CSR Charter ⅡHarmonizing with the Environment and Contributing to Realizing a Sustainable Society
Environmental Management: Indicators, Targets and Results
- Principle and Outline
- CO2 Emissions Reduction Target Set in Long-term Management Vision 2030 and Results
- TOPIC: Participation in the Keidanren’s Commitment to a Low Carbon Society
- Environmental Management Indicator and Result
- Environmental Action Targets and Results
- Environmental Impact in Daigas Group Value Chain (FY2019)
- Environmental Accounting
Principle and Outline
The Daigas Group has set out a long-term vision toward FY2031 and medium-term environmental targets to reduce environmental impact for the Group as a whole, particularly in the city gas business, and is monitoring the progress being made toward achievement of those targets. In pursuit of the environmental action targets, we will be seeking to achieve greater efficiency in environmental management, reduce CO2 emissions, curb waste generation while promoting recycling, and reduce the volume of excavated soil for final disposal. In addition, we will calculate GHG emissions annually throughout the value chain of the Group, as these emissions affect climate change, and utilize that information to promote initiatives to reduce emissions.
CO2 Emissions Reductions Targets and Results Set in the Long-Term Management Vision 2030
The Long-Term Management Vision 2030 announced by the Daigas Group in March 2017 aims to reduce the Group’s CO2 emissions by a cumulative total of about 70 million tons between FY2018 and FY2031, while further promoting ESG-conscious business operations. The targeted CO2 emissions reduction during the period was calculated based on the benchmark of FY2017 CO2 emissions. The projection took into consideration expected effects from highly energy-efficient facilities planned to be introduced in FY2018 or after, and the active use of low-carbon energy sources.
The CO2 emissions reduction effect of the Daigas Group’s various efforts was calculated by multiplying the “extent of expected use of highly energy efficient technologies and low-carbon energy sources” by the “reduction effects expected if existing facilities and conventional energy sources are replaced by highly energy-efficient facilities and low-carbon energy sources.” This calculation method is based on the method of calculating the CO2 emissions reduction in the Japanese government’s anti-global warming plan (approved by the Cabinet in May 2016). Also, based on the above concept, the marginal emission factor (average emission factor of the thermal power sources) was used as the CO2 emission factor for purchased electricity. As shown below, the Daigas Group expects to see its Scope 1, Scope 2 and Scope 3 GHG emissions rise in line with its expanding business size. However, the Group’s efforts to reduce CO2 emissions, such as replacing the current system with a low-carbon energy system, will reduce emissions at other companies’ and in their value chains, which in turn will contribute to society-wide emission reductions.
Further information on the methods used to calculate CO2 emissions reductions is presented below.
Several new initiatives have been taken from FY2018 to FY2019.
These include: the establishment of cryogenic power generation at our city gas production facilities, the introduction of renewable energy sources domestically and high-efficiency thermal power generation both domestically and internationally, the introduction of fuel cells and gas-powered air conditioning and high-efficiency hot-water heaters at customer sites, and conversion to the use of natural gas as a fuel both in Japan and internationally. These efforts have resulted in a total reduction in CO2 emissions of approximately 1.67 million tons.
The Group will remain committed, both at its companies’ and customers’ sites, to the goal of building a low-carbon society by actively introducing highly energy-efficient facilities and using low-carbon energy sources.
Contribute to Reducing CO2 Emissions in Society
Participation in the KEIDANREN's Commitment to a Low Carbon Society
The Japan Business Federation (Keidanren) recognizes global warming as a global-scale issue to be addressed on a long-term basis. Based on this recognition, Keidanren has set out a common vision for Japan's industry—using its technological expertise to play a pivotal role in global efforts to halve greenhouse gas emissions in the world by 2050. This vision was transformed into a Keidanren action plan to create a low-carbon society, drawn up in 2013 and revised in 2017. The action plan spells out what each participating industry should do in Japan through the maximum use of “best available technologies” (BAT) to reduce as much as possible CO2 emissions from business activities and people's life-related activities. The action plan also calls for each industry to provide strong support to overseas efforts to stem global warming. Also set in the action plan are goals and activities aimed at strategically developing innovative technologies that could become a breakthrough for the 2050 CO2 reduction goal.
The Japan Gas Association and the Electric Power Council for a Low Carbon Society (ELCS), both participating in the action plan, have formulated their respective industry plans for realizing a low-carbon society. Osaka Gas, a member of both the association and the ELCS, has joined the industry plans and is working out measures to combat global warming (climate change).
Environmental Management Indicator and Result
Monetary value of major environmental impacts
Osaka Gas sets and uses environmental management efficiency as an indicator to assess progress in environmental management in a continuous and integrated manner. This indicator is used to evaluate our company's environmental management situation regarding the gas business. Therefore, it does not represent our environmental management efficiency in other fields, including the electricity generation business.
This indicator, environmental management efficiency, is the monetary value of the amount of environmental impact per cubic meter of gas produced for the relevant fiscal year (yen / 1,000 m³, calculated for each item): greenhouse gas emissions, NOx emissions, COD emissions, final disposal of general and industrial waste, final disposal of excavated soil, emissions of chemical substances, and water consumption (general and industrial water). This allows us to quantitatively measure how much we are reducing our environmental impact.
The smaller the figure for environmental management efficiency, the greater the reduction in environmental impact per amount of gas produced.
The indices of “Environmental Management Efficiency” are calculated using the second version of the Life Cycle Impact Assessment Method Based on Endpoint Modeling compiled by the National Institute of Advanced Industrial Science and Technology.
[Legend] Environmental impacts
Environmental Management Efficiency ( yen / 1000 m³ )
Environmental Management Indicators and Results
The reuse of excavated soil in gas pipe installation work reduced environmental impact in FY2019, yet the monetary value of the amount of environmental impact per cubic meter of gas produced rose slightly to 12.5 yen/1,000 m³ as a result of an increase in externally purchased electricity. In FY2018, the coefficient for converting the amount of environmentally harmful chemical substances emitted through business operations into monetary value was switched to the latest available figures used in the life-cycle impact assessment method (LIME). Also, the denominator used in the calculation formula was switched from the amount of gas sold to the amount of gas produced in light of the situation of city gas production and procurement.
Environmental Management Efficiency
Environmental Management Efficiency Results
|Environmental impact||CO2 emissions (Tons)*1||133,963||134,003||130,006||122,848||125,396|
|CH4 emissions (Tons)||94||92||75||77||77|
|Final disposal of excavated soil (Tons)*2||12,155||10,494||9,699||2,978||2,285|
|Final disposal of general waste (Tons)||18||17||17||11||11|
|Final disposal of industrial waste (Tons)||395||331||237||236||235|
|NOx emissions (Tons)||4.16||3.42||8.08||10.94||11.84|
|COD emissions (Tons)||3.24||2.20||2.55||2.14||2.00|
|Toluene emissions (Tons)||0.21||0.67||0.03||0.02||0.00|
|Xylene emissions (Tons)||1.9||5.33||0.94||0.68||0.04|
|Water consumption (general and industrial water) (10,000 m³ )||147||110||117||110||124|
|Monetary value of environmental impact (Million yen)||495||474||455||102||101|
|Amount of gas produced (Million m³ )*3||8,259||8,021||8,662||8,772||8,142|
|Environmental Management Efficiency (yen / 1,000 m³ )*4||60.0||59.1||52.5||11.6
- *1 CO2 emissions
- The CO2 emission coefficient for purchased electricity used to calculate environmental management efficiency was 0.69 kg-CO2/kWh until FY2017 and 0.65 kg-CO2/kWh for FY2018 and FY2019.
- The figures listed up to FY2017 are based on the results of a FY2009 survey on construction byproducts (edition compiled for the Kinki region); for FY2018 and FY2019 the figures are based on the same construction byproducts survey conducted in FY2013.
- Use the amount of gas sold until FY2017
- The figures for FY2018 and FY2019 shown in parentheses represent the figures that would have been calculated under the calculation formula used until FY2017.
Environmental Action Targets and Results
Steady progress was made toward achieving the environmental action targets for FY2021 as evidenced by the improvement of most indicators of environmental management efficiency, an integrated yardstick used to assess our environmental conservation activities. Behind the improvement in FY2019 were the smooth operation of the cryogenic power generation facilities for LNG terminals, progress in the reuse of excavated soil, and enhanced energy-saving activities, including the introduction of LED lighting.
Environmental Action Targets (for FY2021)
|Field||Indicators||Targets for FY2021||FY2019 Results|
|Integrated indicator||Environmental Management Efficiency||Environmental impact of gas business per gas produced (Monetary value (yen) of GHG, excavated soil, waste, NOx, COD, chemical substances, water consumption / gas produced (1,000 m³ ) )||14.2 or less
(22% decrease compared to FY2009)
|Low-carbon society||Reducing CO2 emissions from our business activities||City gas
|LNG terminals (CO2 emissions per 1 million m³ of gas produced) (t-CO2 / 1 million m³ )||11.7 or less
(12% decrease compared to FY2009)
|Office buildings (CO2 emissions per 1000 m² floor space)||56.5 or less (27% decrease compared to FY2009)||53.0|
|Group companies' businesses*2||Electricity business (including renewable energy sources) (CO2 emissions per electricity generated)||15% decrease compared to FY2009||32% decrease|
|Other businesses (CO2 emissions per sales) (t-CO2 / 10 million yen)||8.2 or less (12% decrease compared to FY2009)||9.3|
|Reducing CO2 emissions on customer sites and throughout the value chain||Customers||Centered on natural gas, Osaka Gas aims to reduce greenhouse gas emissions by diffusing energy-efficient value-added products.
|Transportation / logistics||
|CO2 emissions reduction for entire Group (t-CO2) (including contribution to reductions at customer sites and overseas)||7 million||Cumulative total: 1.67 million|
|Resource recycling||Promoting the 3Rs in our business||Gas business||Industrial waste from LNG terminals (final disposal rate)||1% or less*2||0.6%|
|Industrial waste from facilities other than LNG terminals (final disposal rate)||1% or less||0.7%|
|General waste (final disposal rate)||3% or less||2.5%|
|Excavated soil (final disposal rate)||1% or less||0.3%|
|Polyethylene (PE) pipes (recycling rate)||100%||100%|
|Gas meters (reuse rates)||98% or more||98.6%|
|Group companies (core affiliates*1)||Industrial waste / general waste (final disposal rate)||4% or less||3.4%|
|Efforts throughout the value chain||
|Technology development||Promotion of technological development to help create a low-carbon society and further solidify the Company's already solid business foundation
|Green procurement / purchasing||
- *1 Group companies
- Of 150 Osaka Gas consolidated subsidiaries, 55 companies are subject to the calculation of greenhouse gas emissions. Those housed in office buildings as tenants and whose environmental data are difficult to grasp and whose environmental effects are minimal are not subject to such calculation. Also excluded from the calculation are overseas companies whose environmental impacts are minimal.
- Industrial waste covered for the rate calculation excludes the disposal of PCB, a chemical substance whose disposal by 2027 is mandatory.
Main changes in calculation methods for targets and indicators from FY2018
- With regard to indicators for environmental management efficiency and CO2 reductions in city gas production sites, the denominator used in the calculation formula was switched from the amount of gas sold to the amount of gas produced in light of city gas production and procurement realities.
- The environmental management efficiency monetary value conversion coefficient was updated to reflect the latest available figures used in the life-cycle impact assessment method (LIME).
The Daigas Group calculated the amount of greenhouse gas (GHG ) emissions from companies that constitute the Daigas Group’s value chain network, based on the GHG Protocol, an international emission standard. The methodology of the calculation and its results have been certified by an independent organization to verify their reliability and accuracy.
Combined GHG emissions by the Daigas Group and value chain companies, measured by CO2, totaled about 34.81 million tons in FY2019. The sum breaks down into about 5.35 million tons, or about 15%, for GHG emitted through business activities by the Daigas Group (Scope 1 and Scope 2), and about 29.46 million tons, or about 85%, emitted by organizations other than the Daigas Group involved in our value chain (Scope 3).
GHG emissions from city gas combustion on the customer side amounted to 18.17 million tons in the reporting year in terms of CO2, accounting for about 52% of the total. To reduce CO2 emissions in society as a whole, it is important for Osaka Gas to promote energy conservation using natural gas, an energy source with low CO2 emissions, and further popularize high efficiency equipment and systems such as its Ene-Farm and cogeneration systems.
GHG emissions through electricity generation by the Daigas Group, as measured in terms of CO2, came to 4.88 million tons, representing about 14% of the total emissions from the Group’s own business activities. With the power generation business expanding, the ratio of CO2 emissions from that business has been increasing every year. As a way of reducing GHG emissions from power generation, the Group will continue to actively introduce highly advanced energy-efficient power generation facilities and use renewable energy sources.
GHG emissions from material and fuel procurement totaled 6.15 million tons, as measured in terms of CO2 in the year, accounting for about 18% of the total emissions. The procurement of energy sources, especially LNG, accounted for nearly 90% of that amount. Under these circumstances, we will continue our efforts to improve fuel efficiency regarding the operation of LNG tankers in collaboration with material suppliers.
Activities that have potential environmental impacts other than GHG emissions include the disposal of waste (general waste and industrial waste), and the disposal of excavated soil and polyethylene pipes associated with gas pipe construction. However, the recycling rates are high for such waste, a situation we will try to maintain in the future.
About 97% of water used for our industrial activities is taken from the sea. Such water is mostly used to vaporize LNG at LNG terminals. Seawater is also used as coolant inside the steam turbine condenser at some power plants. Once used, the water is discharged into the sea under strict control.
GHG Emissions throughout the Value Chain in FY2019
LCA Comparison of GHG Emissions by Fossil Fuel (CO2 Equivalents)
The chart below uses life cycle assessment (LCA*1) to show a comparison of fossil fuel greenhouse gas emissions (as carbon dioxide equivalents), covering all processes from production to combustion. LNG is the cleanest energy of all fossil fuels in terms of GHG emissions.
Greenhouse gas emissions comparison (g-CO2/MJ, total calorific value)
|Coal*2||Oil*2||LPG※2||LNG※3||City Gas 13A※3|
- *1 LCA = Life Cycle Assessment
- A comprehensive quantitative method of survey, analysis, and evaluation for best assessing the amount of environmental impact of products and services. The assessment covers all processes related to products and services from resource extraction to waste disposal including production, transportation, consumption, recycling, and disposal.
- Source: Future Forecast for Life Cycle Greenhouse Gas Emissions of LNG and City Gas 13A (Energy and Resources, Vol. 28, No. 2, March, 2007)
- Source: Calculation of life cycle greenhouse gas emissions of LNG and city gas 13A (Research papers and a collection of academic speeches released at the 35th meeting of the Japan Society of Energy and Resources, held in June 2016)
Increase in environmental investment and expenses
Osaka Gas introduced environmental accounting in FY2001, which we see as an important means of quantitatively measuring environmental costs and economic benefits, encouraging environmental activities in an efficient manner, and as a tool to continuously enhance environmental performance.
Environmental conservation costs—the aggregate of environmental investment and expenses—for FY2019 rose from the previous fiscal year due to an increase in investment in facilities and equipment for research and development and an increase in green purchasing costs. Internal economic benefits decreased from the previous year due to a decline in the amount of benefit from cuts in spending accompanying the reduction and reuse of excavated soil.
We will continue to follow up in monetary terms to ensure that investments allocated to environment-related efforts are utilized effectively.
(1) Environmental Conservation Costs
|In-house activities||Global environment||Investment, management and labor cost for the efforts for energy-saving, efficient energy saving and protection of ozone layer.||1,209||369||44||934||771||943|
|Pollution prevention||Investment, management and labor cost for the efforts for preventing air/water/noise pollution||48||13||60||67||63||48|
|Resource recycling||Investment, management and labor cost for the efforts for excavated soil reduction, recycling, waste management||10||27||12||73||87||32|
|Environmental management||Cost for green purchasing, environmental education, EMS development, environmental organizations||3||0||0||8,706||9,118||9,224|
|Other||Greening at plants, environmental preservation subsidies||5||1||120||115||21||49|
|Environmental impact reduction at customers||R&D||R&D of impact reduction technologies, environment-conscious products, etc.||121||31||168||341||135||98|
|Environmental impact reduction by recycling||Recycling used gas appliances||Cost for collection and recycling of gas appliances and packaging||0||0||0||23||26||37|
|Philanthropic activities||Cost for voluntary greening, environmental advertising, environmental information disclosure||33||0||3||152||71||39|
(2) Internal Economic Benefits
|Economic benefits (million yen)|
|Saving through reduction and recycling of excavated soil||3,057||2,966||2908|
|Sales of valuable resources (LNG cold heat )||184||189||193|
|Cost reduction through energy / resources saving||520||-158||-154|
(3) Environmental Conservation Results
|Impact per output||Total amount||Reduction|
|NOx (LNG terminal):
NOx emissions in the city gas business
|mg / m³||1.28||1.50||t||10.94||11.84||t||39.50||33.35|
|COD (LNG terminal):
COD at all LNG terminals
|mg / m³||0.25||0.25||t||2.14||2.00||t||8.38||8.62|
|g-CO2 / m³||10.21||11.41||1000 t-CO2||85.80||92.89||1000 t-CO2||48||37.83|
|g-CO2 / m³||4.56||4.66||1000 t-CO2||38.94||36.84||1000 t-CO2||38||32.35|
|Final disposal of excavated soil||t / km||13.65||10.65||1000 t||6.82||5.26||1000 t||48||46.90|
|Final disposal of general waste||g / m³||0.00||0.00||t||11.22||10.60||t||1,271||1,173.90|
|Final disposal of industrial waste
(including used gas appliances)
|g / m³||0.03||0.03||t||235.64||241.76||t||5,576||5,137.36|
(4) Social Benefits of Environmental Conservation Efforts (Monetary Value)
|FY2017 Monetary Value
|FY2018 Monetary Value
|FY2019 Monetary Value
|NOx (LNG terminal) : NOx emissions in the city gas business||12||14||12|
|COD (LNG terminal) : COD at all LNG terminals||13||13||13|
|CO2 (LNG terminal)||151||168||133|
|CO2 (other sites)||143||134||114|
|Final disposal of excavated soil||1,093||1,056||1,038|
|Final disposal of general waste||4||4||4|
|Final disposal of industrial waste (including used gas appliances)||173||171||157|
Estimation method of environmental accounting
- The standards incorporated
Osaka Gas's environmental accounting method, which calculates costs and benefits, is based on the 2000 version of The Environmental Accounting Guidelines For Gas Utilities released by the Japan Gas Association. The guidelines are based on the Ministry of the Environment's Creating an Environmental Accounting System guidelines and reflect the distinctive characteristics of city gas companies.
Osaka Gas Co., Ltd.
April 1, 2018 - March 31, 2019
In order to improve the accuracy of environmental accounting as well as reduce the workload, Osaka Gas developed and operates a system tied to the in-house financial accounting system since FY 2001.
Calculation of environmental costs and benefits
(1)Environmental conservation costs
The aggregate figures for each item are compiled as far as possible using only costs incurred for environmental purposes (differential aggregation). R&D and personnel costs from which it is difficult to extract only those costs incurred for environmental purposes are calculated on a pro rata basis using an “environmental ratio” determined in accordance with their degree of connection to the environment.
Investment: aggregate of the fixed assets acquired in the fiscal year in question that contribute to
Costs: aggregate of depreciation costs, labor costs and expenditures for environmental efforts
Depreciation of fixed assets acquired since 1997 (including terminals and other large-scale facilities acquired prior to that) is calculated via the declining balance method over the useful life of the equipment. Labor costs are calculated using standard unit costs.
(2)Internal economic benefits
The benefits accrued from cutting expenses that can be clearly reduced based on the company's operational performance were aggregated.
(3)Economic conservation effects (material effects)
The environmental impact level, the total environmental impact, and the environmental impact mitigation level are calculated.
- Environmental impact level
NOx, COD, CO2, general waste, and industrial waste figures are calculated per cubic meter of gas sold. Final disposal volumes for surplus soil are calculated per km of gas pipes installed.
- Total environmental impact
- Environmental impact reduction
For NOx and COD, the difference from the stipulated value for each facility is posted. For CO2, general waste and industrial waste, figures are calculated by multiplying the differences in output units (amounts per cubic meter of gas sold) from the benchmark FY1998 levels by the volume sold that fiscal year. For final disposal of excavated soil, the reduction in offshore landfill disposal was calculated based on the amount of reduction in excavated soil and the amount of soil recycled.
(4)Social benefits of environmental conservation (monetary value)
The monetary values of social benefits derived from reducing environmental impact were calculated. For final disposal of excavated soil, the monetary values of social benefits stemming from environmental conservation are calculated by multiplying the base unit price determined through the contingent valuation method (CVM; a method in which residents are surveyed on the amounts they are willing to pay for environmental conservation and then the monetary value of this conservation is calculated) by the reduction in environment impact.
Base units were also selected for other environmental impacts corresponding to the amount of environmental value on the basis of research on environmental damage costs, etc., both inside and outside Japan, and then the environmental conservation benefits were calculated by multiplying these base units by the respective amounts of harmful impacts curbed.