Initiatives of tInitiatives of the City Gas Industrhe City Gas Industry toy toCombat Global WarmingCombat Global Warming

The Japan Gas AssociationＮｏｖｅｍｂｅｒ ２９, ２００７

2

City gasGasification, calorific value adjustment

Scope of Keidanren’s Voluntary Action Planon the environment

Initiatives of the City Gas Industry to CombatInitiatives of the City Gas Industry to CombatGlobal WarmingGlobal Warming

(1) Reduce CO2 emissions when producing andsupplying city gas

Indu

stry

Com

mer

-ci

alR

esid

enti

alTr

ans-

port

・Wider use of vehicles poweredby natural gas

(2) Reduce CO2 emissionsat customer-side

CO2 emissions in fiscal 2006: 380,000 t-CO2(Approx. 0.03% of total CO2 emissions in Japan)

・More widespread use of naturalgas

・Development and introduction ofhigh-efficiency equipment

Rawmaterial

Using natural gas to reduce CO2 emissions on both the supply and demand sides

Exampleof LNG

Co-generation systems, fuel cells,Eco-Jozu, etc.

Undergroundtank

LNGvaporizer

High-pressurepipeline

Medium-pressurepipeline

Low-pressurepipeline

Gas holderCustomers

City gas production plant

・Initiatives that will lead to anational movementSupport for environmental education,etc.

3

Initiatives at the City Gas ProductionInitiatives at the City Gas Productionand Supply Stagesand Supply Stages

44

Fuel for reformers, oil heating furnaces,boilers, etc.Electricity for oil/water pumps, coolers, etc.

Electricity for LNG pumps, seawater pumpsfor vaporizers, BOG compressors , etc.

Fuel for coke ovens, etc., electricityfor coal crushers, electrostatic samplers,scrubbers, pumps, etc.

Efficiency of gas production from oil: 85-98%

Shiftfeedstock

・Building the infrastructures such as LNGtanks・Customer-by-customer adjustment ofcombustion for all devices・Switch at one supplier takes up to 10 years

69.8

79.2

80.2

80.6

81.5

82.8

84.0

85.8

87.1

88.2

89.7

6.0

5.5

5.6

5.6

5.8

5.8

5.8

6.0

6.0

6.1

6.7

FY1990

FY1997

FY1998

FY1999

FY2000

FY2001

FY2002

FY2003

FY2004

FY2005

FY2006

unit：％ＬＮＧ

Indigeneousnatural gas Gas from coal

ＬＰＧ

Petro leum gasessuch as naphtha

Efficiency of gas production from natural gas: 99%Efficiency of gas production from natural gas: 99%

Initiatives at the City Gas Production and Supply StagesInitiatives at the City Gas Production and Supply Stages①①

FY2006: 9 suppliers switchedFY2006: 9 suppliers switchedCumulative total: 188 suppliers switchedCumulative total: 188 suppliers switched

Improve efficiency of city gas production by shifting its feedstock tonatural gas

－Entire industry promotes shift to natural gas－

Efficiency of gas production from coal: 70%

Raw material switch is progressingsteadily

Breakdown of feedstock used to produce city gas

55

Initiatives at the City Gas Production and Supply StagesInitiatives at the City Gas Production and Supply Stages ②②

Reduction in volume of LPGused

Reduce volume of steam used in LPGvaporization

Greater use of LNG cold energy①Enhance cold energy power

generation by optimizing coolantcomposition

②Use cold energy in refrigeratedstorages, etc.

More efficient equipment①Reduce seawater volume by re-

engineering vaporizer panels②Boost efficiency by improving seawater

pump impellers③Introduce seawater pump revolution

control④Introduce air-fin-type vaporizers that can

be used even in cold climates, etc.

Revised operating procedures①Reduce vaporizer seawater spray

volume②Revise number of operating units③Reduce heat loss by changing vapor line

steam traps, augmenting insulation, etc.

Promoting energy conservation even at production plants that haveswitched to natural gas

－ Further energy savings on top of high production efficiencyー

6

Results and Forecasts ofResults and Forecasts of Voluntary Action PlanVoluntary Action Plan

54

133

38

1211

84Former target

73

Former target23

0

20

40

60

80

100

120

140

1990 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

Fiscal year

CO

2em

issi

ons

(10,

000

t-CO

2)

0

100

200

300

400

500

City

gas

pro

duce

d(1

00 m

illio

n m

3 )

CO2 emissionsCO2 emissionsintensity

City gas produced(production activity

index)

2010Target

CO

2em

issi

ons

inte

nsity

(g

-CO

2/m3 )

1990

Substantial reductions in CO2 emissions achievedcompared to fiscal 1990, the base year

Although demand for environmentally friendly city gas is expecteAlthough demand for environmentally friendly city gas is expected to increase, ongoingd to increase, ongoingefforts to reduce CO2 emissions are predicted to enable achievemefforts to reduce CO2 emissions are predicted to enable achievement of the new targetsent of the new targets

7

Voluntary Action Plan TargetsVoluntary Action Plan TargetsCarry out changes and raise FY2010 targets for CO2 emissions intensity and

overall CO2 emissions

Targets for city gas production and supply processes

1. CO2 emissions per 1m3 of city gas produced

FY1990→ FY2010

New targets

CO2 emissions intensity [g-CO2/ｍ3]

Percentage reduction

８４ → (２３)→１２（７３％） → ８６％

CO2 emissions [10,000 t-CO2]

Percentage reduction

１３３ →(７３)→５４

（４５％） → ５９％

１

Figures in parentheses are old targetsFigures in red are new targets

8

CustomerCustomer--Side InitiativesSide Initiatives

9

The Switch to Natural GasThe Switch to Natural Gas

Effect of shift to gasSwitching from other fuels such as coal to natural gas

Reduction in CO2 emissions: approx. 25%Note: Effect of shift resulting from subsidies to promote

switching to natural gas in high-energy-use facilities(FY2002–2006)

-2.5 million t-CO2 p.a.(Reduction of approx. 2,400 t-CO2 per facility on average）

Effect of shift to gasSwitching from other fuels such as coal to natural gas

Reduction in CO2 emissions: approx. 25%Note: Effect of shift resulting from subsidies to promote

switching to natural gas in high-energy-use facilities(FY2002–2006)

-2.5 million t-CO2 p.a.(Reduction of approx. 2,400 t-CO2 per facility on average）

Example: Switching of forgingfurnace to natural gas

Effect of boostingefficiency

Introduction of high-efficiencyequipment at time of fuel switch

Even greater reduction of CO2

emissions

Effect of boostingefficiency

Introduction of high-efficiencyequipment at time of fuel switch

Even greater reduction of CO2

emissions

Heavy fuel oil A+ conventional

burner100

CO2emissions

Natural gas +conventional

burner75

Natural gas +regenerative

burner45

Reduce CO2 emissions by switching from other fuels tonatural gas

10

0.34 0.44 0.490.60 0.74 0.89 1.001.19 1.331.51 1.69

1.902.15

2.42

3.13

3.594.00

4.98

0.00

1.00

2.00

3.00

4.00

5.00Installed capacity

(Million kW)

1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010年度

Promoting Natural Gas CogenerationPromoting Natural Gas Cogeneration

Total installed kW figures are rising steadily—on track to achieve2010 target set forth in Kyoto Protocol Target Achievement Plan

・2010 installation target of Kyoto ProtocolTarget Achievement Plan: 4.98 million kW

・Reduction in CO2 emissions resulting fromachievement of target: 11.4 million t-CO2

Ongoing promotion of cogeneration and introduction of more efficient equipment

FY

11

Introduction of More Efficient EquipmentIntroduction of More Efficient Equipment

0.7 2.4

5.714.0

27.5

47.5

77.5

127.5

199.5

0.9 2.6

37.7

19.57.7

0.0

50.0

100.0

150.0

200.0

250.0

2002 2003 2004 2005 2006 2007 2008 2009 2010

万台

年度

目標 実績

1.1

17.5

13.9

10.5

7.4

4.6

2.6

0.32.4

4.1

0.41.2

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

18.0

20.0

2003 2004 2005 2006 2007 2008 2009 2010

万台

年度

目標 実績

2010 Targets and Actual Results (City Gas Only)

Installation of high-efficiency water heaters is steadily increasing thanks to activepromotion—on track to reach 2010 targets for total number of units installed

Energy savings: 13%CO2 emissionreductions: 13%

・The community gas utility industry and the liquefied petroleum gas (LPG) utility industrylaunched the Japan Gas Group Energy Popularization Promotion Council （Collabo） to jointlypromote widespread use of high-efficiency water heaters.・As well as shipping latent heat recovery water heaters and gas engine water heaters, thecouncil funds afforestation projects (in Vietnam). For every 500,000 units installed, 500,000 treesare planted.

-- Promoting Widespread Use of HighPromoting Widespread Use of High--Efficiency Water HeatersEfficiency Water Heaters --

Energy savings: 22%CO2 emissionreductions: 32%

10,000 units10,000 units

Target

FY FY

Eco-JozuActual

ActualTarget

12

Vehicles powered by natural gas make a major contribution toreducing CO2 emissions and oil dependency

Promoting Natural Gas VehiclesPromoting Natural Gas Vehicles

•• Promoting use of natural gas vehiclesPromoting use of natural gas vehiclesas alternative to diesel vehicles,as alternative to diesel vehicles,particularly as commercial trucks andparticularly as commercial trucks andgarbage trucksgarbage trucks

•• Launch of biLaunch of bi--fuel vehicles: light vehiclesfuel vehicles: light vehiclesand small vans powered by compressedand small vans powered by compressednatural gas (CNG) with gasoline asnatural gas (CNG) with gasoline assupplementary fuelsupplementary fuel

Future development of commercialvehicles for inter-city transport�Potential as alternative to large diesel

vehiclesTrucks equipped withTrucks equipped with ““idle stopidle stop”” functionfunction BiBi--fuel vehiclesfuel vehicles

Approx. 20% reduction in COApprox. 20% reduction in CO22 emissionsemissionscompared to gasoline vehiclescompared to gasoline vehicles

Natural Gas Vehicles and Stations in JapanNatural Gas Vehicles and Stations in JapanNatural Gas Vehicles and Stations in Japan

138

311

288

270

224

181

107

82

6247

3424

1266

324

0

4,000

8,000

12,000

16,000

20,000

24,000

28,000

32,000

1991199219931994199519961997199819992000200120022003200420052006

年 度

天然ガス自動車数

0

50

100

150

200

250

300

350

天然ガススタンド数

乗用車

小型貨物(ﾊﾞﾝ)

軽自動車等

トラック

塵芥車

バス

急速充填所

12349

31,462

5,252

243421 759

1,2112,093

3,640

12,012

7,811

16,561

20,638

24,263

27,605

31,500 vehicles in Japan as of March 31,31,500 vehicles in Japan as of March 31, 20072007

Nat

ural

gas

veh

icle

s

Nat

ural

gas

sta

tions

Passenger vehiclesSmall vansLight vehiclesTrucks

Buses

FY

Garbage trucks

High-speed refuelingstations

13

Fuel Cells

Promoting Use of Biogas

Sample initiative� Established biogas promotion center within

the Japan Gas Association in April thisyear—promotes widespread use of biogas bygathering information on technologies,projects, and systems related to use ofbiomass energy and supports efforts bysmall and medium-sized gas suppliers.

Sample initiatives� Large-scale trial projects were implemented to promote introduction of

residential-use fuel cells (polymer electrolyte fuel cells: PEFC) offering 37% ingeneration efficiency and 45% reduction in CO2 emissions. Approx. 300 newunits installed in fiscal 2006.

� From this fiscal year, large-scale trials of solid oxide fuel cells (SOFC) offeringhighly efficient generation will start.

Area Energy Networks

Initiatives Aimed at Further CO2 EmissionInitiatives Aimed at Further CO2 EmissionReductionsReductions

Highly efficient energy use through pooling ofpower and heat among neighboring buildings

Promoting highly efficient energy use throughcogeneration systems that burn a mix of citygas and biogas

Sample initiative� Subsidies for model projects installing natural

gas area energy networks are being offeredfrom this fiscal year and will be used tointroduce such networks.

14

Initiatives Leading to a National MovementInitiatives Leading to a National Movement-- Support for Environmental EducationSupport for Environmental Education --

Promoting ecoPromoting eco--cookingcooking Supporting environmental andSupporting environmental andenergy lessons in schoolsenergy lessons in schools

Recommending environmentally friendlyfood culture covering all aspects fromshopping to cooking and disposing of waste

Lessons on environmental and energyissues offered by guest instructors

Sample initiatives� Example of sessions run by gas utilities:

1,123 in fiscal 2006, with approx. 31,100participants

� Tokyo Gas and JGA cooperating to expandthe initiative through measures such asrunning instructors’ courses open to othergas utilities

Sample initiatives� Example of lessons offered by gas utilities:

3,813 in fiscal 2006, with 114,390 studentstaking part

� “Earth-friendly seminars” based on noodle-cooking lesson

� Production of educational support materialsfor gas utilities in order to expand theinitiative

(Jointly produced with the Information Center for Energyand Environment Education)

15

Support for energy-saving operation of equipmentInformation on monthly gas meter reading slips

Energy-saving information via website/pamphlets

Monthly meterreading slipsinclude data ongas usage in theprevious monthand the samemonth of theprevious year

Introduction of “energy-look” controlpanels for Eco-Will and Eco-Jozusystems, fuel cells, etc. Energy-savingnavigation function helps users toefficiently conserve energy and givesdaily/monthly data on matters such asvolume of power generated.

30,000 copies of Ultra Energy-Saving Book distributed, outliningenergy-saving behavior/appliancesand reduction of CO2 emissions.

�According to a survey of Eco-Willusers, some 70% of customers thinkthe panels have raised theirawareness of energy conservation

Energy-conservation checks

System whereby users can registerfor monthly emissions data,comparisons with similar households,etc. Approx. 30,000 members.

Green monitoring scheme for remotegathering of energy usage data fromoffices, hotels, etc. and feedback tousers.

High-efficiency equipment promoted in conjunction with the Team Minus 6% campaign aimed atencouraging energy consumers to reduce CO2 emissions by 1 kg per person per day.

Energy-saving informationprovided on “Hints for SmartLiving” section of website.

860,000 leaflets produced anddistributed for widespread usethroughout the gas industry.

(All in Japanese)

Providing Information on Energy ConservationProviding Information on Energy Conservation

16

SummarySummary

・Push ahead with initiatives that generate synergy for reduction of CO2emissions by contributing to the national movement, such asenvironmental education and diffusion of information on energyconservation.

・Raise targets and work to meet them.・If targets are achieved, CO2 emissions intensity will be reduced by 86%and total volume of CO2 emissions will be reduced by 59% compared toFY1990 figures.

・Promote more widespread use of natural gas and installation of high-efficiency systems such as Eco-Jozu, Eco-Will and natural gas cogeneration.

Initiatives at the City Gas Production and Supply StagesInitiatives at the City Gas Production and Supply Stages(Voluntary action plan on the environment)(Voluntary action plan on the environment)

CustomerCustomer--Side InitiativesSide Initiatives

Using natural gas as the key,combat global warming from both the supply and demand sides