Environment: Reducing CO₂ Emissions in Factories

Panasonic Group realized our first two zero-CO₂ factories in fiscal 2019, i.e., a home appliance recycling factory in Japan and a consumer battery factory in Europe. Since then, more and more zero-CO₂ factories have been realized in the world. The succeeding zero-CO₂ factories were all 3 sites of Panasonic Brazil (Co., Ltd.), i.e., Extrema, San Jose, and Manaus, and one in Panasonic Centroamericana S.A. (Corp.) in Latin America. These were followed by Panasonic Energy (Wuxi) Co. Ltd., SANYO Energy (Suzhou) Co., Ltd., and Panasonic Manufacturing (Beijing) Co., Ltd. in China. In fiscal 2022, Panasonic Energy (Thailand) Co., Ltd. became the Group's first zero-CO₂ factory in the Southeast Asian region. These efforts have steadily spread worldwide, and we now have zero-CO₂ model factories in all five regions^*3 across the globe.

The factory of Panasonic Energy (Thailand) Co., Ltd. (PECTH), which achieved zero CO₂ emissions in fiscal 2022, manufactures primary batteries such as alkaline/manganese batteries. After investigating and analyzing the overall energy consumption of the entire premises, PECTH established a system to visualize and analyze the energy consumption of the production facilities that consume a lot of energy in order to improve their utilization ratio and reduce quality loss. For other power generation facilities and the like, PECTH promoted energy saving by reducing operational losses and replacing equipment with more efficient equipment, while utilizing electricity generated by own solar power generation system, procuring I-REC (International Renewable Energy Certificate) certified electricity, and furthermore, utilizing credit to offset CO₂ emissions from fossil fuels, and the like. As a result, PECTH achieved a reduction of approximately 16 kt CO₂ emissions in fiscal 2022. PECTH has been working to install additional photovoltaic power generation systems with larger capacities to the existing systems.

*3 "Promoting zero-CO₂ model factories" means implementing advance activities to realize zero-CO₂ model factories in each region in the world through obtaining knowhows.
*4 Five regions are: Japan; China & Northeast Asia; Southeast Asia, Pan Pacific, India, South Asia, Middle East and Africa; North & Latin America; Europe & CIS.
*5 ★As of now, 9 factories have realized zero-CO₂ factories: h PETEC, PANABRAS (three factories), PCA, PECW, SEC (SUZ), PMFBJ, PECTH.PASCZ concluded its contract in January 2022 (counted only as model factories in fiscal 2022). PC Tokyo is a non-manufacturing site.

To increase the amount of renewable energy in our business use, Panasonic Group has been actively promoting installation of renewable energy facilities in our own sites and renewable energy procurement from external suppliers.

The amount of renewable energy adopted at our sites^*6 in fiscal 2022 marked 43 GWh and successfully achieved the fiscal 2022 target of "renewable energy generated at our sites of 40 GWh".

Installation of renewable energy facilities has been actively encouraged in our own sites across the world in a way to suite to the regional characteristics.
Particularly, photovoltaic power generation systems are recommended for installation wherever possible. The major achievement in fiscal 2022 was installation of photovoltaic power generation systems in China. Panasonic Electronic Devices (Jiangmen) Co., Ltd. (PEDJM) respectively installed a 3.36 MW system on the roof of its factory and a 0.58 MW system as a solar carport. These systems are now in operation and generate electricity in total 3.94 MW, which is the largest in a single site in Panasonic Group's history.

Procurement of renewable energy from external sources has been also promoted across the globe. In Japan, at our own site, we are an electricity user, and at the same time, an electricity retailer (registration number: A0136). Since 2005, we have been supplying power to our own sites, factories, and offices. Utilizing our knowhows and experience of electricity procurement and trading that we have accumulated to date, we procure 100% renewable electricity generated from wind, etc., as well as electricity with environmental value such as those with nonfossil fuel certificates and credits to offset CO₂ emissions from fossil fuel. This effort contributed to converting factories in Japan, China, and Southeast Asia to zero-CO₂ factories. We have also determined to develop our own photovoltaic power station with an 18,000 kW capacity for use at own sites in fiscal 2022 and aimed to commence operations by the end of 2022. As described above, we continue to contribute to expanding use of electricity from new renewable energy sources. We also started selling to Panasonic Group employees in Japan, electricity derived from practically 100% renewable energy in fiscal 2021.
https://news.panasonic.com/jp/topics/204036.html

In August 2019, Panasonic Group joined "RE100"^*7, an international initiative that brings together companies committed to sourcing 100% renewable electricity for their global business operations. We aim to switch all the electricity used in our sites across the world to that sourced from 100% renewable energy by 2050. Progress in fiscal 2022 was 6.7%.

*6 The total amount of the adoption is subject to the amount of photovoltaic energy, wind power, and so on including the amount of the renewable energy adopted at our non-manufacturing sites, excluding the amount of energy from heat pumps.
*7 Press release on August 30, 2019.
Panasonic Joins RE100 Aiming for Business Operations with 100% Renewable Energy

In Singapore, a photovoltaic power generation system with an output capacity of 1.0 megawatt-peak(MWp) was adopted in Panasonic Factory Solutions Asia-Pacific (PFSAP) in September 2016. A total of 3,476 Panasonic PV module HIT® panels were installed on the rooftop of three factory buildings. At its peak, the factory's photovoltaic (PV) system is expected to power, on average, close to 20% of its entire energy consumption. Panasonic HIT® panels can generate more energy even on limited rooftop spaces due to industry's top-level efficiency. In addition, the panels are more suited to tropical climates, since they can also maintain high power generation performance even under high temperatures. The product is manufactured by Panasonic Energy Malaysia, located in Kulim Hi-tech Park in Kedah, Malaysia.

Installation of this system is based on a leasing agreement with Sunseap, the largest clean energy provider in Southeast Asia. This is the second, of such leasing agreement in Singapore, following the installation of a 2.4 MWp a photovoltaic power generation system at Panasonic Appliances Refrigeration Devices Singapore (PAPERDSG) in October 2015 also under a leasing agreement with Sunseap. The system in PFSAP is the second of such leasing arrangement between Panasonic and Sunseap.

The Gunma Factory of Panasonic Eco Solutions Interior Building Products Co., Ltd. uses wood scraps and wood particles generated from manufacturing processes as fuel for its biomass boiler. Ever since the system was installed, steam generated by the biomass boiler is used in production in the factory processes, and excess steam is used to generate power. Continuous improvements have been implemented since 2011, including reducing the size of the dust collector, using inverters for fans, and reviewing the wood particle transportation route. We will promote the increase in the efficiency of boilers to make more effective use of wood scrap fuel, as well as examine expanding to other factories in the future.

In Europe, Panasonic Manufacturing UK (PMUK) newly adopted a wood biomass boiler. Conventionally, used wood pallets were shipped as waste, and the wood chips manufactured were used as fuel for biomass power generation in the community. From fiscal 2017, a wood chip production machine, a storage warehouse, and a biomass boiler were installed in the factory to produce wood chips within the factory for use as biomass boiler fuel. This has enabled reduction in the number of trucks to ship wood pallets as well as reduction in boiler gas consumption, achieving an annual reduction of CO₂ emissions by 65 tons. With biomass power generation, we will aim further CO₂ reduction.

To ensure steady progress in reducing the amount of energy used and CO₂ emissions, it is important to visualize trend of the energy consumption of each facility in factory and the effects of the measures for specific emissions reduction for promoting manufacturing with minimum energy. To date, we have been working on CO₂ reduction by adopting more than 40,000 measurement devices and Factory Energy Management System (FEMS) at all of our global manufacturing sites, promoting METAGEJI (Meter and Gauge)^*8, which visualizes and analyzes energy consumption.
See an example of factory energy-saving support service on the following website.

Panasonic Group has been working on to reduce production loss utilizing IoT and to improve productivity in production with innovative manufacturing methods. Panasonic Appliances Air-Conditioning and Refrigeration Systems Co. Ltd. (PAPARS) has minimized energy usage in the preheating process in manufacturing cold chain products. This was achieved by accurately understanding the heating conditions through steady temperature measurements in the production lines and use of simulations. This led to the adoption of a direct heating method using a near-infrared heater, changing from the conventional indirect heating method for filling a large space with heated air. These activities also eliminated the necessity for the steam required for indirect heating in the production process. The new heating method has been adopted to mass production facilities from fiscal 2023. We are now expanding efforts in energy usage minimization to other production processes.

Moreover, Panasonic Environmental Technology Solutions Co., Ltd., the Kitchen Appliances Business Division of Living Appliances Solutions Company, Kato Plastic Recycling Factory, and the Manufacturing Innovation Division of Panasonic Corporation jointly established a nationwide recycling supply chain that significantly reduces GHG emissions from production processes and expands resource recycling of recycled plastic. The companies liaised with a number of partners, including home appliance recycling factories and plastic recycling companies, through a scheme called a "virtual factory under a partnership with excellent recycled plastic companies." The scheme was supported by "improved material collection efficiency by optimizing the sorting system together with other technologies", "Development of technologies for analyzing materials and for physical property recovery, which achieves both cost reduction and good quality", and "Development of technologies how to effectively use recycled plastic". We also revised the quality standard to allow black spots in product parts that are not seen by users to expand the usage of recycled plastics. These efforts reduced the waste to be incinerated and the new material to be used, achieving a GHG reduction of approximately 95,000 t. The partnerships built in this scheme can be a platform not only applicable for plastic recycled from discarded home appliances but also for other types of plastic recycling, and expandable to other industries.
We plan to widen the scope of the scheme towards realizing a circular economy. (Received the Minister's Award under the FY2021 Awards for Resources Recirculation Technologies and Systems hosted by the Ministry of Economy, Trade and Industry, Japan.)^*9

*8 METAGEJI is a coined word created by Panasonic Group which refers to visualizing energy consumption and implementing measurable reduction measures by adopting measurement instruments such as meters and gauges.
*9 Panasonic's project, "Establishment of Circular Supply Chain of Plastic Recycled from Home Appliances" received the Minister's Award under the FY2021 Awards for Resources Recirculation Technologies and Systems hosted by METI, Japan.

Panasonic Energy (Wuxi) Co. Ltd. (PECW) in China achieved zero CO₂ emissions in fiscal 2021. SANYO Energy (Suzhou) Co., Ltd. (SEC (SUZ)), which is under the management of PECW, achieved zero CO₂ emissions and at the same time, obtained the carbon neutrality certificate issued by the Chinese government.

To achieve this status, SEC (SUZ) identified issues specific to the Suzhou Factory while referring to precedent cases in Panasonic Group and implemented 12 different activities, including switching the production heat source from natural gas to steam. This led to 1,288t of CO₂ emissions reduction per year, as well as achieving zero CO₂ emissions and obtaining carbon neutrality certification in a short period of time through the use of environmental values.

The Chinese government published its long-term policy for carbon peak out and carbon neutrality, more focusing on reduction of CO₂ emissions. As Panasonic Group has a number of business sites within China, we will clarify specific environmental issues in China that Panasonic Group should tackle and our contribution values. To address any identified issues, we will proactively establish collaborative plans optimized for the local site in China utilizing our accumulated expertise of CO₂ emissions reduction in production processes. While following the development of the CO₂ emissions trading scheme targeted at the electricity industry throughout China, we became aware that the total power generation capacity from non-fossil power stations in China exceeded that of coal power stations for the first time in 2021. In line with this, we will continue to explore ways of replacing the power we consume with renewable energy-sourced electricity from the viewpoint of establishing collaborative plans with local stakeholders. Although we are not in the eight sectors that must follow the Chinese CO₂ emissions trading scheme, we will actively look for business partners to collaborate for the scheme.

These efforts in fiscal 2022 resulted in 4.9 TWh^*10 of the energy used in factories, and the amount of CO₂ emissions was 1.95 Mt. The fiscal 2022 investment to reduce the amount of energy used and CO₂ emissions by the efforts was 1.9 billion yen.^*11

*10 In fiscal 2021, the unit used to measure the energy consumed in a factory was changed from TJ to TWh.
The consumed power is measured in kWh and the consumed fuel is measured using its calorific value and then converted to electrical power units at 3.6 MJ/kWh. These two values are then totaled.
*11 The total amount includes all investments concerning reduction of the amount of the energy used and CO₂ emissions. Note that differences or proportions of the investment are not calculated.

*12 Includes emissions of Panasonic Corporation of North America after FY2021
*13 We calculated the improvement rate of the "CO₂ emissions per basic unit" versus that of fiscal 2014", which was obtained by dividing CO₂ emissions by the revenue of all Panasonic Group companies.
*14 The CO₂ emission relevant to fuels was obtained by calculating with the factors stated in the "Guidelines for Calculation of Greenhouse Gas Emissions/Report Manual" published by Japan's Ministry of Environment. The factors for purchased electricity by country per fiscal year set by Panasonic Group based on the factors stated in "CO₂ emissions from fuel consumption" by International Energy Agency (IEA). The FY2014 factors in the Book 2017 were used for FY2014. The FY2017 factors in the Book 2018 were used for FY2017. The FY2018 factors in the Book were used for from FY2018 to FY2021. The FY2022 factors in the IEA Emissions factors 2021 were used for FY2022.

*15 The emissions of GHG other than CO₂ from energy sources by Hussmann Parent Inc. and its consolidated subsidiaries, and Panasonic Corporation of North America are not included.