small quantities of hazardous chemicals in gas production and supplyprocesses, it will continue to manage them effectively and in accordance with prevailing laws andregulations and reduce their release.

Compliance with PRTR LawThe Group handled the following amounts of chemicals subject to reporting requirements under thepollutant release and transfer register law* in fiscal 2017. We had no subsidiaries for which reportswere legally required in fiscal 2017.*The act on confirmation, etc., of the release of amounts of specific chemical substances in the environment and promotion of

improvements to their management

Tokyo Gas

Substance Handled amount(kg)

Release(kg)

Transfer(kg) Note

Xylene 3,619 0.1 0.0 Refueling

1,2,4-Trimethylbenzene 1,754 0.1 0.0 Refueling

Toluene 7,219 0.9 0.0 Refueling

N-hexane 3,113 2.6 0.0 Refueling

Measures to Address FluorocarbonsTokyo Gas inspected products specified by the Act on Rational Use and Proper Management ofFluorocarbons (commercial air conditioners, refrigerators and freezers) that it manages and islegally required to check as of the enforcement of the law in April 2015. In fiscal 2017, wesubmitted a report to the competent ministries because the leakage calculated by the specifiedformula exceeded the 1,000 t-CO2 threshold for a subsidiary, although Tokyo Gasʼs leakage wasbelow this level. As a registered operator for fluorocarbon refill and recovery, we collected andappropriately handled fluorocarbons that were removed during inspections and maintenance ofproducts with global warming potential (GWP).The electric chillers we have introduced over the past several years use low-GWP fluorocarbons, andwe continue to adopt low-GWP chillers.

Leakage Calculated as Manager: Tokyo Gas

Substance Calculated Leakage (t-CO2 equivalents)

HCFC 79.9

HFC 135.2

Total 215.1

Leakage Calculated as Manager: 1 Subsidiary

Substance Calculated Leakage (t-CO2 equivalents)

CFC 8,720.0

Total 8,720.0

Refill, Recovery and Destruction as a Registered Fluorocarbon Refill and Recovery Operator.

In fiscal 2017, we did not engage in any refill or recovery as a registered operator for fluorocarbonrefill and recovery.

Anti-VOC MeasuresTokyo Gas has since fiscal 1991 strived to reduce volatile organic compounds (VOCs), which arereleased from such operations as painting gas holders. Also, we have recently shifted to a paintingmethod that uses weak solvent paint (a low-VOC painting method) and aim to reduce VOCemissions further.

Gas holder painting work

Hazardous Waste ManagementWe appropriately store and manage polychlorinated biphenyl (PCB)-containing hazardous waste inour possession and process it by the required deadlines in accordance with the Act on SpecialMeasures concerning Promotion of Proper Treatment of PCB Wastes. In fiscal 2017, we processedno such waste.

Measures to Counter Environmental Risks

Mitigating Environmental RisksIn our business operations we place a high priority on responding positively to environmental issues.We assess potential environmental risks to business activities and appropriately mitigate them. Wealso review and disclose information on environmentally hazardous substances and pollution fromour operations in the past and are taking swift steps to deal with them. If a serious environmentalrisk materializes, we will follow the Emergency Response Organization Regulations and swiftlyimplement measures to prevent a recurrence in light of emergency steps or risk levels and ensurethat we avoid any secondary risks.

Climate Change Mitigation and Adaptation

The Group recognizes concerns that climate change may affect our business activities in thefollowing ways and is responding appropriately.

Climate Change Countermeasures (Climate Change Mitigation)To reduce greenhouse gas emissions, which are associated with rising global temperatures, the

Group has drawn up the Guidelines for Global Warming Countermeasures. Also, it is working toreduce emissions from city gas production facilities, power plants, district heating and coolingcenters and offices as well as from customer sites, which account for the largest share of CO2

emissions in the LNG value chain. Our efforts to combat climate change also include thedevelopment and dissemination of low-carbon systems.

Links▶ Climate Change Countermeasures in Business Operations▶ Climate Change Countermeasures at Customer Sites

Natural Disaster Response (Adaptation)Climate change-induced disasters, such as localized torrential downpours and storm surges, maydamage city gas production facilities and delay or halt LNG transport. We have formulated disasterpreparedness plans at production, supply and other facilities as well as business continuity plans(BCPs) to prepare for a major accident, large-scale power outage or outbreak of disease caused bya major typhoon. In addition, we believe that diversifying the suppliers of LNG, which is used toproduce city gas, will help minimize the risk of supply chain disruption when any single source isaffected by a natural disaster.

Responding to Stricter Regulations to Fight Climate ChangeRegulations such as emissions trading and carbon taxes may rein in the use of fossil fuels.Nevertheless, we are committed to contributing to the creation of a low-carbon society by pushingfor a shift from oil and coal to natural gas, the cleanest fossil fuel, expanding the use of highlyenergy-efficient appliances and systems such as combined heat and power (CHP) systems*,promoting renewable energy use, and making more efforts to build smart energy networks.*Gas engine-based CHP systems generate electricity and recover waste heat generated as a by-product.

Managing Water Risk

The Group addresses water as a business risk and manages its use of tap water, industrial waterand seawater, conserves fresh water and controls water discharge.

Water Risk AssessmentWe have taken steps to protect LNG terminals and gas pipeline-related facilities from floodingcaused by localized torrential downpours and storm surges, which are linked to climate change. Inthe face of increasing water risks, we carry out comprehensive assessments and analyses on currentrisks (water demand, flooding, public health and biodiversity) and future risks (effects of climatechange and securing water resources). Since fiscal 2016, we have used such international indicatorsas the WWF-DEG Water Risk Filter (Map) in addition to the WRI Aqueduct and WWF-DEG Water RiskFilter to supplement each other. We conducted assessments and analyses at eight LNG terminalsand overseas bases in fiscal 2017 and found no problems.Finding it necessary to collect more information on environmental risks on the part of suppliers, weplan to distribute questionnaires to them in addition to our own in-house survey.

Status of Water Resource UseIn fiscal 2017, we used a total of 5,180 thousand m3 of freshwater at LNG terminals where city gasis produced, district heating and cooling centers, power plants using LNG, offices and other facilitiesin Japan. We are working to reduce process water consumption at LNG terminals, district heatingand cooling centers and power plants through such means as optimizing boiler operation, reducingsteam loss and replacing chillers with more efficient electric turbo types. To reduce our use of tapwater at offices and similar facilities, we are increasing our use of recycled water, installing water-

saving toilets and encouraging employees to conserve water. Regarding waste water, we measuredischarges and manage water quality through the use of indicators, such as pH, COD*, and nitrogenand phosphorus concentrations, in accordance with national laws and regulations, local governmentordinances, agreements and other rules. We use seawater mainly at LNG terminals and powerstations as a heat source and then return the entire amount to the sea.*Chemical Oxygen Demand

Water Resource Inputs of the Tokyo Gas Group (Tap and Industrial water)

Combating Soil Pollution

Since fiscal 1999, we have been conducting soil tests and groundwater surveys on land currently orpreviously owned by Tokyo Gas, such as former plant sites, with potential soil pollution and takingthe necessary measures when pollution has been confirmed. We proactively disclosed informationthrough reports to relevant authorities, explanations to nearby residents and press releases.Depending on specific circumstances, we have paved over or excavated and removed contaminatedsoil to prevent its dispersal. Also, we have installed impermeable walls or pumped out contaminatedunderground water to stop it from spreading.We continue to control soil pollution, reporting excavation work to authorities and conductingsurveys in accordance with the Soil Contamination Countermeasures Act and relevant ordinances.Furthermore, we ensure that contaminated dirt is not dispersed and that excavated soil is handledproperly.With the revision of the act in 2010, we have taken action to address soil pollution caused by naturalfactors or landfill with the same commitment as legally mandated interventions for pollutionassociated with our business operations.

Link▶ Disclosure of Incidents That Affected Our Stakeholders

Providing Group Employees with Environmental Educationand Commendations

Environmental Education for Group EmployeesOur environmental education comprises stratified training aimed at deepening the basicunderstanding of environmental issues as well as our Groupʼs environmental measures and EMSeducation for workplace leaders to gain the knowledge they need for environmental management.Additionally, we have offered eco-driving training to develop skills for green and safe driving, a classfor eco-cooking instructors to learn eco-friendly diets, and other practical programs that are helpfulin reducing environmental impact and facilitating environmental communication.We encourage employees to learn at their convenience through the corporate intranet about climatechange-related issues and developments in and out of the company and considerations for handlingwaste.

Award winners at the fiscal 2017presentation ceremony.

The eco-citizen activity award recognizes efforts tobeautify and clean up the area around theHiranuma office.

Main Environmental Education Programs in Fiscal 2017

Type Period Number ofparticipants

Stratifiedtraining

Trading for new employees April 648

Trading for mid-career employees（e-learning）

August–November 154

EMS education

Training for new leaders for environmentalmanagement April–June 9

Training for EMS promoters May 65

Study group on environmental laws andregulations January 146

Eco-driving course▶ Promotion of eco-driving

September,October 114

Class for eco-cooking instructors 8 times a year 41

Environmental Program AwardWe recognize workplaces and partner companies for efforts such as reducing environmental impact,increasing brand value and contributing to communities as models for the Tokyo Gas Group. Westrive to invigorate and improve the entire Group by sharing best practices.Under the commendation system launched in fiscal 1999, we granted awards for 10 of 28applications (3 eco-friendly business promotion awards, 4 eco-office activity awards, and 3 eco-citizen activity awards).

Environmental Awareness Survey

We have conducted employee surveys since fiscal 2001 to ascertain their environment awareness,environmental behavior and understanding of our environmental activities, and we use the resultsas basic information for formulating the plans for the following yearʼs activities. The fiscal 2016survey gathered 9,890 valid answers for a response rate of 58% and found that about 90% of therespondents had expressed interest in environmental issues. We make use of survey results toreinforce measures to raise the environmental awareness of the Group employees and improveeducational programs.

Reduction of CO2 Emissions atCustomer Sites

Reduction of CO2 Emissions at CustomerSites

Advancing and Expanding Natural Gas Usewith Highly Efficient Residential GasAppliances and Systems

Advancing and Expanding Natural Gas Usewith Highly Efficient Commercial GasAppliances and Systems

Promoting Smart Networks

Reducing the Transportation CarbonFootprint

Proposing Exemplary Energy-SavingLifestyles for Customers

Energy Savings and Reduction ofCO2 Emissions in BusinessOperations

Measures at the City Gas Production andSupply Stages

Measures in the Electric Power Business

District Heating and Cooling Services

Measures at Business Offices

Other Efforts to Reduce CO2 Emissions

Addressing Climate Change




The Tokyo Gas Group determined that addressing climate change is a material issue, due to ourresponsibility as an energy company. We have set the Guidelines for Global WarmingCountermeasures, which have concrete numerical targets, not only for our business operations butalso for customer sites where CO2 emissions are highest.In light of the Paris Agreement adopted at the COP21 conference as well as movements againstclimate change in Japan, we have been actively pursuing low-carbon initiatives. These includeimplementing a wider use of natural gas, which has a lower CO2 emission factor, developing andexpanding Smart Energy Networks (SENs) that combined heat and power (CHP) systems* and otherhighly efficient equipment with advanced energy management and embracing digitizationtechnologies and innovation.In our electric power business, we will develop an optimal power source portfolio with eco-friendlynatural gas-fired power plants, renewable energy and so on. Furthermore, in our overseas businesswe will deploy technologies that excel in reducing CO2 emissions and energy consumption across ourLNG value chain as a contribution to global efforts to address climate change.*Gas engine-based CHP systems generate electricity and recover waste heat generated as a by-product.

Greenhouse Gas Emissions along the LNG Value Chain (FY2017)

*Source: “Study of Life Cycle Greenhouse Gas Emissions of LNG and City Gas 13A” (Proceedings of the annual meeting of Japan Society of

Energy and Resources 35, pp. 23–26, 2016)

SCOPE1: Businessʼs own direct emissions of greenhouse gases.

SCOPE2: Indirect emissions from consumption of electricity, heat, and steam supplied by others.

SCOPE3: Indirect emissions other than covered in SCOPE2 (emissions by other parties involved with businessʼs activities).

Link▶ Benefits of LNG as Feedstock for City Gas▶ The Tokyo Gas Group Business Activities and Material Balance

Contribution to the Environment ▶ Climate Change Countermeasures ▶Addressing Climate Change

Source: “Future Forecast for Life Cycle Greenhouse Gas Emissions of LNG and City Gas 13A” (Japan Society of Energy and

Resources, presentation report 28 (2), pp. 51–56, 2007)

Topic

Environmental Advantages of City Gas in Terms of Lifecycle CO2

Emissions

Greenhouse gases are released not only when fossil fuels are burned but also when they areextracted, processed and transported. Therefore, it is important to take into accountemissions throughout the fossil fuel lifecycle. From the lifecycle perspective, natural gasgenerates the lowest CO2 emissions of any fossil fuel.

2

Reduction of CO2 Emissions at Customer Sites

The Tokyo Gas Group is endeavoring to reduce CO2 emissions at customer sites, the finalconsumption stage for city gas, where CO2 emissions are highest. Specifically, we promote the useof natural gas, for example by a fuel shift, help familiarize people with distributed power generationutilizing cogeneration systems, promote the buildup of smart energy networks and the provision ofservices for saving energy, and support the use of renewable energy. Additionally, we proposeexemplary energy-saving lifestyles for customers.

Sponsoring Energy-related and Environmental SeminarsWe have been sponsoring seminars on energy, the environment and community development since2000, targeting local government policy planners. We invite experts to provide information on suchissues as climate change mitigation and natural disaster prevention, with the number of participantsreaching about 300 every year.

Contribution to the Environment ▶ Climate Change Countermeasures ▶Reduction of CO2 Emissions at Customer Sites

Tokyo Gas develops and promotes kitchen stoves fitted with highly efficient burners, highly efficientwater heaters that recover latent heat, and residential power generation systems that utilize exhaustheat.

Popularization of Highly Efficient Eco-JOES Water Heaters

While standard conventional residential gas water heaters have a maximum heating efficiency of83%*1, the Eco-JOES highly efficient, home-use water heaters are equipped with an exhaust heatand latent heat recovery system that boosts this figure to 95%*2. Assisted by the industry-wide“Eco-JOES Adoption Campaign” to promote the introduction of Eco-JOES, the number of residentialinstallations is rising every year. As of the end of March 2017, shipments reached about 7.24 millionunits for the industry as a whole. Due to their efficient use of heat, the Eco-JOES water heatersreduce releases of CO2 into the air and help reduce CO2 emissions and combat global warming.Their remote controls incorporate the EneLook*3 function, which displays gas and hot water usage,a visualization feature that helps users save water and energy.*1 For RUF-A2405AW(A), a conventional water heater.

*2 For RUF-E2405AW(A), an Eco-JOES model.

*3 Some remote controls do not support EneLook.

Note: Calculations for both *1 and *2 were made using the JIS S 2109-stipulated methods. (However, heating efficiencies depend on the

conditions of use.)

How the Eco-JOES Highly Efficient Water Heaters Work

Residential CHP Systems

Residential power generation employs combined heat and power (CHP) systems* that had beenprimarily used at large plants and buildings. This energy-saving system extracts two types of energyfrom one energy source, generating electricity and heat for effective use. The system also generates


Remote Control Panel Showing the State ofSolar Photovoltaic Power Generation

Remote Control Screen on CO2 EmissionReduction

a sense of delight through the value of generating power at home. At the same time, it helps reduceenergy consumption and CO2 emissions. We offer the fuel cell ENE-FARM systems for residentialpower generation.*Gas engine-based CHP systems generate electricity and recover waste heat generated as a by-product.

Saving Energy and Curbing CO2 Emissions through Residential PowerGenerationEnergy that can be directly collected in nature is primary energy, while energy such as electricity,generated through the use of primary energy, is secondary energy. Properly assessing energyconservation and measures to fight global warming requires taking into account changes in primaryas well as secondary energy. Since residential power generation takes place where electricity is alsoconsumed, exhaust heat can be used for such purposes as heating water, which is not possible atthermal power stations.

Residential Power Generation (the ENE-FARM System)

Note: Backup heat source equipment is used to generate hot water used for space heating.

ENE-FARM Residential Fuel Cell CHP SystemIn May 2009, we introduced the worldʼs first fuel cell combined CHP system for detached housings,called the ENE-FARM, and co-developed the product with Matsushita Electric Industrial Co., Ltd.(now Panasonic Corporation). Tokyo Gasʼ estimate for a standard case shows that the ENE-FARMCHP system reduces annual CO2 emissions by about 1.3 tons, compared to conventional systems,and is touted as the key to mitigating climate change using a residential system.The remote control panel in a kitchen or a bathroom features easy-to-understand displays of theamounts of power generated and used. It also shows, on a daily basis, how much the system hashelped the environment in terms of familiar things in order to foster environmental awarenessamong family members. A network access service started in August 2017 allows users not only tosee how much energy is consumed at home but also to obtain information on ways to use energyefficiently, using a dedicated smartphone application.

App Screen ShowingElectricity, Gas andHot Water Usage

Enepa appʼs messagewindow

The ENE-FARM residential fuel cell CHP system(for detached houses, manufactured by PanasonicCorporation)

(1)

(2)

(3)

(4)

Assumptions for Estimates of CO2 Emissions (g-CO2)CO2 emission factor: 0.65 kg-CO2/kWh for electricity (average factor for thermal power in FY2013 according to the governmentʼs Planfor Global Warming Countermeasures (May 2016)), 2.29 kg-CO2/m3 for gas (Tokyo Gas data)Annual load: 16.6 GJ for hot water, 1.3 GJ for bath reheating, 2.2 GJ for cooking, 6.4 GJ for AC (cooling), 12.7 GJ for floor heating, 5.5GJ for AC (heating), 12.5 GJ for lighting, etc. (for a four-person family living in a detached dwelling with a total floor area of 120 m2)Electricity demand for a dwelling supplied with both gas and electricity (using conventional systems): 4,223 kWh (including powerconsumed by gas water/space heater)Equipment used: Conventional system gas water/space heater, gas hydronic floor heating (living room), gas stove, electric AC used forcooling and heating in other rooms

ENE-FARM, gas hydronic floor heating (living room), gas stove, electric AC used for cooling and heating in other rooms

*Figures may not sum due to rounding.

Active Utilization of Solar EnergyFor household use, Tokyo Gas proposes dual power generation, which combines solar photovoltaicpower generation and the ENE-FARM, and the SOLAMO, which combines solar heating with the Eco-Joes highly efficient water heater. Each combination significantly reduces a householdʼsenvironmental impact and includes the kind of backup system required to actively utilize solarenergy, which necessitates an unstable output of secondary energy.

Dual Power Generation by Solar Power and the ENE-FARM

Note: The solar photovoltaic power generation system is not a product of Tokyo Gas.

Water Heating System Using Solar Heat

Development and Promotion of Air Conditioning Systems

In the commercial air conditioning equipment business, we are promoting installations of the GHPXAIR II gas heat pump air conditioning system, which reduces annual energy consumptioncompared to conventional systems, and natural chillers, which use natural refrigerants. We alsoproactively recommend restaurants and hotels to introduce Suzuchu cool kitchen systems, whichlower kitchen heat and reduce environmental impact.

Promotion of Highly Efficient Gas Heat Pump Air ConditionersTokyo Gas emphasizes the promotion of the GHP XAIR II series among its gas heat pump (GHP) airconditioners, which save both electricity and energy. The series reduces 20% of annual primaryenergy consumption, the highest level of efficiency, compared to the previous XAIR, by improvingefficiency. This is achieved by slowing down engine rotation during low load operation, whichaccounts for a significant portion of their running hours.

Annual Energy Consumption Compared with XAIR

*Energy consumption reductions from the model 15 years ago and XAIR are based on actual performance, while comparisons between the

conventional XAIR and XAIR II are based on Tokyo Gas estimates.

Smart Multi Hybrid Air Conditioner, ENESINFO Optimal Control Service*

The Smart Multi is a hybrid air conditioning system jointly developed with Osaka Gas Co., Ltd., TohoGas Co., Ltd. and Panasonic Corporation and introduced into the market in April 2016. The systemboasts the worldʼs first integration of a GHP and an electric heat pump (EHP) into the samerefrigerant line and is optimally operated by remote control.Joining Panasonic, Aisin Seiki Co., Ltd., Daikin Industries, Ltd. and Yanmar Energy System Co., Ltd.began sales of the system in April 2017.The ENESINFO is our originally developed service to ensure optimal operation of the Smart Multi byremote control. The service effectively balances GHP and EHP operation to reduce energy costs,confirming the status of their operation, energy demand and supply situations and energy prices,which vary by season and time of day. It helps to save energy and reduce CO2 emissions byadjusting the operation ratio of the GHP to the EHP to minimize energy consumption and CO2

emissions in accordance with the customerʼs pattern of system use.


Looking ahead, we intend to adapt the service as we anticipate changes in power demand andsupply and in electricity prices associated with such factors as the increasing use of solar and windpower and other renewable energy as well as the liberalized retail electricity market. We will alsorespond to requests for saving electricity in the face of a tight demand and supply balance as ourcontribution to society as a whole.*Smart Multi and ENESINFO are registered trademarks of Tokyo Gas Co., Ltd.

ENESINFO Optimally Controlling the Smart Multi

Optimal Control by ENESINFO

Active Use of Solar Energy

In our support for renewable energy use, and for commercial use, we propose a solar coolingsystem that applies solar thermal energy for air conditioning. This is in addition to the SOLAMOsystem, which combines solar heating with an Eco-Joes highly efficient water heater.

Popularization of Air Conditioning to Use Water Evaporation HeatNatural chillers cool air inside rooms by producing cold water in a cycle of water evaporation, absorption, recovery and condensation. The system uses water as a refrigerant and a lithium bromide*1 water solution as an absorbent that does not include fluorocarbons.*1 An absorbent absorbs water, and a lithium bromide water solution exhibits the properties of saltwater.

How Natural Chillers Work

Natural chillers can effectively use renewable energy such as solar heat and low-temperatureuntapped energy sources such as sewage water, river water, seawater and groundwater as well asexhaust heat from combined heat and power (CHP) systems*2, thereby achieving additionalreductions in energy use and CO2 emissions. Moreover, an unstable renewable energy supply candeliver stable performance backed up by city gas.The latest green models*3 boast a higher efficiency than conventional ones. Using these models asreplacements ensures significant cuts in energy use and CO2 emissions.*2 Gas engine-based CHP systems generate electricity and recover waste heat generated as a by-product.

*3 Green models are the most eco-friendly and reliable gas-using natural chillers and natural chillers that use waste hot water from CHP

systems, selected by Tokyo Gas, Co., Ltd., Osaka Gas Co., Ltd. and Toho Gas Co., Ltd.

Combining Natural Chillers with CHP Systems

Combining natural chillers with CHP systems allows for the effective use of exhaust heat andreduces gas consumption, which leads to further energy savings.

Example of Combination

Cool Kitchens to Reduce Air Conditioning LoadWe recommend equipment that reduces kitchen heat. The so-called “cool kitchen equipment”reduces air conditioning load by 30%* compared to conventional kitchen equipment, and this helpsto improve the kitchen environment while saving energy and cutting CO2 emissions.

Air Conditioning Load Reduction Rate with Cool Kitchen Equipment

Simulation ConditionsCalculation is based on a school lunch kitchen with a floor area of 1.8 × 8.5 meters and a heightof 2.5 metersDisplacement ventilation method is usedAir supply amount comes to 40 kQEquipment (5 rotary pans, 4 multistory rice cookers, 1 oven, 1 gas table), equipmentspecifications are the same

*Source: Presentation materials of Nishikawa and Omori at Society of Heating, Air-Conditioning and Sanitary Engineers of Japan (Sept.

2009)

Development and Popularization of High-performanceIndustrial Furnaces and Steam Systems

The industrial sector dramatically reduces CO2 emissions by switching away from the use of fuelssuch as oil and LPG to natural gas and installing more efficient industrial burners and furnaces.

Promotion of Highly Efficient Burners for Industrial FurnacesRegenerative burner systems capture heat from exhaust gas into a heat storage unit and use it topreheat an air feed. They boast extremely high combustion efficiency and low nitrogen oxides (NOx)emissions. Also boasting energy savings up to 50%, they have been drawing attention as theultimate industrial furnaces for reducing CO2 emissions.

Regenerative burner system

Reducing CO2 Emissions by Switching to Natural Gas, and Using it More Efficiently

Switching from fuels such as oil and liquefied petroleum gas (LPG) to natural gas reduces CO2

emissions by about 25%. Emissions can be curbed even more by switching to more efficientequipment and systems and making more sophisticated use of natural gas.

Development and Popularization of CHP Systems

CHP systems are distributed energy systems that generate electricity by natural gas-fueled highlyefficient engines, turbines or fuel cells and supplies steam or hot water produced with the use of thewaste heat from power generation. The systems are eco-friendly, help strengthen energy security inan emergency and contribute to reducing power consumption.

Environmental Friendliness of CHP SystemsCHP systems achieve high energy efficiency because they generate power close to electricity usersin distributed generation with no transmission loss and effectively use waste heat from powergeneration.Using waste heat in centralized power generation is difficult because electricity is transmitted fromremote areas and 60% of the generated electricity remains unused.Heat source equipment that uses waste heat is suitable for a wide range of uses, such as productionprocesses at plants, hot water or steam supply at hotels and hospitals, air conditioning, andwarming baths or swimming pools.The pursuit of power generation efficiency in research and development allows most CHP systems toachieve an efficiency rate that exceeds the average rate of conventional power generation andsupply systems (on the demand side at substations, including transmission loss) and to significantlysave energy and reduce CO2 emissions.

Using Energy Effectively and Reducing CO2 Emissions with CHP Systems*

Note: Estimated by Tokyo Gas

*1 On a lower heating value (LHV) basis. The heat efficiency and total loss at thermal power plants were calculated on the basis of the

operating performance of Japanʼs nine major power utilities plus power wholesalers in fiscal 2003 (Subcommittee on Classification

Standards for Plants and Other Facilities, September 2005).

*2 Efficiency of CHP systems is on an LHV basis using the recommended configuration.

*3 Emission factor of the nine power utilities: 0.66 kg-CO2/kWh (average factor for fiscal 2030 in thermal power generation in the

governmentʼs Plan for Global Warming Countermeasures announced in May 2016).

Status of Diffusion of CHP SystemsCHP systems with a total output of 2,074,000 kW (excluding household units) are in operation inour service area. They are increasingly adopted across a wider range of fields, such as small- andmedium-scale consumer use beyond residential use, owing mainly to the development of smallmodels with an output of one kW to tens of kW, in addition to models chiefly designed for plants andcommercial facilities with large heat loads.

Diffusion of CHP Systems

Promotion of Energy Saving and Reduction of CO2

Emissions through Energy Services

The Tokyo Gas Group strives to solve energy-related issues of customers and promotes efforts tosave energy and reduce CO2 emissions. To this end, we provide services to learn how customers useenergy and identify the problems they experience, introduce advanced equipment, visualize energyuse and provide services to improve equipment operation.

Supporting Energy Savings with Package ContractsWe strive to provide one-stop solutions for customer issues related to energy. Concluding packagecontracts that cover finance, designing and construction work, equipment ownership, energyprocurement, maintenance and other matters allows us to address those issues and meet customerneeds in order to save energy and cut CO2 emissions so that we can provide an environment inwhich customers can focus on their business operations.

Energy-saving Services for PlantsWe provide various solutions to plants that not only save energy but also reduce CO2 emissions andcosts. Our TG Miru-Net Service visualizes energy use with online measurement and analyses ofequipment in order to save energy, and the Steam fit service, which provides comprehensive,ongoing support for steam systems from design to operation. We meet the needs for saving energy,cutting CO2 emissions and reducing cost with a variety of approaches.

Creating a sustainable society strongly requires society as a whole to address issues such as savingpower and ensuring energy security in addition to the long-sought effort of reducing CO2 emissions.As a means of solving these issues, the Tokyo Gas Group promotes the development of smartcommunities that wisely use energy in a heat and power supply network connecting buildings. TheGroup also pursues efforts to introduce smart energy use for entire buildings, including theconversion of office buildings and plants.

Promoting Community-Wide Smart Energy Use

To create smart energy communities, we construct smart energy networks that optimize energydemand and supply through a heat and electricity network and energy management making use ofinformation and communication technology (ICT).A smart energy community combines a combined heat and power (CHP) system*, which generatesand consumes heat and electricity locally, with the use of renewable or unused energy sources andadjusts energy demand so that the community can reduce the peak load. The region-wideeconomical use of heat and electricity increases energy efficiency of the entire community andsustains business activities and everyday life in the event of a power outage while enhancing thevalue of urban living.Development of smart energy communities is increasing in the Tokyo area in line with national andlocal government policies.*Gas engine-based CHP systems generate electricity and recover waste heat generated as a by-product.

Link▶ Building Communities and a Way of Life that Is Safe and Secure

Smart Meters

Communications-enabled gas meters allow for measuring and controlling the flow of gas. Besidestheir incorporation into home energy management systems, they are used for externally confirmingwhether gas appliances have been turned off and remotely shutting off gas.We are conducting tests and developing technologies so that they can be introduced into everyhome.The introduction of smart meters is intended to increase customer convenience and provide addedvalue through the use of measured data, in addition to improving operational efficiency.


Promoting Visualization at Office Buildings

Office Building Visualization

TG Green Monitor to Visualize Energy UseThe TG Green Monitor service measures energy use at customer sites and visualizes the usage ofgas and electricity as well as the status of equipment operation. The service allows customers toview data shown in simple graphs on a special website designed for each customer so they caneasily track energy consumption and effectively save energy and costs.

TG Green Monitor Screenshot

Building Communities and a Way of Life that Is Safe andSecure

Putting CHP Systems at the Core of Smart Energy CommunitiesTokyo Gas takes into account community characteristics in building smart energy networks. Thedisaster-resilient supply of low-carbon energy contributes to developing sustainable communitieswith superb environmental protection as well as disaster preparedness and management.

Developing a SEN in the Northern District Adjacent to the East Exit of TamachiStation

The Group is constructing a smart energy network (SEN) in the Northern District adjacent to theEast Exit of Tamachi Station*1 in Tokyo in collaboration with Minato Ward. We first built the SmartEnergy Center in the Block I and started providing heat and energy to Minato Park Shibaura, apublic facility, Aiiku Hospital and a child welfare facility in November 2014. This was the first projectin Japan to introduce a SEN as part of the development of a new community. We have alsointroduced a SEN at msb Tamachi in the Block II-2 (West area), which was partly opened in April2018. We built the Block II Smart Energy Center in step with this development of a businesscomplex at a Tokyo Gas-owned site. We hope to reduce CO2 emissions in the entire North District by30% below 2005 levels through the coordinated operation of the two Smart Energy Centers.*1 The SEN project received the Minister of Economy, Trade and Industry Award in the Successful Case of Energy Conservation category at

the Energy Conservation Grand Prize awards in fiscal 2016.

Main Features of a SEN in the Northern District Adjacent to the East Exit of Tamachi Station

Linkages among multiple facilitieswith different purposes Public facility, hospital, office, commercial facility, etc.

Maximum adoption and effectiveuse of renewables, untappedenergy, etc.

Use of solar heat and heat of underground tunnel water for airconditioning (first application in Japan for district heating)

Contribution to BCPs

Capable of uninterrupted power supply to disastermanagement base (Minato Park Shibaura) and uninterruptedheat supply to Aiiku Hospital during power outagesPower, air conditioning used in an office common space, etc.,for a certain duration

Optimal supply/demand control bySENEMS*2

Optimization for area-wide heat and power according tooutside air conditions and energy usage (first in Japan)

Smart Energy Network in the Northern District Adjacent to Tamachi Stationʼs East Exit

*2 SENEMS: Smart Energy Network Energy Management System

Reducing the Transportation Carbon Footprint

Tokyo Gas has been working on popularizing the use of natural gas vehicles (NGVs), which are cleanand feature low CO2 emissions. Along with this effort, we are now laying the foundation forhydrogen supply, including technology development, in the hope of also popularizing fuel cellvehicles.

Diffusion of NGVsAbout 47,000 NGVs were in use in Japan as of March 2018. In our service area, 451 NGVs, mainlyfreight trucks and garbage trucks, were introduced in fiscal 2017, and 17,188 NGVs were in use asof the end of March 2018. A total of 73 natural gas stations operate in our service area, including 13dedicated for collection and delivery vehicles.

Diffusion of NGVs (Our Service Area)

Environmental Friendliness of NGVsNGVs, fueled by natural gas instead of diesel or gasoline, emit only small amounts of nitrogen oxides (NOx) and little particle matter (PM) and sulfur oxides (SOx). They release about 10%–20% less CO2 emissions than gasoline vehicles and are touted for their environmental friendliness.


NGV Exhaust Performance

*Diesel limits are for diesel vehicles weighing over 3.5 tons GVW.

Topic

New Long-Range, Heavy-Duty CNG Truck Launched (Isuzu MotorsLimited)

The environmental friendliness and superior energy security of NGVs make them a highlyviable alternative to gasoline vehicles, and freight trucks, buses, garbage trucks, vans andother NGVs are already in widespread use on urban roads. With fuel diversification requiredfor long-distance, inter-city trucking, Isuzu Motors Limited released a new heavy-dutycompressed natural gas (CNG) truck in December 2015 and expanded its product line. Effortsare going on throughout the logistics sector to reduce CO2 emissions and diversify fuels.

EneLook remote control App for smartphones

Proposing Exemplary Energy-Saving Lifestyles forCustomers

We offer lifestyle proposals, including the visualization of energy use and approaches to savingenergy, to help our customers make better use of energy in their everyday lives.

Visualizing Energy Use

Meter readings slips distributed to customer sites every month, which enables them to comparemonthly gas and power consumption with the previous year and month. After registering for thefree myTOKYOGAS online service, they can also view their monthly gas and electricity bills andconsumption with easy-to-understand graphs on a computer or smartphone. They can also accessinformation, such as advice and alerts, to support energy conservation. The EneLook remote controlalso visualizes energy usage, showing gas and water used by home hot water equipment. TokyoGasʼs highly efficient Eco-JOES latent heat recovery hot water system comes with a standardEneLook remote control, and all new Eco-JOES models feature eco-friendly operation to help userssave water and energy. Our smartphone app for the ENE-FARM residential fuel cell combined heatand power (CHP) system* allows users to enjoy visualized content on energy and encourages themto continue saving energy and reducing CO2 emissions.*Gas engine-based CHP systems generate electricity and recover waste heat generated as a by-product.


Measures at the City Gas Production and Supply Stages

Natural gas extracted abroad is liquefied at -162°C and transported by tanker as LNG (liquefiednatural gas), with a volume that is one-600th of the gaseous form. Tokyo Gas produces city gas atthe Negishi, Sodegauwa, Ohgishima and Hitachi LNG terminals, and we supply city gas by ensuringthe terminals back each other up.Since little energy is used, the energy efficiency in producing city gas from LNG stands at 99% ormore. Energy loss is also extremely slight in city gas supply because it is transmitted directlythrough pipelines to consumption areas.We are making further efforts to save energy, such as by using LNG cold energy.

Ohgishima LNG Terminal

Using LNG Cold Energy

Using cold energy of -162°C LNG at various temperatures, we engage in cryogenic powergeneration, operate cold storage warehouses and produce dry ice. The Negishi LNG Terminaldepends on cryogenic power generation for about 38% of its power consumption. In fiscal 2017, itgenerated 32,024 MWh of electricity, using cold energy of LNG, and reined in CO2 emissions byabout 22,000 tons.

Cold Energy Use (FY2017)

Purpose LNG Used for Cold Energy (1,000 tons)

Supplied to subsidiaries 820

Electricity generated using cold energy 787

BOG*, other 1,283

Total 2,890*Boil-off gas is generated by evaporation of LNG due to heat entering tanks.

Contribution to the Environment ▶ Climate Change Countermeasures ▶Energy Savings and Reduction of CO2 Emissions in Business Operations

Measures to Reduce Methane Emissions

Methane accounts for less than 1% of the Tokyo Gas Groupʼs greenhouse gas emissions. It isreleased mainly during city gas production and gas pipeline construction work. The Group strives tofurther reduce methane emissions by, for example, cutting the amount of sampling gas used inanalyzing produced gas, preventing venting during the shutdown of a calorific value adjustmentsystem, planning pressure reductions to curb methane emissions into the atmosphere duringpipeline construction work, and developing gas absorption and recovery systems.

The Tokyo Gas Group has contributed to mitigating climate change by promoting the use ofrenewable energy sources, such as wind power, for electricity generation in addition to its naturalgas-fueled thermal power generation, which is highly efficient and has a low impact on theenvironment.Since the full liberalization of Japanʼs electricity retail market, Tokyo Gas, as an electricity retailer, hasbeen promoting electricity procurement chiefly from highly efficient thermal power plants andrenewable energy power generators while working to curb CO2 emissions at the retail stage. Thecompany partners with other power utilities to create a low-carbon society via the Electric PowerCouncil for a Low Carbon Society, in which it has been a member since its foundation.

Most Advanced, Highly Efficient Natural Gas-Fired ThermalPower Plant

Tokyo Gas-affiliated power plants are operated by Tokyo Gas Baypower Co., Ltd. (100,000 kWh,wholly owned by Tokyo Gas, 50% maximum efficiency on a lower heating value, or LHV, basis at thegenerating end), Tokyo Gas Yokosuka Power Co., Ltd. (240,000 kW, 75% owned by Tokyo Gas, 51%maximum efficiency), Kawasaki Natural Gas Power Generation Co., Ltd. (840,000 kW, 49% ownedby Tokyo Gas, 58% maximum efficiency), and Ohgishima Power Co., Ltd. (approximately 1.2 MkW,75% owned by Tokyo Gas, 58% maximum efficiency).In addition, we decided to receive the entire output (approximately 1.24 MkW) of the Moka PowerStation, which Kobelco Power Moka Inc. (a wholly owned subsidiary of Kobe Steel, Ltd.) is buildingin Moka city, Tochigi Prefecture. (The plantʼs first unit will be completed in the second half of 2019,and its second in the first half of 2020.)These plants are all highly energy-efficient natural gas-fueled power plants that generate electricityby using cutting-edge gas turbine combined cycle technology.Using the electricity generated by these newly built highly efficient power plants in place ofelectricity produced by the less efficient existing thermal power plants will help reduce our CO2

emissions by the difference between the existing and new plants in CO2 emissions per unit ofgenerated electricity.

Ohgishima Power Station

Gas Turbine Combined Cycle TechnologyCombined cycle power plants that use LNG (liquefied natural gas) as fuel achieve higher power generation efficiency as they convert water to steam with the heat from gas turbines and collect the steam to run steam turbines to generate power.


Combined Cycle Power Generation

Promoting Renewable Energy

The Group promotes the procurement of electricity from renewable energy sources with the aim ofhelping to create a low-carbon society.Electricity generation costs have recently dropped at wind power plants mainly due to their large-scale operations, and expectations are growing for them to emerge as major producers ofrenewable energy. We have engaged in wind power generation since 2005 at a plant with an outputof 1,990 kW in our Sodegaura LNG Terminal. The Sodegaura plant called for the revocation of itscertification under the Act on Special Measures Concerning New Energy Use by Operators of ElectricUtilities in March 2013 and obtained certification under the Act on Special Measures ConcerningProcurement of Electricity from Renewable Energy Sources by Electricity Utilities. In addition, we sellgenerated electricity to ENNET Corporation, an electricity retailer.

Wind power equipment at the Sodegaura LNG Terminal

Our second venture into the wind power business began with the announcement in April 2011 ofour investment in Shonai Wind-Power Generation Co., Ltd. Shonai Wind-Power Generation nowoperates two wind power plants in Yamagata Prefecture, including the Yuza Wind Power Plant (inoperation since December 2010), with a combined power generating capacity of 16,360 kW.

Yuza wind power plant

On January 2015, we signed a power purchasing agreement with Kuroshio Furyoku Hatsuden K.K.,and we have been purchasing approximately 12,000 kW of electricity under this agreement sinceApril 2015. This electricity is generated by two plants operated by Kuroshio Furyoku Hatsuden in theKanto region: the Choshi Takada-cho Wind Power Plant, which entered service in 2006 with one1,990 kW turbine, and the Shiishiba Wind Power Plant, which entered service in 2009 and has five1,990 kW turbines.We intend to expand the use of renewable energy by promoting capital and business tie-ups as wellas other collaborations in order to conduct business operations with integrated expertise.In February 2017, we entered a capital and business partnership with Shizen Energy Inc., adeveloper of solar farms and other renewable energy power systems, and we set up Prominet

Power Co., Ltd. We carry out joint development work toward achieving 60 MW of photovoltaic powergenerating capacity as soon as possible.In May 2018, Prominet Power Co., Ltd. and Kyudenko Corporation acquired part of Tokyo CenturyCorporationʼs stake in a wholly-owned company, SKF Power Co., Ltd., in order to integrate theirexpertise for the development and operation of the solar power business.In June 2018, we signed an agreement with PHOTON JAPAN LLC to cooperate for three years in asolar power generation business and announced that the two companies would pursue jointdevelopment. During that period, Tokyo Gas plans to develop a solar power plant with an output of30,000 kW.In our efforts to create a low-carbon society, we will continue to explore the possibilities of acquiringelectricity generated by various renewable energy sources, such as wind power, biomass, whichassures a high capacity factor, and solar power with high potential capacity.

District Heating and Cooling Services

The Tokyo Gas Group operates district heating and cooling services, including small-scale heatsupply, in 54 districts. We supply steam and hot and cold water with combined heat and power(CHP) systems* that use natural gas, absorption chillers and boilers. We work on fine-tuning themachines to increase energy efficiency and improve their operational efficiency as well.*Gas engine-based CHP systems generate electricity and recover waste heat generated as a by-product.

Makuhari District Heating and Cooling Center

Makuhari District Heating and Cooling CenterWe have updated heat source equipment at the Makuhari District Heating and Cooling Center andconverted it into a regional energy center for power generation and heat supply that promotesregion-wide reductions of energy use and CO2 emissions, from a conventional district heating andcooling center that supplied only heat. We have optimally mixed the use of the latest highly efficientlarge-scale CHP system with a total capacity of 15.7 MW, an electric turbo chiller, a boiler and anabsorption chiller while also reducing fuel consumption by 19% and CO2 emissions by 19% (fiscal2015).

Operational Chart of the Makuhari District Heating and Cooling Center

*Only when the CHP system cannot meet demand.


The Makuhari New City area is provided with district air-conditioning and heating services.

Using Energy Effectively by Combined Heat and Power(CHP) Systems

Using Energy Effectively by Combined Heat and Power (CHP) SystemsTokyo Gas started its energy saving efforts early with the introduction of a CHP system*1 at theHamamatsucho Head Office Building in 1984. We upgraded the system to one employing the mostadvanced technology*2 and started using the new system in April 2009. The replacement allowedthe building to reduce its annual CO2 emissions by about 1,400 tons.In the face of tight power supplies in the summer 2011 after the Great East Japan Earthquake, wesaved electricity use significantly by putting all the Groupʼs CHP systems to work.*1 Gas engine-based CHP systems generate electricity and recover waste heat generated as a by-product.

*2 Upgraded CGS: Two 930 kW-class gas engines, total efficiency of 72% (38% power generation, 32% waste heat capture).

Making Old Buildings Both Energy-Saving andEnvironmentally Friendly

Tokyo Gas introduced the Design Guidelines that care about energy conservation, seismic safety anddurability in 2010 as part of its activities taking the environment into consideration. We follow thenew guidelines in drawing up plans to reconstruct buildings owned by the Group.

The TG Hiranuma Building That Received Environment Ministerʼs Awardfor Global Warming Prevention ActivityThe TG Hiranuma Building is a middle-scale, energy-saving and eco-friendly office building (5 storiesabove ground, about 7,200 m2). The building completed in March 2013 was the first reconstructedbuilding based on the 2010 Design Guidelines. The building has a solar cooling system, which usessolar energy and exhaust heat from its CHP system, significantly reduces mainly daytime CO2

emissions from regular air-conditioning and heating loads. Individual, selective air conditioning bythe GHP XAIR, a highly efficient gas heat pump air conditioner, deals sensitively with air-conditioningand heading loads, which vary according to the time of day and the number of people inside. Thebuilding also uses such equipment as solar power generators and other renewable energyequipment and natural ventilation systems. Without sacrificing internal comfort, it uses about 30%less energy than other office buildings of similar scales.The building was selected as a Leading Project for CO2 Reduction*1 by the Ministry of Land,Infrastructure, Transport and Tourism in fiscal 2011. It was given the Environment Ministerʼs Awardfor Global Warming Prevention Activity (Early Adopter of Solution Technology category) in December2015. In fiscal 2016, it obtained the BELS*2 certification for buildings that meet the governmentʼsenergy-saving criteria. (The assessment was four stars; top assessment is five stars.)The Group works to promote the wider use of energy-saving and CO2-cutting technology adopted inthe TG Hiranuma Building, aiming for a zero-energy building (ZEB)*3.*1 The government gives subsidies for leading housing and construction projects for CO2 emission reduction after publicly soliciting

applications.

*2 The Building Energy-Efficiency Labeling System. In the system, a third-party evaluation body assesses and certifies the energy-saving

capabilities of green buildings under the Act on the Improvement of Energy Consumption Performance of Buildings (Building Energy

Efficiency Act).


*3 A zero-energy building (ZEB) aims to achieve zero net primary energy consumption, or the equal balance between total energy used and

renewable energy generation, on an annual basis. The government is promoting such buildings, putting the initiative into its basic energy

program.

TG Hiranuma Building

Earth Building Tachikawa (TG Tachikawa Building) Given Top CASBEECertificationThe Earth Building Tachikawa (TG Tachikawa Building), rebuilt because of aging, was completed inJuly 2015 as a middle-scale office building (five stories above ground, about 10,600 m2).Aiming for a ZEB, we give environmental consideration, such as the use of renewable energy andhighly efficient equipment and appliances, in operating the Earth Building Tachikawa. The buildingalso excels in ensuring business continuity in case of an earthquake with its system that combinesseismic isolation and vibration suppression equipment.The building received the top S certification in CASBEE*4 for buildings, the first for a Tokyo Gasbuilding. In fiscal 2016, it acquired BELS certification (The assessment was four stars, the topassessment is five stars).*4 CASBEE stands for the Comprehensive Assessment System for Built Environment Efficiency, which assesses environment performance of

buildings and gives ratings on a scale of five.

TG Tachikawa Building

Earth Port as ZEBWe started to take improvement measures at the Tokyo Gas Kohoku New Town Building, dubbedEarth Port, in 2010 to achieve zero net primary energy consumption on an annual basis by 2030 bymaking equipment more efficient and optimizing energy use at a number of buildings. Measuresincluding renewable energy use, such as solar thermal and photovoltaic power generation, andoptimum operation of its CHP system allowed the building to reduce its primary energy consumptionby about 49% and CO2 emissions by about 54%.

Earth Port (after refurbishment)

Example of visualization atHamamatsucho head officebuilding

Poster for an energy conservationcampaign

Chart on Power Provision to Gas Science Museum

Saving Energy through Better Use of Equipment, FacilitiesWe hold an energy-saving committee at each building where we lease an office, among thebuildingʼs owner and equipment administrator and the relevant section of ours. The committee helpsexamine energy use, optimize temperature and humidity and arrange energy conservation patrols,encouraging each of our employees to promote energy-saving activities.The Tokyo Gas Group as a whole engages in energy conservation though campaigns in the summerand winter, when power use peaks.In capital spending, we promote the introduction of more efficient lighting equipment at our officesand facilities, such as LED and high frequency-ballast fluorescent lights, to increase energy saving.

Topic

Buying Renewable Energy with Non-Fossil Fuel Certification

The Gas Science Museum started to purchase electricity from ENNET Corporation under itsGreen Menu*1 electricity program. This is the Tokyo Gas Groupʼs first electricity purchasethrough non-fossil fuel certification in the FIT*2 program. The museum covers about 70% of ispower consumption with electricity generated by highly efficient fuel cells using natural gas.This time, the museum has decided to shift its electricity procurement that covers the rest ofabout 30% to the purchase from ENNET. The shift is estimated to reduce CO2 emissions infiscal 2018 at the museum by 17%*3 from fiscal 2017 to 75 tons.

*1 An ENNET program featuring a CO2 emission factor of zero. Of electricity provided under the program, Tokyo Gas purchases

electricity from renewable energy sources by using non-fossil fuel certification in the FIT program.

*2 The feed-in tariff program, in which the government assures that power companies purchase electricity from renewable energy,

such as sunlight, wind power, hydraulic power, geothermal heat and biomass.

*3 The estimate assumes energy consumption at the museum remains the same from fiscal 2017.

Saving Energy through Better Use of Equipment, Facilities

Nagano Tokyo Gas Forest Employees participating in anenvironmental workshop

2

Other Efforts to Reduce CO2 Emissions

Promotion of Eco-drivingWe train employees in green and safe driving skills in September and October every year. Theseannual practice sessions are led by outside trainers who have been certified as eco-drivinginstructors and draw about some 100 participants. We also designate November as eco-drivingmonth, and each employee selects one special interest from a list of 10 eco-driving tips for being aneco-driver. In fiscal 2017, we reduced CO2 emissions from corporate business vehicles by 6.1% fromthe previous year.

Briefing a trainee on the key points of eco-driving

Topic

Introducing Fuel Cell Vehicles

We encourage the use of low-emission, fuel-efficient vehicles to reduce emissions of nitrogenoxides (NOx), particulate matter (PM) and CO2. As of the end of March 2018, Tokyo Gas hasbeen operating 26 corporate fuel cell vehicles.

Forest Conservation Activities at Nagano Tokyo Gas ForestTokyo Gas owns a 194-hectare forest in the town of Miyotamachi in Kitasaku-gun of NaganoPrefecture and engages in conservation activities to help stop global warming, such as planting andthinning trees under a forestry management plan.We use the forest as an ideal site for providing environmental education to Group personnel.


Mori Sato Umi Tsunagu (Connecting Forests, Villages andOcean) Project is intended to help develop sustainablecommunities and lifestyles through activities to fight globalwarming and preserve biodiversity offered in an area inwhich rivers connect forests, villages and the ocean.In fiscal 2017, Mori (forests) activities consisted of forest-care efforts in partnership with local governments and otherorganizations. The Sato (village) program engaged localnonprofit organizations in conserving thickets, while the Umi(ocean) program had employees join local teams in restoringeelgrass, which provides shelter for small fish and othermarine creatures, in the spring and autumn to help clean upthe sea and reduce CO2 emissions. Customers whosupported this project joined through their Paccho (TokyoGasʼs mascot character) point*2 contributions, which arechanneled to donations for organizations engaged in socialcontribution activities involving forests, villages, the oceanand rivers.We hope that broadening these connections will contribute toachieving the SDGs through both business operations andsocial activities.

A Sato (village) conservation activity aspart of the Tokyo MetropolitanGovernmentʼs Tokyo Greenship Actionprogram

Participants work in the sea in an Umi(ocean) program jointly undertaken withthe Amamo (eelgrass) RestorationCollaboration in Kanazawa-Hakkei,Tokyo Bay Area.

Link▶ Biodiversity Conservation Activities at Nagano Tokyo Gas Forest

Mori Sato Umi Tsunagu (Connecting Forests, Villages and Ocean)Project*1

*1 For this project, we set up the Mori Sato Umi Tsunagu (Connecting Forests, Villages and Ocean) Project Committee in cooperation with

the Japan Philanthropic Association to discuss and decide which subsidies and contributions are in the public interest and fair.

*2 This reward point program is for myTOKYOGAS members and therefore requires prior registration. Members earn Paccho points by using

various Tokyo Gas services and participating in campaigns. The points can be exchanged for original goods or points for the loyalty

programs of tie-in companies.

Topic

Joining Carbon Offset Programs of the G-7 Ise-Shima Summit, IntercityBaseball Tournament, and J.League

Tokyo Gas uses the J-Credit Scheme*, which the government operates to certify greenhousegas emission reductions and contribute to the environment, and participates in internal andexternal carbon offset programs.We provided carbon credits equivalent to 1,190 tons of emissions to offset greenhouse gasemissions at the Group of Seven Ise-Shima Summit in May 2016, Japanʼs annualnonprofessional Intercity Baseball Tournaments, held from 2016 to 2018, home games of theprofessional soccer team F.C. Tokyo during the 2017 and 2018 seasons, and our own events.*Under this scheme, the Japanese government certifies credits for greenhouse gas emission reductions and absorption and sinks

that are achieved by using energy-saving equipment, forest management and other activities. The credits are used for various

purposes, such as carbon offsets and efforts to achieve the goals of business circlesʼ action plans for a low-carbon society.

Creating a Recycling-oriented Society

The Tokyo Gas Group strives to create a recycling-based society by implementing its Guidelines forPromoting Resource Saving and Recycling and rigorously practicing the 3Rs of reduction, reuse andrecycling of waste across the Group. Specifically, we seek to achieve zero waste emissions atproduction sites, reduce the amount of soil excavated during gas pipeline construction, reuse old gasmeters and recycle used gas pipes at every stage of our business activities.

Total Volume of Generated Waste, and Recycling Rate

Group offices produce various types of industrial waste, such as plastics from containers andpackaging and waste from technological development and training as well as maintenance work atcustomer sites. The Group is strongly committed to waste separation and strives to recycle andproperly handle waste.We promote efforts at offices to reduce the use of copy paper, generate less paper waste andrecycle used paper.

Industrial Waste (FY2017)

*1 Production plants includes data at facilities that make products, including city gas, and district heating and cooling centers as well as

power plants. Construction Work includes data on construction work won by Group companies, while Offices, etc. includes data on other

undertakings.

*2 Includes construction work at the sites of Group company customers.


ItemGeneration Amount

recycled Final disposal Recyclingrate

Final disposalrate

（t）（t）（t）（％）（％）

Industrial Waste 160,419 156,064 1,823 97 1

Production Plants*1 617 354 4 57 1

Construction Work*1,

2 155,510 151,997 1,469 98 1

Business offices,etc.*1 4,292 3,713 350 86 8

Tokyo Gas Co., Ltd. 5,950 4,638 981 78 16

Eco-ball temporary backfill Gas pipeline installation work using Eco-balls

General Waste (FY2017)

Promoting the 3Rs

Working to Reduce Waste

Efforts Concerning Excavated Soil

Gas pipeline installation work produces excavated soil and asphalt concrete lumps. We lay pipesshallowly in narrow trenches and use the non-open-cut construction method to reduce the volumeof excavated soil, re-bury excavated soil and make more use of improved soil and recycled roadsurface materials under our 3R efforts. When we re-excavate the same location, we use newlydeveloped materials and construction methods, such as Eco-balls, an innovative temporary backfill.Reducing excavated soil leads to less use of mountain sand and lower CO2 emissions from transportvehicles.

Link▶ Promoting Biodiversity Conservation Measures in Our Value Chain

Measures at Production Plants

We take steps to reduce waste toward achieving zero emissions (a final disposal rate of less than0.1%) at LNG terminals, which include city gas production plants, power plants and district heatingand cooling centers. In fiscal 2017, we produced 617 tons of industrial and other waste, and 4 tonswere subjected to final disposal for a final disposal rate of 0.6%*.*Calculation excludes hard-to-recycle industrial waste such as asbestos.

ItemGeneration Amount

recycled Recycling

rate

（t）（t）（％）

General Waste 2,818 2,090 74

Tokyo Gas Co.,Ltd. 1,010 806 80

Paper waste 1,722 1,570 91

Tokyo Gas Co.,Ltd. 719 680 95

Gas meter Disassembled gas meter

Initiatives for Reuse

Reuse and Recycling of Gas Meters

Tokyo Gas began reusing gas meters immediately after their initial introduction, ahead of other gasservice companies and companies in other industries.Although gas meters installed at customer sites are typically replaced before the expiration of their10-year certified life, we collect retired gas meters, replace consumable parts, recalibrate them andreuse them for up to three cycles, or 30 years.In fiscal 2017, we reused 392 thousand gas meters, thereby avoiding the generation of 1,632 tonsof potential waste. Gas meters reused for three cycles have been recycled through our own channeland reused by electric furnace makers and other companies as material for new products.

Recycling Initiatives

Recycling of Used Gas Pipes

In fiscal 1994, we established a system for recycling used gas pipes, which are removed during gaspipeline installation work and achieved an annual recycling rate of 100%. Polyethylene (PE) pipes*

are reprocessed into such items as gas meter tags that show how to restart them after shut-off inthe event of an emergency. Steel and cast-iron pipes are 100% recycled into raw materials byelectric furnace makers and other companies.*PE pipes have been in widespread use since the Great Hanshin-Awaji Earthquake in 1995 because of their earthquake resistance andanticorrosive property.

Recycling Rate for Used Gas Pipes

FY2013 FY2014 FY2015 FY2016 FY2017

Gas pipesPE pipes 100％ 100％ 100％ 100％ 100％

Steel and cast-iron pipes 100％ 100％ 100％ 100％ 100％

Recycling Process of Used Gas Pipes (PE Pipes)

Recycling of Paper

We follow our Guidelines for Promoting Resource Saving and Recycling and strive to reduce the useof copy paper at all workplaces by holding paperless meetings and promoting double-sided printing.Moreover, we recommend using Forest Stewardship Council (FSC)-certified paper made fromsources with proven consideration for the environment, such as forest conservation and support forthe sustainable use of forests.In fiscal 2003, we started collecting used documents and waste paper and purchased and usedrecycled paper as Tokyo Gas Recycled Paper. In fiscal 2017, we purchased 247 tons of paperrecycled in this way and used it for CSR reports, marketing pamphlets and other publications.Unlike the ordinary recycling of waste paper or purchases of recycled paper, we provide materials forTokyo Gas Recycled Paper and purchase the paper as an independent effort to green the paper-related product chain. Furthermore, we have received cooperation from a wide range of companies,from waste paper haulers and waste paper wholesalers to paper wholesalers and papermanufacturers, in terms of the waste paper distribution and recycled paper production stages, andalso from production and printing companies at the printing stage. Internally as well, all of ouremployees carefully separate waste to make it possible for us to provide high-quality waste paperfor recycling.

Recycling used paper for Tokyo Gas Recycled Paper

Dealing with Waste at Customer Sites

We promote the 3Rs at customer sites by controlling waste generation through considerations at thedesign stage, reducing container and packaging waste, and collecting used appliances.

System for Collecting and Recycling Waste such as Used Gas Appliances(SRIMS)We have operated our own Saving & Recycling Innovative Model System (SRIMS) since August 1994to collect waste when we deliver gas appliances, parts and piping materials to partner companies.Through this system, which allows us to reduce environmental impact while also cutting costs, wecollect used gas appliances and waste that comes from replacement by customers and gasinstallation or home renovation work.In fiscal 2017, we collected 8,140 tons of waste and recycled 7,693 tons.

Saving & Recycling Innovative Model System (SRIMS)

Helping Recycle Home Electric AppliancesThe so-called A Group led by Panasonic Corporation and Toshiba Corporation collects and recyclesTokyo Gas-brand household gas air conditioners and clothes dryers. These are eligible for recyclingunder the Act on Recycling of Specified Kinds of Home Appliances (Home Appliance Recycling Law).In fiscal 2017, 90% (compared to at least 80% legally mandated) of our air conditioners collectedand 87% (82% legally mandated) of our clothes dryers collected were recycled in terms of grossweight.

Recycling under the Home Appliance Recycling Law (FY2017)

Item Unit Air conditioners Clothes dryers

Collected at specified places Number 12,115 6,138

Transported to processing plants Number 12,104 6,152

Recycling

Recycled by number of units Number 12,081 6,030

Recycled by weight t 498 244

Recycled products by weight t 450 215

Recycling rate ％ 90 87

FluorocarbonsCollected kg 7,865 -

Destroyed kg 1,105 -

Cardboard boxes designed torequire less cushioning

Shrink wrapping Returnable packaging(repeatedly used containers)

Reducing Waste of Containers and PackagingWe make it a rule to collect discarded containers and packaging when partner companies sell andinstall gas appliances to reduce waste at customer sites.Collected containers and packaging are recycled in the Saving & Recycling Innovative Model System(SRIMS). In fiscal 2017, approximately 575 tons of corrugated cardboard and 15 tons of polystyrenefoam were recycled. In addition, we work to reduce the quantity of containers and packaging for gasappliances. These efforts include reducing cushioning through the redesigning of cardboardpackaging, cutting back on the use of cardboard through shrink wrapping in plastic film, andadopting returnable packaging, in which packaging materials are collected and reused.

Dealing with Waste from Other Business Activities

Dealing with Waste from Construction WorkThe Group deals with waste from gas equipment installation work under direct contracts with gasutilities, gas pipe work at customer sites, installation of air-conditioning, heating and hot watersystems, and home renovation work. This waste is mainly construction rubble and sludge, scrapmetal and woodchips.

Working to Reduce Waste in Gas Equipment Renewal Work

We have adopted the prefabrication and precut method for piping work for the Tokyo Gas Eco-System (TES) used at condominiums.Pipes and joints as well as other materials are processed at manufacturing plants and supplied aspiping sets in time for the work at each house. The only work necessary at the worksite isconnecting and fixing the pipes to appliances.Since advance processing reduces waste, we promote this method in cooperation withmanufacturers and installation contractors.

Working to Achieve Zero Mixed Waste in Gas Equipment Renewal Work

Replacement of equipment or pipes at condominiums using our HEATS gas central air-conditioningand heating system requires dismantling and removal work. At a relatively small scale, this oftenused to require the disposal of mixed waste because the work period and space did not allow wasteseparation. We have therefore established out a waste separation protocol at the planning stage ofconstruction work in coordination with relevant parties. Thanks to measures such as worker trainingin waste separation, we have achieved zero mixed waste from construction work and reduced thevolume of landfill waste disposal.

Biodiversity Conservation Activities

Promoting Biodiversity Conservation and Sustainable UseHuman activities are believed to have taken many species to the brink of extinction, rapidlyupsetting the balance of ecosystems. Recognizing richly diverse ecosystems as a foundation of itsbusiness, the Tokyo Gas Group has drawn up the Guidelines for Promoting Biodiversity Conservationto preserve biodiversity and its sustainable use and ensure the continuity of our business.Specifically, we monitor the status of each segment of the value chain and work to mitigate theimpact on ecosystems while also engaging in forest conservation efforts at our Nagano Tokyo GasForest along with other activities.

Carrying Out Environmental Impact AssessmentExtracting natural gas and constructing LNG (liquefied natural gas) terminals or power stations havea far from negligible impact on the landscape and natural environment. The Tokyo Gas Group hasreviewed the state of biodiversity conservation at natural gas wells abroad and confirmed thatconsideration is given to local ecosystems. In Japan, we conduct the required environmentalassessments for the construction of LNG terminals and power plants and cooperate withnongovernmental organizations to undertake such activities as managing green spaces with dueconsideration for ecosystems. Taking into account the growing risks facing watersheds, we assessedthe impact of drainage on ecosystems at all our LNG terminals with the use of the IntegratedBiodiversity Assessment Tool, and we did not find problems.

Link▶ Impacts on Biodiversity and Responses along the LNG Value Chain（PDF︓237KB）

Measures in Our Value Chain

We are working to conserve biodiversity by accurately understanding the impact of each segment ofour value chain, from natural gas procurement to transportation, production and supply.

Procurement

Measures at LNG Suppliers

In gas fields from which Tokyo Gas procures LNG, our suppliers implement measures to conservebiodiversity, such as protecting endangered species and forests as well as by engaging inafforestation and protecting marine ecosystems. In our LNG project in Indonesia, for example, weare striving to protect an endangered species of painted terrapin called the sea tuntung and restoremangroves. Our LNG project in Qatar involves relocating coral reefs from a pipeline constructionarea to a new environment. We have also been able to confirm that the coral reefs were successfullytransplanted to that new location and have showed signs of regrowth. In our LNG project inAustralia, we provide the Industry-Government Environmental Meta-database (IGEM), which


LNG carrier Hard clams not previously found in Japanese waters

Staff members plant trees at an LNGterminal

Japanese rice fish in our artificial pond

comprises oil and gas business operators, the government, research organizations and others suchas investors, with data collected in monitoring surveys and other activities as a means for sharingenvironmental knowledge.

Immature Sea Tuntung terrapinsSource: KOMPAS.COM-Pertamina dan YSCLI Selamatkan Tuntong Laut dari Kepunahan

Measures during LNG Transport

Concerns have been raised that the discharge of ballast water (seawater taken into a vessel as acounterweight to maintain stability after LNG is unloaded) adversely affects ecosystems byintroducing foreign aquatic organisms into areas where they are not typically found. Although wehave already taken some steps, such as discharging ballast water on the high seas, we are alsoinstalling ballast water treatment equipment on LNG carriers that we own and operate, includingthose under construction, to reduce the impact on ecosystems, under the International Conventionfor the Control and Management of Shipʼs Ballast Water, adopted by the International MaritimeOrganization, that went into effect in September 2017.

ProductionWe are greening the sites of the Sodegaura, Negishi, Ohgishima and Hitachi LNG Terminals by onlypartially mowing grass fields and curbing the use of herbicides, and our staff also plant trees.In addition, we collaborate with the Jumoku Kankyo Network Society, a nonprofit organization, inconducting research on birds, insects and plants. Thinning trees on the basis of proven research andstacking eco-piles of rotting timber and other matter helps areas with diverse species of flowers witha positive impact on insects. We have confirmed that Japanese rice fish, an endangered species, canbreed naturally in artificial ponds at our LNG terminals.

SupplyWhile we previously used pit sand to refill sites excavated for gas pipeline work, reducing the use ofpit sand mitigates environmental destruction around quarries and reduces the number of sand-carrying vehicles and CO2 emissions. The Tokyo Gas Group lays pipes in shallower, narrowertrenches than conventional installations and adopts a non-open cut construction method, whichdoes not dig up roads, to reduce the volume of excavated soil. Also, we are increasing the use ofimproved soil and recycled road surface materials as well as a new temporary backfill for refill workto reduce the amount of pit sand used.

Workers using a shaft to thrust a gaspipe into place

Pipeline work using Eco-balls, a new kindof temporary backfill

Recycling Excavated Soil

Pipeline work using Eco-balls, a new kind of temporary backfill

Link▶ Promoting 3R Efforts Concerning Excavated Soil

OfficesWe plant trees on rooftops and create green curtains at our offices and corporate museums. Wehave greened the rooftop of the Gas Science Museum and point to this example in communicatingwith customers as well as local elementary schools and other community groups. At the TGKumagaya Building, plants growing against the walls and near the windows provide shade to lowerindoor temperatures.

Greened rooftop of the Gas Science Museum

Plants growing against the walls and windows at the TG Kumagaya Building

A hare in the Nagano Tokyo Gas Forest A wren

Other Measures to Conserve Biodiversity

We participate in forest preservation at the Nagano Tokyo Gas Forest, which opened in 2005, andthe Mori Sato Umi Tsunagu (Connecting Forests, Villages and Ocean) Project, which started on June1, 2017, to examine the connections among forests, villages and the sea through environmentalactivities, the Donguri (Acorn) Project in partnership with customers and the Watashi no Mori (MyForest) Project. These are all part of our efforts to address climate change and conserve biodiversity.

Biodiversity Conservation Activities at Nagano Tokyo Gas ForestWe have been monitoring the environment at the Nagano Tokyo Gas Forest since 2007 togetherwith a local nonprofit organization as an effort to conserve biodiversity. We have confirmed a total of428 species of living organisms in the forest (324 plants, 26 mammals and 78 birds).Looking ahead, we will apply information on ways to take care of trees and address the rise and fallof animal populations as part of future forest preservation and biodiversity conservation plans.

Link▶ Other Measures to Reduce CO2 Emissions, Forest Conservation Activities at Nagano Tokyo

Gas Forest

Environmental and Social Contribution Activities in the Mori Sato UmiTsunagu (Connecting Forests, Villages and Ocean) Project

Link▶ Other Measures to Reduce CO2 Emissions, Support for the environmental and the social

contribution activity: Mori Sato Umi Tsunagu (Connecting Forests, Villages and Ocean)Project

Pursuing the Effective Use of Biomass

We are developing technologies that make use of biomass in a bid to reduce greenhouse gasemissions. Biomass is a generic term for plant and animal-derived organic resources*1 (excludingfossil resources) that can be recycled into energy or material. Burning biomass releases CO2, butCO2 absorbed from the atmosphere by plants during photosynthesis offsets this release. This is thegreatest advantage of using biomass.It can be used as an energy source in a number of ways, such as obtaining heat or electricity withthe use of steam generated by burning it, and using biogas acquired from fermented biomass forcombined heat and power (CHP) systems*2.We plan to promote the wider use of biomass and its diffusion by working on the biogas utilizationtechnologies we have developed through combustion of city gas and biogas as well as technologiesfor extracting biogas through more reasonable and efficient methane fermentation of biomass, suchas food waste, and upgrading biogas to a higher quality gas.*1 Examples are rice straw, farm, forestry and fishery products like livestock excrement, food waste, sewage sludge and wood chips.

*2 Gas engine-based CHP systems generate electricity and recover waste heat generated as a by-product.

Developing Biogas Utilization TechnologiesThe Tokyo Gas Group possesses technologies for converting biomass such as food waste andsewage sludge into gas for use as fuel for boilers and power generation and uses biogas that buildsup at customer sites mainly as fuel for cogeneration equipment. As biogas is a lean fuel comprisingabout 60% of CH4 and 40% of CO2, specific power generators are needed. We were the first inJapan to begin to refine biogas from food waste, adjust its calorific value and odorize it so that itcould be injected into city gas pipelines. In fiscal 2017, we received 485 thousand m3 of biogasderived from food waste (equivalent to about an 827-ton reduction in CO2 emissions).

How Biogas Is Fed into Gas Pipelines

We have been carrying out joint research with the city of Yokohama since fiscal 2013 on ways toexpand the use of biogas from sludge at a sewerage facility in northern Yokohama. We set up testequipment for refining biogas at the North Yokohama Sludge Recycling Center and are developingtechnologies for removing CO2 in sewage sludge biogas using a separation membrane toconcentrate methane.


Test equipment for refining biogas at NorthYokohama Sludge Recycling Center

Establishing a Foundation for Hydrogen Supply

Construction and Operation of Hydrogen StationsWe construct and operate hydrogen stations to popularize fuel cell vehicles (FCVs) and helpestablish the infrastructure for supplying hydrogen. We want to create a hydrogen society thatmakes use of zero-emission hydrogen energy. CO2 emissions for which FCVs are liable do not differsignificantly from those for electric vehicles in terms of mileage, and the use of FCVs helps to reduceenvironmental impact.Japanʼs energy self-sufficiency rate stood at only 8.4%*1 in 2016, a relatively low internationalranking. The nation is often affected by international developments because of its dependency onfossil fuels imported from abroad for power generation. Since burning such fuels produces asignificant amount of CO2, energy diversification is required. The Japanese government is pursuingthe goal of putting about 800,000 FCVs into use and establishing roughly 900 hydrogen stations by2030. As of the end of January 2018, about 2,400 FCVs were in use and around 101 hydrogenstations were in operation.In February 2018, we jointly established Japan H2 mobility, LLC (JHyM) with 10 other companies*2,including infrastructure businesses, automobile makers, financial investors and other companies, toaccelerate the pace of developing hydrogen stations. The worldʼs first collaboration of this kind willpursue an initiative for the strategic development and efficient operation of hydrogen stations. Theobjective is to establish a virtuous circle between FCVs and hydrogen stations, that is, increasingconvenience for FCV users, boosting the number of FCVs, making hydrogen stations businessprofitable and building more hydrogen stations. Tokyo Gas will construct and operate hydrogenstations as an infrastructure company in collaboration with JHyM. Looking ahead, we will continue to pursue efforts to create a sustainable hydrogen society incollaboration with other companies.*1 Source: Agency for Natural Resources and Energy

*2 Three automobile makers: Toyota Motor Corporation, Nissan Motor Co. Ltd. and Honda Motor Co. Ltd.; five infrastructure businesses:

JXTG Nippon Oil & Energy Corporation, Idemitsu Kosan Co. Ltd., Iwatani Corporation, Toho Gas Co. Ltd. and Air Liquide Japan Ltd.; and

two others including financial investors: trading company Toyota Tsusho Corporation and financial firm Development Bank of Japan Inc.

Establishment of Japan H2 mobility, LLC

Chronology of Hydro Station Construction and Operations

Time OutlineHydrogen Supply

Method*3

May 2003 Senju Hydrogen Station opened in a pilot R&D project On-site

December2010

Haneda Hydrogen Station opened in a pilot project. (Japanʼsfirst hydrogen station with a natural gas stand (until 2015) On-site

December2014

Nerima Hydrogen Station opened as the first commercialstation in the Kanto region Off-site

January 2016 Senju Hydrogen Station converted into a commercial facility On-site

February2016 Urawa Hydrogen Station started commercial operations On-site

February2018

Tokyo Gas set up JHyM with other companies to promotehydrogen stations

*3 Hydrogen stations supply hydrogen produced on location from city gas (on-site method) or hydrogen produced elsewhere (off-site

method).

Nerima Hydrogen Station Senju Hydrogen Station Urawa Hydrogen Station

How City Gas Is Changed into Hydrogen (On-site Hydrogen Station)

Tokyo Gas produces hydrogen through the conversion of city gas, which emits only a limited amountof CO2 and has a low impact on the environment.

Process of Hydrogen Production in the On-site Method

*A device for cooling hydrogen to prevent the temperature in an FCV fuel tank from rising during refueling.

Development of Hydrogen TechnologiesTokyo Gas conducted research and development on hydrogen stations for supplying hydrogen to fuelcell vehicles as a participant in a New Energy and Industrial Technology Development Organization(NEDO) project on research and development of hydrogen utilization technology from fiscal 2013 tofiscal 2017. As NEDO is expected to carry this project forward, we will continue exploring ways tocontrol the quality of hydrogen fuel injected into FCVs, assess the accuracy of hydrogen injectionquantity measurement and inject hydrogen into FCVs other than passenger cars, such as buses andmotorcycles. In addition, we will help formulate industry guidelines for these methods in the hope ofincorporating them into international standards. We are further exploring efficient ways to runcommercial hydrogen stations and reduce their maintenance costs.

Technological Innovations in CHP Systems

Improvement of Power Generation Efficiency and Total EfficiencyCHP systems boast significantly better power generation efficiency, approaching 50% for large-scalesystems with an output of 5,000 kW or higher and exceeding 40% for medium-size systems with anoutput of 300 kW to 1,000 kW. This has resulted from technological development, such as themirror cycle method*1 and fine, cylinder-wise control of combustion.We improved the performance of the 1,000 kW-class GS16R2 CHP system, launched in fiscal 2014,and achieved a power generation efficiency of 42.5%, the highest for this class, as well as an overallefficiency of 80.1%. We rolled out the improved model in April 2017 and have benefited from agrowing sales volume.CHP systems have raised customer expectations from the perspectives of eco-friendliness, energyconservation and business continuity planning, and they are predicted to be in wide use in line withimprovements in economy and energy security. In the future, the use of solid oxide fuel cells

Attendant explaining how a 5 kW-classcommercial fuel cell is tested

(SOFCs) that operate in higher temperatures should realize even more efficient CHP systems.In partnership with manufacturers, we tested commercial SOFCs with an output of several tohundreds of kilowatts at the Senju Techno Station. By installing this equipment in facilities fordifferent industries, we were able to assess their durability as well as their potential for savingenergy and cutting CO2 emissions under actual conditions and confirmed energy savings in all cases.As a result, we commercialized a 3 kW-class SOFC system for business use, which features a powergeneration efficiency of 52.0% and total efficiency of 90.0%.*1 The focus of this method is on improving heat efficiency by making the cylinder expansion ratio greater than the compression ratio

through a change in the cam profile shape in order to delay the timing of valve closing, unlike the conventional Otto cycle, in which the

cylinder compression ratio and expansion ratio are the same.

Power Generation Efficiency (LHV) of CHP Systems

Topic

Testing a 5 kW-Class Commercial Fuel Cell at a Public Facility inArakawa Ward

As of March 2018, we are continuing to test a 5 kW-class commercial fuel cell installed at theArakawa Sogo Sports Center in Tokyoʼs Arakawa Ward. The test under actual conditions of 5kW-class commercial fuel cells is being conducted under an agreement concluded betweenArakawa and Tokyo Gas at the end of 2015. This is the first test of its kind at a public facilityin Japan.Electricity generated by a commercial SOFC powers first-floor lighting at the center, whilewaste heat is used to produce some of the hot water for locker room showers. During thetest, a monitor displays the amount of electricity generated by the SOFC, and visitors canexperience the hot water. The project is intended to raise awareness of fuel cells and thecontribution they can make to the creation of a low-carbon society.

Hot box

Topic

Worldʼs First 65%-Level Power Generation Efficiency Achieved by a 5kW-Class Fuel Cell

We have developed technologies to improve the efficiency of SOFC power generation andconfirmed the worldʼs first 65%-level*2 power efficiency rate on a lower heating value (LHV)basis by a small-output, 5 kW-class fuel cell hot box.We combined three technologies̶building double fuel cell stacks, recycling fuel and achievingthermal self-sustainability with unused fuel̶and verified their effectiveness.With these technologies, we will accelerate research and development to build a prototype sothat we can contribute to creating a low-carbon society upheld by the advanced use of citygas with a marginal impact on the environment.*2 Excluding the energy to operate the fuel cell when it is incorporated into a power generation system, and on a direct-currency

transmission-end efficiency basis for use by customers; with an auxiliary loss of 6% and DC-AC inverter loss of 5%.

SOFC Technology for Using More Injected Fuel for Power Generation

Source: Tokyo Gas Co., Ltd.

Topic

Breaking 80% Power Generation Efficiency Barrier: SuccessfulDevelopment of a Theoretical Design for an Innovative Concept toDramatically Improve SOFC Efficiency

In a joint study, Kyushu Universityʼs Next-Generation Fuel Cell Research Center (NEXT-FC) andTokyo Gas have successfully developed an innovative concept to improve dramatically theelectrical efficiency of solid oxide fuel cells (SOFCs) to over 80% on a lower heating value(LHV) basis and improving the mechanism, for the first time in the world. This achievementwas published in July 2015 in Scientific Reports, Natureʼs sister online publication.Super-efficient energy conversion from fossil fuel to electricity is expected to make a majorcontribution to reducing CO2 emissions and provide the core energy technology for creating ahighly environmentally sound, smart energy society. In addition, super-efficient powergeneration systems are potentially far more adaptable to market demand because theyproduce so little waste heat during the power generation process that they can eliminate theneed to use waste heat.

Innovative Technology to Increase Power Generation Efficiency

Contributing to the Creation of a Low-Carbon Societythrough Innovation

The Tokyo Gas Group has consistently developed technologies for reducing energy consumption andCO2 emissions. However, to further bolster efforts to create a low-carbon society, we must movebeyond our proprietary technologies and embrace innovative ideas and technologies from aroundthe world. To that end, we are promoting open innovation style research and development. In fiscal2017, we set up two specialized companies in the United States, Acario Investment One LLC andAcario Innovation LLC, and began investing in venture capital firms and venture businesses thatspecialize in energy technologies. We will seek closer collaboration with startup ventures andcompanies that have innovative business models toward meeting the demands of a low-carbonsociety.

environmental policy and environmental sustainability ... · note: qualitative indicators with no...

Documents