Nippon Yusen Kabushiki Kaisha (9101) Investor update summary

Regulatory and industry context

• International shipping targets net-zero GHG emissions by 2050, with interim goals of 20-30% CO2 reduction by 2030 and 70-80% by 2040, and stricter GHG intensity regulations and pricing mechanisms globally and regionally, though some new rules have been postponed by a year.

• Regional regulations such as EU ETS, CBAM, and FuelEU Maritime are advancing, but a globally consistent framework is considered essential for effective decarbonization.

• Despite regulatory delays, momentum for GHG reduction in shipping remains strong and unchanged.

Ammonia as a next-generation marine fuel

• Ammonia is prioritized for its zero CO2 emissions, scalability, affordability, and strong public sector support, with projections it could account for 44% of marine fuel by 2050.

• Clean ammonia, including blue and e-ammonia, offers significant GHG reduction potential and is expected to become increasingly cost-competitive as production scales up.

• Ammonia demand is projected to reach 260 million tons for marine fuel by 2050, creating new markets and business opportunities.

Strategic roadmap and value chain development

• Multiple alternative fuels are being explored, with immediate adoption of biodiesel and LNG, and a primary shift to ammonia-fueled vessels by 2050, supported by R&D, early adoption, and operational experience.

• A comprehensive value chain approach covers upstream production, midstream transport, and downstream bunkering, leveraging LNG experience and expanding infrastructure and partnerships.