Production and Logistics

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1 Aspects Production and Yasuhito Yamauchi Production Environment Committee Chairman Yasuhito Yamauchi joined Toyota in 1968 and has gained experience in a wide range of engineering, production engineering and production areas. He became a Managing Director in 1999, while also serving as the chairman of the Plant Production Subcommittee and the Overseas Production Subcommittee. He was appointed a Senior Managing Director in 21 and has been the Chairman of the Production Environment Committee since 23. In June 25, he was appointed President of Aisin Seiki Co., Ltd. In the areas of production and logistics, Toyota continued to take action in FY24 focusing on the prevention of global warming, reduction of substances of concern, reduction of waste, and conservation of resources, including water. Toyota was able to achieve most of its goals in these areas, through the steady, joint efts of the production engineering divisions and plants. The achievement of these goals by Toyota Motor Corporation (TMC) alone is not sufficient; group companies subject to consolidation all over the world must take similar actions. Taking action to ensure legal compliance and completely eliminate complaints from the surrounding communities is also important. Toyota is committed to further enhancing its environmental initiatives through the participation of all employees, based on the powerful leadership of company executives at all of its business entities worldwide, including TMC. Production In FY24, Toyota achieved its reduction goals in CO2, completed the fouryear plan to implement measures to prevent soil and groundwater contamination by oil leakage, and took comprehensive risk management steps, including actions to achieve zero non-compliance and zero complaints. Furthermore, Toyota created its Fourth Toyota Action Plan, with the goal of becoming No. 1 in production environment efficiency by FY21. Volume of Resources Input and Volume of Substances Released In the production area, Toyota uses many types of resources and energy, and releases such things as CO2 and waste. The logistics area also releases CO2 during the course of transporting completed vehicles and. The figure on the top of the next page shows the volumes of resources and energy input and the volume of substances released in FY24 in production and logistics processes. A total of 1.67 million tons of raw materials and supplementary materials, 34.5 x 1 6 GJ of energy in the m of electricity and fuel, etc., and 14.3 million cubic meters of water, were used at Toyota million tons-co2 of greenhouse gases and million cubic meters of water were released into the atmosphere and waterways respectively. Of 546, tons of the total volume of waste generated and not processed by Toyota, 54, tons was reused as recyclable resources in the m of raw material steel, and 6, tons was disposed of in landfills. In logistics, CO2 emissions during the transport of 3.5 billion ton-kilometers of completely built units and amounted to 285, tons-co2. 3 Organization Chart (Positions and areas of responsibility as of March 25) Production Environment Committee Chairman: Senior Managing Director Yasuhito Yamauchi Established in 1963 Discusses and determines important issues environmental preservation in procurement, production and logistics areas, and promotes comprehensive environmental protection measures Production Environment Technology Subcommittee Conducts technological development focusing on environmental measures at the pollution source of production equipment and plans measures equipment Overseas Production Subcommittee Promotes transfer of environmental preservation technology to overseas businesses Plant Production Subcommittee Conducts environmental preservation at all plants and housing works Manager by Region (Plant General Manager) Preservation Secretariat by Plant Production Environment Subcommittee Promotes reductions in environmental impact caused by logistics Production Environment Management FY24 Goals Promotion of measures to prevent soil and groundwater contamination Expansion of best practices to prevent abnormalities 1 and complaints that occurred at other plants Plant EMS Internal Audits In FY24, Toyota conducted internal audits at eight of its plants and housing works, and the results satisfied ISO 141 requirements. On-site follow-up audits conducted three to six months later verified

2 & Social Report 25 Volume of Resources Input and Volume of Substances Released into the Environment from 1 Production Plants and in FY24 Input Total materials volume input (1.67 million tons) Amount of materials reused in automobile production processes of Toyota (39, tons) Total energy consumption (34.5 x 1 6 GJ) 1 Renewable energy consumption (Wind power generation: 258GJ) Water consumption (14.3 million m 3 ) Volume of substances subject to PRTR (17, tons) 1. GJ (giga joule) = 1 9 J 2. Greenhouse gas types Six types: CO2, CH4, N2O, HFC, PFC, SF6 3. Includes the ash generated from incinerators during recovery of thermal energy at Toyota Production Process Press Casting and Forging Machine Processing Welding Released into waterways Total amount of wastewater (11.84 million m 3 ) Volume of substances subject to PRTR (14 tons) Gases emitted into the atmosphere Engines Transmissions, etc. Volume of greenhouse gases 2 emitted (1,538.7 thousand tons-co2) CO2: 1,535.5 thousand tons Gases other than CO2: 3,2 tons Volume of substances subject to PRTR (3, tons) Painting Assembly Thermal recovery Volume recovered as thermal energy by Toyota (8,6 tons) Volume of waste generated and not processed by Toyota Volume of substances subject to PRTR disposed of at landfills within business sites (5 tons) CO2 emissions (285, tons-co2) Gases emitted into the atmosphere Total volume of waste generated (546, tons) Volume reused (54, tons) Final volume disposed of (6, tons) 3 Volume of substances subject to PRTR (3 tons) Input Total transportation volume in Japan (3.5 billion ton-kilometers) Volume of wrapping and packaging materials (49,4 tons) Aspects that all of the improvement requirements identified by the main audits had been satisfied. In FY25, in an eft to not only satisfy but go beyond the ISO requirements, Toyota is switching to an auditing method that determines whether the PDCA cycle is effectively functioning in three key areas: (1) Legal compliance (zero abnormalities and complaints), (2) Prevention (risk minimization), and (3) permance improvement (No. 1 in the world, No. 1 in each region). The new audits will also continue to include as important auditing items addressing issues raised in the past at each plant, comprehensive daily management of facilities to prevent soil and groundwater contamination, and propagation of the best practices of other plants to prevent abnormalities and complaints. 1. Abnormalities: Legal non-compliance, accidents and near-miss accidents Production Engineering EMS Internal Audits Toyota conducted internal audits at its nine divisions related to production engineering responsible facility planning, focusing on the status of (1) legal compliance (notice to authorities), (2) prevention (environmentally conscious designs), and (3) environmental permance improvement (production process improvements), all of which are goals of the Production Engineering EMS. Follow-up audits verified that all of the improvement requirements identified by the main audits had been satisfied. In FY25, Toyota plans to conduct audits to assess how firmly the improved systems have been established, with a particular focus on legal compliance and the elimination of environmental accidents. Collaboration between Plant EMS and Production Engineering EMS Zero abnormalities and complaints Notice to authorities Plant EMS Risk minimization ly conscious designs Production Engineering EMS No. 1 in the world, No. 1 in each region Three Key Areas of Production Environment Legal compliance Prevention permance improvements Production process improvements Legal Compliance Activities Achieving Zero Abnormalities and Complaints In this area, Toyota continued to expand implementation of best practices to prevent 11 kinds of potential complaints and 77 actual cases of abnormalities, complaints or near-miss accidents 2 identified during a four-year period ( ). Examples of near-miss accidents included oil release into storm drains from oil-contaminated pallets left outdoors, oil leakage onto intra-facility roads from poorly maintained vehicles, and noise from loading operations. By the end of March 25, use of the best practices was expanded to all departments that could benefit from the shared inmation. 2. Near-miss accidents: Potentially high-risk incidents that did not lead to actual accidents Identification of New Issues and Respective Responses When Toyota established clear internal standards infrequent and non-constant noise and reevaluated the situation, it identified eight cases of concern, including -loading noise at the engine-shipping docks. Toyota will take the necessary measures to rectify the situation by the end of FY25. Similarly, Toyota intends to examine enhancing its in-house offensive odors standards. 31

3 Aspects Production and 32 Integrating Power Supply and Maintenance Allows Centralized Monitoring The Power Supply and Maintenance Center located at the Motomachi Plant (Toyota City) not only manages power 12 plants, but also manages activities to prevent abnormalities and complaints through the use of monitoring cameras and special sound detection microphones. Several cameras are installed at wastewater treatment facilities, chemical storage locations and smokestacks, which have a high potential environmental contamination, allowing monitoring of these sites on video displays. In some locations where plants are close to residential areas, microphones are installed, and if a noise level exceeding the standard is detected, the operation in question is immediately stopped. Central management of operations status at 12 plants Preventive Measures Reporting and Storing Devices Containing PCB In FY24, Toyota reported to the government on its storage of the same number of transmers and condensers (5,247) that contain PCB (polychlorinated biphenyl) as in FY22. Toyota continues to safely store these devices in accordance with the standards specified by law to prevent leakage and soil contamination. Soil and Groundwater-related Measures Toyota completed the soil remediation measures in FY21 that it had been carrying out at six plants. In terms of groundwater contamination prevention, Toyota completed an effluent-prevention measure in 1997 which involved the digging of barrier-type wells and has continued groundwater remediation using pump and treat technology. Toyota reports levels of trichloroethylene to the government, as well as to local councils in the surrounding communities. Trichloroethylene Measurement Values in FY24 standard:.3 Unit mg/l Plant Levels in groundwater Honsha Less than Motomachi Less than Kamigo Less than Takaoka Less than Miyoshi Less than Tsutsumi Less than *Measurements are taken at all plants and housing business sites *Has not been detected in plants other than those listed (at the three housing business sites, measurements began in 1997) *The level has a range since each plant includes multiple measurement points Prevention of Soil and Groundwater Contamination by Oil Leakage Toyota implemented actions to prevent soil and groundwater contamination by oil leakage in accordance with a four-year plan that began in 21. Toyota has adopted all of the actions of the plan, including dualwalled structures underground pits, storage tanks and oil grooves as well as facilities monitoring on a daily basis. In the future, prevention through daily monitoring will be strengthened. Toyota plans to firmly establish the practice of daily monitoring by checking its implementation status through Plant EMS audits. Actions to Prevent Soil and Groundwater Contamination Physical measures Relocation to above ground Dual-walled structure Double-layer structure Implementation of daily monitoring Future actions Visibility measures Fluid level monitoring Alarms EMS internal audits Communication with Surrounding Communities Each of Toyota s plants and housing works holds a community council meeting once a year to communicate Toyota s environmental initiatives and engage in dialog with people in the surrounding communities. In FY24, all plants and housing works held their community council meetings between October and December. At these meetings, Toyota explained its methods managing chemical substances, reported on environmental conditions around the plants, and exchanged relevant opinions. Some local community members expressed their concern about hazardous substances in the event of an earthquake. Prevention of Global Warming FY24 Goal Reduce total CO2 emissions volume per year to 1.57 million tons or less Toyota had established a goal of keeping the combined total CO2 emissions from its 1 plants to 1.57 million tons or less. Through the dedicated efts made jointly by all of the plants, the actual emission was 1.54 million tons, enabling Toyota to meet the goal. Beginning in FY25, Toyota plans to expand its goal to cover offices, research facilities, etc. in addition to plants, and promote energy conservation in these facilities as well. CO2 Reduction by Increased Efficiency and Streamlining of Power Supply Infrastructures To further improve its power efficiency and streamline its power supply infrastructures, Toyota believes it is important to (1) Increase energy conversion rates and reduce supply loss, and (2) Computerize the operation and inspection of power facilities. In order to achieve these goals, Toyota has been taking comprehensive steps. First, Toyota worked on computerization and reducing energy supply loss. Until recently, the running of power supply facilities used to depend on operators intuition and expertise gained from years of experience. However, because these operators focused too much on actions to handle sudden problems or abrupt load fluctuations, they tended to operate facilities at unnecessarily high levels. Additionally, because a wide variety of standards had been established to support the different operating modes of individual plants, effective overall operation was difficult. To resolve these issues, Toyota decided to carry out planned, efficient operations by setting a common operation standard and making energy load ecasts the following day based on local weather ecast data and production plans. Toward this goal, Toyota developed the Power Supply Optimization System, which acts as the actual brain controlling operations, and also took various measures such as introduction of the latest high-efficiency boilers and switching the fuel used from heavy oil to natural gas.

4 & Social Report 25 Company-wide Calorific Energy Use Ratio (including non-production areas) Coke 1.1% Butane gas 3.5% A-type heavy oil 16.1% Natural gas 16.4% Coal.8% Kerosene.3% Electricity 61.8% (Million Tons) Total CO2 emissions (energy consumption) Company-wide CO2 Emissions (Energy Consumption) and CO2 Emissions per Sales Unit , (FY) Note 1: Data housing works as well as that non-production areas such as offices were added to the previously reported figure the automobile production process Note 2: For facilities in non-production areas which FY199 or FY2 emissions data is not available, the oldest subsequent data available is used the graph Please see p. 82 the CO2 conversion coefficient Total CO2 emissions from non-production areas (energy consumption) Total CO2 emissions from production areas (energy consumption) CO2 emissions per sales unit (Tons/Billion Yen) CO2 emissions per sales unit Aspects Purchase of Green Power Toyota concluded a Green Power Certification System agreement with Japan Natural Energy Company Limited. Based on this subcontracting agreement Toyota once again used two million kwh of windgenerated power in FY24. Optimization of Air-conditioner Operation Control Toyota set the long-term goal of reducing CO2 emissions per airconditioner (kg CO2/unit) by half from the FY1995 level by FY27. The two key premises this are: (1) Reduction of energy requirements by establishing a technology to achieve optimum operation based on load ecast, and (2) Reduction of energy requirements at each plant by reevaluating the standards used operation, control, management, and maintenance. First, Toyota optimized the operation standards, which used to rely on the intuition of operators. Then, Toyota evaluated various standards that could lead to the greatest energy savings, and created optimum standards through repeated trials and data analysis. Toyota also made many other meticulous improvements in areas such as the operation of secondary water supply pumps and the method of controlling the cooling water temperature, and as a result, successfully reduced CO2 emissions by 2,618 tons from the FY1995 level (by 44% in kg CO2/unit). Many Energy-conserving Designs Incorporated into the New Head Office Building Many techniques reducing environmental impact were incorporated throughout the New Head Office Building, which was completed in February 25. From the design stage, Toyota adopted 73 of the 11 environmentally sound methods designated by the Ministry of Land Infrastructure and Transport. Some of the major steps taken include load reduction, utilization of natural energy, effective use of energy, and use of ecological materials. For example, to reduce the load borne by window surfaces, the new building uses canopies to shut out the sunlight, as well as air barriers, low-e glass, and automatic control of blinds, substantially reducing the volume of CO2 emissions compared to conventional glass windows. Many other environmentally conscious steps have also been taken, including reduction of electricity requirements lighting through the use of optical duct systems, use of floor-flow air conditioning systems, and natural ventilation utilizing the chimney effect, resulting in expected CO2 reductions of 4% over the entire lifecycle of the building compared to conventional buildings. Lighting using an optical ducts system the employee cafeteria As a result, the new building achieved the Class S (the highest) ranking according to CASBEE,* which assesses the environmental quality and impact of buildings. *CASBEE: Comprehensive Assessment System Building Efficiency 33

5 Aspects Production and 34 Reducing Substances of Concern Reducing VOC Emissions In FY24, Toyota continued to promote the introduction of water-borne paints as a measure to reduce volatile organic compounds (VOC) emissions. Conversion to water-borne paints the top coating (base coat) was completed at nearly all of the lines. Toyota also took additional actions, such as reducing paint solvent usage and increasing the recovery rate after use, and as a result, surpassed the goal FY24 (an average of 37g/m 2 all lines) by achieving 35g/m 2. Trend in VOC Emissions Volume in Automobile Painting Process (Average of All Lines) (g/m 2 ) Emissions volume FY24 Goals Body painting process: Reduce VOC emissions to an average of 37g/m 2 or less all lines Reduce yearly discharge volumes of toluene and xylene (substances subject to PRTR) to 2,5 tons or less (FY) Reducing the Volume of Substances Subject to PRTR Of the substances subject to PRTR, 1 toluene, xylene, ethylbenzene, and 1,3,5- trimethylbenzene are found in Toyota s production processes and account 97% of the total volume. Toyota has been taking various steps to reduce the usage of substances subject to PRTR, including introducing water-borne paints, reducing purge solvent usage, and increasing recovery rates. As a result, the actual released volume of substances subject to PRTR was 3, tons in FY24, which surpassed the original FY25 goal (3,14 tons) one year early but fell short of the revised FY24 goal (2,5 tons). In FY25, Toyota is expanding the targets of reduction actions to include bodies, bumpers, and instrument panels, etc., and is determined to achieve the goal of only 2, tons the year. 1. PRTR: Pollutant Release and Transfer Register Please see p. 85 details on PRTR Discharge volume Trend in Discharge Volumes of Substances Subject to PRTR at Production Plants (Tons) 6, 5,1 5, 4, 3, 2, 1, 3,9 3,6 3,5 3, (FY) Recipient of the 24 PRTR Awards Excellence Prize Toyota received the Excellence Prize in the 24 PRTR Awards run by the Center Inmation Science (CEIS). The contest is designed to encourage businesses to assess by themselves the environmental impact related to the release of chemical substances, promote sound management, and obtain the understanding of the general public. The Excellence Prize Toyota received in 24 is given to business entities (corporations) that are proactively taking steps to manage chemical substances and communicate their risks. CEIS reason giving the award to Toyota was as follows: Toyota not only systematized its chemical substance management, but also established the Eco-Research Corporation 2 to commercialize PRTR data collection work based on its own know-how, and has been actively helping other businesses that lack the necessary know-how. For these actions, Toyota should be highly commended. 2. Eco-Research Corporation: A company that was established jointly by Toyota and Hitachi Group in March 21 and helps other companies comply with the PRTR Law Initiatives to Conserve Resources FY24 Goals Reduce usage of primary raw materials by 11, tons or more Limit usage of foundry sand to 21,5 tons or less Limit usage of oils and fats to 11,1kl or less As primary raw materials, 3 Toyota implemented various measures to reduce resource loss, such as improving the yield in each production process, reducing the number of defective pieces, reducing the number of required, and reducing the required machining by integrating or redesigning shapes. Toyota also took steps to reduce its usage of foundry sand by, example, expanding and consolidating the production of aluminum engine blocks. With regard to reducing the usage of oils and fats, Toyota implemented various routine measures such as eliminating where possible the need oils in the first place by consolidating lines, preventing leakage through early detection and maintenance, and switching to reusable oils and fats. As a result, Toyota reduced its primary raw materials usage by 17,33 tons and used 11,1kl of oils and fats, thus achieving its FY24 goals. However, the usage of foundry sand was 23,2 tons, which was 5,7 tons less than in FY23 but fell short of the FY24 goal. 3. Primary raw materials: iron, aluminum, etc. Changes in Reclamation Rate (%) 1 Reclamation rate Reclamation rate (FY) External recycling volume = Volume of waste not processed by Toyota 1 = Amount of recycling a fee* + amount of recycling free/ amount of money back recycling Volume of waste generated + amount of recycling free/ amount of money back recycling 1 *Money back recycling is a case where the seller obtains a profit after accounting transport and handling costs. Theree, a case where no profit or payment is made after accounting transport and handling costs is called recycling free and a case where a payment must be made to the recycling business is called recycling a fee. Reducing the Volume of Waste Generated FY24 Goal Reduce the volume of waste generated (excluding that recycled) to 12, tons or less (an 8% reduction from 199) After achieving zero landfill waste 4 from production plants in December 2, Toyota achieved the same goal at its nonproduction bases in December 23. The volume of landfill waste generated from both production plants and non-production bases in FY24 was less than 1% of the FY1995 level, and the goal of zero landfill waste was met once again. Toyota significantly reduced the volume of waste generated in FY24, including the portion that was recycled, through reduction measures at the source, such as reduction in the volume of industrial dust collected from casting processes and selling off scrap from grinding processes. Excluding the amount that was recycled, the volume of waste generated was 1,482 tons/year, achieving the FY24 goal. 4. Zero landfill waste: A reduction in landfill waste generated directly by plants to less than 5% of the 1995 level

6 & Social Report 25 Breakdown of the Volume of Waste Generated in FY24 (Excluding that Recycled) Overview of Waste Disposal (FY24 Results) Coal: 11.4 RDF*: 12.9 Fuel (Unit: Thousand Tons/Year) Volume of waste generated Waste oil 7% Paper waste 11% Other 17% Volume of Waste Generated (Excluding that recycled) 1,482 tons Wastewater sludge 11% Plastic waste 21% Volume of Waste Generated (Thousand Tons/Year) Volume of waste generated Paintrelated 33% Amount of recycling a fee Volume of combustible waste Volume of landfill waste (FY) Reduction of CO2 Emissions Associated with Waste Disposal As part of Toyota s efts to promote recycling, in order to reduce the CO2 emissions associated with waste disposal, Toyota compared the volume of CO2 emitted from in-house inceneration with that from external recycling each waste item, determining which method emitted the least CO2 each item. As a result, Toyota was able to reduce the CO2 emissions associated with waste disposal in FY24 by approximately 1, tons/year from the FY23 level. In the future, rather than simply promoting the elimination of combustible waste, Toyota plans to pursue waste disposal methods with the least environmental impact. To handle combustible waste, Toyota has been utilizing fluidized bed boilers* and cogeneration systems, and was able to efficiently recover approximately 9,kl/year of energy (in oil equivalent) in FY24. *Fluidized bed boiler: Sand that is heated to high temperature is turned into a fluid state and swirled by injecting air through the boiler bed, and waste is then fed into the center. The boiler recovers the energy generated by the combustion of the waste and uses this energy to generate steam. Please see p. 85 details on cogeneration systems 1.5 Volume of waste generated (Excluding that recycled) Incombustible.3 Subcontractor Isolated landfills Externally-controlled landfills Note: The details of non-combustible waste are not included because they are minuscule *RDF (Refuse Derived Fuel): Solid fuel derived from waste Combustible 8.4 Intermediary processing by outside subcontractor Incinerated at Environment Center (Energy recovery through electricity generation) Trend in Total Water Consumption at Vehicle Production Plants (Million m 3 ) Groundwater Industrial 2 water (Thousand m 3 N) NOx and SOx emissions volumes Amount reduced (Thermal recovery) Ash from incinerator 5.8 Hazardous dry cell batteries, hazardous dust, etc. Tap water (FY) Trends in Emissions Volumes of Nitrogen Oxides and Sulfur Oxides NOx SOx (FY) Trends in Volumes of Nitrogen and Phosphorus Emissions Included in Wastewater (Tons) Nitrogen Phosphorus Harmless casting waste, etc. Water Consumption/Air and Water Quality Data Water consumption remained basically the same as the previous year. In data accumulated by Toyota on air quality, emissions of SOx (sulfur oxides) continued to decrease. NOx (nitrogen oxide) emissions have been declining slightly because of a fuel switch from butane to natural gas. With regard to water quality data, nitrogen, phosphorus and COD whose aggregate levels in waterways are regulated, all continue to be at levels that are only 1 to 5% of those allowed by regulations Toyota controlled landfills Trend in Water Consumption per Vehicle in Automobile Assembly Plants (m 3 /Vehicle) Yearly emissions volumes COD emissions volume (FY) (FY) Trend in Volume of COD Included in Wastewater (Tons) (FY) Aspects 35

7 Aspects Production and Vehicle Flow Within Japan Ranges covered The area of logistics involves transporting completed vehicles and vehicle throughout Japan and overseas. In FY24, Toyota s transport volume in Japan was approximately 3.5 billion ton-kilometers (tonnage times kilometers). Toyota promoted initiatives to achieve the action goals established by the Production Environment Subcommittee and proceeded with improvement activities. CO2 Emissions Reduction Activities in Japan and their Results Procurement logistics Supplier Directly-shipped products Body manufacturer Production logistics In-house production plant (assembly unit) Completed vehicle Completed vehicle Parts distributor in Japan Completed vehicle Customer Japanese dealer Current Promote enhancement of the management system Customer Overseas Supplier FY24 Goal Reduce CO2 emissions to 268, tons or less (reduce CO2 emissions by 14,3 tons or more) In the area of logistics, Toyota s initiatives to reduce total CO2 emissions during the transport of completed vehicles and include improving loading rates, sharing ship space with other companies to increase shipping efficiency, shifting to more efficient modes of transport, achieving a modal shift, and increasing fuel efficiency. As a result, CO2 emissions decreased by 29, tons in FY24, achieving the reduction goal. However, an increase in the volume of production and a shift of production sites to distant locations (Kyushu and Tohoku districts) increased the total transportation volume and distance, resulting in a total CO2 emission volume of 285, tons. Promotion of Modal Shift Toyota has been promoting a modal shift to marine transport and railway transport, which emit less CO2 per unit of operation. In FY24, Toyota switched the shipment of engines bound Kyushu to marine transport and also switched the shipment of empty shipping cargo containers from Kanto district to railway transport. In addition to these conventional approaches, Toyota also began using railways to ship production on a trial basis in order to expand the use of railway transport. Procurement logistics Parts center center (Packaging plant) Results of CO2 Reduction Actions Use of railway transport packing rate Service Production Imported Shipping port Switched the transport of engines to Kyushu from land to marine transport Further promoted Eco Driving Docking port Expanded the use of railway transport returning empty containers Improved loading rate using newly designed jigs and platms Improved packing rate by loading multiple part types on the same pallet Improved loading rate through deregulation of trailer height limits Reduced number of voyages by sharing ship space with other companies Improved shipment packages loading, etc. Overseas distributor center Group Topic Details Reduction in CO2 production completed vehicles production production completed vehicles production Shift to a mode of transport with low CO2 emissions per unit Reduction of total transportation distance Shift to marine transport fuel efficiency loading rate loading rate Shared shipping loading rate Other Please see p. 82 CO2 conversion coefficients Plant 2,4 tons/year 3,7 tons/year 2 tons/year 1, tons/year 4 tons/year 2, tons/year 3,4 tons/year 7 tons/year 15,2 tons/year Total 29, tons/year Best Practice 1 Use of Railway Production Parts Transportation on a Trial Basis Since April 25, in cooperation with Japan Freight Railway Company, Nippon Express Co., Ltd., and Toyota Transportation, Toyota has been using railway shipment, which results in less CO2 emissions than trucks, on a trial basis. In this trial usage, are shipped in 31-ft railway containers, utilizing the terminal stations closest to the centers in the Toyota district and a distant plant (Iwate Plant of Kanto Auto Works, Ltd.). Toyota s Modal Shift Framework Parts plants in Toyota district Nishi- Hamamatsu Station Morioka Cargo Terminal Station Iwate Plant of Kanto Auto Works, Ltd. The use of railway transportation is expected to reduce CO2 emissions by approximately 1, tons/year compared to truck transportation and by approximately 2 tons/year compared to marine transportation. 36

8 & Social Report 25 Reducing Packaging and Wrapping Materials FY24 Goal Reduce usage to 47, tons or less (reduce usage by 1,5 tons or more) To reduce the volume of packaging and wrapping materials, Toyota took actions such as reducing the material volume at the source, through cooperation between the logistics and design departments, and implementing pinpoint wrapping, which involves wrapping only those areas of that require protection to preserve their quality. As a result, Toyota achieved its reduction goal of 2,5 tons. However, the increase in logistics operations resulted in a total volume of 49,4 tons. Toward Global Expansion With the implementation of the Kyoto Protocol in February 25, the necessity cooperation between companies and their shipping service providers in reducing CO2 emissions is increasing. An example of such cooperation in Japan is the Green Partnership Conference in the transport sector. Toyota s Division has been reducing CO2 emissions at an annual rate of 19, tons over the last three years (7% a year*). Based on these results, we plan to set an even higher goal in Japan and take innovative actions to achieve it. Additionally, we need to strengthen our initiatives from a global perspective and incorporate Toyota s best practices from Japan at overseas sites. Toyota is committed to continuing to take the necessary actions and remaining the leader in logistics-related environmental initiatives as well, both in Japan and overseas. Takeshi Uchiyamada Chairman of Production Environment Subcommittee Executive Vice President since June 25 Aspects Best Practice 2 Improved Packaging Boxes Air-conditioner Condensers In this improvement example, the logistics department participated at the packaging-shape planning stage, which led to modifying the package to a shape that is easier to transport. Toyota changed the delivery mat air conditioner condensers, which used to be delivered with six attachment hooks. These attachment hooks have now been removed, resulting in a switch to the delivery mat of individual packaging boxes of reduced height. This improvement resulted in a 1% (.6 tons/year) reduction in packaging material usage. Delivery mat with attachment hooks Attachment hooks are stored in the gaps and the cushioning material thickness has been reduced *CO2 reduction rate: Calculated according to logistics volume based upon the production and sales plan Results of Reducing Packaging and Wrapping Materials Group Topic Details Reduction production service Increasing the use of returnable containers Increasing the use of returnable containers Streamlining Enhanced Management Expanded use of returnable plastic boxes Change of packaging specifications Global Developments In addition to continuing its supervisory actions in Japan, in FY24 Toyota began assessing actual monthly emissions from logistics operations both completed vehicles and service in North America, and production, completed vehicles, and service in Europe. In the future, Toyota plans to expand the regions involved, and advance its goalbased management activities. Change in the Calculation Method CO2 Emissions In order to correctly evaluate the results of these actions and calculate CO2 emissions volume, Toyota is reassessing the calculation method being used. Toyota is currently using the ton-kilometer method, which calculates CO2 emissions volume by multiplying the load volume by the distance Conversion of individual packaging boxes bumpers to returnable types Size reduction in packaging boxes navigation and audio systems 5 tons/year 2, tons/year Total 2,5 tons/year driven and a CO2 conversion coefficient. By switching from this method to the fuel method, which calculates CO2 emissions based on the actual volume of fuel consumed, by the end of FY25 Toyota plans to more accurately assess its CO2 emissions volume and promote further reduction. Activities at Centers (Zero Complaints from Local Communities) Toyota employees at the Kamigo Center, Inazawa Parts Center, Oguchi Parts Center, Tobishima Center, and Nagoya Wharf Center are all proactively taking the necessary preventive measures in terms of preserving water quality and limiting noise. Each site continually checks oil leaks at truck parking lots to prevent oil leakage, monitors wastewater quality, and measures noise levels in the surrounding areas. As a result, in FY24, there were no problems or complaints at any of the sites. 37