Annual Report 2018

Tosoh is aware of its operations' impact on the environment. It is dedicated to reducing its environmental loading by applying technological and common sense solutions and by exercising care in its use of natural resources and in its handling and management of the products and by-products of its manufacturing operations. The company expends extensive effort and funds on R&D and on employee education programs to ensure the fulfillment of its mission. Its aim is to be a chemical manufacturer devoted to providing value to society and to supporting society’s and its own sustainable growth.

Input and Output

In manufacturing its products, Tosoh reacts, breaks down, and distills a variety of raw materials. Reacting and breaking down these materials requires heat. That heat is provided by the steam generated by our power-generation boilers, which also produce the electricity needed to drive these processes. We suppress the heat created by the reaction process using industrial-use water and seawater. And we carefully monitor, manage, and work to reduce the atmospheric, land, and water emissions resulting from our manufacturing activities to ease the burden on the environment to the maximum extent possible.

Effective Resource Utilization

The company is constantly working to discover new and innovative ways to reuse and recycle precious natural resources and the by-products of manufacturing. Most industrial waste from Tosoh’s power generation facilities is recycled. Coal ash, for instance, is a key ingredient in Tosoh’s cement. The Nanyo Complex reuses or reprocesses virtually all of its industrial waste and sources general and industrial waste externally for use as further raw materials and as fuel in producing cement and operating its cement manufacturing facilities.

Industrial Waste Emissions

Tosoh generated an overall industrial waste volume of 424,515 metric tons in fiscal 2018. Tosoh is dedicated to achieving the target established by the Japan Business Federation for industrial waste disposal volume—a 70% reduction by 2020.

In fiscal 2018, Tosoh disposed of 830 metric tons of industrial waste, or 0.20% of total industrial waste volume. This was far below the Responsible Care® (RC) target of 1,500 metric tons. When outsourcing waste treatment, we submits a manifest for industrial waste management, ensuring appropriate management.1

The company’s goal for fiscal 2019 is to dispose of no more than 1,000 metric tons of industrial waste.

The figures for industrial waste emissions apply to the following facilities: Nanyo Complex, Yokkaichi Complex, and Tokyo Research Center.

1 In Japan, the Waste Management Law requires businesses to ensure the proper treatment of waste disposed in order to prevent illegal dumping or improper disposal. The manifest system is designed to track hazardous waste from the time it leaves the generator facility where it was produced, until it reaches the off-site waste management facility that will store, treat or dispose of the hazardous waste.

Polychlorinated Biphenyl Waste Treatment Including Equipment Disposal

Of the equipment containing high-concentrations of polychlorinated biphenyl (PCBs), transformers and other such equipment were disposed of by fiscal 2016. The remainder will be disposed of by fiscal 2020.

In fiscal 2017, we disposed of 248 pieces of equipment containing low concentrations of PCBs, and the remainder will be systematically disposed of by fiscal 2026.

Class 1 Chemical Emissions

Japan’s Pollutant Release and Transfer Register (PRTR) law requires businesses that deal with chemical substances to estimate and report the volume of chemical substances they emit.2

Tosoh complies with the law and works to reduce its emissions in the interest of contributing to a cleaner, healthier environment. In fiscal 2018, Tosoh’s Class 1 chemical emissions totaled 576 metric tons. That marked a decrease of 17 metric tons from fiscal 2017.

2 PRTR; In accordance with the Act on Confirmation, etc. of Release Amounts of Specific Chemical Substances in the Environment and Promotion of Improvements to the Management Thereof (Law concerning Pollutant Release and Transfer Register), materials that require reporting of movement and discharge quantities.

Atmospheric Preservation

Tosoh’s operation of boilers and furnaces that burn fuel results in the emission of smoke into the atmosphere that contains sulfur oxide (SOx), nitrogen oxide (NOx), and particulate matter. To mitigate the possible adverse effects on health from atmospheric emissions, Japan’s Air Pollution Control Act sets regulatory values for each such facility and applies a total volume control structure to each business unit. Tosoh has gone a step further. We work with the communities where we operate and forge agreements and formulate regulations for appropriate values for our local operations. We have also established our own stringent values in the interest of contributing to sustainable environmental preservation. We strive constantly to meet and surpass the various standards.

We did not exceed any regulatory values in fiscal 2018. Tosoh will continue to work to meet and better the values set forth in regulations and agreements.

Water Preservation

Japan’s Water Pollution Prevention Act and additional regulations based on drainage standards that govern effluent protect open coastal areas and closed bodies of water including Tokyo Bay, Ise Bay, and the Inland Sea where industrial activity is concentrated. Tosoh’s business units, in addition to complying with these and municipal effluent regulations and agreements, have established stricter proprietary effluent values in the interest of sustainable environmental preservation.

Tosoh did not exceed any regulatory values in fiscal 2018, and will continue to work to meet and improve upon the values established by regulations and agreements.

Environmental Accounting

Tosoh’s environmental accounting initiatives seek to better quantify the investments and expenses involved in environmental conservation.

Environmental investments in fiscal 2018 were ¥ 2.6 billion, with a focus on pollution prevention equipment. Environmental costs were ¥ 14.6 billion, an increase of ¥ 740 million compared with fiscal 2017. The economic effect totaled ¥ 5.0 billion, accomplished through the profit from sales of valuable waste and from cost reductions achieved through energy conservation.

Scope: Nanyo Complex, Yokkaichi Complex, Tokyo Research Center, Polyurethane Research Laboratory
Target Period: April 1, 2017―March 31, 2018

Minamata Convention Compliance

In October 2013, the world adopted the Minamata Convention on Mercury, a global treaty protecting people and the environment from potential mercury hazards. Signatories to the convention agree to ban the establishment of new mercury mines and to eradicate established mines, to reduce and eliminate in phases the use of mercury in products and manufacturing processes, and to control the emission of mercury on land and in water. As of May 2017, the Minamata Convention had the 50 signatories, including Japan, needed for ratification and was brought into force in August 2017.

In 2015, Japan’s government established the Act on Preventing Environmental Pollution of Mercury and implemented revisions to its Air Pollution Control Act and Law Concerning Waste Disposal and Scavenging. Its goal was to lead the world in the management of mercury.

Earlier, in 2013, Tosoh established an RC directive regarding mercury and has since worked to reduce and eliminate its mercury use and emissions. It has also developed products in light of the Minamata Convention and increasingly strict regulations for mercury, cadmium, and zinc. These include its TX-55 wastewater heavy metal treatment agent.

Tosoh will continue to pursue ways to reduce the concentration of mercury in smoke exhaust emitted from its boilers and cement kilns. It will also find improved methods for processing industrial waste containing mercury.

Responding to Climate Change

Climate change is one of the greatest global issues of concern. The Tosoh Group promotes improvements in efficiency and technologies based on the recognition that the reduction of emissions of CO2 and other greenhouse gases (GHGs) is the most important task to achieve medium- to long-term growth.

Promotional Structure and Goals

Tosoh’s participation in the Japan Chemical Industry Association (JCIA)’s commitment to a Low Carbon Society reflects its compliance with the greenhouse gas reduction measures undertaken by the Japanese government. We target a 3% reduction in our business-as-usual (BAU) energy production CO2 emissions by fiscal 2031. We are establishing a company-wide energy management structure to achieve this aim.3

3 BAU emissions = production x base year (Japan Chemical Industry Association 2005 Edition) CO2 basic unit.

Central Energy Management Committee

For the reduction of GHG emissions, this committee works to achieve comprehensive energy conservation, including the improvement of energy consumption units for production and transport, and promote the use of alternative energy sources. Specifically, it discusses and determines matters including policies on initiatives related to energy management, medium-term plans and annual plans, status of compliance, methods of assessing the status of compliance, and matters related to energy management.

Energy Consumption Index of Energy Used

The fiscal 2018 energy unit consumption index stood at 97.0% compared with fiscal 2010, but increased 0.6 percentage points compared with fiscal 2017. These results are due to the increase in the number of days for periodic maintenance at the Nanyo Complex.

Greenhouse Gas Emissions

In fiscal 2018, GHG emissions, such as CO2 from primary energy consumption, increased from fiscal 2017 due to a rise in energy consumption.

Greenhouse Gas Emissions by Scope

GHG emissions from the overall supply chain of the Tosoh Group are calculated on a scope-by-scope basis.

Scope 1: 7,710,000 tons
Scope 2: 438,000 tons
Scope 3: 6,550,000 tons

Scope 1: Direct emissions from fuel combustion and plant operation by the company
Scope 2: Indirect emissions from electricity, heat, and other forms of energy purchased from other companies
Scope 3: Other indirect emissions (including procurement and transportation of raw materials and fuel; transportation, use, and disposal of products; and emissions from other business activities such as commuting and business trips of employees)

Logistics CO2 Emissions and Basic Energy Unit

Fiscal 2018 saw a 1.6% increase in the company's CO2 emissions compared with fiscal 2017 that was attributable to the logistics of increased product shipments.

The logistics basic energy unit was 19.1, up 0.3 percentage points from fiscal 2017.4

This was attributable to the increased percentage of transportation by truck (in terms of transport ton-kilograms). Tosoh will continue its efforts to reduce emissions through measures such as promoting a modal shift in its transport of products, including energy-efficient ships.

4 Based on the estimated production volume of licensees and the amount of power saved by shifting from the mercury process or diaphragm process to the salt electrolysis using IM method from Tosoh.

CO2 Reduction through Licensing of Energy-saving Technologies

Tosoh has developed energy-saving technologies for the manufacture of caustic soda and vinyl chloride monomer (VCM), which it licenses to overseas companies. Tosoh contributes to reducing CO2 emissions from local manufacturing plants by having manufacturers use these technologies.

New Caustic Soda Electrolyzer Cell

Tosoh manufactures caustic soda by electrolyzing the raw material salt using the ion-exchange membrane (IM) method.

As the leading company of salt electrolysis using the IM method, Tosoh jointly developed an energy-efficient electrolytic cell in 1995 and has continued technological improvements ever since. Tosoh licenses its technologies to domestic and overseas companies, thereby helping them save energy.

Tosoh has licensed technologies to companies in 36 countries including Japan. The CO2 emission reduction effect enabled by this technology was as much as 9,900,000 tons (fiscal 2018). 5

5 Based on the estimated production volume of licensees and the amount of power saved by shifting from the mercury process or diaphragm process to the salt electrolysis using IM method from Tosoh.

VCM Heat Recovery System

VCM, the material in polyvinyl chloride, is derived through the thermal decomposition of ethylene dichloride. A large amount of heat is released from the cracking furnace used for thermal decomposition. Tosoh recovers a portion of this heat and reuses it as a heat source for the cracking furnace, thereby reducing the amount of fuel used for the furnace.

Tosoh has licensed this technology to companies in three overseas countries, which has resulted in a CO2 reduction effect as much as 36,000 tons (fiscal 2018). 6

6 Estimated based on the production capacity at the time of licensing and the amount of recovered energy before and after the introduction of this technology.

CO2 Reduction by Division

Effective Use of Waste at the Nanyo Complex Cement Plant

The cement plant at the Nanyo Complex makes effective use of waste and other resources from inside and outside the company as raw materials for cement and thermal energy sources. In fiscal 2018, the plant accepted and treated 19,000 tons of plastic waste, automotive shredder residue, and shredder residue from waste home appliances and other items as thermal energy sources in fiscal 2018, and it reduced approximately 36,000 tons of CO2 emitted from fossil fuels.

Initiatives Taken in Daily Manufacturing Activities

Tosoh strives to reduce CO2 emissions in the manufacturing process by taking initiatives to improve energy efficiency and save energy.

In fiscal 2018, Tosoh upgraded to more energy-efficient electrolytic cells and reviewed the operating conditions of each plant at the Nanyo and Yokkaichi Complexes. Tosoh also invested to improve the efficiency of the naphtha cracking furnances and to install gas turbines at the Yokkaichi Complex's facilities.

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