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Environmental Performance Report

Auto weight reduction is an effective means of pre-venting global warming because it improves fuel economy, thereby reducing exhaust gas emissions.

In particular, further reduction in the weight of au-tomotive steel sheets is needed, as these account for the largest percentage by mass of auto structural materials. At the same time, improved crashwor-thiness is also required to ensure passenger safety during collisions.

High tensile strength steel sheets (HITEN) are extremely effective for both weight reduction and crashworthiness because the same strength can be secured with thinner material. However, press formability, weldability, and fatigue characteristics, all tend to deteriorate in high strength steel sheets, limited their applicability.

JFE Steel was among the first steel makers to

take up this problem, and has developed a wide range of innovative high strength steel sheets using the company’s own technologies.

For example, “SFG HITEN,” which offers ex-tremely high formability and attractive surface ap-pearance, was the first 390 MPa*1 and 440 MPa grade steel sheet in the world used in auto side panels, enabling a 10 kg weight reduction, while 980 MPa HITEN sheets manufactured with JFE Steel’s proprietary continuous annealing process are used in the seat frame and various reinforcing members, reducing weight by 15-20 kg. JFE Steel has also developed and commercialized many other high quality, high strength steel sheets for a wide range of applications, including “NANO HITEN” (p. 51) and “BHT steel sheets.”*2

Contributing to Auto Weight Reduction

High Tensile Strength Automotive Steel Sheets (HITEN)

High tensile strength automotive steel sheets (HITEN)

*Door panel test produced with 1200t press at JFE

Ferritic Stainless Steel with High Corrosion Resistance and Ultra-deep Drawing Property JFE-SX1

With automotive fuel tanks, it is important to maximize capacity in the limited space available, which requires forming in extremely complex shapes. The material must have excellent formabili-ty, combined with high corrosion resistance to pre-vent dangerous fuel leaks.

Conventionally, lead-tin plated steel sheets were used in fuel tanks, but in recent years, lead substi-tutes have been demanded in response to stricter environmental regulations such as the ELV Direc-tive*1 in the EU and California’s CARB regula-tions*2 in the U.S. The Strategic Alliance for Steel Fuel Tanks (SASFT) of the American Iron and Steel Institute (AISI) conducted evaluation tests of various fuel tank materials supplied by steelmakers to meet extended product warranties of 15 years-150,000 miles, as required under the California regulations, with the aim of establishing the

super-iority of steel fuel tanks in terms of both durability and environmental performance.

JFE Steel is a leader in R&D on ferritic stain-less steels for fuel tanks, where this material offers excellent corrosion resistance and recyclability, and developed “JFE-SX1” with high formability and corrosion resistance. The performance of this product has also been confirmed in the common corrosion resistance test for North America by the SASFT. JFE-SX1 also possesses sufficient cor-rosion resistance for high concentration biomass alcohol fuels. Because heavy painting for corro-sion resistance is not necessary, it also contributes to reducing environmental loads and improving the working environment in the tank manufac-turing process.

Where formability is concerned, JFE-SX1 is the world’s first ferritic stainless steel to achieve an

extremely high Lankford value (r-value)*3 of 2.6 and has demonstrated satisfactory ultra-deep drawability.

Contributing through Environment-friendly Products/Technologies

Environmental Performance Report

JFE Holdings

JFE Steel JFE Engineering Kawasaki Microelectronics JFE Urban Development JFE R&D

Environment-friendly Steel Products

*1) MPa

Unit of tensile strength. 390 MPa grade steel sheets can withstand a load of 40 kg/mm2. Similarly, 440 MPa and 980 MPa can withstand loads of 45 kg/mm2 and 100 kg/mm2, respectively.

*2) BHT steel sheet

High strength hot rolled steel sheet utilizing strain aging hardening. Products display high formability during press forming and a large increase in strength after paint baking.

*1) ELV(end-of-life vehicle) Directive (EU)

EU Directive on scrapped automobile recycling/disposal.

Effective July 2003, it banned the use of four substances, lead, mercury, cadmium, and hexavalent chromium.

*2) California’s CARB regulations (US)

Strict exhaust regulations imposed by the California Air Resources Board (CARB), centering on ZEV (Zero Emis-sion Vehicle) regulations.

*3) Lankford value (r-value)

Index of the deep drawing property of steel.

Test-manufactured fuel tank using stainless steel

As conventional painting/baking process in can-making generates harmful chemical substances (waste solvents/paint) and flue gas, there have been increasing demands for eliminating the painting process.

JFE Steel produces approximately 800,000 tons/year of coated steel sheets for cans. Replacing this entire amount with laminated sheets would greatly reduce environmental loads in the canmak-ing process, reduccanmak-ing releases of solvents from ap-proximately 4,000 tons to 0 and CO2 emissions from 600,000 tons to 200,000 tons. JFE Steel is therefore developing new laminated steel sheets to realize a 100% laminated canmaking product line.

“Universal Brite” is an epoch-making lamin-ated steel sheet for food cans which was devel-oped based on proprietary JFE Steel technologies.

Using a base hoPET film with a unique mo-lecular structure, a special additive which improves the meat release property (easy re-moval of the con-tents) is added to the film surface lay-er, making it

possi-ble to omit the painting/baking processes while se-curing excellent formability, adhesion, corrosion resistance, and a meat release property equal to or better than those of existing paints.

Universal Brite has been ordered in large quan-tities by major canmakers in North America and has a steadily increasing record of use around the world. It is expected to contribute to expansion of the market as the standard coated steel sheet prod-uct for food cans.

The EU has set a deadline of July 2006 for replac-ing hexavalent chromiun, lead, mercury, and cad-mium with substitutes, in accordance with RoHS Directive*1 effective from February 2003. In Japan, the manufacturing industry is reducing the use of harmful substance amount to their products along with the introduction of “Green Procurement Pro-grams.” In the view of reduction of environmental load and consideration of workers’ health, to re-place chromate coated steel sheets, JFE Steel devel-oped a coated steel sheet which contains no chrome (VI) but still offers excellent corrosion re-sistance, electrical conductivity, paint adhesion, anti-fingerprint property, and lubricity. In particu-lar, because simply substituting other heavy metals for chrome (VI) reduces corrosion resistance, the same performance as in conventional products is secured by a composite film with a unique design consisting of a special organic resin and inorganic substance.

In order to secure high long-term use reliability

in electric appliances made from Chromate-Free Coated Steel Sheets, a test method for accurately evaluating corrosion resistance in actual service en-vironments is indispensable. JFE Steel therefore be-gan development in 2001 and established an inde-pendent Accelerated Corrosion Test for Electric Appliances (ACTE*2) in November 2003. This test method accurately reproduces corrosion phenom-ena in coated steel sheets in actual service environ-ments, which had been difficult with the conven-tional salt spray test, and is useful in appropriate development and selection of coated sheets.

This product is now used in internal panels of appliances and vending machines, internal com-ponents of OA equipment and copiers, chassis of televisions, VTRs, and audio equipment, and other parts, and an expanded range of applications is expected.

The chromate-free ratio of steel sheets at JFE Steel was 60% as of April 2004, and a complete changeover is scheduled by the end of FY2005.

Large Reduction in Solvent/CO

2

Emissions

Laminated Steel Sheet for Food Cans (Universal Brite) Eliminating Use/Discharge of Harmful Chemical Substances

Example of canmaking (half-pound food can)

Contributing through Environment-friendly Products/Technologies

Environmental Performance Report

JFE Holdings

JFE Steel JFE Engineering Kawasaki Microelectronics JFE Urban Development JFE R&D

Environment-friendly Steel Products

*1) RoHS Directive

EU Directive placing restrictions on the use of designated chemical substances in electrical/electronic equipment.

Abbreviation for Restriction on the use of certain Hazar-dous Substances in electrical and electronic equipment.

*2) ACTE

Abbreviation for Accelerated Corrosion Test for Electric Appliances.

Chromate-free Coated Steel Sheets

(2002 Japan Coating Technology Association Technology Award)

*1) TFS Abbreviation for Tin Free Steel.

Cross-sectional structure of Universal Brite

TFS*1

Upper layer:

Surface reforming additive - New homo-PET film Base layer:

New homo-PET film

Assuming 800,000 tons of product (JFE Steel’s total annual production of steel sheets for cans)

CO2 emissions

600 approx.

200 approx.

Solvent releases

4 approx.

0

Comparison of environmental loads in canmaking (annual) (unit: 1000 tons)

Painted can Laminated can

Transition of chromate-free products

(End of FY) (Scheduled) (Scheduled)

’03

’02 ’04

100 80 60 40 20 0

(%)

’05 60

20

90 100

Layers of Chromate-free Coated Steel Sheets

Organic resin

Steel sheet Zinc-coating

layer Chromate-free coating

•Inorganic corrosion inhibitor

•Corrosion resistance, electrical conductivity

•Anti-fingerprint property

•Paint adhesion

Sintered parts can be manufactured in complex shapes at comparatively low cost. Taking advantage of this feature, applications have expanded to in-clude automotive and electrical machinery parts.

Carburizing heat treatment*1 is performed af-ter sinaf-tering to increase the strength of high strength sintered parts for gears and clutches. This requires reheating to around 900˚C, but reheat-ing generates environmental loads (fossil fuel con-sumption, CO2 emissions, etc.) equivalent to about 20% of the total environmental load in the sintering process.*2

To eliminate the need for reheating, JFE Steel de-veloped “Alloy Steel Powder for Sinter-hardening”,

which realizes high strength without carburizing.

Because the microstructure is strengthened in the cooling process after sintering, tensile strength ex-ceeding 900 MPa and surface hardness exex-ceeding 30 HRC*3 can be obtained. These mechanical properties are superior to those of conventional

al-loy steel powders with carburizing. The product has been adopted in power tools gears and similar applications.

Energy Saving Through Omission of Heat Treatment Processes Alloy Steel Powder for Sinter-hardening

Power tool part

Motors are used in a diverse range of products and currently account for more than half of Japan’s to-tal power consumption. A trial calculation showed that an improvement of only 1% in motor effi-ciency would result in energy savings equal to the output of one medium size (550 MW) nuclear power plant.*1 Under the Revised Energy Conser-vation Law, which took effect in April 1999, the

“energy saving top-runner system*2” was intro-duced to promote higher motor efficiency in

desig-nated equipment. However, improvement by methods such as inverter control has now basically completed one full cycle. To achieve higher effi-ciency, improved performance must be achieved in motor materials as such.

JFE Steel has developed and is producing

“Non-oriented Electrical Steel Sheets for High Ef-ficiency Motors,” which were developed to achieve low iron loss*3 in motors, and thereby reduce pow-er loss, particularly by reducing high frequency

iron loss.

In FY2003, trans-formers for the social sector were newly in-cluded in the designa-ted equipment under the top-runner sys-tem. Because transfor-mers have a long life of around 30 years, a

large energy saving effect over an extended period can be achieved by using high efficiency cores with low iron loss, while also solving the characteristic problem of transformer noise during excitation.

Using its own proprietary technologies, JFE Steel developed and is producing “Grain-oriented Electrical Steel Sheets for High Efficiency Transfor-mers.” With excellent magnetic properties, these products achieve energy savings while reducing transformer noise by increasing magnetic flux den-sity and suppressing the magnetostriction.

Reducing Power Loss in Electrical Appliances and Heavy Electrical Machinery

Non-oriented Electrical Steel Sheets for High Efficiency Motors/

Grain-oriented Electrical Steel Sheets for High Efficiency Transformers

Grain-oriented electrical steel sheets for high efficiency transformers Non-oriented electrical steel sheets for high efficiency motors

*1) Carburizing heat treatment

Hardening process used to increase surface hardness by increasing the carbon content in the surface layer.

*2) Source

Kohmei Harada, Materia Japan, Vol. 37 (1998) p. 42

*3) HRC

Unit of hardness. Converted to tensile strength, 30 HRC is equivalent to 950 MPa.

*1) Source

Toshiro Higaki, ’99 Motor Technology Symposium GS, Japan Management Association (JMA)

*2) Energy saving top-runner system

Energy saving standard introduced under the Revised En-ergy Conservation Law. For designated equipment, the product with the highest energy efficiency among current commercial products is considered the “energy saving top-runner,” and a higher target value and time frame for achievement are set.

*3) Iron loss

Energy loss by power consumption as heat due to mag-netic hysteresis and eddy current in the cores of motors and transformers.

Comparison of tensile strength of as-sintered 21SX and Sigmalloy 415 with carburizing

Alloy Steel Powder for Sinter-hardening

(as-sintered)

JFE Steel’s conventional alloy steel powder (sintering heat treatment)

1,000 980 960 940 920 900

(MPa)

Rustproof paint is generally used to prevent corro-sion in steel structures such as bridges, but paint deteriorates and loses its corrosion resistance after 10-20 years, requiring expensive repainting. The work load is heavy, and chemical substances in the paint may affect the environment.

JFE Steel therefore developed “Weathering Steels,” using the steel material itself to suppress corrosion. A fine, dense layer of strongly protec-tive rust forms on the steel, effecprotec-tively preventing further corrosion without painting and contribut-ing to a long life of 50-100 years. Because the pro-tective rust (iron oxide) has the same composition as natural iron ore, it does not cause environmen-tal pollution.

JFE Steel has also developed and introduced nickel-added high atmospheric corrosion resistant steels for use in environments with high airborne salt concentrations, which was impossible with

conventional products. Conventional JIS weather-ing steel is susceptible to lamellar exfoliation of the rust layer in airborne salt environments, and there-fore cannot be used in coastal areas. In contrast, the new JFE products prevent this problem, even in environments with high concentrations of air-borne salt. At present, these products are used mainly in bridges.

In cities and other areas where appearance is important, rust outflows and uneven rusting in the early period are problems which sometimes limit the applicability of weathering steels. JFE Steel solved this problem by developing new rust stabilization treatments. These treatments are ap-plied only once, at the start of use. Thereafter, the dense layer of protective rust which is the essential feature of weathering steels forms on the steel sur-face over time, eliminating the need for periodical paint repair, while preventing rust outflow and

uneven rusting, and maintaining satisfactory scen-ic appearance.

JFE Steel developed and introduced two types of new rust stabilizer, “CUPTEN COAT M”, aging as protective rust, and “e-RUS”, quickly growing as protective rust. They are 100% free of chrome, lead, and other heavy metals and meet a variety of requirements for formation of a dense protective rust layer.

Reducing Environmental Loads and the Life Cycle Cost of Steel Structures Weathering Steel/Rust Stabilization Treatment

Bridge constructed using weathering steel

To meet increasing demand for natural gas as a form of clean energy, deep oil and gas fields have been developed in recent years. Oil well tubes, or OCTG (oil country tubular goods), must have the strength to withstand high temperature/pressure and possess corrosion resistance against CO2 in natural gas, while threaded joints must provide air-tightness under the high compound loads associ-ated with inclined/horizontal drilling.

With conventional OCTG, damage to the oil or gas well due to corrosion was a concern. Chem-ical inhibitors were used to prevent corrosion but caused environmental loads. JFE Steel therefore developed and supplies “Martensitic Stainless Steel Tubes,” such as “13%Cr Steel Tubes,” and threaded joints with excellent airtightness for use

with these tubes. These products satisfy strength and corrosion requirements and reduce inhibitor use, and are widely employed as OCTG for natu-ral gas development. By reducing environmental loads through extension of the life of oil and gas

wells, they are contributing to a stable supply of natural gas.

Supporting Stable Energy Supply

Martensitic Stainless Steel Tubes/Threaded Joints

Contributing through Environment-friendly Products/Technologies

Environmental Performance Report

JFE Holdings

JFE Steel JFE Engineering Kawasaki Microelectronics JFE Urban Development JFE R&D

Ecological Steel Products

Surface platform

Structure of sea bottom oil well

Continental shelf

Sea bottom oil field Surface platform Oil well tube

Responding to Customers’ Green Procurement Programs

Silicon ingot manufacturing plant

Although the manufacturing process for solar cells is energy-intensive, power generation is CO2-free.

Thus, life-cycle CO2*1 emissions are low, at 1/14 to 1/18 the levels in thermal power generation. Solar cells have therefore drawn attention as a means of preventing global warming and depletion of fossil fuels. In addition to heightened environmental awareness in recent years, many nations have adop-ted preferential policies to encourage the use of sol-ar power, resulting in lsol-arge worldwide growth in the demand for solar cells, and in turn, rising de-mand for silicon wafer/ingot materials.

In 1997, JFE Steel began R&D on a new man-ufacturing technology using a metallurgical refin-ing process for solar-grade (SOG) silicon refin-ingots.

By applying steel refining techniques, in 2001, the company established the metallurgical foundations for phosphorus and boron removing processes for SOG silicon for the first time in the world. With this process, production can be adjusted flexibly as required by demand for silicon ingots/wafers for solar cells.

In the same year, JFE Steel also began commer-cial production of silicon blocks for solar cell sub-strates at 200 tons/year using purchased polysilicon material. In August 2004, production was scaled up to 800 tons to meet increasing demand.

Purity exceeding 99.9999% is secured in JFE Steel silicon ingots/wafers by applying contamin-ation prevention technology, and thanks to the homogeneous solidification structure realized with casting technology, solar cells made from JFE’s SOG silicon established a world’s highest level of conversion efficiency*2 of 16% in multi-crystalline silicon.

Development and Popularization of New Energy Solar Cell Material Business

*1) Life cycle CO2

Total CO2 emissions generated in all processes from ex-traction of resources to manufacture of generating equip-ment and fuel transmission, as well as in the combustion of fuel for power generation.

*2) Conversion efficiency

Ratio (%) expressing conversion of light energy to electri-cal energy by solar cells. For example, if 1 kW/m2 of light (energy of sun in clear weather) on a 1 m2 solar cell area produces 100 W of electrical power, conversion efficiency

= 10%.

In addition to eco-product R&D, JFE Steel has strengthened its marketing and created a marketing system for eco-products. It is also actively responding to the entire range of customer needs related to eco-products, which include implementation of EMS, re-duction of toxic substances, submission of environmental load data, development of judgment criteria for green procurement ma-terials, and proposal systems.

Green Procurement Network was created to enable company-wide sharing of informa-tion on customers’ green procurement pro-grams and studies regulatory and social trends to better serve customers with prod-uct information and direct contact. As an ulti-mate goal, JFE is working to establish a quantitative evaluation method based on Life Cycle Assessment (LCA).

Transition of solar cell demand worldwide 800

600

400

200

0

Japan US Europe Others

(FY) (MW)

’01 ’02 ’03 ’04(est.)

JFE effort toward comprehensive products life cycle of automobiles

Auto product

life cycle Trial production Use Recycling

& evaluation Production Design

Automaker’s objectives

Shorter development

cycle

Conventional function of steelmakers

Conventional steelmaker functions

JFE’s basic technologies Material development technology

JFE’s Potential

Process & evaluation technologies Evaluation/analysis of collision deformation Body crashworthiness analysis (strength/rigidity)

Forming simulation Tailor welded blanks

Eco-energy DME

Recycling Waste plastics

(for BF feed) Scraps recycling High pressure

cylinders for eco-cars JFE’s target function

JFE’s expanded range of functions From design/production to recycling

Environmental needs [Fuel efficiency/CO2 reduction] [Recycling]

Material menu, Material quality

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