Kyushu Electric Power

Kyushu’s target to achieve net-zero scope 1, 2 and 3 emissions by 2050 is not aligned with the company’s 1.5°C pathway. To align, Kyushu should aim to reach net zero by 2035, which is consistent with the IEA’s recommendation for electricity generation companies in advanced economies. Kyushu has set targets for 2030, 2040 and 2050, but should set intermediate targets at gaps of no more than five years to incentivise near-term actions on its longer-term goal.

Between 2019 and 2022, Kyushu invested USD 161 million in research and development (R&D). Kyushu reports conducting R&D into carbon capture, use and storage (CCUS) to facilitate decarbonising its thermal power generation assets, and other undefined projects. It also conducts R&D on non-mature technologies related to hydrogen and ammonia co-firing within its thermal operations. Kyushu should disclose its climate-related R&D investing on both mature and non-mature low-carbon technologies and dedicate the majority of its total R&D expenditure to low-carbon technologies and energies, to meet sectoral expectations.

Kyushu aims to expand its renewable energy capacity to 5 GW by 2030, with an interim target of 4 GW by 2025. Kyushu’s transition plan aims for renewable energy to become its main energy source. However, the company lacks plans or commitments to phase out the use of all fossil fuels, only discussing phasing out inefficient fossil thermal sources. Kyushu aims to maximise the use of nuclear power as a low-carbon energy generation source. It also aims to use battery energy storage systems (BESS) and develop a hydrogen/ammonia supply chain, but it lacks scheduled growth plans for half of these business models.

Kyushu aims to achieve net-zero scope 1, 2 and 3 (categories 1, 2, 3, 4, 5, 6, 7, 11 and 15) emissions by 2050, with an interim target to reduce its scope 1, 2 and 3 (categories 1, 2, 3, 4, 5, 6, 7 and 15) emissions by 60% by 2030, compared to 2013. The company also aims to reduce its scope 3 (categories 3 and 11) emissions by 25% by 2030 compared to 2020. Further, it aims to reduce its scope 1 and 2 emissions intensity by 47% by 2030 and its scope 1 and 3 (category 3) emissions intensity by 47% by 2030 compared to 2020.

Kyushu’s transition plan aims to position renewable energy as the company’s main power source, with the aim of developing 5 GW of renewable energy capacity, which will expand its current renewables (solar, wind, geothermal and hydro power) capacity by about 280%. The company also plans to lower the emissions intensity of its fossil fuel-based thermal power generation, moving towards co-firing 1% hydrogen/20% ammonia. Kyushu’s transition plan is supported by a financial commitment of USD 3.85 billion.

In 2022, about 57% of Kyushu’s electricity generation was from fossil fuels, two-thirds of this stemming from gas-fired generation. In 2022, Kyushu’s renewable energy accounted for about 29% of its total electricity generation capacity. Kyushu’s plans for low-carbon business models include expanding its renewable energy and nuclear power capacity, building a hydrogen/ammonia supply chain, promoting the use of electric vehicles (EVs) and using BESS to improve electricity supply and demand balance.

Kyushu’s emissions intensity trend for its own electricity generation decreased between 2018 and 2022, due to an overall increase in the proportion of low-carbon energy in its generation mix driven by nuclear power. Kyushu’s emissions intensity between 2017 and 2022 associated with its purchased power for resale decreased at a rate greater than that required by its 1.5°C pathway for 2022-2027.

Kyushu’s transition plan is supported by USD 3.85 billion in funding but does not commit to phasing out fossil fuels. In 2022, Kyushu spent about 31% of capital expenditure (CapEx) on low-carbon technologies, but the company does not report future projections for its CapEx in low-carbon technologies. Although the company reports that it conducts R&D in hydrogen/ammonia co-firing and CCUS, it does not disclose its associated R&D expenditure.

No evidence was found of the company’s commitment to social dialogue or of the categories of stakeholders the company engages with on a just transition. Furthermore, no evidence was found to demonstrate the company’s ongoing social dialogue and meaningful engagement with affected stakeholders. No evidence was found of the company undertaking just transition planning to mitigate the social impacts of the low-carbon transition on workers, affected stakeholders and its business relationships. Additionally, no evidence was found to demonstrate the company’s engagement in social dialogue and with stakeholders in just transition planning.

The company takes actions to promote jobs in a way that ensures gender balance and inclusion of vulnerable groups. It introduced a system to rehire women employees and expand job opportunities for people with disabilities. However, no public commitment by the company was found stating its intention to create and support access to green and decent jobs as part of the low-carbon transition. Additionally, no relevant disclosure was found of the company’s assessment of employment dislocation risks. No public commitment by the company was found stating its intention to reskill and upskill workers displaced by the transition to a low-carbon economy. Additionally, no evidence was found that the company reskills and upskills workers in a way that ensures gender balance and inclusion of vulnerable groups.

No relevant disclosure was found to show if the company identifies impacts of the low-carbon transition on social protection for workers and affected stakeholders, nor how it contributes to social protection. Additionally, no evidence was found that the company expects its business relationships to contribute to the social protection of their workers and affected stakeholders. No relevant disclosure was found to show how the company identifies any misalignment of its lobbying activities with policies and regulations that support the just transition, nor of the measures it takes to address misalignment. Furthermore, no evidence was found that the company lobbies for policies and regulations for green and decent job creation; retention, education and reskilling; and social protection for workers.

While the company commits to respecting human rights, there was no evidence that it commits to respecting the ILO fundamental rights at work or that it expects its business relationships to respect the same commitment. The company shows its process to identify human rights risks in its operations. However, no evidence was found of the company’s process to assess and mitigate their salient human rights risks in its own operations and in its supply chain. Furthermore, the company does not disclose the stakeholders whose human rights have been affected by its activities, or of the company having a grievance mechanism available to workers and external stakeholders.

The company commits to respecting the health and safety of its workers and expects the same commitment of its business relationships. However, no evidence was found of the company having a time-bound target for paying all workers a living wage. No evidence was found that the company discloses the proportion of its direct workforce covered by collective bargaining agreements or its required working hours. The company discloses the gender of its workforce by employee category. However, no relevant disclosure was found of additional indicators of workforce diversity. No evidence was found that the company commits to gender equality and women’s empowerment.

No company policies or commitments related to key ethical business topics – personal data protection, tax, bribery and corruption, and lobbying and political engagement – were found in the public domain. This includes ensuring ethical business conduct throughout its operations and in its business relationships.