Efforts to Reduce GHG Emissions

To reduce GHG emissions, we implement energy-saving and emission optimization efforts tailored to the site's circumstances and avoid continuous flaring and venting during routine operations at the Group's operator projects. In addition to mainly using clean power at our head office and onshore facilities, we are working with Abu Dhabi National Oil Company (ADNOC) to adopt clean power, including using onshore clean power to supply offshore facility power needs.

In Japan, we are rationalizing the use of energy according to the Act on Rationalization of Energy Use and Shift to Non-fossil Energy and the Act on Promotion of Global Warming Countermeasures. Based on Japan's laws and regulations, we report on energy consumption, the status of other energy use, and studies and efforts related to the rationalization of energy use in the business activities of our operational organizations.

Regarding the Act on Rationalization of Energy Use and Shift to Non-fossil Energy, we have set ourselves the target of reducing average net carbon intensity by 1% or more per year over five years. We have also developed a medium- to long-term plan to achieve this target, and we assess our progress each year and report to the Ministry of Economy, Trade and Industry.

At the Naoetsu LNG Terminal, we reviewed the value of the LNG pump minimum flow setting to limit the generation of boil-off gas (BOG)^*1 in LNG tanks and reduce the power consumption of BOG compressors. We also introduced LED lighting at the Nagaoka Field Office to reduce power consumption.

Regarding the rationalization of energy use, we appoint energy management planning promoters and energy management assistants to maintain facilities that consume energy and to improve and monitor methods of energy use. Based on the Act on Rationalization of Energy Use and Shift to Non-fossil Energy, energy management planning promoters and energy management assistants have completed legally required training courses related to knowledge and skills necessary for the rationalization of energy use.

The Group has set a target of maintaining its methane emission intensity at the current low level (approximately 0.1%). In FY2025, our methane emission intensity was 0.04%, which is below our target level.

We have joined the Oil & Gas Methane Partnership 2.0 (OGMP 2.0), a reporting framework for methane emission reductions by oil and gas companies. OGMP 2.0 was established as an international reporting framework under the United Nations Environment Programme (UNEP), providing member companies with a framework for comprehensive, measurement-based reporting to promote methane emission reductions. Since FY2024, we have been reporting methane emission reductions through the OGMP 2.0 framework and have achieved the Gold Standard Pathway, which is given to companies that meet the standards stipulated in OGMP 2.0. Through this reporting, we will ensure the accuracy and transparency of the Group's methane emission reporting, and actively pursue technological innovations and sharing of case studies with other member companies with the aim of measuring and reducing methane emissions.

To manage and reduce methane emissions, we have been collecting and reporting data on fugitive emissions based on international methods since before joining OGMP 2.0.

Starting from FY2019, we have surveyed and identified inspection points for fugitive emissions from equipment and facilities at our projects in Japan, establishing a structure for data collection and reporting. Subsequently, we brought in a laser methane detector to enable inspections at almost all applicable points. We also introduced vehicle-mounted methane detectors and drones with which we inspect all 1,500 km of our gas pipelines in Japan. Fugitive emissions detected through this inspection process are rectified immediately.

We have been carrying out inspections for fugitive methane emissions through an LDAR program using infrared cameras at our overseas projects. At the Ichthys LNG Project, we have been inspecting the central processing facility (CPF) and floating production, storage, and offloading (FPSO) facility since FY2022, and the onshore gas liquefaction plant since FY2023. In FY2025, we also started measuring methane emissions using drones, advancing methane emission management that is more accurate and transparent.

We are exploring the possibility of implementing similar inspections at other projects and will continue to take further action to reduce fugitive methane emissions across the Group.

The Group has set a target of zero routine flaring at its operator projects by FY2030, and is examining flare reduction measures through collaboration among relevant departments. Since FY2022, we have also been managing our flare volumes in two categories—routine and non-routine flaring—in accordance with the Flaring Management Guidance for the Oil and Gas Industry developed by Ipieca, the International Association of Oil & Gas Producers (IOGP), and the Global Gas Flaring Reduction Partnership (GGFR). While the share of routine flaring in our total GHG emissions has already been reduced to an extremely low level, we will continue to further reduce it while taking into consideration factors such as economic feasibility.

Following the mitigation hierarchy approach, the Group seeks to avoid and reduce GHG emissions and to use carbon credits for offsets after such efforts. We plan to use carbon credits certified under highly trusted domestic and international schemes. Therefore, we work to understand the trend of carbon-related regulations in countries where our assets are located. At the same time, we also track the latest developments in the carbon credit market such as initiatives in Japan and overseas and assess the medium- to long-term performance of our projects. Through these efforts, we work to procure high-quality credits. At the Ichthys LNG Project, which is eligible for the Safeguard Mechanism, Australia's emissions trading scheme, it is also possible to use carbon credit offsets after implementing reduction measures to keep GHG emissions from the facility below baseline level. The carbon credits used for compliance with Safeguard Mechanism are verified and issued by the Australian government authority Clean Energy Regulator, and we plan to use Australian carbon credit units (ACCUs) that are recognized to comply with this regulation.

The Group selects and uses carbon credits certified under the schemes shown below.

To ensure acquisition of high-quality carbon credits from top-grade projects, we first assess projects before making a final selection and purchase. These assessments are designed to identify any permanence^*2 concerns, potential issues with local communities and other stakeholders, and to verify that land ownership and usage rights are unambiguous and guaranteed to extend beyond the life of the crediting period. We make a comprehensive judgment on projects by considering the results of these internal assessments alongside the results of credit assessments by external assessment companies.

In addition to the effectiveness of reducing CO2 emissions and absorbing CO2, we give preference to projects with the Sustainable Development Verified Impact Standard (SD VISta)^*3 and Climate, Community & Biodiversity Standards (CCB Standards)^*4 that deliver co-benefits by contributing to the United Nations' SDGs

Our HSE Policy states that we will "pursue every effort to manage and reduce Greenhouse Gas (GHG) emissions based on our ‘Corporate Position on Climate Change'." In line with our efforts to reduce emissions across the supply chain, our contractor and supplier agreements include a clause requiring compliance with our HSE Policy. Our Supplier Code of Conduct established in July 2022 sets out our expectation that suppliers undertake voluntary environmental efforts, such as measures to reduce GHG emissions. We also collect information about our suppliers' efforts regarding the reduction of GHG emissions by asking them to answer our CSR self-assessment surveys.

The INPEX Group sells carbon offset products to its customers. So far, the reduction of GHG emissions through such sales has exceeded the equivalent of 2,360 thousand tons-CO2e. Carbon offset products are LNG, natural gas, LPG, and jet fuel sold by the Group whose GHG emissions generated across the life cycle—from extraction through transportation and combustion—are offset by the equivalent amount of carbon credits, resulting in net zero GHG emissions. By supplying these carbon offset products, we contribute to our customers' efforts to reduce their supply chain carbon footprints.