Green Growth Strategy (Overview)

1 Green Innovation Fund (2 trillion yen fund) Mechanism to gain commitment of top management Focused investments in projects of particular importanceWe will leverage all of our policies and do our best to encourage companies to take on positive challenges toward Growth Strategy (Overview) Gone are the days when countermeasures to global warming are considered as a cost or constraint to the economic Growth , and the world has entered a new era in which it is viewed as a great opportunity for further prosperity. In fact, the game is beginning to change, as seen in the shift in research and development policies and management policies.

2 In order to accelerate this trend, we will promote the Green Growth Strategy . We will realize innovation and social implementation of innovative technologies. Through this, we will realize not only carbon neutrality by 2050, but also benefits to people s lives that go beyond CO2emission systemsFinanceRegulatory reform and standardizationInternational cooperation1 Offshore wind/solar/ geothermal power Hydrogen/fuel ammoniaNext-generation heat energyNuclearAutomobile/batterySemicondu ctor/ information and communicationShippingFood, agriculture, forestry and fisheriesAircraftCarbon recycling/materialResource circulation-relatedLogistics, people flow.

3 And civil engineering infrastructure234 Housing and building/ next-generation power management6789101415 Life style-related121311 Tax systems to promote investment toward carbon neutrality(UP to 10% tax deduction, 50% special depreciation) Sector-specific roadmaps for high-emission industries Enhancement of the quality and quantity of disclosure based on TCFD, etc. Creation of a Green international financial center Regulatory reform to accommodate new technologies Standardization with a view to market formation Carbon pricing that contributes to Growth Technical cooperation between Japan and the US and between Japan and the EU Asia Energy Transition Initiative Tokyo Beyond-Zero WeekPromotion of university initiativesExpo 2025 Osaka, Kansai, JapanYouth Working Group Human resource development in universities, etc.

4 Analysis methods and statistics related to carbon neutrality A place for the demonstration of revolutionary innovation technologies People s Living Lab(A testing ground for future society) Proposals from the working-age population in 2050We have selected 14 sectors that are expected to grow toward the year 2050. Strengthening international competitiveness by setting high goals and steadily implementing action plans according to the phase of technology. The economic effect in 2050 is estimated to be about 290 trillion yen, and the employment effect about 18 million people. In 2040, 30-45 GW projects [Offshore wind].

5 In 2030, power generation cost of 14 yen/kWh by next-generation solar cells [Solar]. In 2050, about 20 million tons introduced [Hydrogen]. 500 billion yen market in Southeast Asia [fuel ammonia]. In 2050, injecting synthetic methane by 90% into existing infrastructure. In 2035, electrified vehicles accounting for 100% of new passenger car sales. In 2040, semiconductor/information and communication industries achieving carbon neutrality. In 2030, carbon-free hydrogen production technology for HTGR established. Before the conventional target year of 2028, realizing the commercial operation of zero-emission ships.

6 In 2050, carbon-neutral ports realizing decarbonization of ports and construction work. In 2050, zero CO2emissions from fossil fuels in agriculture, forestry, and fisheries sectors. Starting from 2030, installing core technologies such as batteries in stages. In 2050, artificial photosynthesis plastics on par with existing products [CR]. Realizing zero carbon steel [Material]. In 2030, average of new houses and buildings being ZEH and ZEB [housing and buildings]. In 2030, approx. 2 million tons of biomass plastics introduced. In 2050, a carbon-neutral, resilient, and comfortable life.(Formulated on June 18, 2021)2 HydrogenElectrificationDecarbonized electricsourcesSynthesis fuelmethanationConsumer110 mil tonIndustry280 mil tonTransport200 mil tonElectricity440 mil bil ton2030 46% reduction compared to 2013, total GHG emission)Continuing strenuous efforts in its challenge to 50% reduction + Removals = net zero 100% values are the amounts of CO2 derived from energyPlantation, DACCs, Mainstreaming renewable energy.

7 Re-establishment of the nuclear energy policy Reduce the ratio of thermal powergeneration based on the premise of stable supply. Hydrogen/ammonia power generation Intensively promote energy efficiency by regulation and support. Realizing a hydrogen society Electrification by decarbonized power Pursue options: hydrogen, ammonia, CCUS/Carbon Recycling Use carbon removal technologies for leftover. Maximum introduction of renewable energy Use of nuclear powersource Pursue options: hydrogen, ammonia, CCUS/Carbon RecyclingNon-electricityelectricityCarbo n removalRealization of Carbon Neutrality by205031 (1) Offshore wind power (next-generation renewable energy) Setting the introduction targets to encourage domestic and foreign investment.

8 10GW by 203030-45GW by 2040 Developing power grids and port infrastructure based in a planned manner. The Power Grid Establishment Master-plan is scheduled to be completed by the end of FY2022. Launching a study group in March 2021 to develop a long-distance submarine HVDC power transmission system from offshore wind power generation site to large consumption areas. Completing Akita Port development by the end of FY2020. Continuing construction work at the remaining three ports. Also, compiling measures for the nationwide allocation of base ports and regional promotion by the end of FY2021. Forming competitive and resilient supply chains (setting industry goals).

9 Japan Content Target : 60% by 2040 Cost of fixed-bottom offshore wind turbine-generated power: 8 to 9 yen/kWh by 2030-2035 Improving the business environment by comprehensive review of regulations Consolidating examinations under Electricity Business Act and Port and Harbor Act/Ship Safety Act starting from April 2021. Also, from the same month, streamlining the safety review procedures based on the Electricity Business Act under certain conditions. Clarifying the criteria for permission to leave in place fixed-bottom wind turbines based on Law Relating to the Prevention of Marine Pollution and Maritime Disaster by the first half of FY2021.

10 Compiling measures to relax the criteria and conditions related to the installation of aircraft warning lights on wind power generation facilities based on the Civil Aeronautics Act by the end of FY2021. Accelerating the development of elemental technologies in anticipation of demonstrations based on the technology development roadmap. Accelerating the development of elemental technologies especially for wind turbines, which are essential for the construction of supply chains, and floating turbines, which are expected to increase in the medium and long term, while considering the use of the Green Innovation Fund, in anticipation of demonstrations in actual seas based on the technology development roadmap (formulated in April 2021).