Overcoming climate change

The Kirin Group was one of two companies that represented Japan when we announced our environmental measures to the world at the third session of the Conference of the Parties to the United Nations Framework Convention on Climate Change in Kyoto in 1997. The Kirin Group has long been working to reduce GHG emissions.
As a mid-term target for the reduction of GHG emissions, we obtained approval from the international SBT initiative (SBTi) for our science-based 2℃ target in 2017, and subsequently obtained approval for a target under the new standards for an science-based 1.5℃ target in November 2020.
In November 2020, we joined “RE100,” an international environmental initiative consisting of companies aiming to use renewable energy for 100% of their electric power. At the same time, we announced that we would aim to increase the proportion of renewable energy in electric power used to 100% by 2040.
In 2021, we formulated a roadmap to 2030 aimed at achieving our science-based 1.5℃ target, and began implementing related initiatives.

The Kirin Group has been continuously developing scenario analysis based on the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) since 2017. We began to conduct and disclose scenario analysis in 2018 and became the first Japanese food company to declare our support for the TCFD recommendations in December 2018. In the 2022 report, we have referred to the new guidance that the TCFD published in October 2021.

Kirin Holdings’ long-term GHG reduction target was approved by the Science Based Targets initiative based on science-based net-zero targets. The Kirin Group’s long-term GHG reduction target , "realizing net-zero GHG emission from the entire value chain by 2050" set forth in the Kirin Group Environmental Vision 2050 was certified as a scientifically based goal consistent with the level of GHG emission reductions required by the Paris Agreement .

Disclosures based on TCFD recommendations and new auidancce

Targets

GHG emissions reduction target
Net-Zero in 2050 (Kirin Group's Environmental Vision 2050)
By 2030: -50% of Scope1 and 2, -30% of Scope3 from 2019 (Science-based 1.5℃ target)
By 2024: -23% of Scope3 from 2019 (Non-financial target)

The proportion of renewable energy in electric power used
By 2040: 100% of renewable energy in electricity consumption (RE100 target)

progress

Although large-scale investment will be required to achieve this goal, through 2030, the fiscal year of our SBT, the Kirin Group aims to implement measures to combat climate change that will be profit and loss neutral by introducing renewable energy, using the energy cost reduction benefits of energy conservation investments throughout the Group as funds. We have formulated this roadmap to enable us to achieve profit and loss neutrality even without taking ICP (Internal Carbon Pricing) into consideration, but we plan to accelerate the reduction of GHG emissions by taking ICP into consideration.
In terms of the reduction of Scope 3 emissions, of the 15 categories defined in the “GHG Protocol,” Category 1 emissions, i.e., those from the manufacture of ingredients and materials, make up the largest proportion of the total, at approximately 60%. As a key category for the reduction, we will pursue two parallel approaches as we work to achieve our target: “reducing emissions through our own initiatives” and “encouragement of reduction at business partners.”

Raw materials

Measures for adapting to climate change at tea farms

The Kirin Group contributes to measures for adapting to climate change through training programs for Rainforest Alliance Certification at Sri Lankan tea farms. Specifically, we direct people to plant grasses whose roots sink deep into the soil and that crawl the ground on slopes, and thus prevent the runoff of soil from erosion by torrential rain and falls in tea leaf production volumes.

Ocean transportation in large bags and bottling in Japan

Mercian ships some of the wine it imports via ocean transportation in specially designed, large 24kl bags (equivalent to about 32,000 of 750ml bottles) with low oxygen permeability, and bottles the wine in plants in Japan. Compared to importing bottled wine, this method lets Mercian reduce GHG emissions during ocean transport by roughly 60% because it eliminates the need to transport heavy bottles by sea, although it increases the amount of GHG emissions from the company’s plants in Japan owing to bottling in Japan. We are able to use Ecology Bottles (made with at least 90% recycled glass), lightweight bottles, and PET bottles as containers, which contributes to making effective use of resources and reducing GHG emissions significantly across the entire value chain.

Specially designed large bags

In-line PET blowing aseptic filling machine

In the past, we purchased empty PET bottles from container manufacturers and shipped them to plants where we filled them with beverages, to make final products. With an in-line blow aseptic filling machine, we mold PET bottle containers from a material called preform in the production process of the plant and fill them under aseptic conditions. Installation consequently contributes greatly to reducing GHG emissions as using preforms allows us to process greater loads on trucks compared to transporting empty PET bottles.
In 2003, we installed preform molding equipment on the beverage production line at Kirin Distillery ahead of other players in the industry, thereby saving the transportation of preforms.
At the Kirin Beverage Shonan Plant in 2021, we switched our high-pressure compressors for PET bottle molding from V-type reciprocating compressors to inverter-controlled pneumatic machinery in the form of screw compressors and horizontally opposed reciprocating compressors, thereby reducing annual power usage by around 8%. This machinery can also recover and reuse waste heat from compressors.

Renewable energy

100% renewable energy for all purchased electric power

100% of the electric power purchased at Kirin Brewery Sendai Plant, Nagoya Plant,Fukuoka Plant and Okayama Plant have been generated from renewable energy.
Since January 2022, all “Château Mercian” wineries producing Japan Wine (Château Mercian Katsunuma Winery, Château Mercian Mariko Winery, and Château Mercian Kikyogahara Winery) have achieved 100% renewable energy by combining green power certificates with purchased electricity.

Use of large-scale solar power generation at all breweries in Japan

At the Kirin Group, we prioritize “additionality,” which refers to creating new sources of renewable energy in the world. Following the introduction of large-scale solar power generation facilities at all nine breweries.　Introduction of a photovoltaic systems at all nine breweries (eight breweries, excluding the Yokohama Brewery, on a PPA*) will increase the proportion of renewable energy in Kirin Brewery’s overall electricity consumption from approximately 18% to approximately 34%.

Mercian has planned to install a photovoltaic system on a PPA at the Mercian Fujisawa Plant in March 2023 and put it into operation in April 2023. This brings reduction of 124 tons of CO2 emissions per year and increase the proportion of renewable energy in Mercian's overall electricity consumption from approximately 5% to approximately 8%.

Kyowa Kirin also has a plan to install a large-scale photovoltaic system on a PPA at the Ube factory (Ube city, Yamaguchi prefecture) and will put it into operation in March 2023. Following installation, Ube Factory expects to reduce 1,029 tons of CO2 emissions per year.
KIRIN GROUP LOGISTICS, Kyowa Hakko Bio, and Shinshu Beverage have leased parts of their premises and building roofs to companies that build a large-scale photovoltaic system, contributing both to effective use of company assets and to the dissemination of natural energy.

Use of solar power in Australia

In Australia, we installed solar power generation facilities at Castlemaine Perkins Brewery in 2019 and at Little Creatures Geelong in Victoria in 2020. In 2021, Lion focused on developing a brewery network that will support measures to respond to climate change. We continued to invest in energy efficient equipment and review options for expanding the PPA model for renewable energy to other areas outside of our PPA in New South Wales, Australia.
New South Wales' largest brewery, Tooheys Brewery, has signed a PPA agreement with a renewable energy distributor in partnership with the Australian Hotels Association (AHA), which consumes a low amount of energy. By jointly signing a large power contract, the AHA is able to introduce renewable energy at a lower cost, successfully reducing the cost of power for hotels from 11.5c/kWh to 6.9c/kWh. The agreement will reduce Lion's GHG emissions by approximately 20%.

In May 2020, Lion became Australia’s first large-scale carbon neutral certified brewer.
In order to obtain Climate Active^*1 certification in Australia, Lion must disclose carbon credits used to offset total emissions for the year in its annual report, and Lion has been complying with this requirement. This certification standard is a new standard for carbon neutral certification in Australia.
In New Zealand, Lion also obtained Toitū^*2 carbon zero certification in 2021.

A third-party certification body established by the government of Australia
A third-party certification body established by the government of New Zealand

News Releases: Lion New Zealand Reduces Emissions By 10 Per Cent, Committed To Carbon Zero

Renewable energy certificates

Since 2021, Kyowa Hakko Bio has introduced “Renewable Energy Certificates (I-REC)” at Thai Kyowa Biotechnologies in Thailand. This marks the first adoption of these certificates in the pharmaceutical and food industries in Thailand, and we expect it will enable us to reduce annual GHG emissions by 10,200 tonnes, thanks to the use of renewable energy sources for some of the electricity used in the plant.

Wind power

Through a consortium represented by Mitsubishi Corporation Energy Solutions, Ltd., Venti Japan Inc., C-Tech Corporation, and Mitsubishi Corporation (the “Consortium”), we have been selected as a power generation business operator for projects off the coast of Noshiro City, Mitane Town, and Oga City in Akita Prefecture, off the coast of Yurihonjo City in Akita Prefecture, and off the coast of Choshi City in Chiba Prefecture. Kirin Holdings is a partner of the Consortium. These projects are Japan's first fixed-bottom offshore wind power generation projects in general sea areas. They will be among the largest sources of power in Japan, and will make a significant contribution to the Japanese government's commitment to achieve carbon neutrality by 2050. The maximum power output of the three projects will be approximately 1.69 million kW, which is sufficient to meet the electric power demand of approximately 1.21 million households.In the future, through the activities of the Consortium, we will create a positive impact toward the decarbonization of society through the creation of new renewable energy, and achieve cooperation and symbiosis with local communities.
The Kirin Group has been sponsoring the Yokohama City Wind Power Generation Project, which Yokohama City promotes using the Green Power Certification System since 2007 as part of our support for the promotion of the use of natural energy as a Hama Wing Supporter. So far, the power generated by this project has been used by SPRING VALLEY BREWERY TOKYO, the Earth Hour hosted by WWF, etc.

Advanced Energy Conservation at our breweries and plants

Use of heat pumps in production processes

In order to reduce GHG emissions, we need to improve energy efficiency and reduce the amount of energy consumption. At the same time, we believe that shifting the energy mix from fossil fuels to electric power, and, furthermore, using electricity generated by renewable energy sources are the most effective ways of reducing GHG emissions.
Kirin Brewery has successfully reduced its GHG emissions by approximately 70% over the 25 years from 1990 to 2015. We are now taking on the challenge of applying even more technological innovations to achieve our target of reducing Scope 1 and Scope 2 emissions by 50% by 2030 (compared with 2019).
In 2019, we introduced heat pump systems at the wastewater treatment facilities of five Kirin Brewery plants, thereby reducing GHG emissions by 2% (approximately 3,400 tonnes) from the previous year across Kirin Brewery as a whole.In 2020, we expanded the use of heat pumps to the production lines of Shinshu Beverage, followed by production processes at the Kirin Brewery Okayama Plant in March 2022. At Shinshu Beverage, we reuse waste heat, which is difficult to use directly in rinsing processes for bottles and caps, through a heat pump unit, enabling us to reduce GHG emissions by approximately 970 tonnes per year.The Kirin Brewery Okayama Plant has reduced annual GHG emissions by approximately 180 tonnes by reusing waste heat in hot water sterilization equipment for cans and heat in the air.

Fuel shift and cogeneration

The majority of the fuel we use at breweries is consumed in the boilers that generate steam. At all Kirin Brewery and Kirin Beverage plants, we have completed the shift to natural gas, which generates less GHG emissions than heavy oil.
We have achieved more efficient boiler operations through the installation of highly efficient small boilers in line with the fuel shift. We have introduced cogeneration systems to provide some of the plants’ heat and electricity.

Cogeneration

Refrigeration systems

At Kirin Brewery, we reduce energy consumption through improving the efficiency of refrigerating systems. We are introducing a cascade refrigeration system, which cools in phases, for processes that involve a considerable temperature difference, and we are also making operational improvements to refrigeration systems.

Containers

Reducing the weight of containers

Between 1990 and 2021, Kirin Brewery and Kirin Beverage reduced GHG emissions from container manufacturing by a total of 4.8 million tonnes* by reducing the weight of containers and packaging. Making containers lighter leads to reducing GHG emissions in the manufacturing process of containers and packaging and improving loading efficiency, which leads to the reduction of GHG emissions.

Calculated based on the Carbon Footprint Product Category Rule (Certified CFP-PCR Number: PA-BV-02) applied to the actual container usage of Kirin Brewery and Kirin Beverage from 1990 to 2021.

*Product photos are as of the end of June 2022.

*Product photos are as of the end of June 2022.

Improving loading efficiency

Using a truck allocation system that has master data for the precise loading capacities of each truck, the Kirin Group is working to transport our products with the most efficient combinations of trucks and cargo.
Kirin Beverage compensated for reduction in capacity for large carbonated drink containers (1.5 L) by changing the shape of the “shoulders” of bottles and changing the diameter of PET bottles bodies from 92.5 mm to 89.5 mm. This means that the number of cases loaded on one pallet has been increased from 40 (10 cases x 4 stacks) to 60 (15 cases x 4 stacks), improving the loading efficiency by a factor of 1.5.

*Product photos are as of the end of June 2022.

*Product photos are as of the end of June 2022.

Distribution

Modal shift and Joint delivery

The Kirin Group has positioned the logistics area as a non-competitive sector and is actively engaging in initiatives together with other companies in the same industry.
In 2017, together with other companies in the industry, we established a joint delivery center in Kanazawa City, Ishikawa Prefecture, and launched joint transport by rail container from plants in the Kansai area. Neither of the companies has plants on the Japan Sea side, so products previously had to be transported by truck over long distances—of 200 km—from their plants on the Pacific Ocean side. This was inefficient and placed a great burden on the truck drivers. Joint transportation using rail containers has not only significantly reduced GHG emissions but shortened distances between the plants and the terminals and between the terminals and the destinations with a significant alleviation of the burden on drivers, which is helping to solve the social issue of a shortage in truck drivers. Through these efforts, we have successfully completed a modal shift from long distance
truck transportation, equivalent to 10,000 vehicles a year, to railway containers, and we estimate that we can thus annually reduce GHG emissions by approximately 2,700 tons.
In September 2017, we began joint delivery in the eastern Hokkaido area. As a result of these efforts, we are effectively utilizing railway containers and have enhanced truck loading efficiency, leading to more efficient logistics. We estimate that this results in a reduction in annual GHG emissions of approximately 330 tons.*
The Kyowa Kirin Group also conducts joint transportation of products between distribution centers. Since 2020, the Ube Plant has been transporting raw materials in railway containers.
The Kirin Group is actively pursuing a modal shift of switching from truck transport to rail and ocean transport, which has lower GHG emissions, for long-distance shipments (400 to 500 km or more).

Contribution to Avoided Emissions through the Global Value Chain, Third Edition, Keidanren (Japan Business Foundation)

Vendor-managed warehouse

With the aim of mitigating the risk of not being able to transport due to an unavailability of trucks and optimizing transportation efficiency, we started a trial operation of a raw materials procurement and distribution system using a raw materials warehouse (vendor-managed warehouse) adjacent to Kirin Beverage’s in-house plants, the Shonan Plant and Shiga Plant, from October 2019. By establishing this facility as a vendor-managed warehouse, raw ingredient suppliers can transport the desired amount of raw ingredients when they need to, thereby maximizing efficiency.This has made it easier to cope with sudden changes in production plans, and contributed greatly to improving the responsiveness of plants.

Sale

Vending machines

Kirin Beverage was the first in the industry to introduce heat pump-style vending machines in 2006, and from 2012, almost all newly installed vending machines for cans and PET bottles are of this type. As of April 2021, we have switched more than 85% of installed vending machines to this type.
Heat pump-style vending machines pump up the waste heat generated when cooling products and use it for heating to warm up the products. This allows reduction in power consumption compared to conventional vending machines by cutting down the power used by the heaters.
Some types offer higher energy-saving performance, such as with heating functions not only by using the waste heat released by the cooling chamber as previous models did, but by capturing the heat from outside the machine, and by improving hot and cold insulation performance with the heavy use of vacuum insulation materials. These vending machines have evolved to the point where power consumption can be reduced by about 40% compared to 2013. Installation of the new models began in 2015, and we are aiming for 80% of the new machines we install in 2022 to be new models.

Carbon zero certified beer

Steinlager, which Lion sells in New Zealand, has obtained certification as a carbon zero beer under the Toitu program by a body of the New Zealand government. In 2021, we featured the Toitu carbon zero mark in our marketing campaigns to highlight to consumers the commitment Lion has made to reducing GHG emissions through Steinlager and other products.
Iconic Australian beer brand XXXX has announced a major innovation within the non-alcoholic beer category with the launch of XXXX Zero, Australia’s first carbon neutral alcohol-free beer. Extending the brand’s industry leading sustainability efforts, XXXX Zero has Climate Active carbon neutral certification, with the brand already pledging to use 100% renewable electricity by 2025.
In Australia, Lion is preparing to acquire carbon neutral certification through Climate Active for many key products. In order to obtain certification, Lion is working to comply with the requirement that it must offset all GHG emissions from the complete life cycle of the product, including emissions from raw materials and packaging, distribution and product waste.