Aiming to reduce CO₂ emissions with ammonia

The company aims to achieve carbon neutrality throughout the value chain by 2050. In order to solve social issues, we will respect human rights, promote the active participation of diverse human resources, and promote innovation.

At the second quarter financial results briefing in November 2021, IHI President Hiroshi Ide announced that he would promote ESG management and explained the progress of Project Change. 

Mr. Hiroshi Ide: The business environment has completely changed due toCovid-19, such as the shocking impact of aircraft engines, which are our main business. Therefore, on November '20, we announced "Project Change" as an initiative to transform our business in line with changes in the environment. The next medium-term management plan will begin in FY23, and in order to build a strong management foundation for that plan, we are placing emphasis on "appropriate management that takes society and the environment into consideration with ESG as the axis of values." 

IHI's management philosophy is "Contribute to the development of society with technology" and "Human resources are our greatest and only asset." We are proud that this is a precursor to the ESG philosophy. In the 170 years since our founding to build large ships to compete with the Western powers in the wake of Perry's arrival, we have been working to solve social issues around the world through our business. This time, we have reorganized it  as the "ESG Management for the IHI Group." 

Regarding the progress of Project Change, we are making steady progress in expanding lifecycle businesses, transforming business structures, and creating growth businesses to further strengthen our earnings base. We have also reduced fixed costs and inventories and separated the pharmaceutical plant business. We do not intend to change our target of an operating margin of 8% or higher in FY22 at this time. 

It was declared that "we will achieve carbon neutrality throughout the value chain in 50 years." 

In order to achieve carbon neutrality, it is necessary to reduce CO₂ emissions, and there are two ways of thinking about this. 

The use of ammonia and hydrogen, which we are focusing on, will take some time to be realized. We position these new technologies as transformation. 

On the other hand, in the transition, until this is realized, we will promote CO₂ reduction through existing technologies. In Indonesia, we are assisting in the renovation of high-efficiency coal-fired power generation, and in North America, we are adjusting the supply and demand of solar power generation with storage batteries and our energy management system (EMS). Composite materials and ceramics are used in aircraft engines to improve fuel efficiency by reducing weight. Fuel cell vehicles in Germany are equipped with turbo compressors. IHI's technology is used in various fields to contribute to CO₂ reduction. 

In terms of the transformation phase, JERA's Hekinan Thermal Power Plant Unit 4 (output: 1 million kW) will jointly conduct a demonstration project aimed at co-firing 20% ammonia in 2024. In addition, we have succeeded in 100% mono-firing of liquid ammonia with our natural gas (LNG) turbine (2000kW class). We plan to gradually increase the mixing ratio in the future. In order to implement power generation using ammonia in society, it is also necessary to build a value chain. 

In any case, there are various challenges, so it will be a test of how to use the transition time to overcome these hurdles. 

We are also focusing on respecting human rights and the active participation of diverse human resources. 

Covid-19 led to a review of the way we work, but it was also a review of our way of life. We came to the conclusion that human rights should be places at the forefront, and in December 20, we established the IHI Group Human Rights Policy. This policy ensures a healthy and safe workplace for workers and respect to their basic rights. We will strengthen supply chain management and build a system that enables centralized management of human rights risks on a global basis. 

We do not know where the risk of human rights violations such as forced labor and child labor lurks. We need to actively investigate within our own company. We are currently preparing human rights investigations of our business partners throughout our supply chain. 

Human resources with diverse values and backgrounds are the source of innovation. This is an important management issue. For 20 years, we established an open recruitment system called an in-house side job, and we decided that we could use up to 20% of our working hours to realize ideas that were passed during the screening. Through this activity, you will have an opportunity to learn what kind of people are in the company, and if you are an engineer, you will be able to expand the range of people. We also introduced a second job system. 

You are also active in DX (digital transformation). 

The effects of DX are beginning to appear in various places, such as jointly developing a system with Hokkaido Electric Power Company to enhance boiler operation and maintenance support at the Ide Thermal Power Station. It helps reduce inventories by visualizing processes at engine factories where a large number of parts flow. It's not enough yet, but I want to take it in that direction to unlock the power of digital.