Kirin faces costs whichever climate pathway the world takes: a faster transition could make carbon-intensive materials and energy more expensive, while a slower one could increase the physical risks of climate change, including damage to agricultural yields.
The Japanese beverage giant’s latest climate-risk assessment estimates that carbon pricing could add JPY43.8bn (US$274.24m) to packaging costs by 2050 under its Sustainable Scenario, which assumes a stronger global shift towards a low-carbon economy.
The estimate covers emissions associated with aluminium, plastics including PET, and paper used in Kirin’s packaging. The figure reflects the potential cost passed through to Kirin as carbon pricing makes these materials more expensive.
The figure is a scenario-based estimate of potential financial impact, rather than a forecast of what Kirin will actually pay.
The Sustainable Scenario carries the highest packaging cost impact. Under Kirin’s Middle Degradation Scenario, the estimated impact falls to JPY1.1bn (US$6.87) by 2050, while the High Degradation & Climate Change Progression Scenario puts it at JPY0.1bn (US$626,454).
That is because the stronger climate-transition scenario assumes higher carbon prices: the faster the global shift towards a low-carbon economy, the greater the potential cost pressure on carbon-intensive materials.
Kirin also estimates that meeting the targets of its Plastic Policy could require an additional JPY2bn (US$12.53m) in spending on recycled PET resin by 2027. The calculation is based on the volume of recycled PET needed to meet its targets and unit prices assumed when the policy was formulated.
However, the negative impact of PET bottles – such as due to improper disposal of used PET bottles that leak into the ocean – could result in a JPY2.9bn (US$18m) cost for Kirin over the same period.
Acting on climate change is expensive, but failing to transition quickly enough could lead to worsening climate conditions that result in reduced agricultural yields and increasing energy costs, eventually passing on the expenses to consumers.
According to the United Nations report on “Plastics – fueling oil demand, climate change and pollution”, the entire life cycle of plastic – from extracting fossil fuels to disposal – releases billions of tonnes of greenhouse gases into the atmosphere.
This could lead to disruptions to operations due to droughts, which Kirin estimates to cost an additional JPY46bn (US$288m) per year if global temperatures rise by 1.5℃.
Beyond packaging, Kirin expects its low-carbon transition to also financially impact its energy and agricultural raw materials.
What are the different sustainability scenarios?
Sustainable Scenario: A stronger transition towards a low-carbon economy, with tighter climate policies and higher carbon prices, but lower physical climate risks.
Middle Degradation Scenario: A more gradual transition, with moderate climate-policy and physical climate risks.
High Degradation & Climate Change Progression Scenario: A weaker transition with worsening climate conditions, resulting in greater physical risks such as declining agricultural yields.
The Sustainable Scenario carries higher transition costs because carbon prices are assumed to be higher, while the High Degradation scenario carries greater physical risks from climate change.
Financial impact on energy and agriculture
Climate change could have an even larger financial impact on Kirin’s energy costs. The company estimates carbon pricing could add JPY91.8bn (US$574.9m) to energy costs by 2050 under its Sustainable Scenario, compared with JPY3.8bn (US$23.8m) under the Middle Degradation Scenario and JPY3.1bn (US$19.41m) under the High Degradation & Climate Change Progression Scenario.
Agriculture faces a different risk. Kirin estimates declining agricultural yields could have a financial impact of up to JPY2.6bn (US$16.2m) by 2050 under the Sustainable Scenario, rising up to JPY12.1bn (US$75.8m) under the High Degradation & Climate Change Progression Scenario.
Carbon pricing could also affect agricultural raw materials, with the estimated impact up to JPY4.1bn (US$25.7m) under the Sustainable Scenario to a maximum of JPY8.1bn (US$50.7m) under the High Degradation & Climate Change Progression Scenario.
The figures highlight the two sides of Kirin’s climate exposure: stronger decarbonisation could raise transition costs through carbon pricing, while weaker climate action could leave the company more exposed to physical risks such as declining agricultural yields.
Plans for low-carbon transition
“The main targets for the reduction of Scope 3 emissions are containers and packaging and agricultural raw materials. We envisage that regenerative agriculture will be a key adaptation and mitigation measure for climate change related to agricultural raw materials,” according to the Kirin Group Environmental Report 2026.
The company said its transition plan aims to balance emissions reduction, biodiversity and circular-economy goals, with measures including increased use of recycled PET, regenerative agriculture and supplier-level decarbonisation roadmaps.
It is also exploring GHG-free and lower-emission aluminium, as well as increasing PET-to-PET horizontal recycling.
Current initiatives include sustainability certification projects in tea production and research into carbon-sequestering farming practices, with plans to extend regenerative agriculture efforts to additional crops such as soybeans, hops, and barley.
Kirin said it is working with suppliers to measure emissions across its value chain and develop joint decarbonisation roadmaps covering packaging, materials and logistics.
What are Scope 1, 2 and 3 emissions?
Scope 1: Direct emissions from a company’s own operations, such as fuel burned at its factories.
Scope 2: Indirect emissions from the energy a company buys, such as electricity.
Scope 3: Other indirect emissions across the value chain, including raw materials, packaging and logistics.
Kirin invests in low-carbon transition
To reduce Scope 1 and Scope 2 emissions, Kirin has implemented measures to improve energy efficiency and increase renewable energy use. These include reusing waste heat for hot-water sterilisation equipment at the Kirin Brewery Okayama Plant and starting heat-pump boiler operations at New Belgium Brewing in 2025.
The company has also completed the transition to natural gas at all Kirin Brewery and Kirin Beverage plants, as well as the Mercian Yatsushiro plant.
As part of its transition plan, Kirin has allocated JPY4.2bn (US$26.2m) for energy conservation and transition measures between 2025 and 2027, alongside JPY2.6bn (US$16.2m) for renewable energy procurement and expansion. By 2030, those investments are expected to reach JPY8bn (US$50m) and JPY11.4bn (US$71.4) respectively.
Packaging materials and agricultural raw materials account for approximately 70% of Kirin’s Scope 3 emissions, making them key areas of its decarbonisation efforts.
Currently, Kirin is considering the practical application of GHG-free aluminium refined with renewable energy and low-emission aluminium with a higher recycling rate. It is exploring the introduction of carbon-free aluminium cans. It also plans to increase the PET to PET horizontal recycling rate.
Kirin’s New Belgium Brewing in the US has also begun procuring barley produced using regenerative agriculture.
For Scope 3 measures, Kirin estimates costs of JPY200m (US$1.25m) between 2025 and 2027 for low-carbon malt, recycled aluminium and green aluminium, alongside JPY22.4bn (US$140.3m) for recycled PET resin. By 2030, these costs are expected to reach JPY4.7bn (US$29.4m) and JPY25.2bn (US$157.8m) respectively.
“Deriving ‘integrated solutions’ that simultaneously tackle climate, biodiversity, and resource circulation from a holistic perspective has now become a new prerequisite for corporate value creation,” said Hiroaki Takaoka Senior Executive Officer for CSV Strategy at Kirin.
He added that Kirin is targeting 100% renewable electricity by 2040 and net-zero emissions by 2050, alongside greater use of recycled and low-carbon packaging materials and sustainable agricultural practices.