Shin-Etsu Chemical

Carbon per million dollars of revenue. The legacy industry-standard reference (CDP, MSCI). Useful for cross-sector context, but distorted by margin — high-margin firms appear artificially efficient. Read alongside the operational and asset intensities for the full picture.

OpEx (operating expenditure) is the running cost of the business — staff, services, energy, materials. This shows how carbon-intensive operations are per million dollars of spend. Removes the margin distortion that revenue-based ratios introduce.

EVIC (Enterprise Value Including Cash) is the firm's total capital footprint — equity + debt + cash + minority interest. The EU's standard intensity measure (SFDR PAI 3) — answers: how much carbon does each million of capital deployed in this business produce?

PP&E (Property, Plant & Equipment) plus leased real-estate assets is the firm's physical infrastructure on the balance sheet. This shows the carbon intensity of that physical footprint — uses Scope 1+2+3 for consistency with the other headline intensities. Surfaces stranded-asset risk for asset-heavy firms.

Shin-Etsu participates in Gunma Prefecture's 'Local production for local consumption PPA' (Gunma Model), receiving hydroelectric power that will cover all electricity used at the Yokonodaira Plant and cut its GHG by ~90%. Installed solar panels at Goubara (148 kW), Isobe (new in July 2023, 155 MWh/year), Takefu (137 kW, 125 MWh/year) and Shin-Etsu Magnetics Philippines (~1,200 kW, ~1,500 MWh/year, -1,026 tCO2/year). In Thailand, three Group companies will receive biomass cogeneration renewable energy from NSET starting 2027 under the JCM Model Project (~48,000 tCO2/year reduction).

In its measures-to-2050 pie, the Group attributes 6% to CO2 recovery/reuse (CCU) and 9% to carbon offsets, plus tree planting. They are researching introduction of carbon capture plants and considering offsets in the later 2040s. The bulk (54% electricity-related, 31% manufacturing improvements) comes from direct reductions rather than removals.

• Process efficiency and energy-saving in manufacturing

  Continuous productivity improvement, reaction efficiency improvement, heat pump utilization, heat recovery in raw material production, high-efficiency equipment, increased use of charcoal reducing agents, and transition to new manufacturing processes. New silicone intermediate manufacturing method introduced in 2023 cut energy by 48% and GHG by 47% vs. previous method.

• Electricity decarbonisation (Scope 2 — 54% of reduction plan)

  The largest decarb lever, accounting for ~54% of planned reductions, is purchasing hydroelectric and low-carbon electricity (e.g., Gunma PPA covers 100% of Yokonodaira Plant electricity, cutting that site's GHG by ~90%), installing solar PV at multiple plants, and transition of electric power companies to carbon neutral.

• Fuel switching to natural gas, CN gas, hydrogen, biomass, ammonia

  Switching from heavy fuels to natural gas, then to carbon-neutral natural gas (with emission credits), green/blue hydrogen, biomass fuel, and ammonia. Cogeneration systems using natural gas at Gunma Complex (2 new gas turbines at Isobe + 1 at Matsuida added Nov 2022, saving ~24,000 tCO2/year and achieving 100% self-sufficiency) and Naoetsu Plant.

• CCU and carbon capture deployment

  Introduction of carbon capture plant and utilization (CCU) is targeted for the 2030–2050 phase, contributing ~6% of the carbon-neutral plan. The Naoetsu Plant is investigating advanced technologies for waste heat recovery and CO2 recovery.

• Cogeneration with natural gas at Gunma and Naoetsu

  Gunma Complex added two gas turbine generators at Isobe and one at Matsuida in Nov 2022, enabling 100% self-sufficiency and ~24,000 tCO2/year reduction. Naoetsu Plant operates a combined-cycle gas turbine cogeneration system. The Group is also considering carbon-neutral natural gas and ammonia/hydrogen co-firing.

• Process efficiency and reaction-heat utilization

  In silicone intermediate manufacturing introduced in 2023, a new method effectively utilizes reaction heat, cutting energy consumption 48% and GHG emissions 47% versus the prior process. Other measures include sensor-based real-time reaction monitoring (cutting organic solvent use 90% and 15 tCO2/yr at one plant), heat pumps in clean rooms, nitrogen recovery, and high-efficiency chillers.

• Logistics modal shift (truck/air → rail/sea)

  Modal shift initiatives include switching methanol transport from tank truck to railcar, silicon wafer transport from aircraft to ocean vessel, and silicone products from truck to railcar. These reduce Scope 3 Category 4 emissions and Naoetsu Plant is certified as an Eco-Rail Mark company.

• Products enabling customer decarbonisation

  ~70% of Group sales fall into Japan's 14 'green growth' priority fields. Silicones reduce GHG emissions by 14x their production emissions over their use life (Global Silicones Council 2024 study, ~159 MtCO2/yr global reduction). PVC-framed windows could cut 640,000 tCO2/yr if rolled out across Japanese detached homes by 2030. PVC pipes have 1/5 the lifecycle CO2 of ductile cast-iron pipes (potential 1.79 MtCO2/yr reduction). Rare-earth magnets enable 5-10% efficiency gains in air-conditioner motors and core EV drive motors.

• Resource recycling — PVC, rare earth magnets, and other products

  Material recycling of PVC (60% of used PVC pipes/joints recycled into new pipes, 70% of agricultural film into flooring). Rare earth magnet recycling since 2007 from internal scrap and since 2013 from end-of-life appliances and hybrid cars, including a partnership with Toyota Motor Corporation to recycle neodymium and dysprosium from HEV motors. Shintech achieved +Vantage Vinyl Silver certification supporting U.S. vinyl industry recycling.

• Logistics modal shift (Scope 3 Cat 4 + 9)

  Modal shift from road/air to rail/ship for methanol, silicon wafers, and silicone products; acquired Eco-Rail Mark company certification. Started recycling product shipping cartons for heat-dissipating silicone grease, eliminating need for dry ice and reducing supply chain CO2.

• Rare earth magnet recycling with Toyota

  Since 2007, the Group has been recycling magnet powder generated in production; since 2013 it has been developing recycling of rare-earth magnets from used hybrid air conditioners and HEV motors, including a recycling collaboration with Toyota Motor Corporation that extracts neodymium and dysprosium for new magnets.