Otsuka Pharmaceutical Co., Ltd. (Otsuka) will participate in the Sustainable Aviation Fuel (SAF) Promotion Project ("Project") led by the Tokyo Metropolitan Government . Our participation will be as a consignor of our U.S. pharmaceuticals shipments to Yusen Logistics Co., Ltd. (Yusen Logistics), a cargo agent for this project.

The project is operated by Tokyo Metropolitan Government. Through participation in the project, Otsuka aims to reduce CO₂ emissions in the supply chain beyond our direct control (Scope 3), adding to the measures we have taken to reduce our own direct emissions (Scope 1) and indirect emissions (Scope 2). This will be the first time for an Otsuka group company to use SAF for transportation of products from Japan to other countries, as we strive for environmental impact reduction from a comprehensive perspective.

SAF is a type of fuel produced using biomass such as waste cooking oil and sugarcane, as well as municipal waste and waste plastic. As SAF uses waste products and renewable energy as feed stocks, it is estimated to reduce CO₂ emissions by 60 to 80 percent compared to conventional jet fuel refined from crude oil. ^*1 This project, run by Tokyo Metropolitan Government, will support companies in Tokyo, aiming to reduce CO₂ emissions across the entire supply chain of businesses. As Yusen Logistics undertaking a portion of the air cargo transportation for our medical products from Japan to the United States was selected as the cargo agent of this project, Otsuka will participate as a shipper.

The period for this project will run from August 5, 2024 until March 31, 2025. Yusen Logistics will issue a Greenhouse Gas emission reductions certificate to Otsuka through the "Yusen Book-and-Claim" service ultilizing SAF. The CO₂ reduction during the period is expected to be up to 50 tons, which is estimated to be about an 80 percent reduction compared to conventional transport. ^*2

Otsuka will continue to promote environmental-impact-reduction initiatives through the use of new technologies and solutions, and collaborate with business partners, with the aim to contribute to the realization of a decarbonized, more sustainable society.

^*1　Ministry of Land, Infrastructure, Transport and Tourism: What is SAF? https://www.mlit.go.jp/koku/content/SAF_CN.pdf (in Japanese)
*2　Data by Yusen Logistics

■ Additional Information on Project

• Subsidized expenses: Additional charges for using SAF in air cargo transportation conducted through cargo agents
• Subsidy rate: For large companies, 2/3 of eligible expenses up to 10 million yen); for small and medium-sized enterprises, all eligible expenses up to 3 million yen
• Project URL ：　https://www.tokyo-co2down.jp/subsidy/scope3 (in Japanese)

■ Otsuka Group's Efforts Towards Carbon Neutrality

Aiming to create a healthy future as a total healthcare company, the Otsuka group has established the 2050 Environmental Vision, Net Zero, with the aim of reducing total environmental impact across all of its business activities to zero. Based on this vision, the group has determined the material issues for its environmental initiatives to be carbon neutrality, circular economy, water neutrality, and biodiversity. To achieve the group's carbon neutrality target, Otsuka group companies are adopting renewable energy, including the introduction of CO₂-free electricity, utilization of green power certificates, and installation of solar power generation equipment, in addition to maximizing energy use efficiency.

Reference: Otsuka Holdings Co., Ltd. Carbon Neutrality
https://www.otsuka.com/en/csr/environment/climate.html

Based on the corporate philosophy of 'Otsuka - people creating new products for better health worldwide,' Otsuka Pharmaceutical continues to develop business initiatives to resolve social issues and realize a healthy, sustainable society.