Honda Case Studies and 取り組み事例集と補足情報Supplementary Information Environmental Annual Report 2 011

Honda Motor Co., Ltd. 2-1-1 Minami Aoyama, Minato-ku Tokyo 107-8556, Environmental information disclosure

The Honda Environmental Annual Report is published yearly. It presents environmental corporate information, including Honda’s policies and future direction with respect to the environment. The report focuses particularly on the results of the year’s initiatives in each management domain, and on progress made toward targets from the Persons responsible point of view of Honda's corporate activities throughout its products’ life cycles. Complementing the disclosure of Sales and services Head Office...... Takao Aoki environmental corporate information, Honda’s website (http://world.honda.com/environment/index. Automobile...... Shigeaki Kato Honda R&D Co., Ltd. html) provides further details about the results in each domain (for instance, environmental impact Yasumasa Shimizu Automobile R&D Center (Wako)/ data for each Honda facility), and also presents the history of Honda's environmental initiatives. Motorcycle...... Masaharu Iuchi Fundamental Technology Research Center/ By disclosing a wide range of information, we hope to facilitate communication and feedback, Power Products...... Takaoki Watanabe Aircraft Engine R&D Center...... Akio Yagasaki thereby strengthening our environmental conservation initiatives going forward. Service and Parts...... Noriya Kaihara Motorcycle R&D Center/Power Products R&D Center Recycle Promotion Office...... Hideaki Kobayashi ...... Fumihiko Nakamura Automobile R&D Center (Tochigi)...... Jun Yanada Information focusing on annual initiatives Comprehensive environmental information Purchasing ...... Akifumi Suganuma Automobile R&D Center (Takasu Proving Ground) ...... Koji Kawai Factory and office operations environmental administrators Honda Engineering Co., Ltd...... Masuhiro Sakurai Saitama Factory...... Shigeo Ono Tochigi Factory...... Koichi Aonami Logistics Hamamatsu Factory...... Masamichi Matsumura Products and service parts sets...... Toshihide Nakai

Case Suzuka Factory...... Masaomi Ajioka Main Studies and Online Kumamoto Factory...... Takayoshi Fukai Administration report Supplementary Information Automobile New Model Center...... Hiroyuki Yoshihara Administration...... Takao Aoki Quality Innovation Center Tochigi...... Yukihiro Kariya Personnel...... Tetsuya Tsutsui Corporate Communications...... Masaya Nagai Environmental annual report The Honda Worldwide website’s Intellectual Property...... Yuichiro Kawamura The Honda Environmental Report is comprised of two parts: the Main environment section Report, which focuses on annual environmental initiatives, and the Note: Current as of June 1, 2011. Case Studies and Supplementary Information, available exclusively on http://world.honda.com/ Honda’s web site, which covers specific initiatives in each of the environment/index.html domains introduced in the report. Honda global environmental symbol and slogan Editorial policy for the Honda Environmental Annual Report Early in its history, Honda recognized that an involvement in efforts to combat various kinds of environmental problems was one of its most important management priorities. We publish the Honda Environmental Annual Report to inform the public about our environmental initiatives over the preceding year. This is the 14th edition of the Honda Environmental Annual Report, which was first published in 1988. As of 2011, Honda regards global climate change and energy issues as being particularly important among the many environmental problems that exist today. (see Page 6 for details.) To combat these problems, Honda is working to reduce emissions of greenhouse gases resulting from its business activities and from the use of its products, and has set medium-term targets for this purpose (see Page 8). Under our mid-term management plan, we have also formulated and are steadily implementing environmental initiatives to combat other environmental problems (see Page 10). We will continue to inform the public about these initiatives, and in particular about the progress we have made each year, through the Honda Environmental Annual Report. Other information, including details and data, are regularly posted on our website, as indicated in Disclosure of Honda Environmental Information. Our goal under the Honda Environmental Vision is to leave the joy and freedom of mobility for future Other key information disclosure generations (for our children). That is why we must Honda’s environmental reports and website also contain corporate information other than that concerning the environment. create a sustainable society where people can enjoy Honda is continuously working to enhance communication with its stakeholders by making information about its various life (blue skies). These aspirations are symbolized in activities easy to understand and encourages feedback. Honda regards full communication with all stakeholders as essential to our environmental slogan and symbol. further improving its activities, and welcomes feedback to this and all of the reports listed below.

V CSR Presents Honda’s ideas on Corporate Social Responsibility (CSR), and its Information initiatives in the areas of quality and safety, environment and society. CSR website: http://world.honda.com/CSR/index.html CSR report: http://world.honda.com/CSR/report/

V Investor Presents information on Honda’s business performance. Information Investor information: http://world.honda.com/investors/index.html Please direct enquiries to: Annual report: http://world.honda.com/investors/library/annual_report/ ● Environment & Safety Planning Office Production company (Japanese and English versions) Tel: +81-(0)3-5412-1155 SHIAN INC., Tokyo, Japan V Information on Presents the ideas behind Honda’s philanthropic activities, Fax: +81-(0)3-5412-1154 Philanthropic and its main initiatives. Publisher Activities This report can also be found on the Social activities website: http://world.honda.com/community/index.html Honda Worldwide website: Environment & Safety Planning Office http://world.honda.com/environment/report/ V Presents Honda’s safety initiatives from two perspectives: activities aimed at Manager Safety index.html?id=6 Information promoting product safety and those aimed at promoting traffic safety. Michio Shinohara

Safety activities: http://world.honda.com/safety/index.html Editors Driving safety promotion activities: Hisashi Kato, Fumie Kimijma, Shunsuke Kawasaki http://www.honda.co.jp/safetyinfo/ (This URL is Japanese only) Report on driving safety promotion activities: http://www.honda.co.jp/safetyinfo/report/index.html (This URL is Japanese only)

51 CONTENTS

Honda Group case studies

04 Adding 2.4MW capacity thin-film solar panels at business sites in Japan Home Power Generation Business Planning Office Honda Motor Co., Ltd.

07 CO2 emissions reduced by approximately 1,400 tons through thermal recycling and the development of a smaller VOC treatment facility Plastic Department, Saitama Factory, Honda Motor Co., Ltd.

11 VOCs reduced by 50% through the use of water-based base coatings and special coatings for inner panels Paint & Plastic Department, Suzuka Factory, Honda Motor, Co., Ltd.

16 New treatment facilities deliver best wastewater quality in the industry Facilities Department, Suzuka Factory, Honda Motor Co., Ltd

20 Eco-responsible initiatives combined to create advanced Green Factory Business Administration Division, Facilities Control Department, Hamamatsu Factory, Honda Motor Co., Ltd.

25 Cutting CO2 by 21% through a modal shift Production Operations, Production Planning & Logistics Division, Honda Motor, Co., Ltd.

28 2010 Honda Green Conference Honda Motor, Co., Ltd.

32 CO2 emissions reduced by 30% through installation of a gas heat pump Honda Motor Co., Ltd., Administration Division, Real Estate Management Department Kyowa Sogo Management Co., Ltd. Shinryo Corporation Gas Co., Ltd., R&D Center Hokkaido University, Graduate School of Engineering, Laboratory of Building Environment

36 Reducing CO2 emissions through a water cycle framework Kaneta Kogyo Co., Ltd.

Initiatives in Japan

40 Product development

41 Product recycling (reduce, reuse, recycle)

43 Administration

Additional information

44 Automobile environmental performance information (Japan)

45 Motorcycle environmental performance information (Japan)

46 Power products environmental performance information (Japan)

47 Japan facilities information

1 Advancing operations in 6 regions Driven by its philosophy of building products close to the customer, Honda has manufacturing operations in six re- gions worldwide. In FY2011, Honda delivered 27 million products to its customers around the world. Always con- scious of the environmental impact of its operations, Honda is working hard to take environmental responsibility to ever higher levels around the world.

In 2006, Honda announced global CO2 emissions reduction targets for 2010, the first announcement of its type by a company in the automobile industry. In 2011, we adopted“the Joy and Freedom of Mobility” and“a Sustain- able Society where People Can Enjoy Life” as the Honda Environmental Vision. Under this vision, Honda is deter- mined to accelerate its global efforts to find solutions to climate change and the energy problem.

China

Europe/Middle 656,000 Japan East/Africa 273,000 1,241,000 608,000 Power products: included in figure for 190,000 256,000 Asia/Oceania 1,243,000 372,000

Asia/ Oceania 398,000 15,011,000 Automobiles Motorcycles Power products and other Annual sales in Honda’s six regions 1,682,000 by unit volume (FY2011)

Financial information

Net sales Operating income Net income (¥ billion) ■ Unconsolidated ■ Consolidated (¥ billion) ■ Unconsolidated ■ Consolidated (¥ billion) ■ Unconsolidated ■ Consolidated 150,000 10,000 7,000

6,000 8,000 5,000 100,000 6,000 4,000

4,000 3,000

2,000 50,000 2,000 1,000 0 0

0 -2,000 -1,000 2007 2008 2009 2010 2011 (FY) 2007 2008 2009 2010 2011 (FY) 2007 2008 2009 2010 2011 (FY)

2 3 North America Company overview

Company name: Honda Motor Co., Ltd. 1,465,000 Head office: 2-1-1 Minami Aoyama, Minato-ku Tokyo 107–8556, Japan Established: September 24, 1948 184,000 President & CEO: Takanobu Ito Capital: ¥86.067 billion (as of March 31, 2011) Sales: Consolidated: ¥8.9368 trillion 2,094,000 (Results of FY2011) Unconsolidated: ¥2.9154 trillion

Number of associates: Consolidated: 179,060 (as of March 31, 2011)

Unconsolidated: 25,673 (as of March 31, 2011) Consolidated subsidiaries: 383 (as of March 31, 2011) Major products: Automobiles: Standard-sized vehicles, compact vehicles and mini-vehicles Motorcycles: Scooters, mini-bikes, motorcycles, ATVs and personal watercraft South Power products: Power product engines, lawnmowers, America marine outboard engines, CIG thin film solar cells, and household gas- 159,000 engine cogeneration units Note: Honda is a member of the World Business Council for 1,744,000 Sustainable Development (WBCSD). 118,000

Number of associates Net sales by operational area Net sales by region ■ Unconsolidated ■ Consolidated (consolidated: FY2011) (consolidated: FY2011) 200,000

Power products Financial services 150,000 and other 6.3% 3.3% North Other America 11.8% Motorcycles 43.9% 100,000 14.4%

Asia 20.7% 50,000

Europe Automobiles 6.8% Japan 76.0% 16.8% 0 2007 2008 2009 2010 2011 (FY)

2 3 Honda Group case studies Adding 2.4MW capacity thin-film solar panels at business facilities in Japan

In fiscal 2010, Honda installed thin-film solar panels with a total capacity of 2.4MW at 15 major business facilities in Japan. Together with panels previously installed, this brought the total capacity to 3.2MW. We interviewed Eiichi Omura, head of the Home Power Generation Business Planning Office in the Power Products Operations Division, which has coordinated the implementation of this project, about the reasons for Honda’s decision to install solar panels at its main business facilities.

Home Power Generation Business Planning Office, Power Products Operations Division, Honda Motor Co., Ltd.

1 From creating products that people use everyday to the energy production business

“In addition to products with engines, such as automobiles and motorcycles, Honda also supplies power products designed to help people with everyday tasks, such as power generation, water pumping and snow removal. However, there are places in the world where gasoline, gas and electric power are not available. Honda’s energy production business began with the idea that we ought to be able to help these people also to enjoy freedom of mobility in the electrified society of the future” says Mr. Omura, whose division is responsible for Honda’s energy production business, including batteries and cogeneration systems. General Manager Omura

2 19,000 panels installed at 15 sites in one year Honda first became involved in the solar power industry in 2007. The business has since expanded through a trial-and-error process in Japan. Today, companies are expected to contribute to the environment, and Mr. Omura began to wonder if Honda, as a manufacturer of thin-film solar panels, could also use the panels at its own facilities. In FY2010, a plan was submitted to the Executive Council calling for the installation of solar generation systems at all Honda business sites. A decision was made to move forward with installation of panels, principally at business sites of Honda Motor Co., Ltd. Following this decision, one associate from Honda Soltech Co., Ltd., a subsidiary that manufactures and sells solar panels, and one from the Power Products Operations Division were assigned to visit all business facilities in Japan. Their tasks were, with the assistance of facility staff, to Thin-film solar panels at the Hamamatsu Factory explain why the work needed to be done and to arrange for contractors to install the panels. The workload required to move the project forward from initial preparations to the filing and approval of applications was considerable. Mr. Omura recalls that just to arrange subsidies from the Ministry of Economy, Trade and Industry, it was necessary to prepare

4 5 documentation that filled three cardboard boxes. In the 12 months to the end of March 2009, these efforts resulted in the installation of 19,000 panels with a total capacity of 2.4MW at 15 key business facilities in Japan. The work was completed at Honda’s manufacturing facilities, at the research facilities of Honda R&D Co., Ltd. and Honda Engineering Co., Ltd., at the Quality Innovation Center, at the Suzuka Distribution Center, and at Regional Operations (Japan). Actual generation output in February 2011, when the systems first came on line, reached 100–135% of the projected level. The installation of solar

panels at all business sites will reduce CO2 emissions by 1,000 tons

annually, which is equivalent to more than 50% of the CO2 equivalent of electric power used at the Honda Aoyama Building in one year. A solar cell module

3 Honda CIGS thin-film solar panels aim to be the best in the world Silicon-based products currently account for 95% of solar panels sold worldwide. The technology for silicon-based panels is over 50 years old and while their theoretical conversion efficiency, which indicates the amount of electricity generated from light energy provided by the sun, is around 27%, the actual efficiency is still below 25%. In contrast, the CIGS (copper, indium, gallium (di)selenide) solar cells manufactured by the Honda Group are compound cells believed to have a theoretical conversion efficiency of around 30%. At 11.6%, the conversion efficiency of products currently on sale is among the best for compound solar cells. However, there is considerable potential for improvement, and that is what drew Honda’s attention to this technology. As of March 2011, conversion efficiency was expected to reach about 13% in FY2012. If achieved, Honda products will be the best in the world.“We are determined to achieve major improvements through our continuing R&D work,” says Mr. Omura. Because the generating layer of CIGS thin-film solar panels is only Honda Soltec solar panels at the Hanshin Koshien Stadium 1/80 the thickness of that in silicon panels, less materials are required for their production. In addition, the amount of energy used during

production is about one-half that required for silicon panels, so less CO2 is emitted. Another advantage is the ability of CIGS panels to utilize a wider range of light wavelengths, meaning that they can produce more electricity in cloudy weather or during the morning and evening hours. They are also affected less by localized shadows cast by power poles, foliage and other objects. Finally, because CIGS panels are black, they create a more subdued appearance when used on building exteriors. “Honda is the latest newcomer to this field, and we felt that we needed to do something different,” recalls Mr. Omura.“Our goal is to create a product with a high conversion efficiency, since there isn’t room to install large numbers of panels on the small roofs of Japanese houses. We need a way to generate large amounts of electricity from a small number of panels.” While competitors’ plants have annual production capacities of Kumamoto Prefectural Office 1,000MW or more, Honda Soltec’s factory currently produces enough (installation completed in February 2010) panels in a year to generate 27.5MW, which is sufficient to install 3kW systems in around 9,000 houses.“There is a reason for this low capacity,” explains Mr. Omura.“Honda believes that this technology will improve further, and we plan to expand our production capacity when the conversion efficiency reaches about 15%. Then we’ll be able to compete with silicon-based products.”

4 5 4 A commitment to original technology “Traditionally Honda people have been driven to create new products through their own efforts,” says Mr. Omura.“Our CIGS thin-film solar panels are also based on original Honda technology and cannot be matched by competitors. By the same token, this approach prevents us from buying existing facilities from other companies. The rapid growth achieved by Chinese manufacturers at present results from their use of commercially available facilities to mass-produce silicon-based panels, which they sell at low prices. No company has successfully produced CIGS panels or other compound-based panels using purchased facilities. Also, one of the key requirements for any motor vehicle manufacturer is reliability. As we would expect, not one of the Honda solar power generation systems that have been installed has ever failed to achieve its projected output. We have not yet started to sell our panels to general users in other countries, but more than 40% of participants in a survey indicated that they would use Honda thin-film solar panels if they were available. Solar panels are expected to remain in use for at least 20 years, and it seems people feel that they can rely on Honda products.”

5 The Honda Smart Home concept —produce at home, use at home Honda’s Smart Home concept calls for the creation of a single management system that would allow individuals to achieve total control over multiple energy-producing products, especially mobility products, in their homes. Honda will soon be able to offer a full range of mobility and power products based on technology that will allow energy used at home to be produced at home. Our gas engine cogeneration units, which are sold commercially under the“Ecowill” brand, already have this Experimental cars at a solar charging station capability, and there are also electric vehicles (EVs), electric motorcycles and electric carts. We believe that all of these products based on Honda technology can be managed to achieve synergistic benefits, resulting in the reduction of greenhouse gas emissions from all day-to-day activities, including mobility, to zero. One of the energy creation technologies that Honda is exploring to realize this vision is thin-film solar panel technology. At present, Honda is one of the few motor vehicle manufacturers in the world to be involved in solar panel manufacturing on a significant scale. Honda began to research this technology in earnest after participating in a solar car race, and that led to a commercial involvement. This may seem unconventional, but it is typical of the Honda approach.“The love of racing is a fundamental part of the Honda culture,” says Mr. Omura.“There’s no point entering a race unless you intend to win. The same is true of our efforts to develop solar panels.”

6 7 Honda Group case studies

CO2 emissions reduced by approximately 1,400 tons through thermal recycling and the development of a smaller VOC treatment facility

At the Saitama Factory, Honda has installed regenerative thermal oxidizers (RTOs)1 on its bumper coating line to reduce emissions of volatile organic compounds (VOCs). The RTOs enabled VOC concentrations to be reduced below the required standard while also reducing energy requirements through heat recovery, without changing the existing facilities. We also succeeded in reducing the size of RTOs after discovering the leveling effect of activated charcoal on VOC concentrations. These measures have

reduced CO2 emissions by about 1,400 tons annually. 1 Regenerative thermal oxidizers break down gases through combustion and capture the heat emitted.

Plastic Department, Saitama Factory, Honda Motor Co., Ltd.

1 Improving processes without changing existing facilities Opened in 1964, the Saitama Factory is an integrated automobile production facility handling all processes from engine processing and assembly and the pressing of sheet steel body parts to welding, painting, final assembly and inspection. As a typical urban factory, the Saitama The VOC treatment facility at the Saitama Factory Factory has a multilevel structure. On the first floor, the engine and body production lines are laid out so that their products converge onto the assembly line. Pre-assembly painting is carried out on the second floor. “Because of the installation area required, we opted to install VOC treatment systems on its existing lines to make optimal use of limited space,” recalls Hisashi Saito, an engineer in the Plastic Department. “We’re also working to reduce the amount of paint used by modifying coating systems to improve the application efficiency. We first wanted to reduce the amount of VOCs emitted, and then to treat the remaining emissions efficiently.”

2 Minimizing energy used by RTOs

RTOs concentrate VOCs in exhaust gases from coating processes and Hisashi Saito then dispose of them through combustion. The installation of RTOs dramatically reduced VOC emissions but caused an increase in energy consumption equivalent to 510 kiloliters of crude oil.“We wondered if it would be possible to develop an RTO that would not use more energy by designing it to recover combustion heat as an energy source,” says Masahiro Nakao, also an engineer. The first step was to discover the optimal system into which an RTO could be incorporated by creating a 1/400-scale experimental system outside of the incinerator. This system was used to carry out tests to investigate various issues. Would the system be compatible with exhaust gases from coating booths? How many times could the VOCs be concentrated and how much of the mist could be treated? How long would the filters last? VOC concentrations were also measured at various locations. Masahiro Nakao “We confirmed that the treated exhaust gas was clean, and that its temperature rose by 4–5ºC,” recalled Mr. Nakao.“We then decided to capture the energy in the process heat through thermal recycling by

6 7 returning the treated exhaust gas back to the air conditioning system on the painting line.”

Structure of a Regenerative Thermal Oxidizer (RTO)

Regenerative Thermal Oxidizer (RTO): This is a generic term for a system that accumulates heat while breaking down gases through combustion.

Burners Hot bypass Gas burner damper Oil burner This efficiently uses thermal energy from the spontaneous combus- tion of hot VOCs. Incinerator A bumper coating booth VOCs and aromatics broken down at Thermal insulation high temperatures support grid (800ºC or higher)

Thermal insulation Poppet damper 250mm thick̶This Heavily shielded, reduces thermal radia- durable, easy to maintain tion and keeps the surface temperature of the system low.

Input/output ducts Honeycomb ceramic heat absorption material ・ Large contact area̶ high heat exchange efficiency ・ Direct gas flow̶pressure loss reduced * The RTO can be fueled by LNG or VOCs.

3 Heat from RTO utilized in two thermal recycling pathways Using data obtained through these trials, the engineers began to develop thermal recycling technology for the entire facility. Instead of being allowed to radiate away, heat from the RTO would be transferred into a newly installed heat exchanger. This technology was then incorporated into the exhaust system for the bumper coating facility. There are two thermal recycling flows, one of which centers on a heat exchanger. The air conditioners burn gas throughout the year to maintain constant temperature and humidity levels in the coating booths. To reduce the amount of gas used, waste heat from the RTO is Burners fueled by LNG in the air-conditioning chamber used in the heat exchanger to raise the temperature of the air, which is 23–24ºC in the coating booths, by 4–5ºC before it is recirculated. The heat exchanger also heats the moist exhaust gases, which contain VOCs, by 5ºC to reduce their relative humidity. In this way, the humidity level can be controlled until the gases reach the concentration system, where high humidity would result in a lower adsorption rate. Another source of energy is the desorption heat emitted when desorption occurs in the concentration system. This is transferred with the concentrated exhaust gases to the combustion process in the RTO. After combustion in the RTO, the exhaust gases are used in the heat exchanger and recirculated.

Cleaned air is carried through this recycling duct.

8 9 Structure of the VOC treatment system

Thermal recycling duct Bumper coating line air conditioner RTO exhaust

Hot bypass

RTO (regenerative thermal oxidizer)

Adsorption Coating booth air

RTO breakdown of VOCs through oxidation

Cleaned air

Filter unit Heat exchanger Activated charcoal Concentration system removal of humidity removal of solvents with concentration of VOCs coating mist adjustment high boiling points

4 Leveling effect of activated charcoal discovered during trials Activated charcoal is used to adsorb high-boiling-point solvents in order to prevent tar and other high-boiling-point substances in the coating materials from clogging the concentration system and reducing the efficiency of VOC treatment. However, when the Plastic Department analyzed detailed data about VOC concentration changes, they noticed changes in the VOC concentration data after the gases had been passed through activated charcoal. “Because VOC concentrations vary according to the color and area coated,” explains Mr. Nakao,“we expected the VOC graph for the bumper coating booths to have a wave pattern with considerable Factory Manager Shigeo Ono variation. However, we found that the VOC levels became more consistent (overall project supervisor) after the exhaust gases had been passed through activated charcoal.”

5 Leveling effect of activated charcoal used to raise concentration levels, reduce the size of the RTO, and turn VOCs into fuel If VOCs in exhaust gases from the bumper coating process could be concentrated, it would be possible to reduce the size of the RTO and reduce the amounts of electricity and gas used. After discovering that VOC concentrations became more consistent after the exhaust gases were passed through activated charcoal, the Plastic Department considered raising VOC concentration levels so that the RTO could be made smaller. Normally, the system is designed to achieve concentration levels of around 10 times to reduce the risk of internal explosions. This is because concentrations vary significantly when the gases are not passed through activated charcoal and could exceed the explosion limit. If VOC concentrations are leveled using activated charcoal, they can be handled Module Manager Shinichi Araki safely even at high concentrations. (in charge of project implementation)

8 9 “We decided that a concentration level of 15 times would provide the necessary safety margin,” says Mr. Nakao.“At this level we can consistently dispose of at least 90% of the VOCs, while maintaining a balance between treatment efficiency and safety.” As a result, it was possible to reduce the size of the main RTO unit by 30%. The concentration system also turns VOCs into fuel. LNG is burned to raise the temperature in the RTO. At a certain concentration, VOCs undergo spontaneous combustion, helping to maintain the temperature in the incinerator. If the amount of heat provided by the VOCs falls, the LNG burners ignite, ensuring that the temperature is constantly maintained at 830ºC. The burners are off for about 80% of the combustion time, which means that energy savings increase in proportion to the amount of VOCs used.

Checking Concentration Levels Design incorporating the leveling effect General Design of activated charcoal VOC concentration after exhaust gas has (ppmC) VOC concentration in bumper coating exhaust gas (ppmC) passed through activated charcoal 1,200 1,200 RTO design value 1,000 1,000

800 800 RTO design value 600 600

400 400

200 200

0 0 Time → Time →

VOC concentration (toluene equivalent) RTO size reduced (ppm) after concentration and conversion to fuel by 30% 3,500 3,414 Below1/4 of explosion limit concentration 3,000 Outside (equivalent to 3,175ppm of toluene) standard 2,500 Within explosion limit concentration standard 2,000 2,276 2,278 Within Within 1,500 1,709 standard standard LNG consumption reduced by 30% 1,000 Within standard Air consumption reduced by 35% 500 Natural ratio: 80% 0 Without activated Without activated With activated With activated charcoal: 10 times charcoal: 15 times charcoal: 15 times charcoal: 20 times

6 Refusal to accept waste reduces

CO2 emissions by around 1,400 tons These exhaust gas treatment facilities for the bumper coating process have been fully operational since February 2010. In FY2011, CO2 emissions were reduced by approximately 1,400 tons by downsizing the VOC treatment system and employing thermal recycling on the bumper coating line. Even allowing for the use of gas in the RTO, there has been a net reduction in gas consumption by the air conditioner. “Thermal recycling has reduced the amount of energy consumed in VOC treatment by 40%,” reports Mr. Nakao.“What is more, the amount of energy recycled exceeds the amount of energy used to drive the system. This initiative began with the idea that it was wrong to waste heat from the exhaust gases.“The temperature of gases processed in the concentration system was only 27–28ºC, and nobody had thought of Hisashi Saito and Masahiro Nakao recovering and recycling the heat. We thought it was wasteful simply to let the air flow out after we had spent money treating it.”

10 11 Honda Group case studies VOCs halved by 50% through the using water-based base coatings and special coatings for inner panels

In the Suzuka Factory’s new coating plant, Honda has created a coating line that is shorter than normal. It has also halved the amount of volatile organic compounds (VOCs) emitted per unit of production by using water-based base coatings, using special coatings for inner panels, and automating the coating of inner panels. Honda’s approach to the challenge

of reducing VOC and CO2 emissions began with the development of specialized coatings.

Paint & Plastic Department, Suzuka Factory, Honda Motor, Co., Ltd.

1 Gradual conversion of No. 3 line in new coating plant Opened in 1960, the Suzuka Factory mainly produces automobile engines and completed automobiles. Equipment on the No. 3 Coating Line, which processes 1,000 CR-Z and Fit vehicles daily, has become obsolescent over the past 20 years, making it increasingly difficult to

achieve environmental improvements, such as reducing CO2 and VOC emissions, or cope with other priorities such as ensuring production reliability. Honda therefore decided to restructure the coating plant and began planning for the transition to a new coating line in 2006. Shinji Yamamoto, an engineer in the Paint & Plastic Department recalls that the process began with the development of a concept.“Our main focus was to deal with VOCs. We wanted our products to have the best Shinji Yamamoto appearance and quality in their class. We also wanted our coatings to be people-friendly and Earth-friendly. Another priority was to create a line that would ensure optimal worker efficiency and be free of difficult processes. We set a target of reducing the amount of VOCs from 40.3g/ m2 to 21g/m2. It took five years.” While production continued in the plant containing the existing No. 3 Line, a new coating plant was built alongside it. After the new building was completed in May 2009, the finishing processes, including surface preparation, painting and inspection, were progressively moved to the new No. 3 Coating Line. The transition will be completed in August 2011.

2 Drying ovens eliminated to create 4C2B line The coating plant contains major facilities, including the temperature and humidity control system for the coating booth, and the drying ovens, which account for much of the energy used in the factory. For this

reason, to reduce CO2 emissions, a key focus during the development of the new line was to reduce energy use. Honda also wanted to shorten the coating process. Normally, automobiles receive four coatings, starting with an electrodeposited anticorrosion coating. This is followed by a middle coat that prepares the surface for painting, a base coat determining the color, and a final clear coat that adds luster and protects the vehicle’s finish.

10 11 A conventional line is known as a“4C3B” process, since the surfaces are coated four times and baked three times. There is one baking after electrodeposition1, another after the application of the middle coat, and a third after the application of the base and clear coats. On the new line, the use of drying ovens after the application of the middle coat was eliminated, leaving one baking stage after electrodeposition and a second after the application of the other three coats (middle, base, clear). The result is a 4C2B line. With conventional coatings, applying another coat before the previous coat is fully dry causes problems with the performance and finish of the coatings. At the Suzuka Factory, this problem was solved by developing a new paint specifically for the middle coat.“We developed a special middle-coat material that allows a conventional water-based Masahiko Onishi base coat to be applied wet-on-wet after a short predrying period,” says Masahiko Onishi, an engineer in the Painting Department. This eliminated the need for drying ovens, storage2 and post-drying polishing. By shortening the process in this way, Honda was able to reduce both labor requirements and energy consumption. 1 Electrodeposition is a method for applying coatings. The part is immersed in a coating path. An electric current is applied, causing the coating to adhere to the surface. 2 Parts are stored before and after each stage in the coating process to allow for flow adjustments and process shutdowns.

Changes to the coating process

4C3B Process

Jig Drying oven Polishing/ Middle Drying oven Polishing/ Base Clear Drying oven Inspection/ Storage UBC Drying oven F/O Storage F/O Storage attachment Preprocessing Electrodeposition cleaning coat cleaning coat coat polishing

Water-based Water-based Water-based Solvent

4C2B Process

Jig Drying oven Polishing/ Middle Base Clear Drying oven Inspection/ Storage UBC Drying oven F/O F/O Storage attachment Preprocessing Electrodeposition cleaning coat coat coat polishing

Water-based Solvent Water-based Solvent

Key UBC: Under-body coat F/O: Flash-off (predrying)

3 Achieving full automation of inner panel coating VOC emissions (FY2008) Honda took a new approach to VOC reduction in the Coating and Resin Plant by using a special base coating for inner panels. Previously, Electrodeposition: Others: the same coatings were used for both inner and outer panels. Honda 7% 6% decided to use a different base coating for inner panels, allowing it to Middle coat: formulate a coating that would be ideal for application to the panels’ 9% complex shapes. With this new approach, the coat could be made Per unit: thinner, reducing the amount of coating materials used and the amount 40.0g/m2 Clear: of VOCs emitted. The development of specialized inner-panel coatings 15% Base: 63% was the key to the reduction of coating use. According to Mr. Onishi, the idea of using specialized coatings on inner panels arose while the engineers were considering fully

12 13 automating coatings for such panels within the 4C2B process. Full automation requires sophisticated technology, and in many cases human intervention is needed to correct defects, such as paint drips or areas where the surface layer is visible, which can occur with certain colors. With the 4C2B process, however, the two top coatings (base and clear) are finished at the same time, which means that the coating booth needs to be longer. Even if defects need to be corrected, this cannot be carried out during operating hours. To fully automate the inner panel coating process, it would therefore be necessary to develop a coating material designed specifically for inner panels.

Composition of coatings on automobile bodies (four coats)

Clear coat (solvent-based)

Base coat (water-based)

Middle coat (solvent-based)

Electrodeposition

Steel panel

4 Color-coding technology for inner panels made possible by innovative arrangement of coatings

As engineers considered how to develop the facilities and coatings needed to automate the entire inner panel coating process, the idea arose to exploit differences in the appearance of the coatings to color code the inner panels with specific colors. The human eye can clearly distinguish between colors in brightly lit locations, but not so well in low-light conditions. We can also detect color variations on a uniform surface, but on complex surfaces such variations are hard to identify. The new 4C2B coating line Unlike the outer panels of automobiles, inner panels have complex shapes and color variations are difficult to see.“Colors on inner panels can vary within the range that might be attributed to optical illusions,” says Mr. Onishi. The key point is the appearance of the panels after coating. If an outer panel coating encroaches onto an inner panel after it has been coated, the color difference becomes obvious.“The focus of this technology is to establish a color standard to tell us where to use colors developed with appearance in mind,” explains Mr. Onishi.“By defining the colors appropriately, we can enhance the appeal of the product, cut costs, and reduce VOC emissions.” By formulating special inner-panel coatings primarily in colors that show through easily or tend to drip, it was possible to achieve full automation. The new building completed in May 2009

12 13 Changes in pigment composition 5 Amount of coating reduced through (opacity enhancement) opacity improvement Why would the use of specialized base coatings on inner panels reduce Pearl Organic Inorganic the amount of coatings used? One of the properties of a coating is pigment pigment pigment Aluminum opacity3. If the opacity of a coating is weak, the surface layer will show through. For this reason, coatings must be applied with a certain thickness even on inner panels, which have complex shapes.“Even on inner panels, we formulate coatings to prevent the surface from showing through by adjusting the percentages and particle sizes of Rearrangement置換 High opacity lustrous materials (metallic pigments)” says Mr. Onishi.“This allows us to achieve opacity even with thin coatings, which means that the amounts of coatings used can be reduced.” This was the first time in the world that specialized base coatings were used on inner panels to reduce the amount of coatings applied, without any effect on product attractiveness. The new method also improved the quality of the finished result. The facilities at the Suzuka Factory are capable of color coding in up to 16 colors, of which 10 are used exclusively on inner panels. By using specialized coatings on inner panels, Honda could reduce the amount of coatings used by 32 tons per year and emissions of VOCs contained in those coatings by approximately 2.5 tons. 3 Opacity is a color property that prevents the surface layer from showing through coatings.

Specifications for inner panel coating supply system Noritoshi Gouda

Specifications Coated inner for new plant panels

Coated outer panels

Additional facilities

Exterior panel coatings

Specialized inner-panel coatings

14 15 6 Water-based paints in use at the Suzuka Factory since 2000 One of the ways in which Honda sought to reduce VOC emissions was through introducing water-based paints. Because base coatings contain more organic solvents than clear and middle coatings, VOC emissions can be reduced substantially by using water-based products. At the Suzuka Factory, water-based paints were in use as early as 2000 on the No. 1 Coating Line. Currently water-based products are used in the electrodeposition, middle coating and base coating processes on the 4C3B No. 1 line. However, it is more difficult to control temperature and humidity Coatings are prepared in the mixing room. during the coating process when water-based coatings are used. Water- based products also require specially designed facilities, including flash-off systems4 and insulation systems5 on coating supply lines. At the Suzuka Factory, increases in electricity consumption resulting from the need to add functions or enhance performance are being offset in various ways, including the use of air conditioning recycling systems and inverter-based air conditioning motors. These efforts are also helping to

reduce CO2 emissions. Because water-based paints are more difficult to separate than solvent-based products, special chemicals must be used to remove them from wastewater before it is discharged. 4 A flash-off system is a predrying facility used to evaporate water contained in coatings. 5 An insulation system is used to isolate voltage leaks during electrostatic coating.

Left: Outer panel coating, right: Inner panel coating 7 VOC emissions reduced by about 50%, emission concentrations down to 187 ppmC Since the transition to the new line, the amount of solvents contained in coatings has been reduced by 85% through the use of water-based products. The introduction of an automated coating system has improved coating efficiency by 5%, while the amount of coatings used has been reduced by 15% through the use of special coatings on inner panels. As a result of these measures, VOC emissions per unit have been reduced by about 50%, from 40g/m2 on the old line to 21g/m2 on the new line. Emission concentrations have fallen from 208 ppmC6 to 187 ppmC. The development of coatings with special functions, such as middle coatings formulated for use on a 4C2B process and coatings specifically designed for inner panels, has been a key part of creating the new line. 6 This unit expresses the carbon equivalent. It is obtained by multiplying the number of carbon parts by parts per million of the substance. From left: Onishi, Yamamoto, Gouda VOC emissions per unit (actual)

40.0g/m2

40g/㎡ 6.0 Others

Clear 6.0 Water-based 2 coating Target: 21g/m base Coating efficiency coating improvement 30g/㎡

0.14g/m2 Inner panel 20.95g/m2 coatings Others 2.53 20g/㎡ Base 25.2 Clear coating 6.44 coating

Base 10g/㎡ coating 4.35

2K middle Middle 4.68 3.6 coating coating 2.8 Electrodeposition Electrodeposition 2.95

Before After VOC countermeasures

14 15 Honda Group case studies New treatment facilities deliver best wastewater quality in the industry

Wastewater treatment facilities at the Suzuka Factory were replaced in 2010. By adopting an orthodox approach based mainly on biological treatment, we were able to minimize costs while achieving the highest treatment quality in the motor vehicle industry. The new system can also treat wastewater from the new line in the coating plant, which is now using water-based paints as base coatings.

Facilities Department, Suzuka Factory Honda Motor Co., Ltd.

1 Wastewater from the Suzuka Factory enters The Suzuka Factory is a mass-production facility for automobiles. Because treated wastewater is discharged into the , it must comply with tougher standards than are applied to water discharged into sewers under the Water Pollution Prevention Law. The ultimate destination for the wastewater is Ise Bay, which is classified as an enclosed coastal sea area and therefore subject to total pollutant load regulations under the Water Pollution Prevention Law. This means that wastewater from the Suzuka Factory must also meet these even tighter pollutant load standards. However, the wastewater treatment plant at Suzuka is over 30 years old and could no longer be maintained at the standard needed to meet The new wastewater treatment facilities are in line, these requirements. In November 2006, Honda began to develop plans eliminating need for underground work. to replace the facilities.

2 Capacity to treat wastewater from the new water-based coating line In May 2007, during planning for the new wastewater treatment facilities, engineers also began to discuss the use of water-based paints in the new coating plant. When the composition of wastewater changes, the design conditions for wastewater facilities also change. For example, it may be necessary to deal with volatile organic compounds (VOCs). The treatment facility engineers therefore consulted closely with those in the Coating and Resin Plant concerning the extent to which water-based coatings would be used, the amount of wastewater, and the timing of the start-up of the new line. Organic paints need to be highly volatile so that they dry quickly after application. The solvents used to provide this volatility consist Ken Shiotani of VOCs. Water-based paints, in which the solvents are replaced with water, are being introduced to reduce VOC emissions. Paints also include pigments and resins, which are not soluble in water. However, these can easily be dissolved in water by means of catalysts.“While the switch from paints based on organic solvents to water-based paints has reduced the amount of VOCs discharged into the atmosphere, it has also shifted VOCs into the wastewater,” comments Ken Shiotani, an engineer in the Facilities Department.“That means that we have to remove the VOCs in the wastewater treatment plant.”

16 17 Water-based products have been used for middle and base coatings on the No. 1 Coating Line at the Suzuka Factory since 2000, which means that water-based paints were already beings processed in the old system. However, at that time, most of the coatings were still based on organic solvents. The new No. 3 Coating Line, in operation since 2009, has been progressively converted to the use of water-based products, which now make up 80% of the coating materials in wastewater from the coating plant. Several treatment processes were considered, but eventually it was decided to use an orthodox biological treatment method, which is relatively cheap to operate. To meet the stringent environmental standards, a new tertiary treatment facility was also installed.

Hiroshi Sano 3 The concept: wastewater treated to the same standard as industrial water, consistently and reliably The goal of the project was to create a system that would consistently and reliably treat all wastewater treated and released locally to the same standard as industrial water, thereby ensuring low environmental loads at the Suzuka Plant. In addition to raising the quality of treated water, Honda also wanted to improve maintainability, prohibit hazardous processes, and limit the amount of waste produced. In June 2007, the government of issued a notice requiring newly built treatment facilities to meet a total pollutant standard of chemical oxygen demand (COD)1 of 10mg/liter. In 2006, the old facility had a wastewater COD level of 40mg/liter. Honda’s goal was to reduce this to 7mg/liter, which would be less than one-quarter of the old level and among the best in the motor vehicle industry. Wastewater from the Suzuka Factory includes oil-bearing wastewater, which contains cutting oil from mechanical processing equipment; coating wastewater from the coating plant; general wastewater, such as domestic wastewater from kitchens and toilets, and rainwater. Hiroshi Sano, an engineer with the Facilities Department, recalls that there used to be Hiroaki Kubo separate treatment facilities for wastewater from mechanical processing equipment and the coating plant.“The treatment facility for coating

Treatment paths in upgraded wastewater treatment facilities Process wastewater outflow

Circular oil separation tank

Wastewater treatment plant control building

Oil-bearing wastewater treatment facility Coating Emergency Coating wastewater treatment facility wastewater water tank Blower room Oil-bearing Tertiary wastewater wastewater treatment facility

Processed wastewater Secondary wastewater treatment facility Coating wastewater intake tank Coating wastewater path

Oil-bearing wastewater path Coating wastewater and oil-bearing wastewater combined in Processed wastewater path secondary treatment facility (combined coating and oil-bearing wastewater)

16 17 wastewater was on the east side of the factory, and that for oil-bearing wastewater on the west side. After primary processing, wastewater from both facilities was combined on the west side.” Work began in September 2008. Production continued as the facilities were relocated. After a 15-month period, the new facilities were completed in February 2010, during the fiscal year in which the law would take effect. 1 The amount of oxygen required to oxidize oxidizable substances in water.

4 Treatment facilities based primarily on biological treatment The treatment method selected is an orthodox system based primarily on biological treatment. Wastewater from each production process undergoes primary treatment using chemicals. The water, which at this stage is mostly colorless and transparent, then undergoes secondary Treated wastewater flows into a small stream created treatment by microorganisms to remove remaining soluble pollutants. within the factory grounds. This is followed by tertiary treatment, during which organic substances not removed at the secondary treatment stage are adsorbed onto activated charcoal. Once the COD has been reduced to below 10mg/ liter, the water is discharged. The average COD of wastewater after tertiary treatment is 10mg/liter, but water discharged from the Suzuka Factory currently has a COD of 3-4mg/liter. The substances contained in coating wastewater are treated separately, depending on whether they result from electrodeposition, filming or preprocessing. Coating products dissolved in wastewater are precipitated out using chemicals and solidified by means of flocculants. They are then neutralized with lime and removed. A panel display in the wastewater treatment plant showing the wastewater treatment process. At the secondary treatment stage, biological reactions are used

Flowchart of the upgraded treatment facilities

Production wastewater Primary treatment Secondary treatment Secondary treatment Oil-bearing

System A

Pressurization Reaction Neutralization Flocculation vessel System A vessel vessel vessel 反応槽 疑集槽 Electrodeposition

System B System B

Reaction Flocculation Pressurization vessel vessel vessel

Filming System C

Anaerobic Aeration Membrane Activated charcoal Reaction Flocculation Flocculation vessel vessel separation adsorption vessel vessel Settlement vessel vessel vessel Preprocessing Subject to total pollutant regulations Process wastewater

Domestic wastewater Domestic waste

General Industrial wastewater wastewater

Aeration vessel Settlement Sand Neutralization To Suzuka River vessel filtration vessel

18 19 to remove organic substances, nitrogen and phosphorus. The water is cleaned using the continuous biological actions of microorganisms. For example, organic substances and phosphorus are absorbed as nutrients, while nitrogen is used for respiration. The organisms also start to consume excess phosphorus. If the microorganisms begin to increase, they are removed through microfilters so that only clean water is discharged.“By-products are produced when substances are removed using chemicals,” explains Mr. Sano.“This problem can be reduced by breaking down substances biologically to change them into substances that do not harm the environment. This reduces both waste and costs.” On the facility’s west side, the engineers have created a small stream into which wastewater is discharged. This stream, now included in the The central monitoring system in the operations room factory tour, was completed over a year ago and moss has started to grow.

5 Original and simple design—emphasizing ease of maintenance and management In general, machinery is controlled from control panels near each machine. However, all wastewater treatment facilities at the Suzuka Factory are controlled and monitored through a central operations room. “We took care to design facilities without power control boards,” says Mr. Sano.“Simple facilities that we can maintain and control ourselves are easier to understand and more efficient.” The operations room is located on the facility’s second floor, giving operators quick access to the site. Centralizing control systems has also helped to reduce costs.“The key to reducing running costs is the extent to which efficiency can be improved by shifting the load onto the microorganism,” explains Mr. Sano.“With central monitoring, we know immediately if there is any The inside of a circular oil separation vessel, change in the data, so we can always ensure that conditions in the located above-ground treatment facility are optimal for the microorganisms.” Mr. Sano himself was previously in charge of power systems and applied his knowledge of air compressors and other plant power systems to the design of the wastewater treatment facilities.

6 Types of substances reduced to one-third,

CO2 emissions cut by 45 tons per year Improving the wastewater treatment facilities has not only improved the quality of the treated water, but also reduced the number and quantities of chemicals used. Previously, different types of wastewater were treated separately, and a total of 21 different chemicals were used to meet the Kiyomitsu Mukai different treatment requirements. The new plant uses only seven general- purpose chemicals, and in lower quantities. The amount of waste has been reduced to one-third of the previous level, and treatment costs are

also lower. In addition, CO2 emissions have been reduced by 45 tons per year. Targets for all control items have been achieved. “Our priorities are to limit waste and improve energy efficiency,” says Me. Sano.“As we accumulate data from now on, I believe that we will be able to rationalize the system further, so we’ll probably need to make additional modifications in the future.” The new treatment plant has also solved problems that previously caused concern, by eliminating difficult and dangerous tasks.“The new facility is on one level, so we no longer need to worry about hitting our heads when working underground,” reports Kiyomitsu Mukai, an engineer in the Facility Management Block of the Business Management From left: Shiotani, Kubo, Sano, Mukai Division.“It’s easy and convenient to work in this environment.”

18 19 Honda Group case studies Eco-responsible initiatives combined to create advanced Green Factory

The Hamamatsu Factory has been transformed into a powerhouse of automobile production. Located in the middle of the Aoi Plant, this advanced environmentally responsible factory was completed in September 2010. Features include rooftop gardens and the biggest solar power system at any Honda factory. The factory is also equipped with the world’s most efficient air supply system, thanks to the installation of a new compressor in time for the opening of the new facility. As a result, Hamamatsu won the compressor efficiency award at the Honda Green Conference in December 2010.

Business Administration Division Facilities Control Department Hamamatsu Factory Honda Motor Co., Ltd.

1 New environmentally responsible automobile transmission factory In July 2010, the motorcycle plant at the Hamamatsu Factory began a new life as a high-tech manufacturing facility for automobile Hamamatsu Factory transmissions, and as a key support element for Honda’s global operations. The multi-departmental project team for the construction of the new factory was made up of experts in various areas, including processing, assembly, facility management and environmental systems. According to Masamichi Matsumura, the General Environmental Administrator, all discussions among these people focused on three goals. First, the factory must be orderly, bright and clean. Second, it must coexist harmoniously with the local community. Third, it must be an advanced urban factory. These commitments led to the creation of an environmentally responsible transmission factory. The former motorcycle factory located in the center of the site was rebuilt as an advanced factory with enhanced efficiency in terms of space, production and the environment. According to Tetsuji Fujiwara, an engineer in the Business Administration Division of the Facilities Control Department, one of the reasons for the central location was a policy of maintaining straight paths for material flows.“By locating assembly operations in the middle of the factory, we created a smooth flow path, in which parts enter from the east for assembly in the center and shipment to the west.” Masamichi Matsumura The team’s determination to build an advanced, environmentally responsible factory also influenced the construction process, which began in April 2009. Every care was taken to maintain environmental safety in relation to the soil, noise, dust and other factors.

2 New approach to air supply system design—emphasis on usability Tatsuo Toki, an engineer in the Business Administration Division of the Facilities Control Department, had the task of creating the world’s most efficient air system in time for the completion of the new Hamamatsu Factory. In December 2010, these efforts earned the factory the compressor efficiency award at the 2010 Honda Green Conference in Tetsuji Fujiwara

20 21 Eco-responsible initiatives combined to create advanced Green Factory

December 2010. “It was difficult to manage facilities when we only had old compressors that had been used for 20–40 years, and that sometimes impacted production,” recalls Mr. Toki.“We knew that the compressors were the biggest users of energy, so we decided at the outset to

reconcile the goals of reliable air supply and the reduction of CO2 emissions.” After working on the power aspects of facility management, as a member of the Environmental Secretariat, he experienced the task of asking people to save energy.“People often told me that they wanted to save energy but were unable to do so because of a lack of funds. I therefore resolved to go back to power system management and make the savings myself.” Having set the goal of making the Hamamatsu Factory’s compressors Tatsuo Toki the best in the world in terms of air supply efficiency, his first concern was to change the attitudes of those responsible for the management of the system.“I wanted to change the perception that even if we wanted to implement environmental measures we couldn’t because there was no money or because the machinery couldn’t be changed. Among the attitudes that I had to change were my own.” Mr. Toki’s message was encapsulated in the name of the project:“Development of an Enhanced Air Supply System Based on New Perceptions.”

3 The goal: to make the world’s most efficient compressor system Air is used for various tasks, including processing, casting and assembly. It is used to blow things, to drive cutting jets of water or powder, and to provide pressure to push, squeeze or move things. In all, there are 2,000 locations in the Hamamatsu Factory where air is used for such purposes. Because air quality has a major impact on production, filters and pressure reduction valves have been installed in front of each production facility. Modern production facilities are highly automated and use high-cycle technology to save energy and labor and reduce costs. These changes have led to increased use of control equipment and the expansion of load variations. Air quality requirements have also become more demanding. Temperatures must be lower, and moisture, oil content A highly efficient large-capacity IGV turbo compressor and pressure variations need to be reduced to zero.“We wanted to eliminate air quality adjustment systems, which cause losses, but we also needed to meet air quality requirements. We couldn’t do that with the equipment we had then,” explains Mr. Toki.

Air supply efficiency

IN—electricity (KWh) How much air can be supplied for 1KWh of electricity?

Targets

Before After OUT—Air (Nm3) changes changes Benefit Air supply 9.0 15% efficiency 7.8 World’s increase (Nm3/KWh) best Compressor + auxiliary machinery CO2 emissions 2,184 11,844 9,660 OUT Nm3 (t-CO2) reduction = IN KWh

20 21 The compressors used to supply air to each plant consist of the main units, together with unit number control systems, which control each compressor, as well as dehumidifiers and coolant systems. They account for around 13% of the factory’s total CO2 emissions. The existing facilities had been in use for around 30 years, and aging had caused their efficiency to decline by 7% compared with the specifications. As a result, air supply efficiency at the Hamamatsu Factory was the second worst among all Honda factories at 7.8. “The most efficient compressor can produce 10 m3 of air per 1 kWh. Our target was 9.0, allowing a reduction of around 10% for load variations and energy used by auxiliary equipment, including coolant pumps and dehumidifiers,” says Mr.Toki. A control system in the central monitoring room for electrical equipment 4 Automatic control system combining Super-efficient system based on optimal mix screw and turbo compressors of screw and turbo compressors

The process of creating a highly reliable system began with on-site Inverter screw compressor IGV turbo compressor examinations of systems at 17 locations, including Honda factories and Rotor speed adjusted Opening adjusted by inlet guide plants operated by other companies. The engineers then proposed by inverter vane suction valve 10.0 10.0 seven measures designed to reduce losses and improve efficiency. Work Capacity adjustment range Efficiency began in 2007 and continued for four years. difference: Air supply 9.0 1.0 or more 9.0 efficiency One of the strategies was to create a super-efficient optimal mix target Air supply of Lysholm (inverter screw) compressors and inlet guide vane (IGV) efficiency 8.0 Capacity (Nm3/KWh) 8.0 turbo compressors, which have different performance characteristics. adjustment range Previously, capacity adjustment had been based on the use of reciprocal 7.0 7.0 Air 20% Rated 80% Rated compressors. However, one of the features of reciprocal compressors is volume Super-efficient system based on preferential operation for that air tends to become mixed in with the oil. This blocked the filters ① low loads and ② high loads and caused major efficiency losses. Zero oil use Engineers therefore decided to install medium-capacity inverter ① Screw screw compressors, which have extremely wide capacity adjustment ② Turbo ranges, and IGV turbo compressors, which are the most efficient and have large capacities. Both types are oil-free. By combining these two

More units Comparison to a car: types, the engineers were able to create a super-efficient“best of Supercharger for low revolutions Optimal control both worlds” system based on the preferential use of inverter screw Turbocharger for high revolutions } compressors when loads are low and IGV turbo compressors when 10,000 20,000 30,000 40,000(Nm3/h) loads are high. The system initially uses an inverter screw compressor. If air demand increases, a second unit starts to operate. When air demand reaches a certain level, an IGV turbo compressor comes on line and the first inverter screw compressor is halted. This switching process is handled automatically and seamlessly.“It’s similar to the way a car engine is optimally controlled by switching between the turbo for high revolutions and the supercharger for low revolutions,” says Mr. Toki. Reciprocal compressors had previously been used in conjunction with both of these types of compressors. However, fully automated operation of the new compressor combination required special technology and expertise, and had never been tried before at a Honda facility.

5 From supply-side control to demand-side control of pressure Another unique measure implemented for the first time at a Honda facility was quality assurance based on the introduction of a pressure control system at the end user stage. The engineers sought to improve the old control method, which was based on a uniform discharge pressure. “In the past we assumed that as long as the supply-side pressure was uniform, we had to accept that the pressure would fall according

22 23 to the length and layout of the pipes,” recalls Mr. Toki.“If you maintain a constant supply regardless of the usage level, the pressure will be increased wastefully during the night, when air is not used, while in the daytime, when large amounts of air used, the pressure will fall and may drop below the guaranteed level.” The engineers decided to switch to a uniform demand-side pressure control system. Pressure sensors were installed throughout the factory to send data in real time to the control room, and pressure was constantly monitored to ensure that the specified air pressure was at the minimum required level. “The pressure may be the lowest in one plant at one moment, and in another in the next moment,” explains Mr. Toki.“The pressure is monitored constantly and adjusted to the minimum level. That requires Presenting the technology at the 2010 Honda Green Conference sophisticated control technology. We want to bring the pressure as close as possible to the level required in each location. In that way we can provide reliable quality and keep everyone happy. We can also

reduce CO2 emissions.”

6 Potential to reduce CO2 emissions General-purpose by 10,000 tons by using this technology power building in Japan and overseas

E-2 As a result of this initiative, both initial targets were achieved. Air supply compressor room efficiency was improved by 15% to 9.0, while CO2 emissions were reduced by 2,184 tons. Additional benefits included guaranteed demand-side pressure, the improvement of air quality through the maintenance of a standard temperature and the achievement of a zero oil level through the elimination of reciprocal compressors. If these measures were implemented at all factories, it would not only lead to an air supply efficiency of 9.0,

it is estimated that annual CO2 emissions would be reduced by 1,800 tons in Japan and 10,000 tons globally.“Air supply systems account for 15% of energy use in factories, and compressors are a treasure trove of Layout of the demand-side pressure control system opportunity to reduce energy consumption,” says Mr. Toki. At the 2010 Honda Green Conference, this project was praised by Yoshiharu Yamamoto1, then Vice President and Director of Honda R&D Co., Ltd.“It was a wonderful decision to focus on the solution of demand-side usability problems resulting from pressure fluctuations, rather than simply being guided by supply-side logic.” 1 Yoshiharu Yamamoto held this post as of December 2010. He is now President and Director of Honda R&D Co., Ltd.

7 Matching the height of Mount Fuji with 3,776 thin-film solar panels Another priority in the construction of the new factory was to use solar energy, and 2,000 thin-film solar panels manufactured by Honda Soltec were installed. The panels have been installed not only on the roof and walls of the factory, but also along the employee access route, which is visible from the entrance, and on the roof of the multilevel bicycle parking structure. There are now 2,563 thin-film solar panels in place at the Aoi Plant alone. Together with solar panels installed at the Hosoe Plant since 2002, the Hamamatsu Factory as of February 2011 featured 3,743 panels A solar power system has been installed on the roofs and walls of the new factory. with a total capacity of 430 kW. The Hamamatsu Factory is located in Shizuoka Prefecture, a region closely associated with Mount Fuji. Mitsugu Matsukawa, Head of Facility Operations, wanted to pay homage to Shizuoka and Mount Fuji by gradually increasing the number of solar panels to 3,776, which is the

22 23 height of Mount Fuji in meters. The latest batch of installations, finished in January 2011, added another 400 panels on the multilevel parking structure, 10 on the wastewater treatment facility, and 110 on the Hosoe Plant.“Whenever buildings are replaced, we aim to install more panels until the 3,776 target is reached,” says Mr. Matsumura.

8 Rooftop green areas and recreational garden with flowerbeds Green areas covering 8,431 m2 have been created on the roofs of the Hamamatsu Factory. These include a recreational garden with flower Go Saito beds planted with 16 different species of herbs and flowering plants to provide floral displays throughout the year. Covering approximately 801 m2, the garden is used by employees for rest and recreation, and there are also plans to include it in factory tours. The garden provides a view of the rooftop green areas and 3,000 thin-film solar panels. Attractive lawns have been grown to create the rooftop green areas. “We wanted to create a green area using plants that completely cover the soil,” says Go Saito, an engineer in the Business Administration Division of the Facilities Control Department.“That’s because our clean rooms, where we must maintain a high standard of air purity, are located on the second floor of the new factory and would have been affected by dust rising from exposed soil.” Rainwater is used to water the green areas. The water is collected in a coolant pit previously used in the motorcycle plant and pumped up to the roofs, where the green areas are watered automatically every An expanse of green lawns morning and evening through holes in tubes buried in the 7cm soil layer. in the new factory’s rooftop garden area The irrigation system is stopped during rainy periods, and industrial water is used to fill the pit if there are long periods without rain.

9 Other green areas increased by 5% to comply with the Factory Location Act The rooftop green areas were established to comply with the Factory Location Act, which requires the creation of environmental facility areas covering 25% of the total site area. This law provides detailed regulations concerning layouts, and the 25% area devoted to environmental facilities must be divided into green areas covering 20% and other environmental Thyme growing in a flower bed in the rooftop garden facilities covering 5%. The 20% requirement for green areas is further divided into 15% for“general green areas” and 5% for“other green areas.” These ratios must be met in each category. With its gymnasium, ground and other facilities, the Hamamatsu Factory already meets the requirements for environmental facilities other than green areas. However, it does not yet meet the 20% requirement for green areas, as the factory was opened before the present law came into effect and thus was compliant with less strict regulations. However, the green areas must be expanded whenever structures are built or expanded or there is a change in activities. “Every time we build or replace a factory building, we have expanded our green area toward the 20% requirement,” says Mr. Saito. “With the establishment of the rooftop green areas on the new factory, we now fully meet the 5% requirement for“other green areas” under the Factory Location Law.” The rooftop green areas also provide thermal insulation on the roofs The engineering staff of the Business Administration Division and will reduce the air-conditioning load. This factor is expected to of the Facilities Control Department

reduce CO2 emissions by 60 tons annually.

24 25 Honda Group case studies

Reducing CO2 by 21% through a modal shift

In the logistics domain, the Production Planning & Logistics Division is involved with the packing, storage, and transportation of products and components for motorcycles, automobiles, and power products. Aiming

to reduce CO2 emissions from transportation, this division, led by the Products Logistics Office, worked actively during FY2011 with its logistics partners, Nippon Konpo Unyu Soko Co., Ltd., Honda Logistic Service Co., Ltd., and Honda Logistics Inc, to expand modal shifts in the transportation of completed automobiles.

Production Operations, Production Planning & Logistics Division Honda Motor, Co., Ltd.

1 Low-carbon deliveries retaining high quality with speed and low cost Honda’s aim with product logistics is to deliver products produced at the plant to the customer with“low carbon emissions, speedily Modal Shift and at low cost while retaining high quality.” To reduce CO2 emitted ・ Change transportation methods to lower the during transportation, Honda has switched a portion of its overland environmental impact

transportation to marine shipping. This initiative is part of the company’s ・ A measure to reduce CO2 emissions endeavor to lower its environmental impact by changing means of transportation to rail and ships in a“modal shift.” In the past, completed automobiles were transported overland from production facilities to dealers in trucks loaded with five to eight vehicles. Rail transportation, an alternative to truck transportation, HONDA produces only one-eighth the CO2 emissions of truck transportation and carries as many as four vehicles in a single container, but the loading Changing transportation operators equipment needed for the covered containers increases shipping costs. from trucking to rail and marine On the other hand, marine transportation produces only one-quarter the

CO2 emissions of trucks and allows 520 vehicles to be fit into a single vessel, proving more effective as hauling distances increase. We have therefore shifted to marine transportation for regions 500km or farther from the Suzuka and Saitama production facilities.

2 Modal shift advances within 500km

To further reduce CO2, Honda in FY2011 extended this modal shift within the 500-km radius, a distance chosen because it marks the profit- loss breakeven point. Accordingly, Honda has expanded its modal shift,

targeting a 10% reduction in CO2 emissions with no increase in cost. In pursuit of that goal, our Products Logistics Office, working together with our logistics partners, Nippon Konpo Unyu Soko, Honda Logistic Service, and Honda Logistics, has embarked on a large-scale modal shift program for domestic transportation of completed automobiles, covering Honda’s large markets in the Kanto and Kansai regions.

24 25 3 Constructing the optimal logistics network combining marine and overland transportation

The challenge of extending the modal shift has been to make transportation efficient and reliable while maintaining product quality through undamaged shipments. In the past, Honda commissioned trucks to carry products directly from the Suzuka and Saitama production facilities to each dealership. However, transportation partners’ logistic centers were not coordinated, making it necessary to correct the problem of having multiple logistics companies bring vehicles to the same dealer. To create an environment where each company works efficiently and the business segment can expand, a shipping center was established to coordinate for inland shipping, in Yokohama and oriented towards Suzuka and Saitama. This enabled the selection of optimal transportation routes combining marine and overland modes. Moving products by truck from Suzuka to the Port of and from Saitama to the Port of Yokohama, and deploying four dedicated vessels to ship between these two ports, a network was created using these ports as the focal points for shipments to Kanto- and Kansai-area dealers. The heavy freight volumes between Suzuka and Saitama are placed on five round trips with a total of ten shipments per week, which has increased units shipped on the dedicated vessels by 100,000 vehicles. On land, trucks with vehicles loaded at Saitama are upon delivery reloaded at Yokohama with Suzuka-made vehicles destined for Saitama- area dealers, a move that raises the trucks’ backhauling ratio to 85%. Furthermore, bringing the loading at Saitama into the priority shipping system at Yokohama has allowed loading time to be shortened, resulting in an increase from 1.5 to 2.0 round trips per day. Honda has set up a quality control system that shares daily actuals for shipments and cargo receiving/shipping status at each port, and includes the coordination of space utilization plans based on

Marine domain: 4 dedicated ships in full use Overland domain: Logistics optimized within region 1) Optimized pattern for dedicated ships 1) Round-trip transportation Concentrating the largest freight volume in the Suzuka-Saitama route Saitama goods [out]↔Suzuka goods [back]

HONDA ×4

Saitama Backhauling ratio* 0%→85%

3 trips/ week 1 trip/ week 3 trips/ 5 round trips Saitama dealer Yokohama port week (10 full trips) 3 trips/ week 2) Less labor for loading Change to a Yokohama priority shipping layout

253,000 Saitama Yokohama 152,000 Units shipped +101,000 Round trips by dedicated ships Shortened load time 1.5 → 2.0/day Before After

* Ratio of volume of cargo on the return leg to volume on the outward leg in a round-trip shipment.

26 27 transportation quantities at Yokohama and ship assignment meetings at Suzuka and Saitama. A thorough examination was conducted, in cooperation with logistics and port management companies, of transportation routes that have never been used for Suzuka and Saitama product output. Lifting efficiency while making the greatest use of logistic Overall outlook for CO2 emissions companies’ infrastructure is one more way in which Honda has moved

(㎏-CO2/1,000 ton-km) ahead in reducing CO2 while controlling costs. 19.5% 92.1 vs. FY2007 89.1 (-3.3%) 82.9 4 Examining the idea of ports as logistics (-10%)

centers and applying it to motorcycles 74.2 Target achievement The modal shift program has allowed CO2 emissions across all logistics operations to be reduced 19.5% compared to FY2007, as range of marine transportation has been expanded to 300 km or more without increasing logistics costs. Modal shift programs undertaken with suppliers, who act as an extension of Honda, have also deepened communications with these suppliers, leading to a stronger and highly FY2007 FY2011 FY2011 FY2011 Actuals Projected Target Actuals efficient logistics system. outcome With an eye toward further expansion of this program, Honda will examine its facilities in conjunction with the placement of ports as originating transportation facilities for the Hokkaido, Tohoku, and Kyushu regions, and as unloading facilities. Future plans call for additional improvements to transportation efficiency through leveraging of logistic companies’ infrastructure and concentrating logistics into a hub-and- spoke1 system. To further enhance logistics as an environmental leader, Honda intends to create a transportation network based on the one for completed automobiles and apply this to the shipment of motorcycles, ultimately aiming for even higher efficiency in a system capable of moving motorcycles, automobiles, and power products in the same“package,” despite their different shapes. 1 A method that concentrates freight in a distribution center (hub) that binds together long-haul legs and from there uses short-haul legs (spokes) for small shipments to the final destination.

26 27 Honda Group case studies

2010 Honda Green Conference

Honda Green Conference aims to apply top-notch case studies on reducing environmental impact to other areas of Honda’s operations and to make sure this activity takes hold. The all-company conference, which benefits from the participation of all of Honda’s domestic domains and many suppliers as well, reaches beyond the Honda Group to become an event for sharing environmental efforts over the full life cycle of products. The eighth Honda Green Conference, held at the Aoyama Headquarters in December 2010, attracted 300 people engaged in environmental affairs at each of Honda’s divisions and at suppliers.

Honda Motor, Co., Ltd.

1 Sharing environmental direction and case studies beyond the Honda Group The Honda Green Conference was started in 1999 by the production domain to share exemplary case studies, the ultimate aim being to standardize Honda environmental initiatives at a high level. Since then, the conference has grown to cover all Honda domestic domains, including purchasing, production, sales management, and R&D centers. Since 2005, individual conferences have been held by each domain to come up with comprehensive application measures, which culminate in the three-year mid-term plan and the company-wide conference. The December 2010 Conference featured the final reporting of suppliers’ environmental initiatives from the mid-term plan starting in 2008, and presentation of case studies. To speed up future initiatives through concerted efforts with Honda suppliers, the Green Conference has become an event for sharing both company-wide and domain-specific strategic directions. The previous Conference in 2007 set two FY2011 objectives: 1) to be No. 1 in per-unit CO2 emissions through forward-looking programs that lead society through concrete actions and; 2) to have zero Opening remarks by Koichi Kondo, negative environmental impact on the local community from SOCs, Executive Vice President.* including both chemical substances and waste, as well as zero impact * Post as of Dec. 2010 conference date, now Chairman. on water supplies. The 2010 Conference also featured progress reports on the FY2011 targets. One such target is CO2 emissions reduction at factories in Japan.

CO2 emissions per unit of activity were projected to increase worse due to the economic downturn, but energy saving efforts of each division greafly improved these per-unit values. A good example is the effort to cut standby energy in half for equipment at all Honda factories. These measures were also applied at suppliers, resulting in a 50% reduction in standby power across the Honda Group.

The FY2011, CO2 emissions reduction targets covered the factories and logistics domains, but future targets will cover all domains. This means that Honda must consider CO2 emitted over product life cycles, from raw materials to production to operation to disposal. As we look toward 2020, we will decisively reduce CO2 emissions, not only in the Honda Group but also from the product life cycle point of view, while carefully monitoring trends in government policies.

Exhibition space.

28 29 2010 Honda Green Conference

2 Results of the 10th Mid-term Plan (FY2009–11) in each division of the Japan region To achieve its overall targets, Honda has set up specific targets for each division. At the 2010 Conference, the divisions gave presentations on their 10th Mid-term Plan results and future directions. Production Operations, aiming to create products with the lowest environmental impact in plants with the smallest environmental footprint, has pushed ahead with the E Green Action1 program, which seeks to strengthen production line capabilities by eliminating energy losses and improving efficiency. Energy savings during idle hours have been achieved by analyzing energy consumption patterns at plants. Savings during production have been achieved by setting benchmarks based on energy efficiency indices for each process. Production Operations also aims to applying the highly efficient production techniques developed in Japan on a global scale. The Production Planning & Logistics Division has worked to reduce

CO2 from transportation and use less packaging. In the area of CO2 reduction, it has carried out a modal shift. In the past, completed automobiles were transported by ship only if the distance exceeded 500 km. But under the new system, cargo can be moved by ship in for distances exceeding 300 km as a result of setting up transportation ranges in blocks, concentrating transportation into a hub-and-spoke A case study presentation. system, and leveraging logistics vendors’ infrastructure. These actions

have raised efficiency without cost increases and achieved major CO2 reductions. The division will now examine its production facilities in conjunction with the placement of ports as originating transportation points and also extend the logistics network to motorcycles, with the ultimate goal of increasing transportation efficiency for motorcycles, automobiles, and power products. Purchasing Operations procures components and materials with superior in QCDD (quality, cost, delivery, and development) from all over the world. This division has moved to reduce the environmental impact of routine matters close to home, including developing their own Purchasing Green Action2 program within their offices, making energy consumption visible, reducing paper waste, and promoting eco-driving. Purchasing Operations holds a Honda Green Network Meeting twice a year with 46 suppliers for communicating environmental strategy, tracking progress on environmental efforts, and sharing effective environmental measures. They have revised the Honda Green Purchasing Guidelines to point the way to environmental preservation work in the purchasing domain and added‘E’ for the environment to‘QCDD’ to make‘QCDDE.’ Regional Sales Operations (Japan), which operates close to customers in various areas, including product sales and service, solar cell manufacturing, and transportation and packaging of supplies, has created an environmental committee within Sales Operations, conducted information exchanges, and advanced various measures. Working with roughly 1,000 automobile dealers through the Honda Automobile Sales Cooperative, they have advanced measures including controls for heating and air conditioning as well as lighting, Cool Biz support, and eco-driving. Business Support Operations has rolled out environmental initiatives at nine Honda office buildings and 18 Group companies. Although primarily involved with offices, this division pursues initiatives over a wide range of organizations, from hotels to manufacturers. Seeking to“evolve environmental communication,” they hold a yearly Green Conference, the fifth of which was held in 2010 with 17 companies in attendance. The division’s environmental programs include installing the latest technology, significantly reducing energy use for heating, air conditioning 300 attendees, including suppliers.

28 29 and lighting, as well as horizontal application in the heavily energy- consuming IT domain of measures to reduce server power and cooling loads through virtualization. Customer Service Operations supplies parts to the spot where they are needed, capitalizing on a wealth of initiatives that include

CO2 reduction through more efficient services parts shipping logistics; energy conservation at warehouses; less use of packaging materials, and paper reduction by providing manuals in digital form. They have also simplified carrier routes by concentrating logistics centers; reducing parts inventories at warehouses; shrining the size of parts packaging; consolidating warehouses through higher loading ratios, and saving electricity at warehouses. On another front, they have discontinued the use of external packaging and large cartons. From a recycling perspective, Customer Service Operations has put a large effort into raising the IMA3 battery recovery rate. Honda R&D has set up an Environmental Preservation Committee covering all R&D centers, and has placed environmental officers at the

Asaka, Wako, Tochigi, and Takasu operations. Setting CO2 reduction as its most important environmental initiative, Honda R&D’s primary measures include installation of high-efficiency heating and air- conditioning units, abolition or ceased operation of standby facilities, and introduction of cogeneration systems and a mega-solar project. The company holds an annual all-R&D Green Conference, featuring presentations on seven themes selected from each operation. 1 The production domain’s energy conservation program. 2 The environmental impact reduction program implemented at Purchasing Operations’ offices. 3 Integrated Motor Assist, the Honda-original hybrid system.

3 Nine case studies selected for awards from among 59 entries The 2010 Green Conference overflowed with a high level of technical prowess and creative schemes. Out of 59 themes selected by individual domain conferences, nine were chosen for awards honoring horizontal application, per-unit improvement, and compressor efficiency, or for special awards. The employees in charge of these nine exemplary case Case study presentations by team leaders studies gave presentations on their projects. from each operation. The horizontal application awards went to projects from Saitama Factory and Regional Sales Operations (Japan). Saitama Factory’s theme was a project by the Plastic Department of the Coating and Resin Plant, conducted jointly with a manufacturer, for easily upgrading a motor to a higher efficiency motor (Theme name: Energy Conservation in a Separation Tank Pump System through Development of a High-Efficiency IPM Motor). The theme of Regional Sales Operations (Japan) was a project by the Nagoya Service Technical Center of the Automobile Technical Service Division for visualizing electric power consumption and improving awareness through formulation of energy conservation rules. The project was highly regarded for being amenable to horizontal application (Theme name: Many a Little Makes a Mickle—Promoting Eco-

Activities and CO2 Reduction). Themes from the Production Planning & Logistics Division and Business Support Operations were selected for the per-unit improvement award. The Products Logistics Office of the Production Planning & Logistics Division joined forces with a supplier to implement a modal shift (Theme Name: Expanding Modal Shift in the Transportation of Completed Automobiles in Japan1). The IT Infrastructure Department of the IT Strategic Management Office (IT Division) presented a project that visualized temperature distribution in the computer room, and increased cooling efficiency by distinguishing between places to cool and those not Q&A session.

30 31 to cool (Theme Name: Initiative to Reduce CO2 in the Computer Room of the Wako System Center). The compressor efficiency awards went to the Hamamatsu Factory and Honda Foundry Co., Ltd. The Hamamatsu Factory’s project came from the Business Administration Division of the Facilities Control Department, who achieved efficiency improvements not by upgrading equipment and facilities but by raising awareness and renovation (Theme Name: Air Supply System Policy Improvement through Raising Awareness and Innovation2). Honda Foundry introduced a small-model compressor and revised operating procedures as well as improved operating time (Theme Name: Full Shutdown of Compressors during Holidays). Projects by Kumamoto Factory, Kaneta Kogyo Co., Ltd., and Honda R&D Co., Ltd., were selected for special awards. The Motorcycle Machine Award presentation for a leading theme. Module of the Powertrain Plant at Kumamoto Factory eliminated liquid waste by separating the chips from the cutting effluent discharged during machining. (Theme name: Reducing Liquid Waste by Extending the Life of Cutting Fluid.) Kaneta Kogyo’s Hosoe Plant reduced the sprinkling water for use in butane gas tank heating by making use of the heated water resulting from heat processing and realized energy savings at

the same time (Theme Name: CO2 Reduction through Use of a Water Circulation System3). Honda R&D’s special award was earned by the Takasu Department of the PG (Proving Ground) Operation Division. Their project stopped the operation of standby equipment, which is hard to implement in cold regions, through management of an equipment operating schedule and preparation of manuals (Theme name: Stopping Standby Equipment at the Takasu Proving Ground).

The main theme of the 2010 Honda Green Conference, CO2 President and CEO Takanobu Ito reduction, led to successful results in improving quality, innovating work with all team leaders. operations, and cutting costs. The conference helped speed up efforts to reduce environmental impact through new perspectives, and encouraged the participation of divisions that had not been directly involved, while initiatives with suppliers created a sense of oneness and improved communications. A dominant theme of the conference was to show how much Honda can achieve at local business sites through projects in which each individual can make a strong contribution. 1 Details on p. 25. 2 Details on p. 20. 3 Details on p. 36.

4 Summary of remarks by President & CEO Takanobu Ito

It is expected that global CO2 emissions will continue to increase and the Message from President Ito. passenger vehicle and aircraft share of CO2 emissions from mobility will be large. It is Honda’s hope that the independence provided by mobility and its enjoyment will last forever, yet we also sense that we are in a critical stage of creating products with low environmental impact, no matter what the form of transportation. Given these conditions, Honda has declared its direction for the ten years leading to 2020 to be“providing good products to our customers

with speed, affordability and low CO2 emissions.” What’s most important about this vision is that in the attractive, low-carbon products that bring joy to customers and also in production processes, it is“low carbon” that forms the basis for action. As a company that contributes to the environment first

through new technology, Honda must truly have low CO2-emission plants for manufacturing and spread its advanced technology around the world. For Honda, this means Japanese leadership, a step up for us. Looking towards the future, Honda wishes to bring to the world top-level, low- carbon products that create joy for customers throughout their life cycles.

30 31 Honda Group case studies

CO2 emissions reduced by 30% through installation of a gas heat pump

Honda Motor Co., Ltd., Administration Division, Real Estate Management Department Kyowa Sogo Management Co., Ltd. Shinryo Corporation Hokkaido Gas Co., Ltd. Hokkaido University, Faculty of Engineering, Laboratory of Building Environment

Aware of the need to reduce CO2 emissions, Honda’s Facilities Management Group replaced the aging heating and air-conditioning system at the Honda

Sapporo Building with a gas heat pump to reduce CO2 emissions and costs. This initiative furthered energy conservation and environmental improvement.

1 Multiple problems from an aging heating and air conditioning system The Honda Sapporo Building is a seven-story office building with a basement, located in a central area on National Route 230 and close to the Hokkaido government building. The building has 4,764 m2 of extended floor space, a standard size for a Sapporo office building, and houses several Honda-related companies as tenants. In addition to underground parking, the building also provides 68 parking spaces in a parking tower. A special feature is that the exterior walls have a baked enamel finish applied to steel-plated paneling to make the walls dirt resistant. Other features include the ceilings and the heating and air-conditioning system’s control panel. The building showed fastidious workmanship throughout all areas when it was completed in 1987. Although the building was remodeled three times in its first 22 years and the exterior is well-preserved, it has faced many problems due to the deteriorating heating and air-conditioning system. Troubles with the boiler, which doubled as a heat source for road heating1, caused the walkway in front of the entrance to freeze in winter. In addition, Honda Sapporo Building heating and cooling stoppages caused by communication faults with the central monitoring panel and problems on individual floors interfered with tenants’ work. Repairs were needed as much as three to four times per month; maintenance expenses for the boiler, which had exceeded its 15-year expected life, were mounting; and getting spare parts was becoming difficult because the heating and air-conditioning unit had been discontinued. 1 Snow-melting equipment that uses hot-water pipes (or electric wiring) under the walkway in front of the building entrance, so that the snow will not accumulate.

2 Upgrading to a heating and air conditioning system with low environmental impact “The hot-water boiler burned heavy fuel oil and was putting out nearly

300 tons of CO2 per year” explains Takashi Bando, Senior Engineer at Kyowa Sogo Management, building contractor at Honda Sapporo Building since 2006. The old system was a central heating type that used 62 compact water source heat pumps and a heavy oil boiler for a heat source, with an enclosed cooling tower for a cooling source. Because the boiler was run to produce heat even when only one room was being

heated, CO2 was being wastefully discharged to the atmosphere and fuel expenses were climbing. Senior Engineer Bando

32 33 CO2 emissions reduced by 30% through installation of a gas heat pump

A building analysis conducted in 2006 reported that the heating and

air conditioning was deteriorating. Since then, efforts to cut CO2 and lower maintenance costs built impetus for modernizing the heating and air-conditioning system. In searching for a replacement, two systems were investigated. Each would allow heating and cooling to be switched at will, just like the existing water-source heat pumps, and to have a strong heating system suited for a cold region with sub-freezing winter temperatures. These solutions were a gas heat pump (GHP) driven by a gas engine and an electric heat pump (EHP) driven by an electric motor.

Project Manager Ito

Selection of the Sapporo Building heating and cooling system

Initial Running For general Mixed heating and CO emissions System Benefits Disadvantages 2 cost cost use cooling operation (kg/year)

・ High heating capacity ・ Extensive outside facilities GHP ・ Quick start-up ・ Engines require periodic maintenance ◎ ◎ ◎ ◎ 63,469 ・ No electricity fees ・ Gas pipe work required

・ No gas pipe work ・ Transformer capacity must be increased EHP ・ Electricity-only is simple ・ System peak electricity will cause contract △ △ ◎ △ 77,369 and safe demand to increase

3 Electric heat pumps versus gas heat pumps The team then studied whether the heating and cooling system should be an electric or gas heat pump. Without any gas-pipe work needed, an EHP would be easier to install, but this alternative had two disadvantages: 1)cold-region systems that could freely switch between heating and cooling were still under development; and 2)the most critical element, the heating unit, was weak. The GHP, however, allowed heating and cooling units to be freely selected and had solid heating Seven gas heat pumps on 2nd floor roof capability, as well as lower costs. In particular, because certain offices in the Honda Sapporo Building are used irregularly, the GHP with its faster start-up seemed more suitable. From the start, it was felt that“since this is a Honda building, a GHP system using a gas engine is suitable for us.” The cooperation of Morio Maeda, head of the Urban Energy Group in Hokkaido Gas’s Energy Sales Division, and Naoki Shirai, head of the Technology Planning Team in Hokkaido Gas R&D Center’s Technology Development Group was enlisted, and data on gas heat pump safety and business feasibility were collected in a three-year study of facilities using natural gas. This study concluded that a GHP would be preferred for its better energy efficiency, Road-heating (snow-melting) unit in basement among other advantages, leading Honda to use this system for its Sapporo building. Work began in June 2009, with equipment and facility design supervised by Project Manager Hiroshi Ito of the Shinryo Corporation Hokkaido Branch Office’s Design Section, and the GHP installation was completed in November. Seven GHPs for dual heating and air conditioning were placed on the second-story roof and gas pipes were laid away from the building. A special road-heating boiler to melt snow was installed in the basement.

Senior Managers Maeda and Shirai

32 33 12,000

10,000

8,000

6,000

4,000

2,000 Primary energy consumption [GJ/year] Primary energy consumption 0 0 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 Extended floor area[m 2]

Hokkaido offices 2008 (before GHP) 2010 (after GHP) 4 Hokkaido University assists with 12,000 quantitative evaluation of room comfort 10,000 In an example of industry-university cooperation, a research group from

Hokkaido University performed a quantitative evaluation to verify the 8,000 energy savings of a GHP system. The project was for a mid-sized building this is more than 20 years old. Professor Koki Kikuta of the Hokkaido 6,000 University Facilities of Engineering’s Laboratory of Building Environment, 4,000 the leading researcher for heating and cooling systems in cold weather areas, was enthusiastic:“the opportunity to research everyday energy 2,000

conservation in a standard building in Sapporo piqued my interest.” [GJ/year] Primary energy consumption 0 To verify performance before and after introduction of a GHP system, 0 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 the Hokkaido University Laboratory of Building Environment evaluated Extended floor area[m 2] tenant energy consumption and office temperature conditions through Hokkaido office buildings, Honda building before actual measurements centered on the fourth-floor tenants. In addition and after GHP Hokkaido offices 2008 (before GHP) 2010 (after GHP) to measuring electricity and gas consumption, the study used a dozen or so temperature-humidity gauges placed near windows and at air outlets. Time-interval measurements were continued by the Hokkaido Gas R&D Center over one year starting in July 2009, the month before construction started for tenants, and ending in June 2010. To assess tenants’ sense of comfort, the laboratory also did a questionnaire survey of tenants’ clothing and sense of work output, ambient and radiant temperature, air flow and humidity2. Temperature conditions within rooms were scored based on the measurement results and questionnaire3. Results were evaluated and presented at meetings of the Architectural Institute of Japan and the Society of Heating, Air Conditioning, and Sanitation Engineers of Japan4. 2 The survey used PMV (Predicted Mean Vote), a room-temperature evaluation index based Professor Kikuta and Yuki Kimura on four elements from the physical environment (air temperature, radiant temperature, air from Hokkaido University circulation, and humidity) and six human elements including physical activity and clothing. 3 Evaluated through POEM-O, a comprehensive evaluation technique for office environments. Temperature and humidity conditions were rated in five levels. Features of heating and air conditioning units 4 See the list of related research papers (lower right). suited to cold regions Sapporo has extreme temperature differences between Winter and Summer. In Winter, the temperature falls below freezing between 5 Improving temperature and December and March, with snowfalls of more than one meter. Therefore, the running time for humidity while cutting CO2 by 30% heaters is long between October and April, as “One woman wrapped in a stole told me,‘it doesn’t matter if it’s is the running time for air conditioning from May summer or winter, the air is still cold,’” says Mr. Bando, explaining that to September. In the sub-freezing temperatures, quick start-up time and high heating performance the questionnaire survey and the measurements found cases where it’s are highly desirable. Also, road heating requires always cold in the evening and later (see Fig. 1). special heating equipment for cold regions. But after introducing the new system, the POEM-O environment

evaluation found that total comfort had risen. This is because the“feeling Related research reports of air circulation,” one of the psychological elements, had improved. Yuki Kimura, Koki Kikuta, Hirofumi Hayama: Performance Verification Before and After Introduction of a Gas Engine Heat Pump and Air “None of the subjects responding‘uncomfortable’ to the‘feeling of Conditioning System in a Cold Weather Region with Snow Accumulation 1. Summer: Interim Thermal Environment: Evaluation of Energy Use, air circulation’ item before the new system was introduced gave the Architectural Institute of Japan, Hokkaido Section, Research Report No. 83, pp. 231–234, July 2010 same response after introduction. The fact that this feeling improved Yuki Kimura, Koki Kikuta, Hirofumi Hayama: Performance Verification Before and After Introduction of a Gas Engine Heat Pump and Air Conditioning significantly without showing much difference in the physical evaluation System in a Cold Weather Region with Snow Accumulation 2. Winter means that‘feeling of air circulation’ is largely psychological,” explains Thermal Environment: Evaluation of Energy Use, Architectural Institute of Japan, Outline of Technical Lecture, Environmental Engineering・ (Hokuriku), Professor Kikuta. Furthermore,“after the new heating and air-conditioning pp. 365–366, September 2010 Yuki Kimura, Koki Kikuta, Hirofumi Hayama, Kazuyuki Shintani, Naoki system was introduced, scores improved for‘feeling of warmth’ as the Shirai: Performance Verification Before and After Introduction of a Gas Engine Heat Pump and Air Conditioning System in an Existing Office problems with coldness in the evening abated,” according to Yuki Kimura Building 1. Evaluation of Office Thermal Environments, Society of Heating, Air Conditioning, and Sanitation Engineers of Japan, Hokkaido Section, of the Hokkaido University Laboratory of Building Environment. In Winter, Collection of 44th Technology Lectures, pp. 55–58, March 2010 Yuki Kimura, Koki Kikuta, Hirofumi Hayama, Kazuyuki Shintani, Naoki there was also a dramatic improvement in the coldness on Monday Shirai: Performance Verification Before and After Introduction of a Gas Engine Heat Pump and Air Conditioning System in an Existing Office mornings.“In the past, it took 30 minutes for a completely cold room to Building 2. Evaluation of Energy Use, Society of Heating, Air Conditioning, heat up, but now it can be done in 5–7 minutes,” states Mr. Bando, who and Sanitation Engineers of Japan, Hokkaido Section, Collection of 44th Technology Lectures, pp. 253–256, March 2010 has continued to take energy management data since before the new Yuki Kimura, Koki Kikuta, Hirofumi Hayama: Performance Verification Before and After Introduction of a Gas Engine Heat Pump and Air Conditioning system was installed. System in a Cold Weather Region with Snow Accumulation 3. Evaluation of Energy Use over an Annual Period, Society of Heating, Air Conditioning, and “This reconstruction aimed to reduce CO2 emissions. To tenants, Sanitation Engineers of Japan, Collection of Technical Lectures (Yamaguchi), pp. 1319–1322, September 2010

34 35 CO2 emissions are now seen as a monetary charge. The minute they CO2 emissions

switched to a GHP, electric power fees began to fall and CO2 fell as well.” (Tons) 5 200 A before-and-after comparison of CO2 emissions from primary energy 173.35 use between 2008 and 2010 showed a 30.69% drop, from 173.35 tons in 2008 to 120.14 tons in 20106. Gas use rose while electric use fell 150 40.49% and heavy fuel oil was discontinued at the end of March 2009. 120.14

“This building received a very high evaluation in the January 2011 100 ISO 14001 assessment. The old water-source heat pump had a heavy Down 30.69% oil boiler as its fuel source, so the switch to a gas heat source allowed 50 us to completely replace the heavy fuel oil used for melting snow

and drastically reduce CO2.”“This type of fuel conversion is the most 0 orthodox reduction technique and the most effective,” says Mr. Shirai 2008 2010 from the Hokkaido Gas R&D Center. before GHP after GHP 5 Because both gas and electricity were used in 2009, the comparison was made between 2008 (electricity) and 2010 (gas).

6 Calculated using Honda’s unified CO2 emissions factor of 0.37. Hokkaido Electric Power’s factor is lower at 0.338.

Fig. 1. Room temperatures in summer (left: before GHP, right: after GHP)

Before GHP, over-cooling caused the temperature near windows to fall and tenants complained about the evening cold. This improved after GHP was introduced.

(℃) (W) (℃)

Heating and lighting Office perimeter Heating and lighting Office perimeter Office interior Meeting and lecture hall Office interior Meeting and lecture hall Multi-purpose area Outside temperature Multi-purpose area Outside temperature

6 Business and academia team up to

reduce CO2 emissions A PC can be used as a heating and air conditioning controller to monitor temperature and humidity conditions in any room and to manage the heating and cooling overall. This system educates tenants by translating

gas use to a CO2 equivalent, thereby raising interest in gas consumption and producing an increased awareness and changed behavior towards

CO2 emissions. The involvement of a university laboratory allowed the thermal environment to be evaluated. The know-how of experts were leveraged, including facility engineering companies—particularly management companies—as well as energy operators, and universities in the before- and-after evaluation for the modernization of a building heating and cooling

system in a cold region. Not only were CO2 emissions reduced through the pursuit of building energy savings with these organizations, but working together with them proved to be a worthy endeavor. Said Mr. Maeda of Hokkaido Gas:“Having everyone go in the most desired direction produces the greatest effect and the best results.” Professor Kikuta adds that“the job may seem finished after introducing the new system, but because an additional 20% to 30% reduction is in sight through management after The members of the project team start-up, the‘tuning’ of the building plant is very important,” indicating further energy conservation potential through management and operations.

34 35 Honda Group case studies

Reducing CO2 emissions through a water cycle framework

At the 2010 Honda Green Conference in December 2010, special award winner Kaneta Kogyo Co., Ltd., gave a presentation on an initiative in which measures to cut water use in Winter resulted in lower electricity use and produced better ties with a sister company. The initiative was noteworthy not only for its resource and energy reduction, but also for being an original idea from the General Affairs Division.

Kaneta Kogyo Co., Ltd.

1 From“awareness” to the Green Conference special award

Kaneta Kogyo’s initiative, called“CO 2 reduction using a water circulation system,” takes warm water left after heat treatment and uses it to warm butane gas tanks, which cannot discharge gas at temperatures of 0°C or below. At the December 2010 all-company Honda Green Conference, Honda President and CEO Takanobu Ito praised it as a“clean hit” that took an idea and put it in practice. Japan Environmental Committee Vice Chairman and Honda Operating Officer1 Yoshiyuki Matsumoto also had Green Conference these good words to say:“Their project, which went beyond the bounds of the department to take a different perspective than normal, should serve as a reference.” Kaneta Kogyo is based in Hamamatsu in Shizuoka Prefecture, and is involved in making shafts that are incorporated into Honda automobile drivetrains. This project started when Yuka Seki, Technical Chief in the General Affairs Division, noticed something odd. As a company environment affairs officer, Ms. Seki manages water use and started questioning why water consumption at Kaneta Kogyo’s Hosoe Plant leaped in January and February 2008 to six times the average in other periods. 1 As of December 2010.

2 Reducing water used for butane gas in Winter “At first, I couldn’t understand why water use was increasing in winter,” Technical Chief Seki says Ms. Seki. She investigated the cause and found it to be the water used to sprinkle the butane gas tanks. Kaneta Kogyo has butane gas tanks at its facilities, and because the neighboring company Kaneta Yakin Kogyo Co., Ltd., a related company, uses carburizing heat treatment2, Kaneta Kogyo uses butane gas as a fuel for heating and cooling units with the purpose of sharing gas tank facilities. One property of butane gas is that it can not be discharged from the tank at temperatures of 0°C or below. If the ambient temperature is 5°C or less, water from the fire prevention tank will be automatically sprinkled on the butane tanks in order to heat them. Therefore, during cold winter temperatures, water used for sprinkling will increase almost beyond control. Specifically, during the winter of 2008, which had several cold spells with temperatures below 5°C, sprinkling water onto butane gas tanks accounted for 56% of all water use in January and February. Manager Tsutsumi

36 37 Reducing CO2 emissions through a water cycle framework

To reduce this volume, Ms. Seki and her manager, Haruyasu Tsutsumi, Company-wide water use(2008) worked out a countermeasure. (m3) 3 4,500 4,199m 2 A method for hardening steel by heating an alloy at high temperatures followed by quenching. 4,000

3,500 ■ Head 3,000 office ■ Inasa 2,500 plant 2,000 ■ Hosoe plant 1,500

1,000 Average 500 686 m3 0 Jan. Mar. May Jul S-O N-D -Feb -Apr. -Jun. -Aug.

Equipment set-up before measure Sprinkling

Fire water tank water to Butane gas tank Discharge to river warm up Tap water gas tank

Water flow Water flow

Gas flow Supplied to processing

Butane has a boiling point of 0°C. Therefore, if its Vaporizer temperature falls below 0°C, the pressure inside (for liquefied gas) the tank will be lower than atmospheric pressure and the gas will not discharge. To prevent this, Heats the tank is heated when the air temperature is . Gas flow liquefied gas 5°C or lower, by an automatic sprinkling system to vaporize it that draws water from the fire water tank.

Equipment measure after set-up (flow diagram)

Cooling water tank Heat treatment furnace Hot water generated at 40

20℃ 40℃ ° C

20℃ 40℃

Heat released during recirculation Lighter load Waste heat through used in tank 30℃ cooling water heating recirculation Heat released during recirculation 30℃

20℃ 30℃

Pumped up from underground tank

Cleaning tower Butane gas tank

36 37 3 Joining forces with Kaneta Yakin Kogyo next door to create a complete cycle Since keeping the tank gas above 0°C is an absolute requirement, sprinkling must not be stopped. The proposed solution was to recycle water by setting up a dedicated tank for sprinkling water. However, if the temperature falls, water in an underground tank will get too cold to be useful for heating the gas. While the team pondered what to do next, Seiji Miki, the Kaneta Yakin Kogyo plant manager at the time, appeared on the scene. Satoru Tomita, Representative Director and Production Senior Manager for Kaneta Yakin Kogyo, recalls how Mr. Miki offered:“While discussing Production senior manager Tomita production trends, I heard that you were studying how to lower water use. You might be able to use some cooling water from Kaneta Yakin’s heat treatment.” With this suggestion in hand, the team expanded the study to cover water circulation over the entire site, including neighboring Kaneta Yakin Kogyo. The old cycle worked like this: At the heat treatment plant, the temperature of the oil in the oil tank rises instantly when heated parts are immersed in the tank. To cool the oil, a heat exchanger transfers the heat to circulating water, which is then discharged at 40°C. The hot water is cooled to 20°C in a cooling tower, then returned to a cooling water tank, where it can be used once again in the heat treatment process. The team noted that in winter the cleaning tower would run when water intake was 25°C or warmer. If the temperature of the water after heat treatment could be lowered from 40°C, then it would be less of a burden for the cleaning tower. Thus, the idea was born to use post-heat-treated water as sprinkling water for heating the gas tank and then to return the water to the cooling water tank.“Kaneta Kogyo needs warm water to sprinkle on the tank, while Kaneta Yakin needs cooled water for heat treatment. Their mutual demands are a perfect fit,” says Mr. Tsutsumi.

4 Not just saving water—

reduced CO2 as a bonus result The study team calculated the investment effect and consulted with Sprinkling water heats butane tank upper management, winning their approval. Work began in late October 2008 and installation was completed in early November. After a December test period, the system was operational in January when the water temperature falls below 5°C. Since the start of operations in January 2009, a water circulation system has been in place, in which 40°C hot water after heat treatment is sprinkled on a gas tank and falls to 20°C, then runs to a cooling water tank while remaining at 20°C. It can then be used for cooling in the heat treatment furnace. As a result, water Effect of reduced water use use in January and February 2009 fell 56% from the 2008 rate. Company-wide winter water use (m2) (Jan‒Feb 2009) 4,500

Annual electricity reduction 4,000 Down 56% 3,500 Item Before After Effect Down 3,000 2,359 2,500 1,426 kwh 553 kwh Electricity 539 kg-CO2 209 kg-CO2 2,000

-3,617 kwh 1,500 ▲27% -1.33 t-CO 1,000 2 667 1,840 12,196 kwh 9,452 kwh 500 4.6 t-CO2 3.6 t-CO2 108 0 HQ Inasa Hosoe plant plant

38 39 Furthermore, because the water from the cooling water tank enters the cooling tower at 20°C, the cooling tower does not have to be run, and the load on the gas vaporizer is reduced because the temperature of the liquefied gas is raised by the 30°C warm water. As a result, electricity use fell by 27% in the January–February period compared to

the previous year, achieving a 1.33-ton reduction in CO2 emissions. “Our original aim was to use less water, and this also led to less electricity use. The system achieved the beneficial side effect of reducing power consumption from water cooling,” says Mr. Tsutsumi.“The construction expenses were less than the original plan to bury and install a tank, which has kept costs down,” adds Ms. Seki.

5 Effects of environmental initiatives steered by the General Affairs Division Kaneta Kogyo has no specific department dedicated to environmental affairs; such initiatives are instead aided along by the General Affairs

Division. Nor are there environmental offices in charge of reducing CO2 emissions. Instead, involved associates from such diverse departments as IT systems, Safety, Labor Relations and Human Resources discuss their ideas on energy conservation from different perspectives. In 2006, an Energy Conservation Committee was formed with the Administration Division serving as the environmental secretariat. This committee now works with the departments to hold regular monthly events, which has spurred daily efforts to be diligent about unplugging PCs and other commonly used electronic devices.“We do not wait for word from From left: Production Senior Manager Tomita above, but go ahead with whatever associates see as being able to save from Kaneta Yakin and Technical Chief Seki and energy. Lacking the capacity to install fancy energy-saving equipment, we Manager Tsutsumi from Kaneta Kogyo do all that we can within our means,” explains Toshio Kume, Director of the General Affairs Division. Mr. Tsutsumi claims that by winning a special award at the 2010 Honda Green Conference,“we were able to change people’s viewpoints and perceptions toward environmental matters at Kaneta Kogyo. The environmental work done so far has been recognized and conveyed throughout the company, which has raised the awareness of low-profile initiatives. Momentum has built for proposing new environmental ideas to upper management.” In this initiative, the key element was the partnership with Kaneta Yakin Kogyo, a sister company. Mr. Tsutsumi comments:“One big result was closer communications between members involved in the project.” Before, Kaneta Kogyo viewed Kaneta Yakin as a separate company and would proceed on their own with environmental measures, but “owing to this experience, our idea is to work with Kaneta Yakin again on the next measure to better the environment,” says Ms. Seki. “Getting results as a group was a good thing and I am glad they found a way of reducing energy use in auxiliary production equipment. Through the efforts of the General Affairs Division, the road has been paved for other ideas to proceed. I believe this will be mutually beneficial for the future,” echoes Mr. Tomita.

Kaneta Kogyo Co., Ltd. Founded in Hamamatsu, Shizuoka Prefecture in 1949 for the purpose of selling screw products. Now a specialty manufacturer of a variety of shafts used in transmission components for motorcycles and automobiles. Produces shafts from raw materials using a proprietary total production system. The Hosoe Plant specializes in main shafts. The company has three production facilities in Hamamatsu and overseas production facilities in the U.S., China, and Indonesia. Kaneta Yakin Kogyo Co., Ltd. is a related company specializing in heat treatment. http://www.kanetakogyo.co.jp (This URL is Japanese only.) Kaneta Kogyo’s Hosoe Plant

38 39 Initiatives in Japan

Product development

Automobile initiatives

1 Reduction of in-vehicle VOCs Since October 2007, Honda has been meeting the guideline values for in-vehicle concentrations of volatile organic compounds (VOC) for all automobiles sold in Japan, as set by the Ministry of Health, Labour and Welfare.

2 Noise reduction Honda is working proactively to reduce acceleration noise, the main sources of which are engine noise, air intake and exhaust noise, and tire noise. The new model Fit Hybrid that went on sale in September 2010 achieves a low level of noise (71 dBA versus the regulatory value of 76 dBA) by adopting the technologies below.

Main noise reduction technologies

●Engine noise reduction technology ●Intake noise, intake radiated ●Exhaust noise, exhaust radiated noise ・ High-rigidity cylinder block noise reduction technology ・ Sound absorption chamber ・ High-rigidity crankshaft ・ High-rigidity air cleaner ・ Two-layer shell silencer ・ Stiffener with integrated aluminum . ・ High-rigidity resonator chamber ・ Two-layer converter heat cover oil pan ・ Bonnet/hood insulator, . front inner fender insulator Sound absorption chamber ・ Engine room undercover High-rigidity resonator chamber Improves effectiveness of Reduces radiant noise by use . noise attenuation through of rigid structures sound-absorbing materials in chamber

Two-layer shell silencer Reduces radiant noise through exterior panel Fit Hybrid undercover rigidity Blocks engine noise outside the vehicle

High-rigidity Converter cylinder block Two-layer heat cover High-rigidity air cleaner High-rigidity Reduces radiant noise crankshaft through rigidity Stiffener with integrated aluminum oil pan

40 41 Product recycling (Reduce, Reuse, Recycle)

1 Development phase initiatives Reducing substances of concern Voluntary reduction targets of the Japanese Automobile Manufacturers Association, Inc. (JAMA) Automobile initiatives Honda has implemented an initiative to reduce discharges of four heavy Automobiles Substance Target Stated model details metals that are harmful to the environment (lead, mercury, hexavalent reduced chromium, and cadmium). In FY2011, Honda achieved reduction Lead1 Reduce average lead ● Status of JAMA voluntary reduction use2 in passenger targets targets* set by the Japanese Automobile Manufacturers Association, cars by the end of 1. Achieved 2006 JAMA target Inc., (JAMA) for all new automobile models, including the Fit Hybrid and 2005 to 1/3 of the (1/10 of 1996 base) 1996 amount or less 2. Achieved 2006 JAMA target (1/3 of 1996 baseline) models that have seen slight revisions. In addition, the CR-Z released in Reduce to 1/10 2010, utilizes a discharge headlight that uses no mercury, a first of its (1996 basis) starting January 2006. For ● Components using lead kind for Honda. commercial vehicles (Statement of fully replaced including buses, components) For HFC-134a (a replacement refrigerant) in Japan, we expanded reduce to 1/4.

the application of air conditioners that reduce the use of HFC-134a Mercury Use prohibited ● Status of JAMA targets starting January Achieved 2005 JAMA target by 10% or more compared with FY1997 levels, and completed their 2005 (except for (Use prohibited since January application to all automobile models in FY2011. We are also examining trace amounts 2005) in essential (Statement of fully replaced the feasibility of pre-installing air conditioners in automobiles with no use components3 for components) traffic safety) of HFC-134a in automobiles, and continue to monitor industry trends Hexavalent U s e p r o h i b i t e d ● Status of JAMA targets and technical developments in this area. chromium s i n c e J a n u a r y Achieved JAMA target 2008 (Use prohibited since January 2008) For the Fit Hybrid, we curtailed the use of PVCs (polyvinyl chlorides) ● Uses stated for instances in which and lowered the chloride concentration in shredder residue through target not achieved such steps as using olefin resin, with its superior recyclability, in most (Statement of fully replaced components and substances) interior and exterior resin components. Cadmium U s e p r o h i b i t e d ● Status of JAMA targets s i n c e J a n u a r y Achieved JAMA target 2007 (Use prohibited since January 2007) Motorcycles initiatives ● Uses stated for instances in which Honda implemented an initiative to eliminate the use of four heavy target not achieved (Statement of fully replaced metals (lead, mercury, hexavalent chromium, and cadmium) in components and substances) domestically produced motorcycles by the end of December 2005. Honda achieved this goal in 2006, and proceeded to achieve voluntary Motorcycles Substance reduction targets for FY2009 motorcycle production as well. We have Target Stated model details reduced completely eliminated from domestic production the use of polycyclic Lead1 Amount used shall ● Status of JAMA targets aromatic hydrocarbons, whose use in tires has been prohibited by the b e 6 0 g o r l e s s Achieved JAMA target starting January (Amount used shall be 60g or less EU since 2010. 2006 (for a 210- since January 2006) kg vehicle) ● Components using lead (Statement of fully replaced Power products initiatives components)

Honda implemented an initiative to eliminate the use of four heavy Mercury U s e p r o h i b i t e d ● Status of JAMA targets since October Achieved JAMA target metals (lead, mercury, hexavalent chromium, and cadmium) in all 2004 (except for (Use prohibited since October 2004) domestically produced vehicles by the end of December 2006. For t r a c e a m o u n t s (Statement of fully replaced in essential components) power products, there are no specific corresponding regulations, but components3 for traffic safety) as a result of its initiatives to comply with JAMA voluntary reduction Hexavalent U s e p r o h i b i t e d ● Status of JAMA targets targets, Honda achieved its targets for eliminating three of these chromium s i n c e J a n u a r y Achieved JAMA target 2008 (Use prohibited since January 2008) metals—lead, mercury, and cadmium—from all domestically produced models, including power products. In March 2008, Honda completed ● Uses stated for instances in which target not achieved a program to replace hexavalent chromium contained in certain anti- (Statement of fully replaced components and substances) corrosion agents in marine outboard motors in Japan. Cadmium U s e p r o h i b i t e d ● Status of JAMA targets s i n c e J a n u a r y Achieved JAMA target 2007 (Use prohibited since January 2007)

● Uses stated for instances in which target not achieved (Statement of fully replaced components and substances)

1 Excludes used batteries that have already been collected 2 Average lead use in passenger cars is 1,850g (excluding batteries) 3 Navigation system displays, combination lamps, discharge head lamps, cabin lamps (automobiles)

40 41 Initiatives in Japan

Product recycling (Reduce, Reuse, Recycle)

1 Initiatives for product use stage System for recycling disposed batteries Since FY1998, Honda has collected used batteries from customers through 68 sales locations in Japan and is expanding voluntary collection through cooperation with recovery agencies.

Battery and lead recycling ■ Used batteries ■ Lead (1,000 units) (Tons) 800 4,000 3,290 2,860 600 3,000 2,332 2,144 2,115 400 438 2,000 381 311 286 282 200 1,000

0 0 2007 2008 2009 2010 2011 (FY)

42 43 Administration

Use of environmentally responsible low-emission vehicles as company cars at main facilities

Use of Japanese government-designated environmentally responsible vehicles*

Introduction rate (Vehicles) Introduction rate 16.8% 400 15.4% 364 12 339 12 0 300 0

Introduction rate Introduction Introduction 5.5% 200 rate rate 351 4.0% 3.6% 326 131 8 9 ■ Fuel cell electric vehicles 101 92 8 100 3 ■ Hybrid vehicles 4 80 5 117 76 ■ Electric vehicles 8 3 3 1 1 0 ■ Natural gas vehicles 2007 2008 2009 2010 2011 (FY)

Composition of low-emission and high fuel-economy vehicles (gasoline, hybrid, natural gas vehicles) in company fleets

Adoption Adoption rate rate 88.9% Adoption Adoption (Vehicles) rate rate 96.9% Adoption 2,485 89.1% 96.3% rate Total: 2,500 96.4% 170 2,306 2,285 2,168 152 18 126 24 2,118 2,101 28 7 5 1 108 34 2,000 626 94 504 418 20 341 287 17 1 1 140 99 221 107 1,500 182 123 117 94 ■ Compliance with the 2007 exhaust emission standards 104 110 111 146 102 98 (mini trucks) 199 209 ■ Honda LEVs1 1,000 ■ Emissions comply with 2000 regulations2 ■ Emissions 25% lower than 2000 regulations 1,307 1,315 1,371 1,302 1,131 1,125 ■ Emissions 50% lower than 2000 regulations3 500 ■ Emissions 75% lower than 2000 regulations4 ■ Emissions comply with 2005 regulations5 ■ ULEV (emissions 50% lower than 2005 regulations)6 0 ■ SULEV (emissions 75% lower than 2005 regulations)7 2007 2008 2009 2010 2011 Vehicles that (FY) meet green purchasing guidelines

1 Of 34 vehicles, 33 attained 2010 fuel economy standards +5% under amerded Japan Rationalization of Energy Use law 2 Of 94 vehicles, 87 attained 2010 fuel economy standards; 1 attained 2010 fuel economy standards +5% 3 Of 17 vehicles, 1 attained 2010 fuel economy standards +25% 4 Of 287 vehicles, 239 attained 2010 fuel economy standards; 5 attained 2010 fuel economy standards +5%; 3 attained 2010 fuel economy standard +10%; 1 attained 2010 fuel economy standards +20% 5 Of 99 vehicles, 84 attained 2010 fuel economy standards; 3 attained 2010 fuel economy standards +5%; 4 attained 2010 fuel economy standard +10%; 1 attained 2010 fuel economy standards +15%; 1 attained 2010 fuel economy standards +20% 6 Of 94 vehicles, 23 attained 2010 fuel economy standards; 12 attained 2010 fuel economy standards +5%; 3 attained 2010 fuel economy standards +10%; 2 attained 2010 fuel economy standards +25% 7 Of 104 vehicles, 48 attained 2010 fuel economy standards; 45 attained 2010 fuel economy standards +5%; 5 attained 2010 fuel economy standards +10% 8 Of 1,371 vehicles, 69 attained 2010 fuel economy standards; 430 attained 2010 fuel economy standards +5%; 177 attained 2010 fuel economy standards+10%; 5 attained 2010 fuel economy standards +15%; 105 attained 2010 fuel economy standards +20%; 516 attained 2010 fuel economy standards +25%

42 43 Additional information

Automobile environmental performance information (Japan)

Model FREED spike Fit Hybrid

Release date 2010. 7. 9 2010. 10. 8

Type covered C HYBRID

Type details DBA-GB3 DAA-GP1

Engine (motor) type L15A LDA-MF6

Engine displacement (cm3) 1,496 1,339

Type of drive train1 FF FF Drive train Transmission2 CVT CVT

Compliance with 2005 emission standards3 ★★★★ ★★★★

Mode 10・15+JC08C JC08H+JC08C

CO 0.50 0.50 Emissions . Values reported to MLIT NMHC 0.013 0.013 (g/km) NOx 0.013 0.013

PM — —

10-15 mode (km/L) / CO2 emissions (g/km) 16.4/141.6 30.0/77.4

JC08C modes (km/L) / CO2 emissions (g/km) — 26.0/89.3

Noise near exhaust outlet / 96/80 96/83 standard value (dbA) 4,000 4,350 Noise level . Engine rpm 76/71 76/71 (MLIT measurement) Acceleration noise / 72/69 72/68 standard value (dbA) 50 50

1 FF=Front engine, front-wheel drive 2 CVT=Continuously Variable Transmission 3 SULEV: Super ultra-low-emission vehicle (emissions 75% lower than 2005 standards).

For additional information on all automobile models that are introduced or registered in Japan, http://www.honda.co.jp/auto-environment/ see URL on the right. This URL is Japanese only.

LCA results for automobiles

LCA results for major automobile models released in FY2011 (Japan)

Materials Production Use Sales/Service Disposal Transportation (%) 160 140 120 Baseline 110 100 100

80 68 60 40 20 0 Civic FREED spike Fit Hybrid (2006)

44 45 Motorcycle environmental performance information (Japan)

Model VT1300CS VT400S Release date 2010. 4. 28, 2010. 5. 18 2010. 11. 5 Type details EBL-SC66・EBL-SC67 EBL-NC46 Engine (motor) type SC61E NC46E Engine displacement (cm3) 1,312 398

Transmission 5-speed return PGM-FI

Exhaust gas compliance regulation level 2006, 2007 2007 Emissions . CO 2.0 2.0 Values reported . HC 0.3 0.3 to MLIT (g/km) NOx 0.15 0.15 60 km level course test measurement 27.0 40.0 Fuel economy (km/L) 30 km level course test measurement — — Noise near exhaust outlet / standard 94/87 94/84 value (dbA) Engine rpm Noise level . Acceleration noise / standard value (dbA) 73/72 73/72 (MLIT measurement) Constant speed passing noise / 72/68 72/69 standard value (dbA) 50km/h

Model Giorno CBR250R Release date 2011. 1. 28 2011. 3. 18 Type details JBH-AF70 JBK-MC41 Engine (motor) type AF70E MC41E Engine displacement (cm3) 49 249 Transmission CVT 6-speed return Exhaust gas compliance regulation level 2006 2006 Emissions . CO 2.00 2.0 Values reported . HC 0.50 0.3 to MLIT (g/km) NOx 0.15 0.15 60 km level course test measurement — 49.2 Fuel economy (km/L) 30 km level course test measurement 73 — Noise near exhaust outlet / standard 84/81 94/87 value (dbA) Engine rpm Noise level . Acceleration noise / standard value (dbA) 71/70 73/72 (MLIT measurement) Constant speed passing noise / 65/64 71/67 standard value (dbA) 50km/h

For additional information on all motorcycle models that are introduced or registered in Japan, http://www.honda.co.jp/motor-environment/ see URL on the right. This URL is Japanese only.

LCA results for motorcycles

LCA results for major motorcycle models released in FY2010 (Japan)

Materials Production Use Sales/Service Disposal Transportation (%) 160 140 Baseline 120 107 100 100 80 80 67 60 40 35 20 0 CB VT VT Giorno CBR 400SF 1300CS 400S 250R (2005)

44 45 Additional information

Power products environmental performance information (Japan)

Name BF115

Model BF115D

Release date 2010. 6. 3

Type details BBHJ

Engine (motor) type BEBHJ

Engine displacement (cm3) 2,354

Vehicle weight (kg)1 LN: 217 XN: 220 XCN: 223

Continuous operation (hr) —

Fuel consumption rate [g/kWh] At max. outpu: 315 At rated output: 315 5 mode: 340 Compliance with EPA Phase II emission standards . — for power products2 Compliance with CARB Tier 3 emission standards . — for power products2 Compliance with Japan Land Engine Manufacturers . — Association voluntary standards Emissions Compliance with EPA marine2010 emission standards . ○ for power products2 Compliance with CARB marine2010 emission standards . ○ for power products2 Compliance with voluntary standards of the Japan . ○ Land Engine Manufacturers Association EU guaranteed sound power level LWA 70 Noise Noise at the ear LPA 80

Note 1: LN/XN/XCN are type names for the BF15. 2: Similar models have obtained emissions certification in the United States, but products marketed in Japan are not guaranteed to meet those standards.

46 47 Japan facilities information

For environmental data . of facilities in Japan, . http://www.honda.co.jp/environment/activities/data/index.html please see the URL on right.

Honda Motor Co., Ltd.

Saitama Factory Address: 1-10-1 Shin-Sayama, Sayama City, Saitama Prefecture, Japan Established: 1964 Major products: Legend, Odyssey, CRV, Accord, etc. Number of associates: 5,290 (as of March 31, 2011) Water discharge points: sewage system (domestic and industrial wastewater);. (indirect cooling water) ISO 14001 certification: January 1998

http://www.honda.co.jp/environment/activities/data/office/hd010100.html (This URL is Japanese only.)

Suzuka Factory Address: 1907 Hirata Cho, Suzuka City, Mie Prefecture Established: 1960 Major products: Civic, Fit, Insight, etc. Employment: 6,706 associates (as of March 31, 2011) Water discharge point: Suzuka River ISO 14001 certification: February 1998

http://www.honda.co.jp/environment/activities/data/office/hd010500.html (This URL is Japanese only.)

Kumamoto Factory Address: 1500 Hirakawa Ohaza, Ohzu Machi, Kikuchi Gun, Established: 1976 Major products: Motorcycle, mini vehicle engines, multipurpose engines, . transmission parts for passenger vehicles, etc. Employment: 3,188 associates (as of March 31, 2011) Water discharge point: via Hyuga River and Koushi River ISO 14001 certification: November 1997

http://www.honda.co.jp/environment/activities/data/office/hd010600.html (This URL is Japanese only.)

46 47 Additional information

Japan facilities information

Honda Motor Co., Ltd.

Hamamatsu Factory Address: 1-13-1 Aoi Higashi, Naka-ku, Hamamatsu City, Shizuoka Prefecture Established: 1954 Major products: Automatic transmissions for automobiles, etc. Employment: 2,506 associates (including those working at the Hosoe Plant, . as of March 31, 2011) Water discharge point: Sewage system (industrial and non-industrial wastewater), Isaji River, Danzu River (rainwater only) ISO 14001 certification: March 1998

http://www.honda.co.jp/environment/activities/data/office/hd010300.html (This URL is Japanese only.) Hamamatsu Factory, Hosoe Plant Address: 5794-1 Kiga, Hosoe Cho, Kita-ku Hamamatsu City Established: 2001 Major products: Marine outboards Employment: Included as Hamamatsu Factory associates Water discharge point: Lake Hamana (rainwater only)

http://www.honda.co.jp/environment/activities/data/office/hd010400.html (This URL is Japanese only.)

Tochigi Factory Address: 19 Matsuyama Cho, Mohka City, Tochigi Prefecture Established: 1970 Major products: Engine parts, suspension parts, etc. Employment: 1,342 associates (as of March 31, 2011) Water discharge point: Kokai River via Gogyo River ISO 14001 certification: September 1997

http://www.honda.co.jp/environment/activities/data/office/hd010200.html (This URL is Japanese only.)

Automobile New Model Center Address: 2900 Kamitakanezawa Ohaza, Takanezawa Machi, Shioya Gun, . Tochigi Prefecture Established: 1995 Major responsibilities: Manufacturing of fuel cell electric vehicles and technical support of automobile manufacturing Employment: 488 associates (as of March 31, 2011) Water discharge point: Nomoto River via Haga Industrial Park . Treatment Center

http://www.honda.co.jp/environment/activities/data/office/hd010700.html (This URL is Japanese only.)

Quality Innovation Center (Tochigi) Address: 52-1 Hagadai, Haga Machi, Haga Gun, Tochigi Prefecture Established: April 2003 Major responsibilities: Responses to quality issues in the market and . management of certification processes Employment: 711 associates (as of March 31, 2011) Water discharge point: Nomoto River via Haga Industrial Park . Treatment Center http://www.honda.co.jp/environment/activities/data/office/hd010800.html (This URL is Japanese only.)

48 49 Honda R&D Co., Ltd.

Automobile R&D Center (Wako) Fundamental Technology Research Center Aircraft Engine R&D Center

Address: 1-4-1 Chuo, Wako City, Saitama Prefecture Established: 1960 (spin-off from Honda Motor Co., Ltd.) Major responsibilities: Automobile design research, basic research and . development, and development of aircraft engines Water discharge point: Wastewater Treatment Center, located . in the Arakawa Right Bank District (sewage)

http://www.honda.co.jp/environment/activities/data/office/hd010900.html (This URL is Japanese only.)

Automobile R&D Center (Tochigi Proving Center) Address: 4630 Shimotakanesawa, Haga Machi, Haga Gun, Tochigi Prefecture Established: 1982 Major responsibilities: Automobile research and development (design, trial production, and testing of engines, bodies, and chassis) Water discharge point: Nomoto River via Haga Industrial Park Treatment Center (domestic and industrial water)

http://www.honda.co.jp/environment/activities/data/office/hd011100.html (This URL is Japanese only.)

Motorcycle R&D Center/ Power Products R&D Center Address: 3-15-1 Senzui, Asaka City, Saitama Prefecture Established: 1973 Major responsibilities: Research and development of motorcycles and . power products Water discharge point:  Right Bank District . Sewage Treatment Center

http://www.honda.co.jp/environment/activities/data/office/hd011000.html (This URL is Japanese only.)

Takasu Proving Ground Address: 21-10, Takasu Cho, Kamikawa Gun, Hokkaido Established: 1996 Major responsibilities: Research and development of motorcycles, automobiles, and power products (on test courses) Water discharge point: Shumamu River

http://www.honda.co.jp/environment/activities/data/office/hd011300.html (This URL is Japanese only.)

48 49 Additional information

Japan facilities information

Honda Engineering Co., Ltd.

Address: 6-1 Hagadai, Haga Machi, Haga Gun, Tochigi Prefecture Established: 1990 Major responsibilities: General machinery and production equipment (development, design and manufacture of machine tools, dies and functional parts) Water discharge point: Nomoto River via Haga Industrial Park Treatment Center (domestic and industrial water) ISO 14001 certification: July 1997

http://www.honda.co.jp/environment/activities/data/office/hd011400.html (This URL is Japanese only.)

Other environmental data

ISO/EMAS certification status http://www.honda.co.jp/environment/activities/data/iso/ (This URL is Japanese only.)

PRTR-listed substances (production domain) http://www.honda.co.jp/environment/activities/data/office/hd011500.html (This URL is Japanese only.)

Analysis of groundwater http://www.honda.co.jp/environment/activities/data/office/hd011600.html (This URL is Japanese only.)

Environmental awards received http://www.honda.co.jp/environment/award/ (This URL is Japanese only.)

50 Environmental information disclosure

The Honda Environmental Annual Report is published yearly. It presents environmental corporate information, including Honda’s policies and future direction with respect to the environment. The report focuses particularly on the results of the year’s initiatives in each management domain, and on progress made toward targets from the Persons responsible point of view of Honda's corporate activities throughout its products’ life cycles. Complementing the disclosure of Sales and services Head Office...... Takao Aoki environmental corporate information, Honda’s website (http://world.honda.com/environment/index. Automobile...... Shigeaki Kato Honda R&D Co., Ltd. html) provides further details about the results in each domain (for instance, environmental impact Yasumasa Shimizu Automobile R&D Center (Wako)/ data for each Honda facility), and also presents the history of Honda's environmental initiatives. Motorcycle...... Masaharu Iuchi Fundamental Technology Research Center/ By disclosing a wide range of information, we hope to facilitate communication and feedback, Power Products...... Takaoki Watanabe Aircraft Engine R&D Center...... Akio Yagasaki thereby strengthening our environmental conservation initiatives going forward. Service and Parts...... Noriya Kaihara Motorcycle R&D Center/Power Products R&D Center Recycle Promotion Office...... Hideaki Kobayashi ...... Fumihiko Nakamura Automobile R&D Center (Tochigi)...... Jun Yanada Information focusing on annual initiatives Comprehensive environmental information Purchasing ...... Akifumi Suganuma Automobile R&D Center (Takasu Proving Ground) ...... Koji Kawai Factory and office operations environmental administrators Honda Engineering Co., Ltd...... Masuhiro Sakurai Saitama Factory...... Chihiro Morimoto Tochigi Factory...... Koichi Aonami Logistics Hamamatsu Factory...... Masamichi Matsumura Products and service parts sets...... Toshihide Nakai

Case Suzuka Factory...... Masaomi Ajioka Main Studies and Online Kumamoto Factory...... Takayoshi Fukai Administration report Supplementary Information Automobile New Model Center...... Hiroyuki Yoshihara Administration...... Takao Aoki Quality Innovation Center Tochigi...... Yukihiro Kariya Personnel...... Tetsuya Tsutsui Corporate Communications...... Masaya Nagai Environmental annual report The Honda Worldwide website’s Intellectual Property...... Yuichiro Kawamura The Honda Environmental Report is comprised of two parts: the Main environment section Report, which focuses on annual environmental initiatives, and the Note: Current as of June 1, 2011. Case Studies and Supplementary Information, available exclusively on http://world.honda.com/ Honda’s web site, which covers specific initiatives in each of the environment/index.html domains introduced in the report. Honda global environmental symbol and slogan Editorial policy for the Honda Environmental Annual Report Early in its history, Honda recognized that an involvement in efforts to combat various kinds of environmental problems was one of its most important management priorities. We publish the Honda Environmental Annual Report to inform the public about our environmental initiatives over the preceding year. This is the 14th edition of the Honda Environmental Annual Report, which was first published in 1988. As of 2011, Honda regards global climate change and energy issues as being particularly important among the many environmental problems that exist today. (see Page 6 for details.) To combat these problems, Honda is working to reduce emissions of greenhouse gases resulting from its business activities and from the use of its products, and has set medium-term targets for this purpose (see Page 8). Under our mid-term management plan, we have also formulated and are steadily implementing environmental initiatives to combat other environmental problems (see Page 10). We will continue to inform the public about these initiatives, and in particular about the progress we have made each year, through the Honda Environmental Annual Report. Other information, including details and data, are regularly posted on our website, as indicated in Disclosure of Honda Environmental Information. Our goal under the Honda Environmental Vision is to leave the joy and freedom of mobility for future Other key information disclosure generations (for our children). That is why we must Honda’s environmental reports and website also contain corporate information other than that concerning the environment. create a sustainable society where people can enjoy Honda is continuously working to enhance communication with its stakeholders by making information about its various life (blue skies). These aspirations are symbolized in activities easy to understand and encourages feedback. Honda regards full communication with all stakeholders as essential to our environmental slogan and symbol. further improving its activities, and welcomes feedback to this and all of the reports listed below.

V CSR Presents Honda’s ideas on Corporate Social Responsibility (CSR), and its Information initiatives in the areas of quality and safety, environment and society. CSR website: http://world.honda.com/CSR/index.html CSR report: http://world.honda.com/CSR/report/

V Investor Presents information on Honda’s business performance. Information Investor information: http://world.honda.com/investors/index.html Please direct enquiries to: Annual report: http://world.honda.com/investors/library/annual_report/ ● Environment & Safety Planning Office Production company (Japanese and English versions) Tel: +81-(0)3-5412-1155 SHIAN INC., Tokyo, Japan V Information on Presents the ideas behind Honda’s philanthropic activities, Fax: +81-(0)3-5412-1154 Philanthropic and its main initiatives. Publisher Activities This report can also be found on the Social activities website: http://world.honda.com/community/index.html Honda Worldwide website: Environment & Safety Planning Office http://world.honda.com/environment/report/ V Presents Honda’s safety initiatives from two perspectives: activities aimed at Manager Safety index.html?id=6 Information promoting product safety and those aimed at promoting traffic safety. Michio Shinohara

Safety activities: http://world.honda.com/safety/index.html Editors Driving safety promotion activities: Hisashi Kato, Fumie Kimijma, Shunsuke Kawasaki http://www.honda.co.jp/safetyinfo/ (This URL is Japanese only) Report on driving safety promotion activities: http://www.honda.co.jp/safetyinfo/report/index.html (This URL is Japanese only)

51 Honda Case Studies and 取り組み事例集と補足情報Supplementary Information Environmental Annual Report 2 011

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