ESG finance
Overview of the Transition Bond
| Bond Issued | the 15th debenture bond(Transition Bond) | the 16th debenture bond(Transition Bond) |
|---|---|---|
| Issue amount | 10 billion yen | 10 billion yen |
| Maturity | 5 years | 10 years |
| Issuance date | July 14, 2022 | July 14, 2022 |
| Interest rate | 0.480% | 0.879% |
| Use of Capital |
・ Projects which meet the qualifying criteria set forth in the Idemitsu Kosan Co., Ltd. Green/Transition Bond Framework (new expenditures and refinancing of existing expenditures) ・ Turning refineries into CNX center*1(SAF*2, etc.), Power and renewable energy projects, low carbon solutions projects for coal-fired power generation, etc. |
|
| Third-party appraisal organization | DNV Business Assurance Japan K.K. | |
| Lead underwriters |
Mitsubishi UFJ Morgan Stanley Securities Co., Ltd. ・ Daiwa Securities Co. Ltd. Co., Ltd. ・ Mizuho Securities Co., Ltd. Co., Ltd. |
|
| Structuring agent | Mitsubishi UFJ Morgan Stanley Securities Co., Ltd. | |
| Bond rating | A (R&I) | |
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CNX (Carbon Neutral Transformation) Center: Plan to transform our facilities such as refineries and plants to supply bases for next-generation energies with renewable energy, ammonia, biofuel, synthetic fuel, etc.
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SAF: Sustainable Aviation Fuel
Third-party assessment of eligibility
Second party opinion
We have, beforehand, formulated a green / transition bond framework, and through DNV Business Assurance Japan K.K., obtained second party opinions such as "Green Bond Principles 2021 (ICMA)", "Ministry of Environment Green Bond Guidelines 2020", "Climate Transition Finance Handbook 2020 (ICMA)" and "Basic Guidelines on Climate Transition Finance (May 2021)” announced by the Financial Services Agency, Ministry of Economy, Trade and Industry, Ministry of the Environment, upon issuing corporate bonds.
Ministry of Economy, Trade and Industry Model Project Selection
Idemitsu’s corporate bond was selected to be “FY2021 Climate Transition Finance Model Case" as the first model case in oil sector by the Ministry of Economy, Trade and Industry.
Transition Bond and Framework
Reporting
Allocation Report
| Procured appropriations | 19.9 billion yen (amount excluding issuance expenses) |
|---|---|
| Appropriations used*1 | 19.9 billion yen |
| Appropriations to be used | 0.0 billion yen |
| Project No. | Project category |
Appropriations Use *1 (Refinance) |
Impact Metric |
|---|---|---|---|
| 1 |
Power and Renewable Energy (geothermal & solar) |
2.4 billion yen (2.2 billion yen) |
・Equipment capacity (MW) ・Power generation performance (kwh) ・CO₂ reduction amount/reduction contribution amount |
| 2 | Low-carbon Solutions for Replacing Coal-fired Power Generation | 5.6 billion yen (5.6 billion yen) |
・CO₂ reduction amount/reduction contribution amount ・Project progress status |
| 3 | Development of Functional Material Products | 11.9 billion yen (9.0 billion yen) | ・Progress of the eligible project |
| Total | 19.9 billion yen (16.8 billion yen) | ||
Impact Report
[Project NO.1] Power and Renewable Energy
Impact Metric
| Project category |
Installed Capacity (MW) (Idemitsu Equity) |
Actual Power Generation (kwh)*1 (Idemitsu Equity) |
Environmental improvement effect *2 (Annual CO₂ emission reduction) |
|---|---|---|---|
|
Power and Renewable Energy (geothermal & solar) |
31.9MW (23.3 MW) |
133,795 MWh (67,728 MWh) |
35,589 t-CO₂ |
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The planned amount of power generation is included in the figures.
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Calculation method: Power generation (MWh) × CO₂ emission factor (t-CO₂/MWh)
The CO2 emission coefficient is the difference between the CO2 emission coefficient of the electricity company to which renewable energy is sold and the CO2 emission coefficient associated with project execution.
[Project NO.2] Low-carbon Solutions for Replacing Coal-fired Power Generation
Impact Metric
| Project category |
Amount of Idemitsu Green Energy Pellets (Black pellet) Produced *1 |
Environmental improvement effect *2 (Annual CO₂ emission reduction) |
|---|---|---|
|
Low-carbon solutions for replacing coal-fired power generation |
120,000 tons | 191,302 t-CO₂ |
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Planned amount
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Calculation method: "Amount of black pellets (ton) × CO2 emission coefficient of black pellets (t-CO2/ton)" and "Amount of coal replaced by black pellets (ton) × CO2 emission coefficient of coal (t-CO2/ton)" ” difference.
Progress of the Eligible Project
Idemitsu Green Energy Pellets (IGEP) plans to start commercial production for consumers (production volume: 120,000 tons/year) in Vietnam at the end of August 2023. It will then gradually expand its manufacturing bases mainly in Southeast Asia with the aim of building a supply structure of 3 million tons per year by 2030.
IGEP
IGEP plant in Vietnam
[Project NO.3] Development of Functional Material Products
Progress of the Eligible Project
The Company is working on the development of various functional material products. As an example, we will introduce the theme of solid electrolyte development for all-solid-state lithium-ion rechargeable batteries (hereafter, “all-solid-state batteries”). The Company’s key strength lies in its extensive patent portfolio and its integrated manufacturing technology from sulfide raw materials to solid-state electrolytes which it has cultivated through petroleum refining and established through many years of R&D. The Company has been accelerating its efforts with respect to collaboration with car battery manufacturers and other customers to further improve the performance and cost competitiveness of solid-state electrolytes.
In preparation for mass production, in addition to increasing production capacity (scheduled to be completed in FY2024) at the first plant (operation began in November 2021) of small pilot facilities within its Chiba Complex, it is also constructing a second plant (operation is scheduled to begin in July 2023) within its Advanced Technology Research Laboratories.
First Plant of Small Pilot Facilities
All-Solid State Batteries
From Medium-term Management Plan
DNV TRANSITION BOND PERIODIC REVIEW (July 2023)
We have obtained a review from DNV Business Assurance Japan, an independent external reviewer, to evaluate whether its reporting is aligned with our framework.