Realize Carbon Neutrality

NTN Group has set the target of "Achieve carbon neutrality by the fiscal year 2035 (by the fiscal year 2050 for the entire supply chain)" and promotes efforts for CO₂ emissions reduction in business activities and contribution to the environment through providing our products and services.

■NTN Group's target year for carbon neutrality

CO₂ Emission Reduction Initiatives

Own Emissions (Scope 1 (Direct Emissions), Scope 2 (Indirect Emissions))

The NTN Group is committed to reducing CO₂ emissions and emission intensity in all of its business activities. We undergo third-party verification to ensure the reliability of the data. In the past, from the perspective of reducing energy consumption, CO₂ emissions were calculated using the electricity emission factors of the location-based method for the benchmark year, but from this fiscal year we are switching to calculating CO₂ emissions using the electricity emission factors of the market-based method. ^＊ In the fiscal year ending March 31, 2031, we aim to reduce CO₂ emissions by 50% of fiscal year ended March 31, 2019 levels.
We are working on activities with the goal of achieving carbon neutrality by the fiscal year ending March 31, 2036.

＊Calculated using emission factors sourced from "Emissions Factors 2021" (IEA) in overseas sites.

■CO₂ emissions/emission intensity [Japan]

■CO₂ emissions/emission intensity [Overseas]

Supply Chain Emissions (Scope 3)

We have set a carbon neutrality target for 2050, including supply chain emissions (Scope 3). Currently, we are calculating Scope 3 emissions for our business sites in Japan using the intensity factor sourced from the Input Output Table. Category 1, "Purchased Products and Services," which is the largest emission category among all categories, is mostly due to the procurement of raw steel materials and semi-finished products such as forgings, turned products, and other work-in-process products. We will improve the Scope 3 calculation method, such as by reviewing the intensity factor used and promote activities to identify and reduce emissions in actual conditions.

■Supply Chain Emissions (Scope 3)

Reducing CO₂ Emissions in Logistics

The NTN Group is reducing CO₂ emissions (Scope 3 Category 9) during product transportation by improving logistics efficiency. Main measures include "shortening transportation distances by optimizing distribution routes," "increasing the loading ratio by expanding the use of module outer boxes," "reducing the number of containers by increasing the loading ratio of export containers" "promotion of reuse and recycling (repair) of wooden pallets," and "having carries strictly adhere to non-idling requests". In the fiscal year ended March 31, 2022, CO₂ emissions from domestic product transportation were 12.7 thousand tons-CO₂/year (target: 12.3 thousand tons-CO₂/year) and CO₂ emission intensity was 0.0375 tons-CO₂/ million yen (target: 0.0345 tons-CO₂/ million yen) and falling short of both the CO₂ emission and emission intensity targets. The reason for the underachievement was mainly transportation inefficiency (high frequency small lots) due to the COVID-19 pandemic and shortage of semiconductors. To do deal with this, we are promoting improvement of transportation efficiency by optimizing truck loading capacity.

■CO₂ Emissions and Emission Intensity in Logistics

Verification Opinion by a Third Party on CO₂ Emissions

A third-party verification of CO₂ emissions for the fiscal year ended March 31, 2022 was conducted, confirming that there were no issues with the method for calculating CO₂ emissions.

Introduction of Renewable Energy

As part of our efforts to achieve carbon neutrality, we have installed renewable energy generation equipment for our own consumption at our business sites under various schemes (PPA^＊1, leasing, and self-investment) to reduce CO₂ emissions (Scope 2). Emissions by 412 tons-CO₂ in Japan and 8,210 tons-CO₂ overseas were reduced in the fiscal year ended March 31, 2022. ^＊2

＊1 PPA (Power Purchase Agreement): A contract to install solar power generation equipment owned by a third-party power producer on a roof or other location and purchase its electricity.

＊2 Calculated using emission factors sourced from "Electric Utility Emission Factors" (Ministry of the Environment and the Ministry of Economy, Trade and Industry) in Japanese sites and calculated using emission factors sourced from "Emissions Factors 2021" (IEA) in overseas sites.

■Results of Renewable Energy Generation (Fiscal Year Ended March 31, 2022)

Region	Power generation (kWh)	CO2 emission reduction (tons-CO2)
Japan	1,021,348	412
France	1,100,990	56
China	13,279,603	8,154
Total	15,401,941	8,621

Self-Invested Photovoltaic Installations on Roofs

Hikari Seiki Industry Co., LTD. (Japan) installed a total of 350 solar panels on the roof of its new CVJ plant, which began generating electricity in July 2021 and reduced CO₂ emissions by 40 tons in the fiscal year ended March 31, 2022. ^＊
The equipment has also disaster/emergency power supply capabilities as an option.

＊Calculated using emission factors sourced from "Electric Utility Emission Factors" (Ministry of the Environment and the Ministry of Economy, Trade and Industry).

■New CVJ Plant (Hikari Seiki Industry)

Grasping the Scope 2 Market Reference Emissions

In order to promote substantial reductions in Scope 2, the NTN Group is switching to calculating CO₂ emissions using the market-based emission factors^＊ in Japanese business sites in the fiscal year ending March 31, 2023. For overseas business sites, we will continue to investigate market-based CO₂ emission factors.

＊Market-based emission factors: CO₂ emission factors defined by the GHG Protocol for electricity procurement units.

Offsetting through Renewable Energy Procurement and Credits

As part of our efforts to achieve carbon neutrality, the NTN Group is actively promoting the procurement of CO₂-free electricity and carbon offset city gas through renewable energy sources and credits.
The Nagoya Sales Office and NTN Antriebstechnik G.m.b.H. (NTN-AT, Germany) have already introduced CO₂-free electricity. This year, Kuwana Works and NTN Mie Corp. (both in Japan) plan to purchase city gas made from carbon neutral LNG^＊ using voluntary credits.

＊Liquefied natural gas

■Actual Procurement of Renewable Energy (Fiscal Year Ended March 31, 2022)

Site name	Energy type	Procurement (kWh)	Reduction of CO2 emissions (tons-CO2) ＊
Nagoya Sales Office	CO2-free electricity	43,909	17
NTN-AT		12,210,880	3,089
Total		12,254,789	3,106

＊Calculated using emission factors sourced from "Electric Utility Emission Factors" (Ministry of the Environment and the Ministry of Economy, Trade and Industry) in Japanese sites and calculated using emission factors sourced from "Emissions Factors 2021" (IEA) in overseas sites.

■Annual Purchase Schedule（Scheduled to be Purchased in the Summer of 2022）

Site name	Energy type	Procurement (thousand ㎥)	Reduction of CO2 emissions (tons-CO2)
Kuwana Works	Carbon neutral city gas	1,400	3,211
NTN Mie		1,800	4,128
Total		3,200	7,339

Efficiency of Energy Used for Utilities

As part of our efforts to reduce CO₂ emissions from production activities, the NTN Group is working to improve the efficiency of energy used for air, air conditioning, lighting, and other utilities. We are steadily working to reduce utility usage by installing high-efficiency compressors, air conditioning, lighting, and other equipment, regularly taking measures to prevent air leaks, and turning off non-operating equipment.

■Major Energy Conservation Measures (Japan and Overseas)

Energy conservation measures	The number of implemented sites		Reduction of CO2 emissions（tons/year）＊		Remarks
	Japan	Overseas	Japan	Overseas
Compressor updated	6	1	215	440	Renewed 7 compressors in Japan and 2 compressors overseas
Switching to LED lightning	15	13	659	247	LED completion degree  Japan: approx. 70%  Overseas: approx. 80%
Inverterization of motors and pumps	3	4	36	24	Power saving by frequency control of motor power
Transformer updates	6	0	44	0	Upgrading to equipment compliant with the "Top Runner Program"
Compressed air leak repair activities	17	11	335	2,918	Use of air leak detectors
Air conditioning renewal	8	5	280	104	Room temperature optimization by new control method and switching to inverter type

＊Calculated using emission factors sourced from "Electric Utility Emission Factors" (Ministry of the Environment and the Ministry of Economy, Trade and Industry) in Japanese sites and calculated using emission factors sourced from "Emissions Factors 2021" (IEA) in overseas sites.

Reducing Power Consumption by Introducing Intelligence LEDs

NTN Transmissions Europe (NTE, France) is promoting a project to replace its lightnings with LED lightnings. The LED lightnings installed are equipped with intelligence functions that enable them to optimize the illuminated area according to the layout of production equipment, the presence or absence of employees, and natural light conditions during the day by using lightning sensors. The installation of these fixtures has also been outsourced to an outside firm that promotes the employment of people with disabilities and those seeking to return to work. This project will reduce the use of electricity for electric lighting.

■Intelligence LED (NTE)

Fuel Reduction of Heating Boilers by Heat Pumps

NTN-SNR ROULEMENTS (SNR France, France) uses boiler heat for winter heating. By using a heat pump to utilize waste heat from the cooling tower for heating, we were able to reduce the fuel consumption of the boiler and the water consumption of the cooling tower. 42 tons of CO₂ emissions were reduced in the fiscal year ended March 31, 2022. ^＊

＊Calculated using emission factors sourced from "Emissions Factors 2021" (IEA).

■Heat Pump Heating Boilers (NTN-SNR)

Reduction of Electricity Consumption by Controlling Air Conditioning with Motion Sensors

NTN NEI Manufacturing India Private LTD. (NNMI-Chennai, India) has reduced electricity consumption by using motion sensors to control air conditioning, thereby eliminating unnecessary operation. The introduction of this system reduced CO₂ emissions by approximately 3.6 tons in the fiscal year ended March 31, 2022. ^＊

＊Calculated using emission factors sourced from "Emissions Factors 2021" (IEA).

■Air Conditioner Control Motion Sensor (NNMI-Chennai)

Energy Conservation of Production Facilities

The NTN Group is working to reduce CO₂ emissions (Scope 1) generated by processing machines and heat treatment facilities in the manufacturing process. For heat treatment facilities, which are a major source of CO₂ emissions, we have completed fuel conversion to LPG^＊ and city gas at major facilities as a first-stage energy-saving measure. In the future, we will not only expand the use of highly efficient high-frequency heating equipment and electric furnaces based on renewable energy use, but also consider the use of green ammonia and green hydrogen, which do not emit CO₂ during production and use, to promote carbon neutrality through the use of diverse energy sources.

＊Liquefied petroleum gas

Improvement of Heat Insulation of Outer Wall of Heat Treatment Furnace

The NTN Group is working to reduce energy loss in the heat treatment process by adding heat insulating materials to the outer walls of heat treatment furnaces and by applying heat insulating coatings. These measures have resulted in reduced use of city gas and electricity and lower heat dissipation from the furnace body, thereby reducing CO₂ emissions and improving the working environment.

■Construction Example (Fiscal Year Ended March 31, 2022)

Site name	Measures	Facilities	CO2 reduction (tons-CO2)
NTN Mie	Adding insulation	City gas furnace	19
NTN Noto	Heat-insulating coating	Electric furnaces	58

Improving Fuel Efficiency by Controlling the Mixing Ratio of Natural Gas and Air in Heat Treatment Furnaces

NTN-BOWER Corp. Hamilton Plant (U.S.A.) was able to increase fuel efficiency by controlling the mixing ratio of natural gas and air in the heating gas burner of the heat treatment furnace accordingly. In particular, the plant was able to optimize the mixing ratio at the beginning of furnace operation, enabling the furnace to operate more efficiently. As a result, the amount of natural gas used decreased by 13.6% compared to the previous fiscal year.

Visualization of Energy Consumption at Production Sites

The energy consumption facilities of our business activities include utility-related facilities such as compressed air, air conditioning, and lighting, as well as heat treatment and processing facilities. For compressors, one of our major energy consumption facilities, we have been systematically investing in energy conservation by introducing highly efficient types and inverter. In order to grasp the effect of energy saving, we are promoting visualization of energy efficiency (kWh/㎥) based on compressed air discharge (㎥) and electricity consumption (kWh) of compressors. Monitoring of energy efficiency is used for early detection of compressor problems and efficient maintenance. In the future, we will consider expanding the scope of facilities subject to energy visualization.

Consideration and Implementation of Measures to Adapt to Climate Change and Wind and Flood Damage.

The NTN Group is committed to thorough risk management against large-scale damage from natural disasters such as earthquakes, high winds, and floods. We have formulated preventive measures against natural disasters, which are becoming more severe due to climate change, and action plans to minimize damage in the case of a disaster, as well as conduct regular evacuation drills. Based on the improvements made through these drills, we will continue to work on our BCP (Business Continuity Plan).

Installed Green Power Station for Emergency Power Supply in Case of Disaster

In December 2021, NTN Hakui Corp. (Japan) installed NTN's Green Power Station as an emergency power source in the case of a disaster on site. In the case of a disaster, the stations can be used not only by employees but also by residents of the neighborhood as a place to charge smartphones and other devices.

■Green Power Station (NTN Hakui)