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Coordinating Corporate Growth,

Environmental Conservation

1. To reduce environmental influence in all business operations

2. To make contributions through technologies and products

3. To make contributions through conservation of resources and energy

4. To promote communication with society

5. To promote international cooperation

The JFE Group considers the improvement of the

global environment to be of utmost importance for

management, and promotes business operations in

harmony with the environment to create a

prosperous society.

Editorial Policy

“JFE Group Environmental Sustainability Report 2007” states environmental protection activities in the year ended March 2007, as well as results of those activities in the business operations of JFE Holdings, Inc., which is the holding company of the JFE Group, and its operating companies. This Report was edited/prepared in accordance with “Guidelines for Environmental Reports (FY 2003 ed.)” issued by Japan’s Ministry of the Environment (MOE)

and “Sustainability Reporting Guidelines 2006” issued by the Global Reporting Initiative (GRI). Please note that this Report is disclosed solely on the website. If you need (a) brochure(s), please print out this document. For further company information, business descriptions, product information, and operation facilities, etc., please refer to JFE GROUP BUSINESS REPORT 2007 or our website at

http://www.jfe-holdings.co.jp/en/index.html

CONTENTS

• Message from Senior Management • Priority Environmental Targets and Results • JFE Steel’s Activities to Prevent Global Warming  • Environmental Management

• Environmental Accounting

• Communication with Society Related to the Environment • Contribution to Biodiversity

CHAPTER ⅠReducing Environmental Loads in Business Activities

Energy/Material Flow in the Steelmaking ProcessReducing Environmental Loads in Business Activities at JFE SteelReducing Environmental Loads in Business Activities at JFE EngineeringReducing Environmental Loads in Business Activities at Kawasaki MicroelectronicsReducing Environmental Loads in Business Activities at JFE Urban Development

CHAPTER ⅡReducing Environmental Loads through Products and TechnologiesJFE’s Products/Technologies Which Contribute to Global Environmental ProtectionContributing through Steel Technologies/Products

JFE Engineering’s Products/Technologies Which Contribute to Global Warming PreventionRecycling Technology Contributing to a Sustainable Society •Research & Development of Environmental Conservation Technology •International Contribution by Providing Environment/Energy Technologies

History of Environmental Measures in JFE Group

Environmental Businesses Network of JFE Group Companies Awards Received for Excellence of Environmental Technologies Third-party Comments

1 2 3 7 9 10 11

13

15

19

21

22

24 25 27 29 31 32 33 35 37 38

The JFE Group is dedicated to implementing effective strategies for protecting the natural environment. To date we have invested substantial time and energy into energy saving production processes, green technolo-gies and products, and cooperation both regionally and internationally. We will maintain these efforts in the years to come, guided by corporate standards of busi-ness conduct and an environmental policy that empha-size coexistence with and enhancement of the global environment.

The Kyoto Protocol will soon enter its first commitment period. Indeed, 2008 is just around the corner. With this milestone firmly in mind, the JFE Group has been promoting reduction of greenhouse gas emissions through various measures, including

conservation of energy, reduced application of chemicals with substantial global warming coefficients, and introduction of new technologies. We are committed to assuming our social responsibility and achieving the reduction targets stipulated by the Japan Business Federation (Nippon Keidanren) in its voluntary action plan.

Development and maintenance of social infrastructure depends on JFE Group products and technologies such as steel products and energy/recycling technology. Determined to play an important role in supporting the global environment, JFE Group will continue to manufacture and innovate environmentally friendly products and technologies.

Senior Vice President

Eiji Hayashida

Environmental Philosophy Environmental Policy

J F E G R O U P

2 0 0 7

(3)

Priority Environmental Targets and Results

2007 Results 2008 Priority Environmental Targets 2007 Priority Environmental Targets

Promote measures to prevent global warming

• Promote measures to prevent global warming based on Japan Iron and Steel Federation’s Voluntary Action Plan. (Achieve a 10% reduction in energy consumption by the year ending March 2011, compared to the year ended March 1991 level.)

Promote byproduct recycling

• Look at developing and applying technologies for recycling dust and slag.

(Maintain the year ended March 2006 target.) • Reduce final disposal of waste bricks by 20% in a

year-to-year comparison.

Strive to reduce environmental risks

• Comply with new regulations.

• Promote voluntary environmental conservation activities.

Reduce chemical substances

• Reduce PRTR substances by one type. • Reduce notification substances from two types to

one type.

Reduce consumption of chemical substances

• Reduce consumption of the notification substance.

Reduce waste

• Reduce waste generation by 4% or more.

Reduce industrial waste

• Reduce wastewater treatment-origin dehydrated sludge by 10%.

Promote energy-saving activities in production divisions

Tsurumi Engineering & Manufacturing Center:

10% reduction compared to the year ended March 1998 level. Shimizu Works:

16% reduction compared to the year ended March 1998 level. Tsu Works:

16% reduction compared to the year ended March 1998 level.

At Tsurumi, the target is calculated based on electricity usage per hour of operation.

At Shimizu and Tsu, the target is calculated based on electricity usage per unit volume of production.

• Targets were fulfilled at Tsurumi and Shimizu but not at Tsu.

Tsurumi Engineering & Manufacturing Center: 10% reduction compared to the year ended March 1998 level.

Shimizu Works:

17% reduction compared to the year ended March 1998 level.

Tsu Works:

10% reduction compared to the year ended March 1998 level.

• Reduced unit energy consumption by approximate 18% compared to the year ended March 1991 level. • Implemented CDM.

(In Philippines: obtained approval from the UN in May 2007.)

• Installed more CDQ.

• Ongoing development of technologies for recycling dust and slag.

Dust treatment technology by Hi-QIP method. Recycling technology for stainless acid detergent. • Final disposal rate of waste bricks:

Achieved targets by sorting out and recycling bricks based on each usage and recovered almost all.

• Complied with new regulations.

• Promoted voluntary environmental conservation activities. Wastewater control activity by manufacturing line. Installation of monitoring sensors.

Implementation of voluntary administrative activity to reduce VOC.

Promote reduction of construction site waste

• Reduce final disposal rate*1 to 35% or less in three years ending March 2008.

• The year ended March 2007 final disposal rate: 32.4%. (Total waste volume: 1,960 tons)

Promote resource-saving and

environmentally friendly office activities

• 4% increase in green procurement rate of office supplies compared to the year ended March 2005 level.

Promote energy-saving activities in production divisions

Tsurumi Engineering & Manufacturing Center: 11% reduction compared to the year ended March 1998 level.

Shimizu Works:

17% reduction compared to the year ended March 1998 level.

Tsu Works:

11% reduction compared to the year ended March 1998 level.

Promote byproduct recycling

• Continuously look at developing and applying technologies for recycling dust and slag. • Reduce landfill of slag by 20%.

Continuously strive to reduce environmental risks

• Comply with new regulations.

• Promote voluntary environmental conservation activities.

Promote measures to prevent global warming

• Promote measures to prevent global warming based on Japan Iron and Steel Federation’s Voluntary Action Plan. (Achieve a 10% reduction in energy consumption amount during the period from the year ended 2009 to the year ending March 2013, compared to the year ended March 1991 level, and another 1.5% reduction (additional target) through effective usage of waste plastics, etc.)

Promote reduction of construction site waste

• Reduce final disposal rate to 35% or less in three years ending March 2008.

Promote resource-saving and

environmentally friendly office activities

• 6% increase in green procurement rate of office supplies compared to the year ended March 2005 level. • Targets were fulfilled at Tsurumi and Tsu but not at

Shimizu.

Tsurumi Engineering & Manufacturing Center: Up 9.2%. Shimizu Works: Up 0.0%.

Tsu Works: Up 4.0%.

Promote measures to prevent global warming

• Energy saving rate: 1.0% or higher.

• Carry forward experiments to reduce PFC gas*2 by 70%.

Promote measures to prevent global warming

• Energy saving rate: 1.0% or higher.

• Complete alternatives for C2F6 and commence specific reduction measures aiming at 10% reduction of PFC emissions compared to the year March 1996 level. • Energy saving rate: 0.78%.

• Completed basic evaluation on C2F6 (PFC gas) reduction and consideration on practical application of alternatives.

• Terminated the use of acetic acid 2-ethoxyethyl. • Reduced notification substances from two types to one

type (hydrogen fluoride and its water-soluble salt).

• Achieved reduction of 4% or more.

*1 Final disposal rate = {total waste volume – (volume recycled + volume reduced)} / total waste volume

*2 PFC: Perfluorocarbon

JFE Steel

JFE Engineering

Ka

w

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(4)

The year 2007 is a very important year as the first commitment period of the Kyoto Protocol starting 2008 is approaching. In light of expanding crude steel production in response to increasing customer needs for highly functional steel products and more energy consumption due to stricter environmental measures, goals of the Voluntary Action Program of the Japan Iron and Steel Federation (JISF) will not be easily attained. Nevertheless, we are determined to make all-out efforts to achieve those goals mainly by reducing CO2 emissions through our technological measures, and partly by using the Kyoto Mechanisms as a complementary measure.

Energy Saving Activities

Iron and steel manufacturing uses coke as a reducing agent during the process of reducing iron ore. The reducing process leads to CO2 emissions. Since the 1970s, JFE Steel has been recovering gases generated from each stage of various processes in coke ovens and BF, etc., in order to use them as fuel gas or gas for power generation and meet fuel demand at respective steelworks. JFE has also been striving to effectively reuse flue gas and waste heat. As a result of these efforts, we have achieved a 35% reduction in unit energy consumption

from the year ended March 1974 level, realizing the world’s top-class efficiency of energy consumption.

JFE Steel will implement further energy savings by promoting operational upgrades such as the addition of CDQ, cutting reducing agents, and using cold iron sources. We will also contribute to the international prevention of global warming and environmental conservation through the Meeting for Environmental Protection and Energy-saving by the CISA and JISF and the Asia-Pacific Partnership based on the cultivated technologies.

Efforts of Iron Industry

(The JISF’s Voluntary Action Program)

The JISF achieved a 6.5% reduction in energy consumption in the year ended March 2006 (6.9% reduction in CO2 emissions) compared to the year ended March 1991 level. As a complementary measure, the JISF has made a purchase contract of the Kyoto Mechanisms (28 million tons).

JFE Steel Corporation Vice President

Takashi Sekita

The JISF’s Voluntary Action Program

The JISF has set a 10% reduction in energy consumption as its goal for the year ending March 2011 compared to the year ended March 1991 level on the assumption that annual crude steel production would amount to the 100 million-ton level. It is also committed to effective use of waste plastics (equivalent to another 1.5% reduction).

Further efforts

– 6.5% –10%

–1.5%

Source: The Japan Iron and Steel Federation

2,500

2,000

1,500

1991

2,519

1996

2,402

2001

2,340

2003

2,321

2002

2,264

2004

2,338

2005

2,369

2009-2013 (target)

2,229 2,267

2006

2,354

1 9 7 4 - 1 9 9 0

Introduction of energy saving equipment • Reduction of reheating furnace fuel • Large-scale waste heat recovery equipment BF top pressure recovery turbine (TRT), sintering waste heat recovery, etc. • Process continuation

Continuous casting line, continuous annealing line, etc.

1 9 9 1 - 2 0 0 7

2 0 0 8

-Further promotion of energy saving • Waste plastics feeding into BF • Introduction of regenerative burner • Endless rolling

• City gas blowing technology for BF • High efficiency oxygen plant

Global warming prevention measures by energy saving • New construction of shaft furnace (operation start scheduled in August 2008) • Augmentation of CDQ

(operation start scheduled in March 2009) • Broader introduction of regenerative burner • Augmentation of high effeciency oxygen plant • BOF gas sensible heat recovery

JFE Steel

Index (1974 = 100)

1974

100

1981

83

1986

77

1991

79

1996

82

2003

69

2004

67

2005

67

2006

67

2007 65

100

90

80

70

60

Transition of Unit Energy Consumption Index at JFE Steel

(Years ended/ending March 31)

Transition in Energy Consumption by the Iron and Steel Industry in Japan

(PJ/year)

(Years ended/ending March 31)

Message from

Senior Management

History of Energy Saving Activities

JFE Steel’s Activities to Prevent Global Warming

– For Compliance with the Japan Iron and Steel Federation’s Voluntary Action Program –

(5)

Transition of Total Energy Consumption and Unit Energy Consumption at JFE Steel

(Years ended/ending March 31) Further efforts

Total energy consumption (PJ/year) Unit energy consumption (GJ/t-s)

Transition of Crude Steel Production at JFE Steel

(Years ended March 31)

Transition of Total Energy Origin CO2 Emissions and

Unit CO2 Emissions at JFE Steel (Estimation)

Total CO2 emissions (million t-CO2/year) Unit CO2 emissions (t-CO2/t-s)

Further efforts

(Years ended/ending March 31)

Unit energy consumption in comparison to the

Unit CO2 emissions in comparison to the

–1.5% –1.5%

Achievements in the Year Ended March 2007*

In the wake of stronger demand for highly functional steel products from customers mainly in the automobile, electric appliance, and shipbuilding industries, JFE Steel has been increasing production to fulfill its supply responsibility. As a result, compared to the year ended March 1991 level, crude steel production increased 23% in the year ended March 2007.

Using the same comparison, energy consumption and CO2 emissions recorded a 1.4% increase and a 0.9% increase, respectively. And yet, JFE Steel has substantially improved efficiency with an approximately 18% reduction in unit energy consumption and unit CO2 emissions. * The non-consolidated base calculation does not include electric

furnace steel companies in the JFE Steel Group.

18

cut

(million t/year)

1991

23.55

2004

27.01

2003

26.47

2005

27.65

2006

26.72

+23%

2007 29.04

30

28

26

24

22

20

0

1991 2004

653 24.2

2003

658 24.9

2005

667 24.1

2006

643 24.1

2009-2013 (target)

–10% +1.4%

–17.8%

2007 679

23.4

800

600

400

200

0

30

26

22

18

14

28.5

603 670

1991 2004

54.3 2.01

2003

55.1 2.08

2005

55.1 1.99

2006

52.6 1.97

2009-2013 (target)

2007 55.8

1.92

80.0

60.0

40.0

20.0

0

2.50

2.00

1.50

2.35

50.3 55.3

–18.2%

–9% +0.9%

(6)

CDQ (Coke Dry Quenching) is equipment to quench coke by exposing the dried/heated coke after the coke oven process to inert gas flowing in a cooling chamber. This equipment does not emit dust and realizes sensible heat recovery power generation, which contributes to energy saving. JFE Steel is now carrying forward broader utilization of CDQ into the Kurashiki area.

A regenerative burner alternately uses a pair of burners which are integrated with the thermal storage body, and thereby uses waste heat generated from one burner as preheat for the other burner’s combustion air. This system excels in thermal efficiency and realizes substantial energy saving (CO2 emission

reduction) and NOx emission reduction. CDQ equipment

Installation status of regenerative burners

For Compliance with the Voluntary Action Program

JFE Steel is determined to prevent global warming by promoting further energy saving (reduction of CO2 emissions) activities in order to achieve the JISF’s Voluntary Action Program with certainty even though crude steel production is increasing.

We will make concrete efforts such as improving operational efficiency (cutting the reducing agent ratio and utilizing more iron scraps), energy savings by streamlining equipment, and technological innovations through R&D.

Use of the Kyoto Mechanisms

JFE Steel has been promoting the utilization of CO2 emission rights according to the Kyoto Mechanisms as a complementary measure to reduce CO2 emissions in addition to implementing technologies. This is being done so that we can achieve the goals of the Voluntary Action Program with certainty.

• CDQ

• Regenerative burner • BOF gas sensible heat recovery

• High efficiency oxygen equipment • High efficiency power generation equipment • High quality and high productivity sintering technology

• Shaft furnace

• Containers and packaging plastics Pulverization plant

Broader introduction of waste heat recovery equipment

Broader application of high efficiency equipment

Active use of cold iron source

Reduction of BF reducing agency rate

* CDM (Clean Development Mechanism)

This system is introduced in the Kyoto Protocol and allows the developed nations to use the reduced emissions when counting their own achievements by offering technologies and funds to developing nations.

Power generation by PSC sintering waste heat recovery

Implementation of CDM*

Japan Greenhouse Gas Reduction Fund The World Bank’s Bio Carbon Fund

Participation in funds

Purchase of CO2 emission rights approved by the United Nations

Purchase of CO2

emission rights

CDM to PSC (Philippine Sinter Corporation)

In plants that manufacture sintered ore, which is used as a material for iron-making, steam is produced by utilizing waste heat diffused in the air and 18.6 kWh of power is generated. As a result, 62,000 tons of CO2 are reduced per year. This project has been approved as CDM by the United Nations.

Panoramic view of PSC

62

,000

Annual reduction in CO2 emissions

tons

% %

(7)

Social Contribution through Steel Products

Non-energy origin

(million t-CO2) Methane

Estimated effect of highly functional

Energy Saving Measures at the Transportation Division JFE Steel has been also striving to reduce the CO2 and NOx emissions inherent in production transportation. The enhancement of transportation efficiency as well as the streamlining of operating cars and ships have also been carried forward to promote modal shifts*1. The modal shift rate in production transportation has reached 95%, including JFE Steel.

JFE Steel’s CO2 emissions caused by transportation as a cargo owner were estimated at approximately 400,000 tons*2 in the year ended March 2007.

*1 Modal shift: Switching transportation measures from trucks to railways or ships to promote streamlining of transportation and reduce the environmental load.

Non-energy Origin CO2 Emissions

Limestone and dolomite used in BF, converters and the like are kinds of non-energy origins of CO2 emissions. Methane is emitted in the process of manufacturing coke, and N2O is emitted by fuel usage or from water treatment equipment and similar sources.

The total limestone/dolomite origin CO2 and CO2 equivalent of methane and N2O emitted by JFE Steel reached 3.2 million tons*2 in the year ended March 2007.

*2 We started aggregate calculations from the year ended March 2007 under the Energy-Saving Law and the Global Warming Solutions Act.

Truck

5

Source: The Japan Iron and Steel Federation

1991 1996 2001 2002 2003 2004 2005 2006

0.2

0.2 0.1

0.1 0.1 0.1 0.1 0.1

10

5

0

11.6 10.5 10.3 10.1 10.3 10.9 10.2 10.4

Source: The Japan Iron and Steel Federation

Modal Shift Rate of the Iron and Steel Industry in Japan

Truck

61

Ship + Rail

95

% Ship + Rail

39

All Industries (Ministry of Land, Infrastructure and Transport, Japan) Iron and

Steel

Transition of Non-energy Origin GHG Emissions by the Iron and Steel Industry in Japan

(Years ended March 31)

CO2 Emission Reduction Effect at the Stage of Using Steel Products

(As of the Year Ended March 2006)

Trains

0.07

Ships

0.92

Boilers for power generation

0.54

Automobiles

4.93

Steel manufacturers are actively promoting development of highly functional steel products with properties of light weight, high efficiency and longevity, etc.

These steel products substantially contribute to energy saving when finished goods such as automobiles are practically used in society. Typical highly functional steel products manufactured from the year ended March 1991 to the year ended March 2006 are estimated to have deterred CO2 emissions of approx. 7.6 million tons as of the year ended March 2006, proving a significant contribution to society.

Transformers

1.14

CO2 emission reduction

7.60

million tons

7.6

cut

approx.

(8)

Environmental Management System

JFE Group Environmental Committee

JFE Group Environmental Committee

Chairman: President of JFE Holdings

Members: Directors responsible for environmental matters at JFE Holdings and each operating company

Environmental Committee (Operating Company)

Chairman: President or director responsible for environmental matters at the operating company

Members: Managers of related departments, persons responsible for environment at each works, center

Environmental Committee (Affiliated Company)

Chairman: Directors responsible for environmental matters Members: Managers of related departments

JFE Steel Environmental Management System

JFE Steel

Company-wide

JFE Steel Group Companies Environmental Liaison Committee

JFE Engineering Environmental Management System

JFE Engineering

JFEエンジニアリング環境委員会

JFE Engineering Environmental Committee

JFE Engineering Environmental Experts

Committee

Environmental Control Section

Environmental Control Liaison Meeting

(Administrative)

JFE Engineering Environmental Liaison Committee

Affiliates and Subsidiaries

JFE Steel Environmental Committee

Environmental Management Committees

Environmental Management

Construction and Operation of Environmental Management System

Under the Group CSR Convention, the JFE Group has set up not only the Group Environmental Committee chaired by the President of JFE Holdings but also an Environmental Committee in each of the Group’s operating companies and affiliated companies. With this multi-tiered committee system, JFE has been dealing with environment-related issues such as setting objectivities for environmental protection activities, progress check of those activities, and evaluation on environmental performance as a whole group.

JFE has also established the Group Environmental Liaison Committee made up of persons responsible for environmental matters at JFE Holdings and the five operating companies in order to spread environmental activities within the Group evenly and improve the level of activities. In March 2007, “Environmental Management Guideline for preventing pollution by enterprises” was issued by the Ministry of Economy, Trade and Industry and the Ministry of the Environment. JFE aims to improve environment management system by evaluating our efforts based on the guideline.

JFE Steel En

vir

onmental

Committee JFE Engineering En

vir

onmental

Committee Ka

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onics

En

vir

onmental Committee

JFE R&D En

vir

onmental

Committee

JFE Urban De

velopment

En

vir

onmental Committee Gr

oup En

vir

onmental Liaison Committee

Member

s: P

er

sons r

esponsible f

or en

vir

onment

at

JFE Holdings and each oper

ating compan

y

Affiliated Compan

y Gr

oup En

vir

onmental

Liaison Committee Member

s: P

er

sons r

esponsible f

or en

vir

onment

at

each oper

ating compan

y and affilia

ted compan

y

Affiliated Compan

y

En

vir

onmental Committee

Affiliated Compan

y

En

vir

onmental Committee

Production Centers

Affiliates and Subsidiaries

JFE Steel Group Companies Environmental Liaison Committee J F E G R O U P

E N V I R O N M E N TA L S U S TA I N A B I L I T Y

(9)

Profile of ISO 14001-certified companies is provided at the following website:

http://www. jfe-holdings.co.jp/ environment/ Promotion to Receive ISO 14001

Each company in the JFE Group has been aiming to receive ISO 14001 certification in order to promote voluntary and continuous environmental activities. Three operating companies with production facilities have all received ISO 14001 certification, either for individual works or at the whole company level. In April 2007, Steel Research Laboratory of JFE Steel received ISO 14001 certification. Many affiliates of the operating companies have also been aiming to receive the certification, with four companies accredited for the first time in the year ended March 2007. The JFG Group will continuously extend the number of accredited companies/production facilities.

Environmental Education

The JFE Group conducts environmental education at all levels to deepen the understanding of each employee and encourage individual efforts to improve the environment as part of regular work. In each operating company, environmental education is incorporated in training programs for new employees and promotion, and also includes annual programs at each level, covering social trends related to environmental problems, the significance of the environment to JFE and measures being taken by the company, the responsibility of individual employees, and the importance of environmental management.

Environmental Auditing

At the JFE Group, the environmental auditing has been conducted on the basis of ISO 14001, and with the aim of enhancing environmental management quality. As for the environmental auditing on the basis of ISO 14001, external inspection is made by certification authorities, while internal auditing is conducted by qualified employees who not only have taken the auditor-training course offered by an external institution but also have experience in environment-related work.

As for the environmental auditing with the aim of enhancing environmental management quality, internal auditors of the head office’s audit department and environmental experts of the head office’s environmental management division conduct auditing on issues centering on the environmental management status and compliance system with environment-related regulation of each of the operation facilities and affiliated companies.

Status of Green Purchasing

In 2002, the JFE Group established a common group-wide set of “Green Purchasing Guidelines” for purchases of office supplies and parts/materials for production.

For further information

In outline, the Guidelines specify

• Adequate study of required quantities before purchase to minimize purchased amounts. • Consideration of environmental loads

over the entire life cycle of final products, in addition to price, quality, delivery schedules, etc. • Requests for and cooperation with environmental

protection efforts of suppliers on a daily basis.

Examples of green purchasing: Stationery, office equipment

Recycled oil, solvent containers, packaging materials,

electric/natural gas/hybrid vehicles, etc.

(10)

Environmental Accounting

362.0

19911992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 20062007

400

300

200

100

0

362.0

19741976 1981 1986 1991 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 20062007 506.7

500

400

300

200

100

0

* Investment in environmental protection:

Total investment in effective use of resources and environmental protection Transition of Capital Investment

To promote energy saving and further reduce environmental loads, JFE has actively invested in plant and equipment based on R&D achievements in the Group’s proprietary environmental technologies. Cumulative investment in energy saving since 1990 has reached ¥362.0 billion, enabling us to achieve energy efficiencies that rank among the highest in the world.

We are planning further investment in plant and equipment to promote global warming prevention.

Meanwhile, cumulative investment in environ-mental protection since 1973 has reached ¥506.7 billion. We will continuously invest in measures to further reduce environmental loads.

Cumulative Investment in Energy Saving

(billion yen)

(Years ended March 31)

Cumulative Investment in Environmental Measures*

(billion yen)

(Years ended March 31) Cumulative investment

in energy saving since 1990

billion yen

506.7

Cumulative investment in environmental measures since 1973

billion yen

Environmental Protection Costs

Description

Total

Amount of Investment

Amount of Expenses

Environmental investment & expenses related to JFE’s own business

Management Monitoring & measurement of environmental influence, EMS-related activities, environmental education & training, etc. ─ 3.3

1.2

9.0

─ ─ ─ 13.5

2.3

15.2

17.5

33.0

1.7

4.5

0.6

74.8 (billions of yen) Environmental Accounting

In the year ended March 2007, environment-related capital investment totaled ¥13.5 billion and expenses amounted to ¥74.8 billion. The ratio of environment-related capital investment against total capital

investment is approximately 10%. As a result of activities during the year ended March 2007, the effects of energy conservation were valued at ¥1.4 billion by estimation.

Environmental investment & expenses related to customers and society

Prevention of global warming

Effective use of resources Environmental protection

Miscellaneous

Research & development

Social activities

Energy conservation, effective use of energy, etc.

Recirculation of industrial water, recycling of by-products & waste generated in-house, waste management, etc. Prevention of air pollution, water pollution, soil contamination, noise, vibration, ground subsidence, etc.

Fees/charges, etc.

Technology development for environment, energy, prevention of global warning

Protection of nature, support to forestation, information disclosure, exhibition, advertisement, etc.

Environmental accounting data stated above were calculated on the basis of the following assumptions. Period subject to accounting: April 1, 2006 to March 31, 2007

Scope of Compiled Data: For costs, data on environment-related investment and expenses at JFE’s steelworks were gathered, but in the field of research & development, Group-wide data were collected.

The effects refer to “presumed effects”; “risk aversion effects,” etc., are excluded from calculations.

Calculations do not include capital investments made primarily for purposes other than environmental protection, such as renovation of superannuated facilities, even if the process as a whole results in a net energy saving compared to the former process.

The year ended March 2007:

Environmental investment

billion yen

13.5

The year ended March 2007:

Environmental cost

billion yen

74.8

J F E G R O U P

E N V I R O N M E N TA L S U S TA I N A B I L I T Y

(11)

Communication with Society

Related to the Environment

Exchanges through Exhibitions

The JFE Group participates in various exhibitions on environmental themes to encourage information exchanges with a wide range of people. At Eco-Products 2006, which attracted approximately 150,000 visitors, we presented JFE’s environmental initiatives as well as the Group’s technologies/products that support society and life, and contribute to environmental protection.

Information through the Internet

The JFE Group actively offers information related to the environment through the Internet. On the JFE Group website, its environmental management policy, activities and results are introduced under the title of “Environmental Activities.”

Moreover, JFE has been cooperating with an environmental website, where general knowledge on environmental issues is presented in an easily comprehensive way. Through this linkage, the Group introduces voices of “eco people,” who are innovatively involved in environmental issues. This is one example of JFE’s efforts to promote environmental awareness activities among the general public.

JFE booth at Eco-Products 2006

“Let’s See How to Make Steel” section

For further information

JFE Holding’s environmental initiative website at:

http://www. jfe-holdings.co.jp/ en/environment/ index.html

Environmental website “ecobeing” at:

http://www. ecobeing.net/

Environmental abnormality prevention system

Example of disclosed data

Environmental Abnormality Prevention System (Publication of Environmental Information)

JFE Steel has strived to drastically restructure the en-vironmental management system since December 2004, when the water quality problems were recog-nized at its East Japan Works (Chiba). As part of these efforts, the environmental abnormality prevention sys-tem has been under the construction based on our ac-cumulated expertise. Moreover, real-time information disclosure system on environment was completed in March 2007, and is now open to the general public.

Location: Visitors’ Center at JFE Steel’s East Japan Works (Chiba)

(1) Environmental initiatives: Presentation on JFE Steel’s activities to cope with the environmental problems since the incidence

(2) Environmental Data

1 Measurement results of air environment NOx, SOx (12 stacks)

2 Measurement results of wastewater quality COD, wastewater volume (7 wastewater treatment plants)

─ ─ ─

For further information

About environmental problems concerning water quality, please refer to the following:

http://www. jfe-steel.co.jp/ works/east/chiba/ environment2.html Open Tour for the Real-time Information Disclosure System

■Operating hours:

9:00 a.m. to 5:00 p.m. (excluding Saturdays and holidays)

■Contact/Application: Environmental Management Department, East Japan Works (Chiba), JFE Steel Corporation

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The experimental tanks where the “dragonfly rescue operation” was conducted

Contribution to Biodiversity

Greening of Steelworks

JFE Steel’s efforts to facilitate green premises at its steelworks have resulted in habitats for precious creatures. For example, little terns are breeding within the premises of JFE Steel’s East Japan Works (Chiba). The breeding ground previously had been put at risk of being flooded because of precipitating water while the premises’ wastewater pathways had been under maintenance. Yet it was eventually protected by absorbing the rain water through pumps. Another example is green space within the premises of the East Japan Works (Keihin), where good habitat conditions allow kingfishers to nest.

Okukusatsu

JFE has been promoting forest conservation such as afforestation and thinning within the area of Kunimura, Agatsuma-gun, Gunma Prefecture. The area consists of a privately owned old open-pit iron mine site and surrounding national forests. As a result of longstanding efforts, forests have been recovered as a habitat for precious plants and animals. Part of this area has been designated as a Natural Holiday Village, where people can enjoy communion with nature.

Reefs for Coral and Seaweed

JFE has been developing restoration technologies for marine environments by utilizing steel slag, which is a byproduct of manufacturing. Porous Marine Block®, which is JFE’s block product made from steel slag and CO2 through a solidification reaction, has been adopted for coral reef restoration works in Sekisaishoko on a trial basis. So far, good results have been observed. Marine Block® has also been used in rejuvenation experiments for seaweed reefs close to Japan because of its excellent performance as an implantation base for seaweed.

Participation in “How Far Do Dragonflies Travel?” Forum

JFE Engineering’s Tsurumi Engineering and Manufacturing Center has been a participant in studies on dragonfly populations since the first survey in 2003. We have provided a survey site within the company premises as well as helped to capture dragonflies. In 2006, it was decided to fill the premises’ experimental tanks temporarily with saline water. Since these tanks were the habitat of dragonfly larvae, researchers carried out a “dragonfly rescue operation” over the weekend by capturing and transferring 100 dragonfly larvae to other tanks. In this way, we have conserved the regional biodiversity.

We were surprised to find various living creatures including over nine kinds of dragonflies, water stick insects, and water boatmen inhabiting our premises. These findings have somehow reminded us of a sense of wonder. Through our forum activity, we not only rediscovered the importance of green space but also could interact with people from various fields. Such experiences have helped us boost our own motivation.

General Affairs Division Tsurumi Engineering and Manufacturing Center JFE Engineering Corporation

Fureai-no-ike (the pond in communion with nature) in Keihin

JFE Okukusatsu Holiday Village

Coral growing on Marine Block

For further information

ecobeing JFE Okukusatsu Holiday Village

http://www. ecobeing.net/ ecopeople/peo30/ index.html

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C H A P T E R

Reducing Environmental Loads

in Business Activities

By Utilizing the World’s Most Advanced Technology for Reduction of Environmental Loads

Energy/Material Flow in the Steelmaking Process

Reducing Environmental Loads in Business Activities at JFE Steel

Reducing Environmental Loads in Business Activities at JFE Engineering

Reducing Environmental Loads in Business Activities at Kawasaki Microelectronics

Reducing Environmental Loads in Business Activities at JFE Urban Development

13

15

19

21

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Materials for steel production

• Iron ore 46 million tons

• Coal 24 million tons

• Lime 5 million tons

Purchased energy

• Electricity + Oil type 103 PJ

Industrial water

228 million tons

Recycled materials

• Steel scrap (BOF)

• Waste plastic (BF)

• Toner (sintering)

Recycled materials

• Waste plastics

• Waste PET bottles

• Electric appliances

• Food waste

• Dust/ Sludge

• Others

Input

Yard water spraying, belt conveyor dust collection, laser dust monitoring

Gas turbine combined cycle power plant, Power plant fuel preheating device, High-efficiency air separation equipment Coke dry quenching

(CDQ), coal moisture control (CMC), combustion control

Sintering cooler waste heat recovery, line burner

Waste plastics feeding, pulverized coal injection, top pressure recovery turbine, hot stove waste heat recovery

Gas recovery, gas-sensible heat recovery

Dust Dust

Coke oven gas desulfurization, waste ammonia liquor COD treatment, chemical by-product recovery Dust, NOx, SOx, COD Flue gas, dust, wastewater (ammonia liquor)

Flue gas desulfurization & denitrification Dust, NOx, SOx Flue gas, dust, wastewater

Gas recovery, dust collection, dust treatment, slag recycling Dust, SS Flue gas, slag, dust, wastewater

Gas recovery, dust collection, dust treatment, slag recycling Dust, SS Flue gas, slag, dust, wastewater

Counter-measures facility

Generated substance

Environmental impact

Counter-measures facility

Energy conservation technology

Steel production process

Environmental conservation technology

Recycling Process at the JFE Group

Steel Production Process at JFE Steel

Energy recycling in works 66%

Wastewater, evaporation loss 6.2%

Landfill disposal 0.4%

BOF, EF, CC Blast furnace

Sintering plant Coke oven

Raw material yard

Coke oven gas BF gas BOF gas Oxygen plant

Byproducts recycling 30.6%

Water recycling 93.8%

Recycled water

Energy/Material Flow in the Steelmaking Process

JFE Steel Corporation has endeavored to reduce environmental loads through R&D on energy saving and environmental protection technologies and aggressive investment in facilities. As a result, our steel production processes now boast the world’s

highest energy efficiency and recycling rates. Far from becoming complacent with its achievements, JFE Steel still continues to conduct R&D and introduce equipment to further reduce environmental loads in each steel production process.

Energy recycling in works

Byproducts 16.0 million tons

• Slag • Dust • Sludge

66

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Energy supply 34%

• Power • Fuel gas • Steam

Marine & land civil engineering materials 69% • Material for cement • Roadbed material • Port & harbor construction material • Fertilizer

Other products • Chemicals • Oxygen • Nitrogen • Hydrogen • Argon Iron and steel products 29.0 million tons (crude steel base)

Byproducts

• NF® Board

• PET material

Output

Regenerative burner, direct charging, low-temperature extraction

Endless rolling, online heat treatment

Waste heat boiler, rotary regenerative heat exchanger

Shortening of transportation distance, improvement of load efficiency, modal shift, application of IT

Low-NOx burner, use of cleaner fuel NOx

Flue gas, dust

Waste acid & waste alkali treatment, waste oil recycling, coagulating sedimentation SS, waste oil, waste acid, iron salt Rolling wastewater, pickling wastewater

Wastewater treatment Metallic ion, etc. Coating wastewater

Conversion to low-emission vehicles NOx, SPM (suspended particulate matter) Exhaust gas

Chemical substances • Release 710 tons • Transfer 1,991 tons

CO2 Approx. 59 million tons Flue-gas • SOx 3.6 million m3 • NOx 13.0 million m3 • Dust

Continuous annealing, coating Hot rolling,

cold rolling

Reheating furnace Shipment Power generating

plant

Recovered energy recycling

• Byproduct gas

• Waste heat recovery steam • Power (BF Top pressure Recovery Turbine: TRT)

93.8

99.6

Byproduct recycling rate

Water recycling

Local community/Other industries/Society

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JFE Steel

http://www. jfe-steel.co.jp/ en/index.html

40

30

20

10

0

1974 1981 1986 1991 1996 2001 2002 2003 2004 2005 20062007

36.8

7.1 5.8 6.0

5.4 5.9 5.7

3.3 3.4 3.8 3.6 3.6

1974 1981 1986 1991 1996 2001 2002 2003 2004 2005 20062007

34.6

15.3

12.313.7 13.0 13.8 13.5 14.0 13.8 13.6 12.613.0

30

20

10

0

Reducing Environmental Loads

in Business Activities at JFE Steel

Air Quality Preservation

Reducing Sulfur Oxide (SOx) and Nitrogen Oxide (NOx) Emissions

JFE Steel has implemented active measures to reduce emissions of SOx and NOx. In these actions as well as R&D, particular emphasis has been placed on sintering furnaces, of which emissions of SOx and NOx are especially large in the steel production process. Flue gas desulfurization equipment has been installed at all the company’s sintering furnaces. Flue gas denitrification equipment has also been installed at all sintering furnaces of East Japan Works (Chiba and Keihin).

Reducing Dust

Since dust is generated from various sources in the steel production process, JFE Steel has been promoting appropriate reduction measures by identifying individual sources and designing specific measures for each source. As for dust generated during combustion, the optimum dust removal equipment has been installed to fit with the dust’s properties. Similarly, to reduce other dust in terms of its generation as well as release, JFE Steel has been developing technologies and upgrading processes.

For the corporate profile

Transition of SOx Emissions

(106 Nm3/year)

(Years ended March 31)

(106 Nm3/year)

(Years ended March 31)

Transition of NOx Emissions

Dust-proof fence at West Japan Works (Fukuyama)

Dust collector at West Japan Works (Fukuyama)

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93.8

400

300

200

100

0

94

93

92

91

90

1991 1996 2001 2002 2003 2004 2005 2006 2007

220 214 210 210 220 226 228 231 228

93.3 93.4

94.1 94.0 93.9 93.9 93.9 93.7 93.8

1991 1996 2001 2002 2003 2004 2005 20062007

3.7

3.2 3.5 3.4 3.4 3.2 3.6

3.3 3.3

4

2

0

1991 1996 2002 2003 2004 2005 2006 2007

48.0

8.5 9.5

7.5 11.0 7.9 6.0 6.0

50

40

30

20

10

0

100

99

98

97

96

95

96.5

99.3 99.5 99.5 99.3 99.5 99.6 99.6

Water Quality Preservation

JFE Steel has been earnestly promoting circulation/recycling of industrial water consumed in the steel production process, with its industrial water circulation rate* maintained at as a high level as about 93.8%. For release into public waters, wastewater is given appropriate purification treatment so that its pollution loads can be reduced.

* Industrial water circulation rate

Industrial water circulation rate = (Total consumption – Received industrial water) / Total consumption

Effective Utilization of Byproducts

JFE Steel has been recycling byproducts (i.e., iron and steel slag*1, dust, and sludge*2) in the steel production process in the works as raw materials for steel manufacturing and has been promoting effective utilization of byproducts as resources. Moreover, JFE Steel has been actively expanding applications and markets for steel slag products such as Road Cool®. Among such efforts, application developments of environmental restoration materials such as Marine Block® and Marine Base® have been conducted through industry-government-academia collaboration.

*1 Iron and steel slag:

Material consisting of non-iron rock components in iron ore and lime, etc. It separates from and floats on the molten metal. Slag is mainly used as material for cement.

*2 Sludge:

Material remaining after dewatering of the mud-like substance separated and removed by circulating water/wastewater treatment equipment.

Transition of Received Industrial Water and Circulation Rate

(Years ended March 31)

Received industrial water (million t) Industrial water circulation rate (%)

Transition of Landfill Disposal and Recycling Rate of Byproducts

(Years ended March 31)

Landfill disposal (10,000 t) Recycling rate (%)

Transition of COD (Chemical Oxygen Demand)

(t/day)

(Years ended March 31)

Industrial water circulation rate

99.6

Byproduct recycling rate Ⅰ

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JFE Steel effectively recycles a wide range of

waste in various processes at steelworks, and thereby supports sustainable societies.

To give a specific example, JFE Steel developed a unique process to effectively utilize carbon and hydrogen components contained in plastics as reducing agents by injection waste plastics instead of cokes into a blast furnace (BF). Actually, the company has become the world’s first practical user of this integrated process, which not only effectively uses plastics but also contributes to reduction of CO2 emissions by reducing consumption of coke in the steel production process.

Moreover, JFE Steel has been successively developing and putting into practical use various recycling technologies, including technology to dechlorinate vinyl chloride into BF feed and other technology to pulverize waste plastics into

BF feed. Recovered hydrochloric acid (separated and refined) from the process of dechlorinating vinyl chloride is recycled in the acid pickling process. Aluminum recovered from waste fluorescents is also recycled as a refining agent in the steel production process. To sum up, steelworks have become important bases for recycling resources.

http://www.jfe-steel.co.jp/products/slag/slag.html

“Road Tough®” Temporary Road Material Temporary road material made from steel slag. Road Tough has an excellent compaction property, so that roads using the

material can be opened to traffic immediately after construction, even if the roads are constructed on soft ground. It also has a good wear resistance.

“Marine Base®” Sand-capping Material A sand-capping material which is made from granulated blast furnace slag. It suppresses elution of phosphorus

and nitrogen, which cause eutrophication, from sea bottom mud. It is suitable for bottom-dwelling organism habitats.

“Marine Stone®” Submerged Embankment Submerged embankment/breakwater material using steelmaking slag. It has

a similar appearance to natural stone and can be used for construc-tion same method as natural stone. Marine Stone® is superior as a habitat for life.

“Marine Rock®”: Artificial Stone (Steel Slag Hydrated Block: Ferro-Foam) Artificial stone made

by mixing of steel slag, ground granu-lated blast furnace slag and other addi-t i v e s . I addi-t i s n o w utilized mainly as a material for port and harbor construction.

Waste Recycling in Steel Production Process

Plant for pulverizing waste plastics

Advanced Applications for Iron and Steel Slag

Construction of road using Road Tough Marine Base

Marine Stone Marine Rock

We are promoting R&D to turn steel slag into socially useful materials.

Hiroyuki Tobo

Senior Researcher Slag & Refractories Research Dept. Steel Research Laboratory JFE Steel Corporation

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2002

893 875 633

1,415

843

763 720 698

1,053 1,098 1,327

2,003

2003 2004 2005 2006 2007

Release Transfer Air Public waters Soil on-site Landfill on-site Sewerage Off-site

Zinc compounds (water-soluble) 2-aminoethanol

Antimony and its compounds Asbestos

Bisphenol A type epoxy resin (liquid) Ethylbenzene

Ethylene glycol Xylene

Chromium and chromium (III) compounds Chromium (VI) compounds HCFC-22

Vanadium pentoxide Cobalt and compounds HCFC-141b

HCFC-225 Dichloromethane Styrene

Selenium and its compounds Dioxins

Hexamethylenetetramine Tetrachloroethylene Copper water-soluble salts 1,3,5-Trimethylbenzene Toluene

Lead and its compounds Nickel

Nickel compounds Hydrazine Phenol

Hydrogen fluoride and its water-soluble salts Benzene

Boron and its compounds Poly (oxyethylene) alkyl ether Poly (oxyethylene) nonylphenyl ether Formaldehyde

Manganese and its compounds Mercaptoacetic acid

Molybdenum and its compounds Tris (dimethylpheny) phosphate

0 0 0 0 0.7 38 0.1 285 0.02 0 0 0 0 67 12 15 0.3 0 8.9 0 24 0 11 77 0 0 0.009 0 1.1 0 70 0 0 0 0.02 0.04 0.002 0 0 601 5.5 2.6 3.1 0 0 0 0.3 0 0.9 0 0 1.7 0.04 0 0 0 0 0.04 0.00004 0.06 0 0 0 0 0 0 0.7 0.05 0.03 40 0 13 0 3.4 0 18 0 7.7 0 97 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 2.1 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 9.3 0 0.9 0 12 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 20 39 0 0.5 7.1 4.3 914 1.3 3.5 0 0 0 0 0 0 1.8 0 0 0 0 0.06 3.5 190 65 70 0 0.003 28 0 4.4 0 1.5 0 634 0.003 3.4 0 1,991 1 16 25 26 30 40 43 63 68 69 85 99 100 132 144 145 177 178 179 198 200 207 224 227 230 231 232 253 266 283 299 304 307 309 310 311 345 346 353 ■ ■ ■ ■ 2,000 1,500 1,000 500 0 Control/Release Reduction of Chemical Substances

JFE Steel has been promoting voluntarily release reduction program, which gives the first priority to chemical substances having higher toxicity and larger release amounts. Since the year ended March 2002, total release into air and public waters has been reduced. In the year ended March 2007, landfill disposal increased due to the production increase of crude steel.

Release and Landfill Disposal

Release into air and public waters

(t) Landfill disposal

(Years ended March 31)

Substances Reported under PRTR (The Year Ended March 2007) (Unit: tons; dioxins: g-TEQ)

No. Substance

(20)

I n p u t

JFE Engineering

• Tsurumi Engineering and Manufacturing Center • Shimizu Works • Tsu Works

ー ー

20

15

10

5

0

1991

16.8

2004

13.9

2003

15.5

1998

18.8

2005

14.0

2006

14.5

2007

15.3

8.9

18.6

O u t p u t

Reducing Environmental Loads in

Business Activities at JFE Engineering

Preventing Global Warming

The Japan Society of Industrial Machinery Manufacturers formulated a “Voluntary Action Plan for the Environment by the Industrial Machinery Industry” in 1997. The Plan aims for a 12.2% reduction in CO2 emissions from the year ended March 1998 levels by the year ending March 2011.

Under such circumstances, JFE Engineering Corporation has implemented Environmental Management Systems suited to functions and business attributes at each of its works and endeavors to prevent global warming.

The office division has been promoting various energy saving activities, including adoption of the high-efficient Clathrate Hydrate Slurry (CHS) Latent Heat Air-conditioning System and power conservation such as turning off lights during the lunch break and turning off personal computers when not in use. Meanwhile, the production division has implemented power-saving on lighting at factories during sunny daytime, more efficient use of compressed air, and energy-saving check patrols.

Combined CO2 emissions in the year ended March 2007 from the production division and the

office division amounted to 15.3 thousand tons or an 8.9% reduction from 16.8 thousand tons in the year ended March 1991 and an 18.6% reduction from the level of the year ended March 1998.

JFE Engineering has also been striving to determine CO2 emissions in site construction works since August 2004. In addition, CO2 reduction activities such as a “stop idling” campaign have been implemented at construction sites since the year ended March 2007 on a trial basis.

Transition of CO2 Emissions

(Years ended March 31)

CO2 emissions (1,000 t-CO2)

CO2 reduction from the year ended March 1991

Down

CO2 reduction from the year ended March 1998

Down

Material Balance

Raw materials Energy

Electricity consumption A-heavy oill Kerosene Light oil Gasoline Urban gas LPG LNG Water

63,310 t

31,344,244 kWh

480.1 kl

75.6 kl

176.9 kl

22.7 kl

369,659 Nm3

206.9 t

0 t

176.4 thousand tons

Products Air pollutants

CO2 NOx SOx Dust

Waste generated Wastewater Other (PRTR)

59,152 t

15,255 t

max 81 ppm

max - ppm

max 0.0220 g/Nm3

1,508 t

147.1 thousand tons

114 thousand kg

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I n p u t

Reduction of waste in office division

25

35

Landfill disposal of office waste

Tsurumi Center (%)

Shimizu Works (%)

Tsu Works (%)

17.3 34.8 ー

Target Actual

Reduction of waste in the production division

0.99

0.96

0.086 Unit waste discharge

Tsurumi Center (t/1000 hrs)

Shimizu Works (t/1000 hrs)

Tsu Works (t/1000 hrs)

1.150

0.710

0.124 Target Actual

Reduction of waste at site construction works

Landfill disposal rate of site construction waste Target Actual

Release Total Air No. Substance Transfer Public

waterson-siteSoil Landfillon-siteSewerage Off-site

Zinc compounds (water-soluble) Bisphenol A type epoxy resin

Lead and its compounds Manganese and its compounds 0.0 0.0 15,526.6 43,303.8 25,538.9 0.0 0.0 0.0 84,369.3 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 1,340.7 2,266.2 2,191.5 5,978.9 6,053.9 1,844.0 162.0 9,736.0 29,573.2 84,369.3 29,573.2

O u t p u t

1 30 40 63 227 230 232 311 Ethylbenzene Xylene Toluene Nickel compounds

Reducing Generation/Discharge of Waste JFE Engineering strives to reduce generation and discharge of waste.

To give concrete examples, the office division has carried out educational activities through on-site broadcasting and posters, etc., as well as more segmented sorting for the purpose of reducing the landfill disposal rate of office waste. At both Tsurumi Engineering and Manufacturing Center (hereinafter “Tsurumi Center”) and Shimizu Works, the office division achieved the reduction targets for landfill disposal rates. Meanwhile, the office division at Tsu Works has been working on waste reduction together with the production division.

The production division has endeavored to reduce unit waste discharge per hour. Both the centers and works have worked on thorough sorting, complete sorting and effective use of recyclable waste, and industrial waste patrol to check sorting conditions. Shimizu Works achieved its reduction target, while Tsurumi Center and Tsu Works could not reach their targets due to changes in operations and other factors.

In site construction works, JFE Engineering has been promoting activities to reduce the landfill disposal rate, including sorted collection of rubble,

waste pipes, waste metals, waste plastics, and waste wood, etc., efforts toward smaller bulk, and a recycling campaign. As a result of these activities, the landfill disposal rate at site construction works came to 32.4%, achieving the target of 35% or less ahead of the deadline of the year ending March 2008. The planning and designing division has been also making environment-friendly plans and designs by adopting recycling materials or selecting energy-saving equipment, etc.

Control and Reduction of Chemical Substances In compliance with the Pollutant Release and Transfer Register (PRTR) Law, JFE Engineering controls release and transfer volumes of the designated chemical substances and reports those figures to the national government through local governing bodies. The company has been promoting activities to reduce the controlled substances including paints, solvent, and gasoline. Moreover, its reduction efforts go beyond such PRTR substances and include gases, CO2 and propane, etc., to make its business activities environment-friendly.

Educational poster to reduce office waste

At the office division in Tsurumi Center, JFE Engineering has increased the number of sorted office waste items from 4 items to 14 items since the year ended March 2006 in order to further promote recycling efforts. In the year ended March 2007, generation of office waste in Tsurumi Center increased by 27% year to year mainly due to transfer of some headquarters functions to Tsurumi area, while the recycling efforts resulted in a 37% increase in recycled volume.

Reduction of Waste (The Year Ended March 2007)

Substances Reported under PRTR

(The Year Ended March 2007) (kg)

(22)

20.0 15.0 10.0 5.0 0.0 1.60 1.20 0.80 0.40 0.00

I n p u t

0.78

O u t p u t

1996 11.6 1.00 2004 15.1 0.99 2005 15.2 0.94 2006 15.6 0.84 2007 15.9 1.37 50.0 40.0 30.0 20.0 10.0 0 1996 14.0 2004 32.6 2005 37.2 2006 44.4 2007 33.8 Total

283 Hydrogen fluoride and its

water-soluble salts 135 1,199 0 0 0 1,254

1,334 1,254

1

item

* Energy saving rate:

Percentage of energy saving effect for the fiscal year relative to power consumption in the works as a whole

Reducing Environmental Loads in Business

Activities at Kawasaki Microelectronics

Kawasaki

Microelectronics

• Utsunomiya Works Material Balance

Total energy Electricity Gas Coal and oil PFC purchase (CO2 equivalent) Chemical purchase Water usage

Resource input (raw material)

0.392 PJ

37.2x106 kWH

4 t

822 KL

66x103 t-CO2

5,948 t

197x103 m3

2.60 t

CO2

PFC emissions (CO2 equivalent) SOx NOx Wastewater Waste generated Chemical emissions/transfer Products

16x103 t-CO2

34x103 t-CO 2

419.7 m3

2,164.7 m3

195x103 m3

1,864 t

3 t

2.57 t

Preventing Global Warming

In the year ended March 2007, energy-origin unit CO2 emissions per capacity utilization increased, while the energy saving rate* reached 0.78% as a result of introduction of inverter control for compressors and other measures.

As part of efforts to reduce emissions of PFC gases, Kawasaki Microelectronics, Inc. has implemented an experiment to replace C2F6 gas (accounting for approximately 70% of total emissions of PFC gases) by

substitutes since the year ended March 2006. The basic assessment and consideration for practical use was completed in the year ended March 2007. Accordingly, the company is determined to work on such shifting in the year ending March 2008.

Reducing Generation/Discharge of Waste Kawasaki Microelectronics succeeded in recycling plastic packaging materials as valuable substances in the year ended March 2007, after having achieved such recycling of non-ferrous metals in the year ended March 2005 and semiconductor containers in the year ended March 2006.

Control and Reduction of Chemical Substances Kawasaki Microelectronics succeeded in replacing acetic acid 2-etoxyethyl with substitutes in the year ended March 2007, following the replacement of N, N-dimethylformamide in the year ended March 2006. In addition, the company reduced emissions of catechol by improving its use conditions. As a result, only one substance is now subject to PRTR reporting requirements.

Energy-Origin CO2 Emissions

(Years ended March 31)

CO2 emissions (1,000 t-CO2) Capacity utilization index unit

CO2 Equivalent Emissions of PFC, HFC and SF6 Gases

CO2 equivalent emissions (1,000 t-CO2)

(Years ended March 31)

Substances Reported under PRTR (The Year Ended March 2007)(kg)

Release Air No. Substance Transfer Public waters Soil on-site Landfill on-siteSewerage Off-site

Energy saving rate

achieved

Replacing PRTR substances by substitutes resulted in

reduction

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