Idemitsu Kosan : Collaboration on the Establishment of a BlueCarbon-free Ammonia Supply Chain with Korea Electric Power Co.

April 21, 2023

Press Release

Company Name: Idemitsu Kosan Co., Ltd.

Representative Director & Chief Executive Officer: Shunichi Kito

(Company Code: 5019, TSE Prime Market) Contact person:

Daisuke Mogi, General Manager,

Investor Relations Office, Finance & Accounting Department (TEL: [phone])

Collaboration on the Establishment of a Blue/Carbon-free Ammonia Supply

Chain with Korea Electric Power Corporation

Idemitsu Kosan Co.,Ltd. (Head office: Chiyoda-ku, Tokyo; Representative Director, President

• Chief Executive Officer: Shunichi Kito; hereinafter "Idemitsu") is pleased to announce that it has signed a Memorandum of Understanding (MOU) with Korea Electric Power Corporation (Head office: Jeollanam-do, Korea; President and CEO: Seung-Il Cheong; hereinafter "KEPCO") for seeking the collaboration on the Establishment of Blue/Carbon-Free Ammonia Supply Chain in Japan and Korea. Both companies will jointly study on procurement, marine transportation, and supply of blue/carbon-free ammonia to each country.

Ammonia, which does not emit CO2 when combusted, is expected to become a next-generation fuel contributing to the realization of a carbon neutral society. It is particularly attracting attention as a fuel for power generation, especially coal-fired power generation. On the other hand, the reduction of CO2 emissions through the manufacturing process remains as a challenge. Thus, the production, procurement, and use of blue ammonia, which is produced by capturing and utilizing CO2 generated in the manufacturing process, and carbon-free ammonia using renewable energy, are now being developed.

Idemitsu plans to trial ammonia co-firing using existing naphtha cracking furnaces and coal boilers at the Tokuyama Complex (Shunan City, Yamaguchi Prefecture), with a view to supplying CO2-free ammonia to neighboring industrial complexes by establishing an ammonia import terminal utilizing our existing infrastructure in the future. KEPCO, Korea's largest power producer, aims to co-fireCO2-free ammonia at its own coal-fired power plants. Under this MOU, both companies, heading toward concrete efforts to utilize fuel ammonia, will study the following collaboration items to accelerate the establishment of a blue/carbon-free ammonia supply chain in Japan and Korea.

・Joint search for ammonia production projects around the world

・Optimization of marine fuel ammonia

transportation costs through cooperative ship operations.

・ Optimization of supply and demand adjustment through mutual product exchange

Schematic illustration of future collaboration

In the Medium-Term Management Plan (FY2023 - FY2025) released in November 2022, Idemitsu announced our commitment to promote business portfolio transformation through social implementation in the following three business domains.

This initiative is positioned as an effort to develop and socially implement "Energy one step ahead" among the three business domains that Idemitsu has identified to realize a carbon-neutral society by 2050. Idemitsu will continue to contribute to the realization of a carbon-neutral society through collaboration with various leading companies in Japan and abroad.

MOU signing ceremony (April 14, 2023)

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