Measures for Achieving Carbon Neutrality
Formulation of a Roadmap
With the aim of achieving net-zero GHG emissions in 2050, the SMM Group set reduction targets for FY2030, formulated a roadmap of action to take through 2050, and announced it in December 2023. The interim reduction targets for FY2030 is a reduction of at least 38% (at least 50% in Japan and at least 24% overseas) with FY2015 as the base year and emissions of no more than 2 million t-CO2.
■ Roadmap to Net-Zero GHG Emissions (as of December 2023 announcement)
Measures to Achieve Carbon Neutrality by 2050
In the lead up to FY2030, we will take action to maximize the use of existing technologies including comprehensive energy conservation and increases in efficiency, fuel conversion of fossil fuels, and expanded introduction of renewable energy. To achieve carbon neutrality by FY2050, we will tackle the challenges of developing innovative technologies for refining processes, an area where it is currently difficult to achieve reductions, and introduce new technologies including next-generation energy and carbon dioxide capture and storage premised on innovative decarbonization technologies and their social implementation.
Measures for Achieving FY2030 Targets (as of December 2023 announcement)
Regarding the FY2030 interim targets, we expect an increase of 140,000 tons due to business expansion and will take action to reduce emissions by 220,000 tons through energy conservation and higher efficiency, 250,000 tons through fuel conversion, and 500,000 tons through improvement of the emission coefficient for procured (purchased) electric power in order to achieve our target of 2 million tons in FY2030, corresponding to a 38% reduction compared to FY2015.
■ GHG Emissions
GHG Emissions (Scope 1 and 2)
The SMM Group’s GHG emissions in FY 2023 were 2,556 kt-CO2e, a year-on-year decrease of 267 kt-CO2e resulting from a decline in production volume, fuel conversion from heavy oil to LNG, and improvement of the electric power CO2 emissions coefficient. In addition, direct GHG emissions reductions from energy-saving measures and fuel conversion in FY 2023 were 37.6 kt-CO2e. Additionally, the solar power plant operated by SMM in Kashima, Ibaraki Prefecture helped to reduce emissions by approximately 1.7 kt-CO2e in FY2023.
Scope 1: Direct GHG emissions generated by a business (due to fuel consumption, industrial processes, etc.)
Scope 2: Indirect GHG emissions generated through the use of electricity, heat, and steam supplied by other companies
Scope 3: Indirect GHG emissions not covered by Scopes 1 or 2 (emissions from other companies with a connection to the business’ activities)
■ GHG Emissions (Scope 11 and 22)
- 1Both Japan and overseas figures are calculated based on the GHG Protocol, and emission factors are based on the Japanese law “Act on Promotion of Global Warming Countermeasures”
- 2GHG emissions factors for electric power purchased in Japan are based on the adjusted emissions factors of electric suppliers
The GHG emissions factors for purchased electricity overseas are based on the emissions factors for each country specified in the IEA Emissions
Factors – 2023 Edition
Energy and GHG Emissions Intensity Indices1
(Reporting Boundary: Smelting & Refining Business in Japan)
In FY2023, the energy intensity of the Smelting & Refining Business in Japan improved by approximately 5% year on year.
SMM is a member of the Japan Mining Industry Association (JMIA), an organization of non-ferrous
mining, smelting and refining companies, and we are participating in the Carbon Neutrality
Action Plan being led by the Japan Business Federation (Keidanren).
We will continue to proactively engage in thorough energy management, the promotion of
energy-saving activities, the introduction of renewable energy, the use of unutilized heat, and
other endeavors with the aim of reducing energy intensity by an average of at least 1% per year and
further lowering CO2 emissions over the medium to long-term.
- 1Energy and GHG emissions intensity indices: the amount of energy consumed and GHGs emitted during the production of 1 ton of product (In the figure below, FY1990 is the base year with a value of 1)
■ Energy and GHG Emissions Intensity Indices
Scope 3 Measures
Scope 3 GHG emissions generated in FY2023 amounted to 4,409 kt-CO2e. Starting from the categories with the highest emissions ratios, we will communicate with business partners to make the emissions calculations more accurate, confirm the status of their GHG reduction initiatives, and set Scope 3 reduction targets.
- 1Reporting boundary: the entire SMM Group (however, data for Category 5 to 7 only covers Group companies in Japan)
- 2Excludes Categories 8–12, 14, and 15
■ Scope 3 Emissions and Percentage of Overall Emissions
| Category | Emissions (kt-CO2e) |
Percentage | Calculation Method |
|---|---|---|---|
| Total Scope 3 | 4,409 | 63.3% | |
| 1.Purchased goods and services | 3,603 | 51.7% | Σ (weight of key raw materials x emissions intensity)1 |
| 2.Capital goods | 551 | 7.9% | Σ (amount of capital expenditures x emissions intensity x 1.05)2 Capital expenditures include construction in progress, used equipment, and intragroup transactions |
| 3.Fuel- and energy-related activities not included in Scope 1 or Scope 2 | 221 | 3.2% | Σ (electricity and fuel consumptions x emissions intensity [electricity2, fuel1) |
| 4.Upstream transportation and distribution | 23 | 0.3% | Emissions from domestic transportation are calculated based on the Japanese laws the “Act on Rationalizing Energy Use” and “Act on Promotion of Global Warming Countermeasures.” |
| 5.Waste generated in operations | 7 | 0.1% | Σ (amount of waste by type (major sites in Japan) x emissions intensity by waste type)2 |
| 6.Business travel | 1 | 0.0% | Σ (number of employees (major sites in Japan) x emissions intensity1 |
| 7.Employee commuting | 3 | 0.0% | Σ (number of employees (major sites in Japan) x number of business days x emissions intensity)2 |
| 8.Upstream leased assets | Not applicable3 | ||
| 9.Downstream transportation and distribution | Not applicable4 | ||
| 10.Processing of sold products | Not applicable4 | ||
| 11.Use of sold products | Not applicable4 | ||
| 12.End-of-life treatment of sold products | Not applicable4 | ||
| 13.Downstream leased assets | 0.2 | 0.0% | Σ (electricity and gas consumption by tenants of the Head Office building x emissions intensity)5 |
| 14.Franchises | Not applicable6 | ||
| 15.Investments | Not applicable7 |
- Reporting boundary: the entire SMM Group. (data for Category 5 to 7 only covers Group companies in Japan)
- 1For emissions intensity, we used values from the Research Laboratory for IDEA Research Institute of Science for Safety and Sustainability (RISS), National Institute of Advanced Industrial Science and Technology (AIST) LCI Database AIST-IDEA Ver. 3.4
- 2For emissions intensity, we used values from the Database for Calculating GHG Emissions of the Supply Chain, Ver. 3.4
- 3Not applicable as it is included in calculations of Scope 1 and 2 emissions
- 4This category is not applicable because it is difficult to calculate emissions since our products are mainly non-ferrous metals and highly advanced materials, which have diverse applications after sales destinations, and each application has different GHG emission characteristics
- 5Emissions intensity was calculated based on the list of calculation methods and emission factors of the Ministry of the Environment’s Greenhouse Gas Emissions Calculations Reporting and Publication System
- 6Not applicable as we do not operate any franchise businesses
- 7Not applicable as it is the disclosure of information on investments for profit
Using Internal Carbon Pricing
The SMM Group set Internal Carbon Pricing (ICP) to develop technologies for decarbonization and to promote energy conservation and introduced an ICP system that reflects GHG reduction effects in the effects of investment. We introduced ICP in September 2020 and have actively invested in decarbonization using ICP at business sites. Specifically, in addition to energy-saving investments, such as introducing LED lighting and switching to highly efficient air conditioning equipment, we are actively taking on challenges including introduction of solar power and a fuel transition from heavy oil to LNG, which previously were difficult under existing investment standards. Going forward, we will continue reviewing ICP as necessary in consideration of changes in social conditions and other factors and to promote decarbonization.
| ICP price | Investment projects subject to ICP1 | Anticipated CO2 emissions reduction (t-CO2/year)2 |
|---|---|---|
| JPY20,000/t-CO2 | 40 | 84,000 |
- 1Covers investments for which the application of the system was decided between FY2021 and FY2023
- 2Projected CO2 reductions are calculated based on normal operating conditions. As this includes investments that will be implemented from FY2024 onward, the period in which effects manifest and the period in which application was decided are not concurrent
- Fuel transition from heavy oil to LNG with low CO2 emissions,
boilers at the Niihama Nickel Refinery and Isoura Plant, steam heating equipment and drying equipment at the Toyo Smelter & Refinery, and other equipment are being converted in stages from heavy oil to LNG, cutting CO2 emissions by 20% to 30%. - Co-firing of woody biomass instead of coal
CBNC and THPAL started woody biomass co-firing tests in coal-fired power generating facilities (in-house power generation) in FY2023. In the future, we plan to address issues, such as stable operation when the co-firing ratio is increased and securing the necessary procurement volume of wood pellets, and investigate the possibility of co-firing with woody biomass in kilns at Hyuga Smelting Co., Ltd. and Shisaka Smelting Co., Ltd. in Japan. - Switch to electricity generated with renewable energy for procured electric power
The SMM Group is switching in stages to electricity generated with renewable energy at domestic sites including the Harima Refinery, Hishikari Mine, Hyuga Smelting, Head Office building.
Development of Innovative Smelting and Refining Processes
For the Group to achieve carbon neutrality by 2050, it will be necessary to make improvements to innovative smelting and refining processes that dramatically reduce GHG emissions in the smelting and refining business, a main source of GHG emissions. To do this, we are developing new low CO2 nickel smelting and refining methods, direct lithium extraction methods for recovering lithium from salt lakes, CO2 absorption and fixation technologies using waste ore, and other technologies.
Low CO2 Nickel Smelting and Refining Methods
Ni preferential reduction method
This is an efficient nickel reduction process that uses a reactor device known as a rotary hearth furnace. With this method, processing at lower temperatures and in shorter times than earlier methods is possible, and it is expected that this method will substantially reduce GHG emissions and energy usage. Also, GHG emissions can be reduced to zero by using biomass fuels as the reducing agent and green electricity as the heat source.
Hydrogen reduction method
This recovery method recovers reduced nickel metal from nickel oxide ore using hydrogen, which had been considered difficult in the past. By investigating the feasibility through fundamental testing, we achieved the target of recovering reduced nickel metal. We are currently developing the process as a whole, including investigation of equipment to achieve recovery, and aim to start pilot testing by 2030.
Demonstration testing of lithium recovery from salt lakes (direct lithium method)
The conventional lithium recovery process used large volumes of chemicals that generate large
amounts of CO2, such as hydrated lime, but we developed a new direct lithium extraction (DLE)
technology that uses small amounts of absorbents to selectively recover lithium, which leads to
reduced CO2 emissions.
We are currently verifying the reliability of the process at a pilot plant installed in Chile, South
America, improving the absorbent, and narrowing the target salt lakes with the aim of completion
by FY2030.
Development of technology to absorb and fix CO2 using waste ore and other materials
We started development of CO2 absorption and fixation technology that uses magnesium by focusing our efforts on waste ore that includes large amounts of magnesium and is generated when recovering nickel from low-grade nickel ore using HPAL technology. Currently, we are conducting joint research with a university on technology to fix the CO2 contained in combustion exhaust gas from thermal power generation and so on. The amount of ore handled and the volume of gas generated are both large, so we are working to solve the technological and economic problems and put this technology into practical application by 2050.
