P.21 Material Issues Management Capital

21 01. Value Creation Stories for the Future

Material Issues × Management Capital

Overcome climate change Human capital Intellectual capital

▶ Carbon credit | https://www.sumitomocorp.com/en/jp/enrich/contents/0129

Lead the carbon credit market to support transition to a decarbonized society

Carbon credits quantify the amount of greenhouse gas (GHG) emissions reduced or removed by third parties and can be traded to offset residual emissions. We are turning this emerging market into a business opportunity while contributing to societyʼs decarbonization.

Build a track record and trust across the spectrum̶generate, connect, and use

We bring together the people and expertise needed to support every stage of the carbon credit value chain̶from credit creation, brokerage, and utilization support to market development. As a result, we are involved across the full spectrum (generate, connect, and use) of the carbon credit market. By leveraging our intellectual capital and engaging from the credit generation stage, we provide high-quality carbon credits that deliver value beyond decarbonization by creating additional benefits for local communities and biodiversity, thereby earning the trust of our customers.

Expand the carbon credit market to advance Japanʼs decarbonization and build a sustainable earnings base

Since the launch of the carbon credit market operated by the Tokyo Stock Exchange, we have helped foster market liquidity through continuous trading and have been recognized as a Best Market Maker for three consecutive years. We have also played an active role in developing market rules. By looking ahead to the marketʼs future development, we are turning increased demand driven by the full-scale launch of GX-ETS into a growth opportunity that supports the development of Japanʼs decarbonization market. Going forward, we will continue engaging across the entire process, from credit creation to sales, connecting supply and demand while enhancing market trust. In doing so, we aim to accelerate the social implementation of carbon credits while building a new earnings base.

Sumitomo Corporationʼs Role in the Carbon Credit Industry Creation Trading Utilization Those Who “Generate” Carbon Credits Those who “Connect” Carbon Credits Those who “Use” Carbon Credits Sellers Intermediaries Buyers Sumitomo Corporationʼs Areas of Involvement Certification Bodies Review, validate, and verify projects and issue/certify credits In addition to credit generation, trading, and utilization support, Sumitomo Corporation is also involved in rulemaking

Build resilient and prosperous society Global relationship capital

▶ Sulfuric acid | https://www.sumitomocorp.com/en/jp/enrich/video/0022

Provide a stable supply of sulfuric acid̶an essential material for everyday life̶to customers globally as a world-leading supplier

Sulfuric acid is essential to a wide range of industries, including agriculture, mining, and manufacturing, and a vital raw material supporting peopleʼs daily lives. Through Interacid Group, a wholly owned subsidiary, we have built a global relationship that connects producers and consumers worldwide, thereby achieving social value in the form of stable supply and sustainable growth.

Business model that leverages one of the worldʼs largest trading operations to turn supply–demand imbalances into value

Sulfuric acid is the worldʼs most widely traded basic chemicals and an indispensable industrial raw material. However, supply and demand vary significantly by region. Handling around 30% of global maritime sulfuric acid trade, Interacid Group is one of the worldʼs largest market players. By identifying regional supply–demand gaps and strategically securing logistics hubs, it has established a system that ensures the stable supply of sulfuric acid. Its competitive advantage lies not simply in trading but also in its ability to optimize logistics.

Integrated capabilities in seaborne trading, logistics, and distribution to ensure a stable supply

While operating as a trader, Interacid Group is the only market participant that owns and operates its own storage tanks, enabling it to provide integrated services that seamlessly combine marine transportation and inland logistics. It has established a system that enables us to reliably receive sulfuric acid, which is difficult to store, and supplies it to customers when needed. By providing the added value of balancing supply and demand and ensuring safety and reliability, Interacid Group generates sustainable earnings while delivering lasting value to its customers.

Customer trust built through decades of rigorous safety management

Handling sulfuric acid requires rigorous safety management. Accordingly, Interacid Group adheres to its Zero Leakage Policy, ensuring that not a single drop is spilled. Through its unwavering commitment to safety and reliability, it has built long-term relationships with producers and customers, creating a network that spans the world. These relationships, cultivated over more than 30 years, are the foundation of Interacid Groupʼs sustainable growth. Interacidʼs tank terminal located in Mejillones, Chile