Hachinohe Biomass Power Plant to Provide Environmental Value to JR East via Virtual PPA — Promoting Decarbonization in the Railway Business

Hachinohe Biomass Power Co., Ltd. (President: Hiroshi Yasuda; hereinafter "Hachinohe Biomass"), in collaboration with eREX Co., Ltd. (President: Hitoshi Honna; hereinafter "eREX"), will provide environmental value to East Japan Railway Company (President: Yoichi Kise; hereinafter "JR East") starting in April 2026.

This initiative utilizes a virtual PPA (Power Purchase Agreement). A virtual PPA is a long-term contract to purchase only the environmental value of a renewable energy power plant. It is becoming a popular method for corporate decarbonization, as it allows consumers to utilize renewable energy without changing their existing electricity contracts.

Through this initiative, the Hachinohe Biomass Power Plant, which has been operating under the FIT (Feed-in Tariff) system, will transition to the FIP (Feed-in Premium) system*. It will provide approximately 85 million kWh of environmental value annually to JR East, equivalent to a reduction of about 35,000 tons of CO2 per year. This contributes to a reduction of approximately 2% of JR East's total CO2 emissions.

Through this effort, we will contribute to the self-sustainability of renewable energy sources and work toward the realization of a carbon-neutral society, which is a pressing social issue.

*FIP System: Abbreviation for Feed-in Premium. In addition to the revenue obtained by power producers from selling electricity and environmental value on the wholesale electricity market, a FIP premium (the difference between the FIP base price and the reference price) is granted by the Organization for Cross-regional Coordination of Transmission Operators, Japan (OCCTO). The reference price is linked to market prices and is reviewed on a monthly basis.

1. Overview of the Initiative JR East will purchase the environmental value equivalent to the total power transmission of the Hachinohe Biomass Power Plant through the eREX Group. The Ministry of Economy, Trade and Industry is promoting the transition of FIT power sources to the FIP system to make renewable energy a primary power source, and the power plant will transition to operations under the FIP system starting in April 2026.

2. Initiatives of Each Company (1) Hachinohe Biomass Power Co., Ltd. Hachinohe Biomass Power Co., Ltd. was jointly established by Sumitomo Forestry Co., Ltd., Sumitomo Osaka Cement Co., Ltd., and JR East with the aim of expanding the use of forest resources and creating environmentally friendly energy. Since starting operations in April 2018, it has supplied electricity equivalent to approximately 27,000 households. It operates as a biomass power plant exclusively using domestic wood, specifically unused forest materials from Aomori and Iwate prefectures. It has been certified as a regional resource biomass power generation facility, recognized for its contribution to forestry promotion using local materials and its stable supply unaffected by weather. We will continue to work with the local community to create environmentally friendly renewable energy.