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CSR Charter ⅡHarmonizing with the Environment and Contributing to Realizing a Sustainable Society

Helping Customers' Efforts for Realizing a Low-Carbon Society

Aspects Determined as Materiality

  • Emissions

Principle and Outline

To help create a low-carbon society in light of global trends to stem climate change, the Daigas Group believes it important not only to reduce the greenhouse gas emissions generated in its business activities, but also to have customers reduce their CO2 emissions as well. The Daigas Group is seeking to assist customers in reducing their CO2 emissions by popularizing natural gas as clean energy and developing/proposing high-efficiency equipment. The Group is also working hand-in-hand with business partners and affiliate companies to reduce CO2 emissions in logistics.

Benefits of Energy Saving and Reductions of CO2 Emissions

CO2 emissions reduced by approx. 4 million tons at customer sites

The Daigas Group has proposed and sold various products that can help reduce CO2 emissions and thereby contribute to the curbing of climate change. Those products include the “Ene-Farm” fuel cell and the “Eco-Jozu” highly energy efficient water heater, both for residential use. Marketed for commercial and industrial use were gas cogeneration systems, gas absorption chiller, gas engine heat pump (GHP) and natural gas vehicle (NGV). CO2 emissions at the end of FY2018 declined by the cumulative total of 4 million tons from the base year of FY2009 due to the introduction of these products.

Approaches at Customer Sites (Households)

Household cogeneration systems

To help realize a low-carbon society, Osaka Gas is striving to sell and disseminate two types of fuel-cell systems that generates electricity through chemical reactions between the hydrogen extracted from city gas and oxygen in the air, which are polymer electrolyte fuel cells (PEFC) and solid oxide fuel cells (SOFC) sold as “Ene-Farm” and “Ene-Farm type S,” respectively as co-generation systems for household use that help conserve energy and reduce CO2 emissions. These are high-efficiency energy systems that make effective use of the heat generated alongside electricity to supply hot water.

As of the end of March 2018, a cumulative total of about 82,000 “Ene-Farm” and “Ene-Farm type S” units had been sold, helping to cut CO2 emissions by about 122,000 tons per year.

Cumulative Sales Total of the Fuel Cell Systems

Cumulative Sales Total of the Fuel Cell Systems

“Eco-Jozu” high-efficiency water heater

The “Eco-Jozu” high-efficiency water heater is able to recover the exhaust heat produced during combustion that is ordinarily lost and utilize it to heat water or room spaces; this saves considerable energy and helps mitigate global warming by reducing CO2 emissions.

A cumulative total of about 861,000 “Eco-Jozu” units had been sold as of the end of March 2018, helping cut CO2 emissions by 207,000 tons per year.

Cumulative Spread of “Eco-Jozu” in Osaka Gas Supply Area

Cumulative Spread of Eco-Jozu in Osaka Gas Supply Area

Solar power generation

Growing interest in the feed-in tariff for reusable energy and in energy security since the Great East Japan Earthquake has encouraged an expanding number of customers to introduce solar power generation systems. Responding such needs, Osaka Gas prepared a series of equipment for home generation including gas co-generation systems and solar power generation systems for residential use. A cumulative total of about 23,000 units had been sold as of the end of March 2018, helping reduce CO2 emissions by 54,000 tons per year.

We are also recommending “Double Power Generation” that combines a solar power generation system with “ECOWILL” or “Ene-Farm.” We have sold customers a cumulative total of about 37,000 units as of the end of March 2018.

Reduction of CO2 Emissions at Customer Sites (Business / Industrial Use)

Technological development and the spread of gas co-generation systems

Distributed energy systems generate power at the site where power is consumed and utilize waste heat from the power generation process for hot water supply and air conditioning. Thus distributed energy systems are highly economic and environmentally friendly. The Daigas Group is striving to popularize and technically develop gas co-generation systems that use eco-friendly gas as fuel for business/industrial use in factories, offices, and commercial facilities.

Since releasing the first commercial-use micro-cogeneration system in 1998, we have expanded our lineup of cogeneration systems with power outage response capability. Due to their superior power-saving capabilities, these systems have been widely used in factories, hospitals, public welfare facilities, hotels, spas and restaurants. As of the end of March 2018, there were 4,529 cogeneration systems under operation in the Osaka Gas service area with a combined output capacity of 1,574,000 kW.

In order to meet the diverse needs of customers, we are developing technology to further improve energy efficiency, reliability. In FY2018, we worked with Mitsubishi Heavy Industries Engine & Turbocharger, Ltd. to develop a highly energy efficient gas engine cogeneration system with an output capacity of 1,200 kW and evaluate a small-size solid oxide fuel cell (SOFC) for business use. In the year, we focused on commercializing both products. A business-use SOFC with an output capacity of 3 kW, made by Kyocera Corp., achieved 52% in power-generation efficiency and 90% in overall efficiency. With its electricity output being large compared with its heat output, the SOFC features specifications that suit the needs of customers from whom heat demand is relatively low. Osaka Gas began selling the product in FY2018. In collaboration with Mitsubishi Heavy Industries Engine & Turbocharger, Ltd., we embarked on a project to develop an 800 kW-class gas engine cogeneration system with an enhanced power output capacity and power generation efficiency, a feature aimed at achieving sustainable energy saving during replacement. We will continue to step up energy saving and contribute to reducing environmental impacts by expanding sales of cogeneration systems.

Commercial and Industrial Cogeneration Systems: Cumulative Total of Installed Capacity and No. of Units

Commercial and Industrial Cogeneration Systems: Cumulative Total of Installed Capacity and No. of Units

Development of energy-saving gas boilers

Simplified once-through boilers are characteristically small and lightweight and, not requiring any qualifications to operate, they are used by a wide range of customers, including dry-cleaning shops and food/textile/chemical plants requiring large volumes of steam.

Osaka Gas is working with a variety of manufacturers and gas companies to develop, propose, and sell new simplified once-through steam / heating medium boilers.

The products achieve combustion with a lower load than earlier models, recover about 15% more heat from the exhaust gas released during combustion, and have a higher rated boiler efficiency, helping improve boiler operation efficiency and reduce air blower power consumption.

In FY2018, Osaka Gas developed the SQ-1200ZL, a gas-fired, once-through small-size steam boiler, Japan's first such device compatible with low-pressure gas pipes, which uses venturi suction technology.* In the same year, the Company also undertook joint development of the best-in-class-performance boiler with an evaporation capacity of 1,000 kg/h. By catering to a broader range of customers through the development of these products, we are contributing to energy saving and environmental conservation.

* The employment of a venturi suction technology enabled the development of a product with specifications that are compatible with low-pressure gas pipes.
The technology envisages gas fuel being taken in and supplied to a burner, using negative pressure which is generated when air flows into a venturi installed at the inlet of a blower. The venturi is designed to create a low-pressure area inside the device by narrowing the cross section where the liquid flows, a mechanism that can lead to a higher liquid flow speed. Conventional boilers required medium-pressure gas due to a mechanism in which gas fuel is injected into a high-pressure area at the outlet of the blower for mixing gas and air. The venturi suction technology has specifications that are suitable for low-pressure gas even in large-capacity boilers. Because it does not require medium-pressure gas pipes, the product can be used by a broader range of customers.
The venturi suction technology

Working together with customers to save energy

Heat measurement at customer's site for saving-energy. 1
Heat measurement at customer's site for saving-energy. 2

Heat measurement at customer's site for
saving-energy.

Try! Carbon Offsets

“Try! Carbon Offset”

The Daigas Group is united in supporting customers using gas for industrial and business purposes in their energy saving activities and promoting energy conservation to contribute to global environmental protection.

Experts from Osaka Gas take heat and other measurements at the facilities of customers, such as factories, hospitals, and other commercial establishments, and use the results to recommend appropriate ways customers can save energy.

Our energy-saving activities with our customers help deepen the relationship of mutual trust. We are also holding in-house training and educational sessions on energy saving on a regular basis based on the results of energy-saving efforts. These sessions are designed to accumulate energy-conservation technologies and promote the shared use of these technologies while developing human resources with expertise in the field of energy-saving technologies.

Part of efforts to encourage local companies in the Kansai region to introduce natural gas equipment, Osaka Gas is promoting the “Try! Carbon offset” project, which envisages using the central government's J-Credit system to reduce the amount of CO2 emitted at various events held in Kansai region to effectively zero.

Under the government's J-Credit system, CO2 emission reductions achieved by customer companies when they introduce high-efficiency gas equipment such as natural gas-fueled boilers, cogeneration systems, and gas engine-driven heat pump air-conditioning systems are converted into credits, which are acquired by us. We then use the credits as carbon offsets for local sports events, local-government-organized events, and so on, which means that the CO2 emissions from such events are offset to the zero level. As a result of this initiative, we are promoting so-called “local consumption,” whereby credits earned by local companies are used for local events.

In FY2018, CO2 emissions dropped by 1,912 tons*1 , equal to the sum of CO2 emitted from about 478 ordinary households*2

List of Major Events in which Carbon Emissions are Offset in FY2018

Event Host CO2 emissions (t-CO2)*1
International Festival UTAGE 2017 in Osaka (international food expo) booths set up by Osaka Gas Executive Committee for the International Festival UTAGE in Osaka ; Osaka Restaurant Management Association; Kansai-Osaka 21st Century Association (public-interest foundation) 337
44rd Sakai Festival Sakai Tourism and Convention Bureau 102
Events in Nara Prefecture (multiple occasions) Nara Prefecture 5
Hirakata Eco Forum Hirakata City 11
Events in Neyagawa City (multiple occasions) Neyagawa City 11
Higashiosaka Family Festa Higashiosaka City 2
Suita Environmental Education Festa Suita City 1
Ikoma Environmental Festival Ikoma City 1
Cerezo Osaka home games Osaka Soccer Club Co., Ltd. 862*3
Performance by Takarazuka Revue Star Troupe (Takarazuka Grand Theater) Hankyu Corporation 568
Other 12
Total 1,912
*1 Calculation of CO2 emissions to be offset
The amount of CO2 emissions to be offset is calculated based on the concept of a marginal factor. Specifically, the amount is calculated mainly using the marginal factor for electric sources (0.65 kg-CO2 / kWh), adopted under the J-Credit system.
*2 Calculation of CO2 emissions by general households
The average amount of CO2 emitted by a general household is set at about 4 tons a year, calculated by Osaka Gas based on data used on the Website of the Japan Center for Climate Change Actions.
*3 CO2 emission offset by Osaka Gas
Total 1,313 t-CO2 was shared with cooperating companies, and the Company carried out credit depreciation of 862 t-CO2.

Provision of Energy-saving “Eneflex” as part of various ICT services

The Daigas Group has worked on a large number of energy-saving measures on the software front on top of proposing optimal and highly energy-efficient devices. Various information and communication technology (ICT) services the Group has developed are being used by many customers.

For example, the “Eneflex” energy-saving service is one such ICT service, through which customers can remotely control the operation of a gas engine heat pump (GHP) while being notified of the operational status of the pump and its energy consumption situation via the Internet or e-mail. “Eneflex” is designed to support the ongoing energy-saving efforts of customers by making energy use status available in a visible form.

In addition, we have also developed a service called “Eneflex Premium,” which offers a menu of functions in addition to the previous “Eneflex” functions, including a patrol function for automatic energy-saving in GHPs, an energy-saving control function, a thinning function, and a charge allocation function. “Eneflex Premium” is designed to enable busy customers to engage in energy-saving activities easily. About 390 customers are currently utilizing the service for about 5,600 GHPs (as of the end of FY 2018).

ICT services are offered in response to various customer demands.

ICT services are offered in response to various customer demands.

How “Eneflex” Works

Eneflex

In FY2017, we developed the “ekul” real-time data measurement device that can be inexpensively and easily installed even in small buildings by using wireless systems and batteries. We will redouble our efforts to improve convenience and economy for customers.

Downstream business in Southeast Asia

The Daigas Group sees Southeast Asia as a priority area, due to its promising outlook in view of its expected high economic growth and the business operations of many Japanese companies in the region, mostly manufacturers. To study the feasibility of launching downstream business overseas, the Group has been conducting market research in the region since around 2010.

Gas business in Singapore
Members of CITY-OG

Members of CITY-OG

Osaka Gas and Singapore's City Gas Pte Ltd. agreed to launch joint sales of natural gas in Singapore. Osaka Gas concluded a contract to buy an equity stake in City-OG Gas Energy Services, a new company set up by City Gas to sell natural gas for industrial use. Under the agreement, Osaka Gas began selling gas in Singapore in August 2013, marking the company's first overseas gas sales.

A total of nine staff—four from Osaka Gas Singapore (OGS) and five from City Gas—belong to City-OG as of April 2018. OGS members are strong in proposal-oriented marketing, especially in conversion of boiler fuels, while City Gas members have prowess in approaching potential local customers and in local business procedures. Since the business in Singapore started in August 2013, 28 contracts have been concluded with local customers. A total of more than 50 industrial customers receive gas from us as of April 2018.

Energy service business in Thailand
Members of OGT and OGPS

Members of OGT and OGPS

Osaka Gas has stepped up its business in Thailand with a focus on the energy service (ES)*1 business, utilizing Osaka Gas's energy service solution know-how, which is based on its engineering prowess regarding the use of natural gas in the Thai industrial market. Specifically, the new company undertakes overall utility-related businesses, including the installation of boilers and industrial furnaces, CNG supply, water and biotechnology.

In October 2013, Osaka Gas founded Osaka Gas (Thailand) Co., Ltd. in Thailand. A total of 24 staff—13 loaned from Osaka Gas and 11 local staff — belong to Osaka Gas (Thailand). OGT has received three orders for ES and 46 orders for facility installation and consulting services (as of April 2018) since the business started in October 2013.

In July 2014, Osaka Gas and Nippon Steel & Sumikin Engineering Co., Ltd. agreed to form a business partnership for an on-site business*2 using cogeneration systems built in Thailand. Under the agreement, the two companies established NS-OG Energy Solutions (Thailand) Ltd. The joint company has clinched five contracts for a cogeneration system developed by Osaka Gas. In 2017, an on-site energy supply project for Yokohama Tire Manufacturing (Thailand) Co., Ltd., the tire manufacturing arm in Thailand of the Yokohama Rubber Group, got started. In the same year, the second phase of an on-site project to supply energy to the Prachinburi Plant of Honda Automobile (Thailand) Co., Ltd. was completed. Energy supply to the two plants began following the respective moves.

In November 2015, Osaka Gas and a subsidiary of PTT Public Co., Ltd. in Thailand jointly established OGP Energy Solutions Co., Ltd. to undertake ES business for industrial clients in Thailand. The joint company has received nine orders from local companies for energy services and facility installation (as of April 2018).

*1 Energy service (ES) business
This service enables customers to introduce natural gas and other facilities, without any initial investment, simply by paying fees that correspond to the amount of energy use. The new company is equipped with natural gas-fired facilities, including boilers and combustion furnaces, to supply steam and other forms of energy to customers to meet their energy-saving needs. As an one-stop service for the management of energy use and facility maintenance, the company has promoted energy-saving as well as stable energy supply.
*2 On-site business
Service in which the Daigas Group sets up a cogeneration system on customers' sites or near their sites, and supplies electricity and heat there. The cogeneration system is operated and maintained by staff posted at the facility.
Energy business in Indonesia and Philippines
Members of a representative office in Jakarta

Members of a representative office in Jakarta

Osaka Gas Singapore Pte. Ltd. established a representative office in Jakarta in October 2016, marking the Daigas Group's entry in the Indonesian market, and a similar office in Manila in March 2017 to begin business in the Philippines. The Jakarta office marked the third Southeast Asian country in which Osaka Gas operates in the region and the Manila office the fourth. Other Southeast Asian countries where the Company had started business earlier are Singapore and Thailand.

The Jakarta representative office was staffed with five employees dispatched from Japan (as of April 2018). The office has been conducting full-fledged studies of the downstream gas business and energy-related infrastructure development projects in Indonesia in response to an expected increase in energy demand in the country, with a population of over 250 million and an expanding local economy.

The Manila office has been undertaking business research with a workforce of two since July 2017. Osaka Gas aims to launch energy-related infrastructure development projects in the Philippines, especially LNG-related projects, in view of an expected rise in energy demand there and the country's plan to introduce LNG in response to the expected depletion of locally produced natural gas. Osaka Gas sees energy infrastructure development as a field where the company can use its experience and knowledge effectively.

Efforts in Renewable Energy

Utilization of solar heat

Osaka Gas teamed up with Tokyo Gas Co., Ltd., Toho Gas Co., Ltd., Kawasaki Thermal Engineering Co., Ltd., Sanyo Electric Co., Ltd., and Hitachi Appliances, Inc. to jointly develop a solar natural chiller, a commercial air conditioner that uses solar heat for cooling. The product primarily uses solar heat, and makes up for shortages on rainy days with gas backup power for a system that enables maintained performance. The solar cooling system, which is a commercial air conditioning system, is composed of a solar heat collecting device and a solar natural chiller. When used in a building with floor space of 4,000 m² (3-4 story building), this system requires 24% less primary energy a year for cooling and heating, and it emits 21% fewer CO2 emissions (approximately 34 tons-CO2) compared to a system that does not incorporate solar heat.*

* Calculation of primary energy consumption and CO2 emissions
Calculation based on a 4,000 m² tenant building equipped with a solar heat collecting device of 240 m² and a solar natural chiller; compared to a conventional gas absorption-type water cooling/heating device with a Coefficient of performance (COP) of 1.0 (Higher heating value (HHV)). Note that the results for energy efficiency and CO2 emission reductions stated here for this system may differ from actual results due to the size of surface of the solar heat collecting device and the air conditioning load in the customer's building.

Conceptual Image of a Natural Solar Chiller

Conceptual Image of a Natural Solar Chiller

Efficient use of biogas

A main component of biogas is methane, as in the case of natural gas. Biogas is a renewable energy source and is seen as an effective tool to combat global warming. Osaka Gas began purchasing biogas in September 2010 on behalf of customers who are to receive the gas from us through our pipelines, in line with our “Biogas Procurement Guidelines” — a set of conditions we apply when we buy biogas for customers.

It is a pilot project Osaka Gas launched jointly with Kobe City and Kobelco Eco-Solutions Co., Ltd., in which biogas produced at the processing plant in Kobe City is provided as our city gas to customers via gas pipelines operated by the Company. The amount of biogas we accept into our pipelines — whose brand name is “Kobe Biogas” — is about 800,000 m3 per year (equal to the gas consumed annually by about 2,000 households). Furthermore, Osaka Gas began operating a digestion gas-based power generation project at the Tamatsu sewage treatment plant in Kobe City, and a similar project at the Iho water purification center in Takasago City, both in April 2018.

Meanwhile, OGTCS Co., Ltd., a Daigas Group company, began operating the “Power Generation Business Using Digester gas at Sewage Plants in Osaka City” in April 2017 in partnership with the Osaka City municipality, Tsukishima Kikai Co., Ltd., and Tsukishima Technology Maintenance Service Co., Ltd. Having combined power generation capacity of about 4,090 kW, the four power plants will generate electricity of about 25.8 million kWh annually, which is equal to the sum used at about 7,100 general household in a year. The project is one of the largest of its kind to be launched in Japan under the feed-in-tariff (FIT) power purchasing system, introduced in line with the Act on Special Measures Concerning the Procurement of Electricity from Renewable Energy Sources by Electricity Utilities.

Trial Project for Supplying Biogas via Gas Pipes

Trial Project for Supplying Biogas via Gas Pipes

Energy Bank Japan Co., Ltd.
Power generation project based on renewable energy sources launched using unique financing technology

Energy Bank Japan Co., Ltd., a Daigas Group company, has undertaken projects aimed at promoting power facilities based on renewable energy sources across Japan, including solar power facilities, using its unique financing technology called “EcoWave,” known to have been effective in diffusing energy-saving facilities developed by Osaka Gas.

A financing scheme under EcoWave enables customers to install power facilities run using renewable energy sources without any initial investment. The scheme focuses on fund raising exclusively earmarked for developing renewable energy sources. Under the scheme, highly professional services backed by technological expertise are provided to local communities to support their efforts to develop renewable energy sources with the aim of promoting local production and local consumption.

As of the end of February 2018, power generation projects using the EcoWave financing scheme totaled 43 cases with a combined power generation capacity of 48,852 kW, including projects that have yet to start and projects still under construction.

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