Three key themes toward Environmental Value Creation
- GHG Emission Reduction
- Resource Circulation
- Biodiversity
GHG Emission Reduction
The Hitachi Construction Machinery Group identified “Product and technology development contributing to Climate Change Mitigation and Adaptation” as one of our materialities. Aiming to achieve net-zero carbon emissions throughout the entire value chain by 2050, we have formulated a roadmap for reduction measures to be undertaken with regard to the two aspects of product development and production processes.
With regard to product development, we have set and are promoting the goal of reducing CO2 emissions by 22% and 33% by fiscal 2025 and fiscal 2030, respectively, compared to fiscal 2010 (base year) (Diagram 1). This will serve as an indicator of our ability to provide our customers and society with environmentally friendly products that contribute to the reduction of CO2 emissions. To achieve this goal, we are promoting the development of an entire product range—from compact equipment to ultra-large mining machines. In addition to reducing fuel consumption, we are also working on the early market launch of electrified construction equipment and identifying hydrogen-fueled products from a technological perspective. Furthermore, we are striving to provide solutions that enable our customers to reduce CO2 while equipment is in use (Diagram 2).
Meanwhile, as for the production process, we have set and are promoting the goal of reducing CO2 emissions by 40% and 45% by fiscal 2025 and fiscal 2030, respectively, compared to fiscal 2010 (base year) (Diagram 3). Our methods for reducing CO2 emissions include energy conservation, conversion to renewable energy (in-house power generation through capital investment, introduction of renewable energy electricity), electrification, and fuel conversion (Diagram 4).
These initiatives aimed at realizing carbon neutrality throughout the entire value chain are also consistent with the spirit of “GX League,”*1 which will launch full-scale activities in Japan in fiscal 2023. Hitachi Construction Machinery became a member of “GX League” in May 2023. With our membership in this league helping us facilitate carbon neutrality initiatives, we will work in collaboration with other members and organizations while playing our part in the transition of Japan’s socio-economic system as a whole.
*1 Green Transformation (GX) League: An initiative established by Japan’s Ministry of Economy, Trade and Industry to provide a place for collaboration among business corporations, government agencies, financial institutions and universities to take on the challenges of GX and transform economic and social systems, with an eye to achieving carbon neutrality in 2050
Electrification Initiatives
Electrification of mining dump trucks
Major mining customers have set a goal of achieving net-zero emissions by 2050. As part of this effort, there is a particularly strong demand to reduce the emissions of dump trucks, of which there are a large number, to zero. To meet this demand, we are working with ABB of Switzerland to make our dump trucks fully electric, and aiming to achieve net zero emissions for the entire mining site. By replacing the engine of our current trolley-type dump trucks, which can run on electric power, with a battery, we will be able to use both the trolley electric supply and battery electric supply to achieve a fully electric machine. When our EH3500AC-3 rigid dump truck is fully electric, operating 20 hours a day will result in a reduction of 6.8 tons of CO2 emissions.
GHG reduction in production process
We are promoting reduction of CO2 emissions from the perspective of energy conservation, conversion to renewable energy (in-house power generation through capital investment, introduction of renewable energy electricity), electrification, and fuel conversion.
To further encourage investments in energy saving facilities and reduce CO2 emissions from production (Scope 1 & 2) by 45% compared to FY 2010 by FY 2030, we have been implementing an internal carbon pricing (ICP) framework since 2019. ICP, which was initially set at 5,000 yen, has been raised to 14,000 yen per ton in 2021 to adapt the increase of importance of facilities with low CO2 emissions and the introduction of carbon prices in the future. By introducing an energy visualization system and a solar power generation system, we invested in energy conservation and decarbonization, and were able to reduce CO2 emissions by 33% in FY2023.
In order to carry out continuous improvement in environmental performance, Hitachi Construction Machinery Group constructed its own aggregation system which visualizes our companies’ environmental footprint, and we manage our environmental impacts monthly. In the five plants in Ibaraki Prefecture, we have introduced the integrated energy & equipment management service utilizing advanced IoT technology from Hitachi, Ltd. to engage in initiatives such as power saving in production facilities and saving electricity in offices to lower peak electricity usage and reduce standby power consumption based on visualized data of power consumption and standby power usage. Such efforts received recognition in the form of the FY2018 “Prize of the Chairman of ECCJ” awarded by The Energy Conservation Center, Japan.
Since April 2021, we have been using “Hitachi Construction Machinery Energy Control System” to continuously reduce energy consumption at production bases.
Ongoing Initiatives
Electric machinery drive components are currently still expensive with major hurdles to cross in order to bring these to prices acceptable for customers, but there is still a need to expand the product line-up in readiness for a rapid expansion in the market. If future advances in cost-competitive electric drive component technologies in conjunction with the move to electric cars and trucks can be achieved, this will let us offer a wide range of electric products from mini- through to ultra-large excavators and loaders, allowing the group to fully demonstrate its strengths. At our production plants, we are working to improve the efficiency of production process and reduce CO2 emissions by introducing solar power generation systems, power visualization systems, cogeneration systems, and other energy-saving equipment.
Endorsement of Initiatives
As an official member of the Japan Construction Equipment Manufacturers Association (CEMA), Hitachi Construction Machinery agrees with the “Low-Carbon Society Action Plan” for the construction machinery industry proposed by the CEMA. In order to achieve it, we take part in the Energy-saving Technology Sub-committee and the Manufacturing Energy-saving Measures Sub-committee in the Engineering Manufacturing Committee, propose measures and hold exchanges of opinions regarding climate change. We work on climate change measures in line with the policy of “Low-Carbon Society Action Plan” by the CEMA.
Resource Recycling
The Hitachi Construction Machinery Group aims to shift to a resource recycling business through value chain businesses that contribute to circular economy.
One of the Group’s materialities is to shift to a resource-recycling business. The unsustainable business model of mining, using, and then disposing of resources will eventually reach its limits.
The Hitachi Construction Machinery Group takes a Group-wide approach to the implementation of the “4Rs,” namely, “Reduce, Reuse, Recycle and Renewable,” through its value chain businesses ranging from remanufacturing, used machinery sales and rental to services. In doing so, we strive to reduce the volume of waste emissions in diverse facets of our operations.
Product usage begins with the delivery of a new machine to customers and spans the lifetime of that machine. We aim to lengthen product life by 1.5 times. With this in mind, we are expanding our value chain businesses while striving to both maximize customer value and minimize resource consumption. Specifically, we will leverage the machinery monitoring system ConSite, a service solution that supports our unique strength. We will also promote parts and machine remanufacturing. We will thus strive to lengthen the machines’ useful lives from 10 years to 15 years. Such efforts help reduce the volume of waste emissions as well as the volume of resources needed, thus contributing to the reduction of CO2 emissions.
With regard to the effective use of water resources, we are recycling water and reducing the amount of water used overall in our business activities (including fresh water). To reduce water use, we are working to optimize robotization and coating conditions. We also implement water conservation measures such as extending the service life of water used in painting facility and expanding the use of circulating water.
Hitachi Construction Machinery products and services that realize resource circulation
Parts Remanufacturing Business
Because construction machinery is operated for long hours in a variety of environments, the time it takes to replace or repair parts greatly affects the productivity of customers’ work sites. Hitachi Construction Machinery has operated a global business of remanufacturing parts such as hydraulic pumps, hydraulic cylinders, and travel device since 1998.
we manufacture refurbished parts that guarantee the same functionality and performance as new parts. Parts collected from customers are disassembled, serviced, and inspected, and consumable parts are replaced as needed. Advanced remanufacturing technologies can help reduce resource inputs by extending the life of components. In addition, we utilize our accumulated expertise to recondition discarded aircraft so that they are again the equivalent of new machines, which are then sold as used machines. This reduces the use of new materials and contributes to a new resource-recycling business model. Hitachi Construction Machinery Zambia is refurbishing ultra-large hydraulic excavators (EX1200) to make them as good as new. In addition, they are also working to remanufacture them as high-value products that reflect even minor changes in the product.
Remanufactured Parts Production Volume: Number of remanufactured part units produced
Rental and used equipment business
Hitachi Construction Machinery provides advanced maintenance services through ConSite during the usage period of PREMIUM RENTAL machines that are certified by Hitachi Construction Machinery. We extend the operational life of the machines and distribute them to emerging countries as PREMIUM USED, high-quality used machines with a manufacturer’s warranty. This contributes to reducing the number of discarded machines.
Parts and service business
Through the ConSite menu, we are working to extend the service life of machinery through appropriate maintenance using IoT. At the same time, we monitor the operation of each machine and make proposals to reduce fuel consumption through work improvement proposals, thereby contributing to the reduction of CO2.
Support for Product Retrofitting
Hitachi Construction Machinery endeavors to develop products that can improve the performance of machinery by adding systems and equipment to delivered machinery, contributing to the reduction of customers’ lifecycle costs and saving of resources.
For example, the EH AC-3 Series of rigid dump trucks can be retrofitted as “AHS-specification machinery” essential for automation in mine operation by adding the systems required for the mining dump truck autonomous haulage system (AHS) currently under development.
Furthermore, the ICT hydraulic excavator ZX200X-6, at the core of the ICT construction solution can be easily upgraded to 3D (three-dimensional) specification utilizing positional data from a satellite by installing additional equipment dedicated to 3D system, even if the customer is using a 2D specification machine.
Response to Water Risks
Water is an important resource, and the amount and quality of water that can be used varies from region to region.
In order to identify regions where there is a high-water stress level during business activities, the Hitachi Construction Machinery Group uses the AQUEDUCT tool released by the World Resources Institute, Water Risk Filter toll by World Wildlife Fund and local data to quantify the water stress level at all their production facilities both domestic and international, and identify regions of high water stress. Of the 21 facilities, two sites in Indonesia and China are in areas with high water stress.
Initiatives for effective use of water resources
Ongoing Initiatives
Regarding resource recycling, we announced that the company has decided to consolidate the domestic remanufacturing operations at Banshu Works (Kako, Hyogo Prefecture) which had been dispersed to Tsuchiura Works (Tsuchiura City, Ibaraki Prefecture) and Hitachinaka Works (Hitachinaka City, Ibaraki Prefecture) from fiscal 2024 to expand and develop the remanufacturing business on a global scale in the future. This consolidation of remanufacturing operations will allow us to utilize the facilities and space in two current remanufacturing plants to further increase the production capacity of new machinery and components.
As our initiatives to water resource, in order to recycle water, we will directly support leakage measures and recycle rate improvements with a focus on companies with especially high levels of water usage.
Basic Concept
Biodiversity is positioned as an issue that is closely related to climate change, and governments and investors are increasingly demanding companies’ response to this issue.
Meanwhile, biodiversity-friendly initiatives are already put into practice at the Hitachi Construction Machinery Group business sites, and we believe it is important to actively communicate these initiatives internally and externally and link them to develop biodiversity initiatives.
In light of this situation, the Hitachi Construction Machinery Group formulated the Biodiversity Policy in June 2024, which will serve as the basis for the Hitachi Construction Machinery Group's biodiversity response.
Hitachi Construction Machinery Group Biodiversity Policy
１．Commitment
- The Hitachi Construction Machinery Group's vision, ‘Ensure a prosperous land and society for the future. We contribute toward realizing a safe and sustainable society.’, represents our vision of a society based on harmonious coexistence with society. Based on this vision, and recognizing that the Group's business activities depend on the benefits of biodiversity and have the potential to affect ecosystems, we aim to realize a society in harmony with nature through the development of environmentally friendly products and the promotion of a circular economy, including regeneration projects.
２．Compliance with national laws and regulations in accordance with international conventions
- We comply with the relevant laws and regulations of each country, including the prohibition of illegal logging of forests, in accordance with international biodiversity conventions such as the Convention on Biological Diversity, and work to conserve biodiversity in the areas where we operate.
３．Addressing biodiversity through business
- We strive to reduce environmental impact along the value chain, from design and development to production and logistics, with the aim of promoting a circular economy and realizing nature positivity.
- We aim to reduce the impact on the ecosystem by actively working on the lengthening of product life cycles and the remanufacturing business based on the ‘4 Rs*1’, thereby reducing waste and new resource inputs.
- By actively developing and providing ICT construction solutions, we will improve productivity and shorten construction periods, thereby contributing to the reduction of greenhouse gases and sustainable forestry management.
４．Understanding the relationship between business and biodiversity and reducing impacts
- With the aim of preventing biodiversity loss (no net loss), we will select priority areas for biodiversity conservation, assess the impacts and dependencies on nature, including biodiversity, arising from our operations, as well as risks and opportunities, and promote appropriate measures. In addition, we aim to create a net positive impact (i.e. the effect of compensatory measures on biodiversity exceeds the loss of biodiversity) by 2050, and we will work to prevent deforestation that has a negative impact on ecosystems through afforestation and other reforestation initiatives.
- When operating in priority areas from a biodiversity perspective, targets and indicators will be managed by adopting the concept of prioritization (mitigation hierarchy*2), whereby negative impacts are avoided, reduced or minimized and compensatory measures are taken for those impacts that still remain.
５．Stakeholder engagement and disclosure
- Collaborate and dialogue with the Hitachi Construction Machinery Group's employees, procurement partners, local communities and NGOs to increase the effectiveness of biodiversity conservation initiatives.
- Proactively disclose information on initiatives based on this policy.
６．Scope and jurisdiction
- This policy will be promoted within not only the Hitachi Construction Machinery Group, but also procurement and business partners for their endorsement.
- The Board of Directors reports on and approves the development and changes to this policy.
*1 ４Rs : Reduce, Reuse, Recycle, Renewable
*2 mitigation hierarchy : A framework for minimizing adverse effects on nature with a long-term perspective. It is a concept that guides organizations to first avoid impacts, and if that is not possible, to reduce the impact on nature, and finally to fulfil their responsibility to restore affected areas and ecosystems
Responding to the biodiversity crises
Companies depend on the benefits from nature, such as atmosphere, water, and soil. These benefits are supported by biodiversity. In order to prevent its loss and to maintain and restore them, the Hitachi Construction Machinery Group believes that we can contribute to ecosystem conservation through both its business and social contribution activities related to nature conservation.
Biodiversity is faced with four types of crisis. Hitachi Construction Machinery Group is providing support through our products and through employee participation in order to respond to these crises.
No.1 Crisis
(Crisis caused by human activities and development)
Reduction / extinction of habitats brought about from development and overfishing
No.2 Crisis
(Crisis caused by the reduction of lobbying for nature)
Reduction in the quality of nature due to lack of care for local areas and mountains
No.3 Crisis
(Crisis caused through items being brought in by humans)
Disturbances of ecosystems by bringing in foreign species
No.4 Crisis
(Crises due to changes in the global environment)
Crises caused by global warming
※ Excerpted from “The Approaching Crisis to Biodiversity” on the Biodiversity Center of Japan website
Conservation of the natural environment at test site
Since its establishment in 1992, Hitachi Construction Machinery Urahoro Test Site in Hokkaido has played an important role to provide safe, secure, and high-quality products to customers while preserving the greenery and nature of the region's unique Quercus oak forest and humid broad-leaved forest. At the testing site, we carry out forest conservation activities based on long-term plans. When conducting business activities, we conduct natural environment surveys to minimize the impact on the on-site ecosystem. A variety of plants and animals grow in the vast forest of Urahoro Test Site. In order to grasp and protect these ecosystems, we conduct surveys of birds, plants, and benthic animals every time we carry out forest development work.
Additionally, we hold an Eco School every year for local elementary school students, with the aim of helping them rediscover the wonders of Urahoro's natural environment and the meaning of nature conservation activities.
Conservation of Lake Biwa
Hitachi Construction Machinery Tierra, located in Shiga Prefecture, supports the Mother Lake Goals (MLGs), which are goals for a sustainable society in 2030 with Lake Biwa, and is conducting various activities to preserve Lake Biwa. They hold Lake Biwa seminars for executives and environmental managers to learn important things about protecting and utilizing Lake Biwa, they also carry out clean-up around lakes and rivers, exterminate invasive species, and engage in activities as rice field owners.
Afforestation of the Horqin Desert
Hitachi Construction Machinery (Shanghai) has carried out Afforestation of the Horqin Desert for a 10-year period since 2005. Aiming for the restoration of habitats that have been destroyed and turned to desert due to over-grazing etc. and protection of weak ecosystems, a 100,000m2 desert belt within the Horqin desert of China’s autonomous Inner Mongolia region has been designated as an “Hitachi Construction Machinery Carbon Offset Forest” and afforested, which has contributed greatly to greening. 26 of our partner dealers are participating in our new plan for the next 10 years which commenced in 2015 for the first time, and afforestation of a desert belt of 130,000m2 has begun.
Through this initiative, we were able to protect the trees planted in desert areas from illegal logging and wild animals, and successfully allowed them to grow larger. Progress in greening has reduced wind and dust damage, leading to environmental improvements. Additionally, by asking people from nearby villages to take care of the trees, they also contributed to the creation of continuous employment.
Soil Restoration After Mine Closure
After mining has completed, soil restoration (rehabilitation) is a crucial issue in order to protect the environment and enable stable use of the sites.
It is important to return the mine to a self-sustaining natural ecosystem and a state that ensures the safe future use of the land, and our group's business partners are actively working on soil restoration.
We will continue to work on biodiversity issues in collaboration with stakeholders.
