Environmental Report 2003

Contact http://www.jfe-holdings.co.jp Environmental Solutions Center TEL : +81-3-3217-3038 FAX : +81-3-3214-3141 1-1-2, Marunouchi Chiyoda-ku, Tokyo 100-0005, Japan E-mail : [email protected]

What is the JFE Group? 2 Toward Sustainable Growth 3

JFE toward Sustainable Society Transition of Environmental Measures 5 JFE Technologies for Sustainable Growth 7

Environmental Management Environmental Management System 9 Activities in 2002 / Future Objectives 10 Promoting Environmental Management 11 Environmental Accounting 13 Communication with Society 15

Reducing Environmental Loads in Business Operations Efforts at JFE Steel 17 Efforts at JFE Engineering 27 Efforts at Kawasaki Microelectronics 28 Efforts at JFE Urban Development 28

Contributing through Products and Technologies Contributing through Steel Products and Technologies 29 Contributing through Engineering Products and Technologies 34 Contributing through Microelectronic Products and Technologies 37

Research and Development 38

Editorial Policy This “JFE Environmental Report Building Environment-Friendly Towns 2003” is based on the actual performance of the JFE Group in envi- Providing Total Solutions for a Better Environment 41 ronment-related activities during fis- Leading the Recycling-oriented Society cal year 2002 (April 1, 2002 to March 31, 2003). Examples of activities also with a Recycling Business 43 include some items continuing into fiscal 2003. Every effort has been made to maintain the continuity of the content and International Cooperation to improve the level of an information disclosure while promoting Contributing to the Global Environment through broader understanding of the efforts International Cooperation 45 and philosophy of the JFE Group to contribute to sustainable growth with the world's most innovative Environmental Businesses of JFE Group Companies 47 technology. This Report has been prepared and External Evaluation of JFE's Activities 49 edited in accordance with the guide- Coexistence with Nature lines of Japan's Ministry of the Envi- 50 ronment (MOE), the Global Report- ing Initiative (GRI), and other relevant standards.

1 JFE Environmental Report 2003 What is the JFE Group? The JFE Group consists of five operating companies, JFE Steel Corp., JFE Engineering Corp., JFE Urban Development Corp., Kawasaki Microelectronics, Inc., and JFE R&D Corp. under a holding company, JFE Holdings, Inc.

Scale of Business Operations (billions of yen) Consolidated net sales,FY 2002 ¥2,426.8 Stockholders’ equity ¥594.5 (Breakdown) Steel ¥1,755.7 (72.3%) Engineering ¥ 520.8 (21.5%) No. of employees 54,100 Other businesses ¥ 150.3 (6.2%) (as of March 31,2003) Outline of Businesses

JFE Steel Corporation (steel business) To create a production system with the world’s highest competitiveness through integrated management of neighboring steel-works, four sites (Chiba Works / Keihin Works, Kurashiki Works / Fukuyama Works) were reorganized into two works (East Japan Works, West Japan Works) in a 2 works / 1 plant system (including Chita Works). •Manufacture and sale of iron and steel products (sheets, plates, shapes, pipes and tubes, stainless steel, electrical steel sheets, bars and wire rods, iron powder, etc.) •Recycling business

JFE Engineering Corporation (total engineering business) To respond quickly to changes in the business environment, promote common business strategies, and maximize consolidated profit in each field, JFE Engineering has adopted a “division company” system consisting of its business divisions and affiliated companies responsible for specific functions. •Energy industries engineering •Environmental industries engineering •Water and waste water engineering •Steel structure engineering •Steel engineering •Solution engineering •Machinery center

JFE Urban Development Corporation (urban development business) Responsible for development of large idle land holdings owned by the JFE Group and expansion of the Group’s condominium business. Emphasizes efficient development of land holdings J F E H o l d i n g s , I c . utilizing accumulated urban development know-how. •Large-scale complex urban development •Condominium construction and sales •Asset utilization

Kawasaki Microelectronics, Inc. (semiconductor business) Manufactures and sells system LSIs for image processing in digital cameras, copiers, etc., and LSIs for image control in liquid crystal displays for personal computers, cell phones, and liquid crystal televisions. •ASICs (application specific integrated circuits)

JFE R&D Corporation Conducts research and development in core technologies common to the steel and engineering businesses (measurement & control, mechanical, civil engineering, building technology, numerical analysis, bio / catalyst) and projects in growth fields.

Main Works in Japan The JFE Name

The JFE name is composed of the letter “J” for Japan, JFE Steel – West Japan Works JFE Steel – East Japan Works (Fukuyama / Kurashiki) (Keihin / Chiba) “F” for steel (as in Fe, the JFE Steel – atomic symbol of iron) and Chita Works “E” for engineering. JFE Holdings, Inc. The acronym can also be thought of as standing for Kawasaki Microelectronics – “Japan Future Enterprise,” i.e., Utsunomiya Works a future-oriented Japanese JFE Engineering – business group centered Tsurumi Engineering and around the core businesses of JFE Engineering – Tsu Works Manufacturing Center steel and engineering. JFE Engineering – Shimizu Works

JFE Environmental Report 2003 2 Toward Sustainable Growth JFE has historically placed high priority on environmental protection in all aspects, including not only protection of air and water quality, but also recycling and prevention of global warming. We are proud Corporate Vision to be among the world’s leaders in this field. With the creation of the JFE Group in 2002, we renewed our commitment to the environment The JFE Group-contributing to society with the world’s most by making global environmental protection a priority management innovative technology. task and are working to further improve our environmental performance through companywide efforts encompassing all JFE Group companies. As a technology-oriented business group, JFE has developed many unique technologies and is continuing to apply these to Environmental Philosophy environmental protection in all its business activities. At the same time, we understand that providing products and services that help The JFE Group considers the improvement of the global create a better global environment is an important mission for a environment to be of utmost importance for management, manufacturing company such as ours. In particular, we are contributing to environmental protection in the following areas. and promotes business operations in harmony with the 1) Advanced and innovative steel ecological products environment to create a prosperous society. 2) Engineering services which reduce environmental loads in society 3)Recycling through a synergy of steel and engineering technologies We also believe that earning recognition as a good corporate citizen which merits the trust of society is essential for the continuing growth of JFE, and to this end, we maintain close communication Environmental Policy with society at every level. JFE’s Environmental Report 2003 is part of this effort. 1 To reduce of environmental influence in all business operations As representatives of the management and employees of the JFE JFE endeavors to reduce present and future environmental loads Group, we are confident that our continuing efforts to improve the and promotes the development of innovative technologies for global and regional environment will create new value in JFE, while reducing environmental loads. also contributing to sustainable growth for future generations. 2 To make contributions through technologies and products JFE contributes to the creation of a better environment through the development and supply of advanced technology, equipment, and ecological products. 3 To make contributions through conservation resources and energy JFE contributes to the creation of a resource and energy-saving society through recycling and energy supply businesses which give priority to preservation of the global environment. 4 To promote communications with society As a member of regional society, JFE contributes to a better environment at the regional level in cooperation with local citizens, government and administrative authorities, and other businesses. 5 To promote international cooperation JFE contributes to environmental protection activities at the global level through active involvement in international cooperation in the form of technology transfer, etc.

Kanji Emoto Yoichi Shimogaichi Chairman and Co-CEO President and Co-CEO JFE Holding, Inc. JFE Holdings, Inc.

3 JFE Environmental Report 2003 JFE Environmental Report 2003 4 Toward Sustainable Growth JFE has historically placed high priority on environmental protection in all aspects, including not only protection of air and water quality, but also recycling and prevention of global warming. We are proud Corporate Vision to be among the world’s leaders in this field. With the creation of the JFE Group in 2002, we renewed our commitment to the environment The JFE Group-contributing to society with the world’s most by making global environmental protection a priority management innovative technology. task and are working to further improve our environmental performance through companywide efforts encompassing all JFE Group companies. As a technology-oriented business group, JFE has developed many unique technologies and is continuing to apply these to Environmental Philosophy environmental protection in all its business activities. At the same time, we understand that providing products and services that help The JFE Group considers the improvement of the global create a better global environment is an important mission for a environment to be of utmost importance for management, manufacturing company such as ours. In particular, we are contributing to environmental protection in the following areas. and promotes business operations in harmony with the 1) Advanced and innovative steel ecological products environment to create a prosperous society. 2) Engineering services which reduce environmental loads in society 3)Recycling through a synergy of steel and engineering technologies We also believe that earning recognition as a good corporate citizen which merits the trust of society is essential for the continuing growth of JFE, and to this end, we maintain close communication Environmental Policy with society at every level. JFE’s Environmental Report 2003 is part of this effort. 1 To reduce of environmental influence in all business operations As representatives of the management and employees of the JFE JFE endeavors to reduce present and future environmental loads Group, we are confident that our continuing efforts to improve the and promotes the development of innovative technologies for global and regional environment will create new value in JFE, while reducing environmental loads. also contributing to sustainable growth for future generations. 2 To make contributions through technologies and products JFE contributes to the creation of a better environment through the development and supply of advanced technology, equipment, and ecological products. 3 To make contributions through conservation resources and energy JFE contributes to the creation of a resource and energy-saving society through recycling and energy supply businesses which give priority to preservation of the global environment. 4 To promote communications with society As a member of regional society, JFE contributes to a better environment at the regional level in cooperation with local citizens, government and administrative authorities, and other businesses. 5 To promote international cooperation JFE contributes to environmental protection activities at the global level through active involvement in international cooperation in the form of technology transfer, etc.

Kanji Emoto Yoichi Shimogaichi Chairman and Co-CEO President and Co-CEO JFE Holding, Inc. JFE Holdings, Inc.

3 JFE Environmental Report 2003 JFE Environmental Report 2003 4 JFE Toward Sustainable Society JFE has a long history of leadership in environmental protection and possesses a wealth of technology and know-how in the field. Recognized in Japan as the “first name in technology,” JFE is contributing to sustainable growth with the world’s most innovative technology.

Transition of Environmental Measures JFE Toward Sustainable Society JFE Toward 1965 70 75 80 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 2000 2001 2002 2003

’72 United Nations Conference on the Human Environment ’85 Adoption of Vienna Convention on ’92 Earth Summit in Rio de Janeiro:Adoption of Framework Convention on Climate Change, ’01 Adoption of POPs Convention (Stockholm): Adoption of Stockholm Declaration Protection of the Ozone Layer Agenda 21, and Convention on Biological Diversity G5 Plaza Agreement ’02 Earth Summit (Rio +10) ’87 Adoption of Montreal Protocol ’95 Publication of IPCC 2nd Assessment Report in Johannesburg

orld ’73 First Oil Crisis ’79 Second Oil Crisis (Ozone Layer Protection) ’96 Implementation of ISO14001 environmental standard

W ’87 Brundtland Commission: Proposal of concept of “sustainable development” ’97 Kyoto Conference of the Parties of the United Nations Framework Convention on Climate Change (COP3): ’88 Establishment of Intergovernmental Panel on Climate Change (IPCC) Adoption of Kyoto Protocol ’89 Adoption of Basel Convention (regulation of cross-border movement of wastes)

’00 Implementation / revision of 6 laws related to ’02 Ratification of Kyoto Protocol ’67 Implementation of Basic Pollution Control Law ’79 Implementation of Energy Conservation Law ’88 Implementation of the Law concerning the Protection of the Ozone Layer establishment of recycling-based society ’02 Implementation of Social Trends ’68 Implementation of Air Pollution Control Law and Noise Regulation Law ’90 Establishment of Action Plan for Preventing Global Warming ’98 Implementation of Law concerning Soil Contamination Control Law the Promotion of the Measures to Cope ’91 Implementation of Law for Promotion of Effective Utilization ’70 Revision of Basic Pollution Control Law with Global Warming ’01 Start of Ministry of the Environment of Resources (Recycling Law) Japan ’70 Implementation of 14 pollution-related laws ’98 Revision of Energy Conservation Law ’01 Start of PRTR system ’93 Implementation of Basic Environment Law ’01 Implementation of Law concerning Special Measures against Waste PCB ’71 Establishment of Environment Agency ’99 Implementation of PRTR Law ’94 Establishment of Basic Environment Plan ’99 Implementation of Law concerning Special Measures against Dioxins

General Measures ’91 Establishment of Global Environmental Charter by Keidanren (Japan Business Federation) ’80 Establishment of energy control regulations ’91 Establishment of Coordinating Committee for Global Environmental Issues ’01 Establishment of Environment & Energy Liaison Center ’96 Establishment of Voluntary Action Plan by Japan Iron and Steel Federation ’67 Creation of Environmental Control Section in Head Office Technology Dept. ’92 Settlement of suit concerting ’97 Establishment of Voluntary Action Plan by Keidanren ’70 Establishment of companywide Environmental Management Committee Chiba Works No. 6 BF ’97 ISO14001 certification of Keihin Works ’02 Start of JFE Group ’71 Establishment of Environmental Management Dept. ’97 ISO14001 certification of Mizushima (Kurashiki) Works and Utsunomiya Works (LSI plant) ’93 Establishment of Global Environmental Dept. ’72 Establishment of environmental control regulations ’98 ISO14001 certification of Fukuyama Works ’93 Establishment of Guideline and Program ’03 Start of 5 operating ’70 Pollution Prevention Agreement with Kanagawa Pref., Kawasaki City, and Yokohama City Principle for Activities for Global Environmental ’98 ISO14001 certification of Chiba Works companies Protection ’03 Start of Environmental ’71 Pollution Prevention Agreement with Hiroshima Pref. and Fukuyama City ’96 Establishment of Environmental Charter ’99 ISO14001 certification of Engineering Division Management Network ’72 Pollution Prevention Agreement with Okayama Pref. and Kurashiki City ’96 Settlement of Kawasaki pollution suit ’99 ISO14001 certification of Chita Works System ’96 Settlement of Kurashiki pollution suit ’74 Pollution Prevention Agreement with Chiba Pref. and Chiba City

Energy-saving Activities '73～'78 '79～'85 '86～'94 '95～ 1st Period 2nd Period 3rd Period 4th Period Environmental Protection & Energy-Saving Activities at Works Energy saving by operational improvements Introduction of large-scale waste Process continuation and integration, energy-saving operation, Energy saving measures for global warming prevention (reduced fuel consumption by heat recovery equipment, conversion to low-cost fuels reheating furnaces, etc.) power saving measures ’96 Introduction of environment-friendly regenerative burner

Supply of Ecological Steel Products,Equipment ’80 TMCP high strength steel sheets ’96 Steel-framed House ’00 Development of Super-OLAC technology for shape steel ’83 Rust stabilizer for weathering steel ’96 Start of waste plastic recycling for BF feed ’01 Tailor Welded Blank ’01 As-sintered alloy steel powder (heat treatment-free)

Measures at JFE ’86 Start of production of stainless clad plates ’98 Development of Super-OLAC technology for plates (high strength, high toughness, high weldability) ’01 Mass production technology for solar grade silicon (SOG) ’91 Fire resistant steel construction products ’01 Lead-free free-cutting bars for machine structural use ’91 Heat-treated rails ’98 Ni-added high performance weathering steel ’92 Oriented electrical sheets for high efficiency transformers ’98 Water-permeable steel sheet piles ’02 Development of Super-OLAC technology for ’93 Martensitic stainless steel tubes ’98 BF cement / BF granulated slag high carbon hot-rolled sheets ’93 Stainless sheets and tubes for auto exhaust system ’02 Start of production of NF Board for ’98 Chromate-free coated steel sheets ’95 Non-oriented electrical sheets for concrete forms using recycled resin high efficiency motors ’99 “Tsubasa” screw pile

’97 Startup of circulating fluidized bed (CFB) boiler turbine power plant Supply of Clean,Energy-saving Technologies ’81 Startup of in-ground LNG storage tank ’00 Development of energy-saving air conditioning system using clathrate hydrate slurry ’66 Startup of Matsukawa Geothermal Power Plant ’81 Gas engine cogeneration system ’98 Startup of wind power generation facilities ’01 Tie-up for high efficiency fuel cell power generation (SOFC)

’02 Startup of sewage sludge circulating

Supply of Ecological Products, Engineering Technology,Equipment Supply of Environmental Protection Equipment ’97 Startup of electric resistance type ash melting furnace fluidized bed incinerator ’73 Startup of stoker type waste incinerator ’87 Startup of sewage sludge methane fermentation plant ’00 Order for high temperature gasifying & direct melting furnace ’90 Order received for large-scale deep-shaft night soil treatment facility ’00 Order for environment-friendly high-efficiency arc furnace (ECOARC) ’00 Startup of JFE THERMOSELECT gasifying & melting furnace ’01 Completion of waste electrical appliance recycling plant

1965 70 75 80 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 2000 2001 2002 2003

5 JFE Environmental Report 2003 JFE Environmental Report 2003 6 JFE Technologies for Sustainable Growth Responding to heightened social needs for energy conservation and environmental preservation, JFE supplies products and services which help prevent global warming, reduce environmental loads, and support the creation of a recycling- oriented society. These pages are a brief summary of JFE’s wide-ranging environmental and energy-related technologies. JFE Toward Sustainable Society JFE Toward

Low power loss Energy-saving Low environmental load Electrical and electric power equipment Ships Automobiles Clean energy Low core loss electrical steel sheets High strength plates for weight reduction Creation and popularization Reduced welding in shipyards of clean energy ●Grain-oriented electrical steel sheets Non-oriented ●TMCP high strength steel plates High strength sheets ●DME (dimethyl ether) ● for weight reduction electrical steel sheets ●Wind power generation ●High strength automotive ●LNG storage tank steel sheets (HITEN) ●High-efficiency fuel cell power ●Tailor Welded Blank generation (SOFC) High strength, high formability ●Solar power generation tubes for weight reduction ●Natural gas hydrate ●HISTORY, ERW steel tubes Supply of energy-saving / low environmental load equipment CO2 CO2 reduction / absorption Gas engine cogeneration system Energy-saving reduction / ●Marine Block ● Environment-friendly regenerative burner equipment absorption ●Solar grade silicon ● (High-purity silicon Preven ting ●Energy-saving air conditioning system using clathrate hydrate slurry (CHS) for solar cells) Global W arming ●Circulating fluidized bed (CFB) boiler turbine power generation

Advanced energy-saving Energy-saving iron- and steel-making processes Steel ●Introduction of energy-saving manufacturing technologies / equipment processes JFEJFE TechTech nologies nologies Waste detoxification and recycling Long-life low environmental Water and load products ●Stoker-type waste incinerator Environmental load reduction technologies sewage ●Electric resistance ●Steel-framed House Building a Reducing treatment / Demolition of incineration plants and plasma-type ash Recycling-oriented Environmental ● soil protection melting furnaces ●Sewage sludge methane fermentation Waste Society Loads ●Protection of soil environment detoxification / ●High-temperature gasifying & direct melting furnace ●Dam sediment removal recycling ●JFE THERMOSELECT ●Dam / river water quality preservation Seawater exchange-type hybrid caisson gasifying & melting furnace High corrosion-resistance tubular products ●

Eco-Town Concept ●Martensitic stainless steel tubes Reduction of Low environmental load materials ●Keihin Coastal Area Environmental City Corrosion resistance / weathering steel plates environmental ●Soga Ecology Park ●Weathering steel ●Rust stabilizer Toxic substance-free steel sheets ●Stainless steel sheets / tubes pollutants Bingo Eco-Town for automotive exhaust system Eco-Town ● ●Chromate-free coated steel sheets Special chromate-free Projects Contribution to recycling-oriented society coating Zn-coating 2 ・Corrosion resistance, ●Waste plastic recycling for 20g/m surface conductivity BF feed/NF Board ・Anti-fingerprint property Steel sheet ・Paintability ●Home electric appliance recycling ●Food waste recycling

Long-life, low environmental load Low environmental load Recycling-oriented society OCTGs, linepipes, bridges and offshore structures Office equipment

7 JFE Environmental Report 2003 JFE Environmental Report 2003 8 Environmental Management As the environment has become an issue of global concern, JFE has redoubled its efforts to solve environmental problems. As part of this, JFE has created a world-class environmental management system.

Environmental Management System (EMS) Activities in 2002 / Future Objectives Environmental Management Environmental Committees Based on its performance to date, JFE sets new objectives for improvement of global environmental activities. Because the JFE Group assigns high priority to for environmental matters at JFE Holdings and the five “improvement of the global environment” as a manage- operating companies to share information in practical Aims of JFE Group Future objectives Results in FY2002 ment task, it has established a JFE Environmental Com- work related to the environment. In a similar manner, ・ISO14001 certification JFE Urban Recycle Corp. mittee as the highest decision-making body for environ- each of the operating companies decides and implements ・JFE Environmental Committee and environment-related committees ment-related problems common to the Group. environmental measures for the individual company and in operating companies (1) Expansion of ・Strengthening of systems ・andCreation of Group intranet information network JFE is dealing with environment-related problems with a holds liaison meetings with its affriates. environmental improvement in level of ・Study of condition of environmental management in affiliated companies management environmental management・Expansion of guidelines to affiliated companies (in progress) 3-tiered committee system consisting of the JFE Environ- mental Committee, Environmental Committees in each of ・Expansion of green procurement・Disclosure of environmental information by Environmental Report and homepage in Group as whole ・Timely information by company and works magazines the Group’s five operating companies, and Affiliated (2) Communication ・Strengthening of communication・Participation in ecological products and waste technology trade shows with society ・Holding of “Urban Renaissance Symposium” by Environment & Energy Company Environmental Committees at affiliates under Liaison Center each of the operating companies. The JFE Environmental ・Lectures at JFE Technical Culture Seminars Research support by JFE 21st Century Foundation 1. Environmental ・ Contribution to Kanagawa Prefecture’s Kanagawa Forest Conservation Program Committee is chaired by the President of JFE Holdings, management and ・ for Water Resource Regions program by participating as Riverhead Forest Partner Inc., with related Directors of JFE Holdings and Directors communication responsible for environmental matters at the five companies as members. Thus, the decisions of the JFE Group’s (3) International cooperation top management are reflected in the Group as a whole, enabling JFE to implement unified environmental man- ・Contribution to global warming ・Feasibility studies for energy saving and environmental measures and agement. As a support function for the 3-tiered commit- countermeasures under Kyoto Mechanism implementation of model projects in China, Thailand, Malaysia, Brazil, etc. (joint implementation, CDM, etc.) ・Receiving of trainees from Environmental Agency in Shenyang, China tee system, JFE has also established a Group Environ- ・Communications with overseas ・Presentation of examples of Japan’s Eco-Town projects at China Council mental Liaison Committee made up of persons responsible organizations, etc. 1st meeting of the JFE Environmental Committee (4) Environmental ・Qualitative measurement and evaluation of ・Publication of environmental accounting information accounting environmental activities

(1) Prevention of global ・4.4% reduction in energy unit consumption ・ Progressing as planned warming in 2010 from 1995 baseline under steel JFE’s IT-based “Environmental Management Network System” industry’s Voluntary Action Plan ・Achieved 99.5% recycling ratio in FY 2002 In parallel with the Environmental Committee system, JFE JFE Holdings, the five operating companies, and Group ・Increased receiving of waste plastic as blast furnace feed ・Increase recycling ratio of byproducts of ・Received 570,000 used appliances for recycling created a system which enables common use of environ- affiliates by transmitting news on environmental trends to manufacturing processes ment-related information on the Group intranet to support the individual employee level, improving the effective- 2. Reduction of ・Recycling of byproducts (waste) generated environment loads by society ・Reporting of releases / transfers in FY2002 to government and disclosure in more complete environmental management. Information ness of environmental management in the Group as a in all business Environmental Report Reduced use and improved control of PRTR activities (3) Promotion of ・・Measures to strengthen flue-gas treatment equipment at sintering plants is shared among persons in charge of the environment at whole. substances (2) Promotion environmental of recycling ・Achieved 70% reduction in benzene emissions against 1999 baseline by various protection ・Dioxin countermeasures reduction measures ・80% reduction in benzene by FY 2003 ・Shortened transportation distance and increased transportation lot size against 1999 baseline ・Reduced environmental loads by more efficient product distribution

・Development of innovative technologies to ・Development and expanded application of heat island mitigating paving technology JFE Group Environmental Committee solve global environmental problems ・Start of proof experiments for clathrate hydrate slurry (high heat-density medium) production system Chairman: President, JFE Holdings, Inc. Environmental Management ・LCA-based product development ・Development of high efficiency natural gas hydrate production technology Members: Directors responsible for environmental matters Network System (1) Environment-conscious ・Development of Marine Block for CO at Group companies R&D Affiliate A 2 absorption and coastal seaweed JFE Steel Corp. Environmental Committee farm restoration Affiliate B JFE Group Environmental Liaison Committee (2) Ecological products ・Reduction of environmental loads in society ・Increased sales of high performance chromate-free coated sheets by expanded use of high performance steel ・Auto weight reduction by Tailor Welded Blank JFE Engineering Corp. Environmental Committee Affiliate C products ・Development of high strength sheets for ultra-lightweight auto body Members ・Development of slow-release potassium silicate fertilizer ・Increased production of solar grade silicon (SOG) JFE Urban Development Corp. Environmental Committee Persons responsible for environment at JFE Holdings Kawasaki Microelectronics, Inc. Environmental Committee and each operating company 3. Contribution through (3) Total solutions for ・Contribution to Eco-Town ・Start of PET bottle recycling business technologies, the environment and recycling-oriented society ・Start of concrete form board (NF Board) production using recycled resin products, and services ・Development of clean energy sources ・Start of 100t/day DME direct synthesis pilot plant project JFE R&D Corp. Environmental Committee anticipating next-generation needs ・Start of development of large-scale DME diesel power generation system ・Contribution to society by multi-faceted ・Cumulative wind power capacity reached 84,000kW (end of March 2003) environmental engineering activities ・First order received for waste incineration demolition Chairman: Director responsible for environmental matters ・Successful development of methane fermentation technology using cogeneration waste heat Members: Managers of related departments, ・First order received for JFE THERMOSELECT gasifying & melting furnace Managers of Planning & Control Depts. at affiliates ・Start of operation of sewage sludge circulating fluidized bed (CFB) incinerator ・First order received for dioxin detoxification equipment (Hi-Clean DX) for waste incineration fly ash Affiliated companies Environmental Liaison Committee ・Start of full-scale operation of siloxane (organic silicon-based polymer) removal equipment for sewage treatment plant ・Start of full-scale operation of high temperature gasifying & direct melting furnace ・Start of construction of RDF power plant

9 JFE Environmental Report 2003 JFE Environmental Report 2003 10 Environmental Management As the environment has become an issue of global concern, JFE has redoubled its efforts to solve environmental problems. As part of this, JFE has created a world-class environmental management system.

9 JFE Environmental Report 2003 JFE Environmental Report 2003 10 Promoting Environmental Management Environment Month Activities

As part of its environmental man- Each year, East Japan Works (Keihin) holds a contest for environmental Environmental Management Environmental Auditing agement system, JFE voluntarily slogans. This year, the number of entries showed a large increase, reaching conducts a program of Environment 857. The following were selected as winning entries. In order to implement a high-quality in-house environmental inspectors is Month Activities in June of each year environmental management system, being promoted. Teams of employ- to raise employee awareness of the Prize for Excellence in Environmental Slogans it is important to understand whether ees led by external experts carry out environment. This year’s activities the system is operating appropriate- internal auditing in JFE in order to began with a message from the “Think before you throw – Your idea makes the difference between waste ly, and whether performance is be- ensure transparency in inspection. President of JFE Holdings and inclu- and resources.” ing continually improved. At JFE, in Issues pointed out by internal or ex- ded public road cleanup operations addition to external inspection by ternal auditing are used as a basis and others, as follows. “Your little cooperation helps to stop warming of our precious globe.” certification authorities, employees for revising and continuously im- experienced in environment-related proving the system, taking into ac- [Public Road Cleanup Operations] “Your trash is a resource too – Let’s recycle!” work such as environmental and en- count the changes in the surround- [Lectures on the environment] ergy management participate in in- ing conditions. [Works Environmental Patrols] “Just a minute – before you throw it away! ternal auditing. Also, the training of [Environmental Education under ISO14001] Have a think and put the Eco-mark on your heart.”

Auditing at steelworks by external auditors Status of the JFE Environmental Management System JFE aims at developing a comprehensive environmental management system based on its environmental philosophy. As such, it is promoting voluntary and continuous environmental activities by each company in the JFE Group based on ISO 14001 certification.

ISO 14001 Certification Certified in

JFE Certified in Certified in Works environmental patrol JFE Steel East Japan Works (Keihin) May 1997 JFE Steel East Japan Works Jul. 1998 Environmental Education JFE Steel West Japan Works (Kurashiki) Oct. 1997 (Chiba including Nishinomiya district) Kawasaki Microelectronics Oct. 1997 JFE Steel Chita Works Jul. 1999 JFE conducts environmental educa- vironment to JFE and measures be- To strengthen environmental education at all levels to deepen the un- ing taken by the company, the re- tion, JFE introduced an Environmen- JFE Steel West Japan works (Fukuyama) Mar. 1998 JFE Engineering Dec. 1999 derstanding of each employee and sponsibility of individual employees, tal Management Network System in encourage individual efforts to im- and the importance of environmental June 2003, creating an electronic prove the environment as part of management. environment in which all employees, Affiliated companies Certified in Certified in regular work. Environmental educa- Based on an annual schedule, each including those at affiliated compa- NKK STEEL SHEET & STRIP May 1997 JFE CIVIL ENGINEERING & CONSTRUCTION May 2000 tion is incorporated in training pro- works conducts periodical environ- nies, can access internal and exter- grams for new employees and pro- mental education (once/year) for nal environment-related information JFE WELDED PIPE MANUFACTURING May 1997 TOYOHIRA STEEL Sep. 2000 motion, and also includes annual general employees, employees en- such as Environment Month Activi- NKK TUBES May 1997 JFE METAL PRODUCTS & ENGINEERING Dec. 2000 programs at each level, covering so- gaged in designated work, etc. as ties from the homepage. JFE CHEMICAL Jul. 1998 KAWASHO Dec. 2000 cial trends related to environmental part of its environmental manage- KAWATETSU TRANSPORTATION & TECHNOLOGY Jul. 1998 JFE Mie Tech. Service Feb. 2001 problems, the significance of the en- ment system. KAWATETSU MINING Jul. 1998 JFE Koken Jun. 2001 KAWASAKI REFRACTORIES Apr. 1999 Fuji Kako Sep. 2001 Green Purchasing JFE KANKYO July.1998 Philippine Sinter Corporation Nov. 2001 JFE has created a common set of In outline, the Guidelines specify: JFE MATERIAL Feb. 2000 JFE Environmental Service Dec. 2001 Green Purchasing Guidelines for the ○Adequate study of required quan- JFE Soldec Feb. 2000 NKK BARS & SHAPES Mar. 2002 group, which apply not only to office tities before purchase to minimize supplies but also to parts and mate- NKK MARINE & LOGISTIC Mar. 2000 JFE URBAN RECYCLE May 2003 purchased amounts. rials for production, and refers to ○Consideration of environmental JFE CONTAINER Mar. 2000 these Guidelines when making pur- loads over the entire life cycle of final chasing decisions. Application is products, in addition to price, quality, (Limited to the subsidiaries for the JFE group consolidation, and other applicable companies in accordance with the equity method.) currently being expanded to affili- delivery schedules, etc. ated companies. ○Requests for and cooperation with environmental protection efforts of suppliers on a daily basis. Introduction of hybrid car Terminology Examples of green purchasing: Recycled oil, solvent containers, ●Environmental Management System (EMS) packaging materials, electric/natural Management system for minimizing the environmental impacts of business activities, under which the organization establishes an environmental policy, prepares and implements plans based on that policy, checks progress and reviews plans, and voluntarily endeavors to achieve continuous progress. gas/hybrid vehicles

11 JFE Environmental Report 2003 JFE Environmental Report 2003 12 Promoting Environmental Management Environment Month Activities

ISO 14001 Certification Certified in

11 JFE Environmental Report 2003 JFE Environmental Report 2003 12 Environmental Accounting 2002 Totals Investment in environment-related penses were environmental imately 10% of total research and Environmental Management Over the past three decades, JFE has invested huge include the large ongoing financial burden of facilities was ￥9.4 billion, which ac- protection, effective use of resour- development expenses. sums in environmental protection, including meas- maintaining this accumulated investment. In particular, counted for approximately 10% of ces, and prevention of global warm- In fiscal 2002, JFE Steel achieved a ures to prevent air and water pollution, reduce noise, when evaluating annual expenses and results, it is total capital investment for the year. ing. Operation/maintenance and de- recycling rate of 99.5%. Energy-sav- treat waste, and create greenbelts. JFE has also put important to consider these past efforts and their Expenses were ￥70.6 billion. The preciation accounted for the majority ing benefits were equivalent to ￥2.2 great effort into energy-saving investment, achieving continuing benefits. primary focus of investment was en- of these expenses. Environment-re- billion. the world’s highest level of energy efficiency. As one measure of management performance, JFE vironmental protection and preven- lated research and development ex- It should be noted that JFE’s current environmental evaluates its environmental activities based on tion of global warming. Primary expenses were ￥3.6 billion, or approx- activities were developed in the course of fulfilling its environment-related data. As an example of this, corporate mission of creating industrial and social investments and expenses are included in the infrastructure, and its current environmental costs Environmental Report. Major item InvestmentExpenses (billions of yen)(billions of yen)

Monitoring & measurement of environmental influence, Environmental Management 1.3 Investment in Energy Conservation investment & expenses EMS-related activities, environmental education & training, etc. related to the JFE’s Prevention JFE embarked on an aggressive program of energy Energy conservation, effective use of energy, etc. own business of global warming 3.5 13.8 conservation following the first Oil Crisis in 1973. After (billions of yen)Cumulative investment in energy-saving the second Oil Crisis in 1979, it developed or introduced 400 Effective use Recirculation of industrial water, Recycling of by-products a wide variety of waste heat recovery equipment and of resources & wastes generated in-house, waste management, etc. 1.0 17.4 invested heavily in energy-saving production processes Prevention of air pollution, water pollution, soil contamination, such as continuous casting and continuous annealing. 300 Environmental protection noise, vibration, ground subsidence, etc. Today, JFE is maintaining its position as a world leader in 4.8 31.7 energy efficiency. Cumulative investment since 1990 has Miscellaneous Fees, charges, etc. now reached approximately ￥334 billion. 200 0.1 2.1 Representative investments in FY2001-2002 Environmental Technological development for the environment, energy, Measures to improve power plant efficiency ・ 100 investment & expenses prevention of global warming ・ Construction of new private power plant related to customers Research 3.6 ・ Installation of energy-saving regenerative burners and society & development Protection of the nature, support to forestation, information disclosure, advertisement, etc. at plate mill reheating furnaces 0 90 95 00 01 02 (FY) Social activities 0.7

Investment in Environmental Protection Total 9.4 70.6 Because JFE operates steelworks in the environs of large metropolitan areas, it has made particularly strong efforts (billions of yen) Cumulative investment The totals mentioned above were calculated on the following basis. to protect the environment, including construction of 500 in environmental measures desulfurization and denitrification plants as measures ●Period: April 2002 to March 2003 against SOx and NOx in the atmospheric environment and 400 ●Scope: Environment-related investment and expenses at JFE’s steelworks, but in the case of research and development, on water treatment facilities to reduce COD and prevent a companywide basis. Calculations do not include presumed effects based on estimates or risk avoidance benefits. water pollution. As a result of companywide investment in (Note) environment-related equipment, which totals approximately 300 Calculations do not include investments made primarily for purposes other than environmental protection, for example, renovation of superannuated ￥476 billion since 1973, JFE’s clean steelworks boast the facilities, even when the process as a whole realizes a net energy saving in comparison with the former process. world’s highest levels of environmental performance. 200 In recent years, JFE has actively invested in measures to Future Challenges recycle byproducts of its steelworks and apply iron and 100 In maintaining and promoting envir- steel making processes as infrastructure for recycling in onmental accounting, an accurate society at large, thus leading the movement toward a 0 grasp and correct evaluation of the recycling-oriented society. 73 80 90 95 96 97 98 99 00 01 02 (FY) actual status of environmental activi- Representative investments in FY2001-2002 ties are necessary. However, there ・ Modernization of sintering machine flue-gas treatment equipment are cases where existing methods ・ Modernization of incinerator flue-gas treatment equipment ・ Improvement of steelmaking shop dust collection are inadequate, for example, items which cannot be quantified and Main Results problems in determining the appli- The main results of environment- and energy-related capital investment and expenses are summarized on the following pages. cable scope of effects. JFE is continuing to develop more appropriate Energy Conservation Environmental Protection concepts and methodologies for maximizing the effectiveness of en- Environmental protection See “Protecting the Environment” (pp. 23-24) Energy- See “Success of JFE Steel’s Energy vironmental accounting in environ- saving effect Conservation Measures” (p. 20) Effective use of resources See “Building a Recycling-oriented Society” (pp. 21-22) mental management. Greenbelt at steelworks

13 JFE Environmental Report 2003 JFE Environmental Report 2003 14 Environmental Accounting 2002 Totals Investment in environment-related penses were environmental imately 10% of total research and Environmental Management Over the past three decades, JFE has invested huge include the large ongoing financial burden of facilities was ￥9.4 billion, which ac- protection, effective use of resour- development expenses. sums in environmental protection, including meas- maintaining this accumulated investment. In particular, counted for approximately 10% of ces, and prevention of global warm- In fiscal 2002, JFE Steel achieved a ures to prevent air and water pollution, reduce noise, when evaluating annual expenses and results, it is total capital investment for the year. ing. Operation/maintenance and de- recycling rate of 99.5%. Energy-sav- treat waste, and create greenbelts. JFE has also put important to consider these past efforts and their Expenses were ￥70.6 billion. The preciation accounted for the majority ing benefits were equivalent to ￥2.2 great effort into energy-saving investment, achieving continuing benefits. primary focus of investment was en- of these expenses. Environment-re- billion. the world’s highest level of energy efficiency. As one measure of management performance, JFE vironmental protection and preven- lated research and development ex- It should be noted that JFE’s current environmental evaluates its environmental activities based on tion of global warming. Primary expenses were ￥3.6 billion, or approx- activities were developed in the course of fulfilling its environment-related data. As an example of this, corporate mission of creating industrial and social investments and expenses are included in the infrastructure, and its current environmental costs Environmental Report. Major item InvestmentExpenses (billions of yen)(billions of yen)

13 JFE Environmental Report 2003 JFE Environmental Report 2003 14 Communication with Society Links with Wider Society Environmental Management JFE believes that it is important to raise social awareness of the environment through communication. Environment-related Participation in Kanagawa Cooperation with NPO Environmental communication is also a tool for change within the JFE Group, for example, by heightening Support and Assistance Riverhead Forest Partnership in Oceanographic Survey the awareness of managers and employees and deepening understanding between divisions. The JFE Steel 21st Century Founda- As a water consumer, JFE under- Together with NKK Marine & Logistics tion is responsible for the JFE stands the importance of healthy Corporation, JFE is cooperating with Group’s direct social contribution. water circulation between water the NPO (nonprofit organization) VOS Concretely, the Foundation provides sources and urban areas, and is Nippon in a voluntary oceanographic Employees Local communities support for environmental purifica- therefore participating in Kanagawa survey by installing automatic tion and has prepared English and Prefecture’s Kanagawa Forest monitoring equipment on oceangoing Media Investors Japanese educational resources on Conservation Program for Water vessels operated by NKK Marine. the Japanese steel industry’s ad- Resource Regions as a Riverhead Data are collected each time vessels vanced environmental and energy- Forest Partner, contributing to the return to Japan and made available Dialogue with JFE Public relations saving technologies, which it don- creation of riverhead forests. to interested researchers. Research organizations local communities journals Customers Group ates to universities in Japan and Environmental Report Trade shows other countries as part of its effort to Homepage Ecological products make Japanese technology avail- Periodic reports Technical cooperation able to the world for global environ- Trade organizations Plant tours Technical reports Administrative agencies mental protection. Information on these educational resources and Consumers Suppliers NPO other activities can be found at the Foundation’s homepage. Symbol of Kanagawa Forest Conservation Program URL ： http://www.jfe-21st-cf.or.jp/ for Water Resource Regions program Oceangoing vessel M/V SUN FRONTIER

Cooperation with Industry, Government, and Universities in Environmental and Energy Activities Coexistence with Local Communities Opening the Works to the Public JFE’s Environment & Energy Liaison Center was established in 2001 to Role of Environment & Energy Liaison Center JFE has concluded environmental protection JFE holds annual open-house events at each of its works for create new ideas and concepts for agreements (pollution prevention agreements) for the enjoyment of area residents. To encourage better activating environmental busines- air and water quality, noise, waste, etc. with local understanding in the surrounding community, JFE has ses, conduct environment- and en- Cooperation with governments governments at the prefectural and city levels in also established Visitors’ Centers in its works and (National & local governments) ergy-related R&D, and provide infor- Seed-stage technology areas where it has plants. Some of these agreements opens its plants to tour groups of local elementary and search & incubation mation through cooperation with Cooperation apply stricter standards than those in national laws, middle school students and the general public. Other with academics Environment Market research

other industries, government agen- Information transmission

and some also cover items not required by the programs include can recycling and voluntary cleanup Universities & Energy Liaison Center cies, universities, and local com- （ Joint study national government. JFE enters into such agreements activities in areas where works are located. （& research institutes munities. It currently sponsors the Consultation from the viewpoint of regional environmental protection,

Environment and Energy Network Cooperation with industries

and strictly observes their terms in all cases. Under Environment- Research Committee, which is com- （ greening agreements with local governments, JFE （and energy-related companies, etc. prised of businesses in the Keihin has created greenbelts in all of its works and is active Coastal Area, promoting recycling in maintaining and managing wooded areas. These among different types of industries. efforts help preserve the local scenery and have The Center is active in information important environmental functions in absorbing CO2 URL ： http://www.eelc.gr.jp/ exchanges with national and local and suppressing dust and noise. governments, businesses, and pri- As a good citizen in local society, JFE attaches special vate citizens, and serves as a forum importance to direct contact with community residents, for communication on energy and conducting public service cleanup activities in the Guided plant tour the environment. area and holding sports classes and tournaments.

Works festival

JFE Cup Volleyball Tournament

15 JFE Environmental Report 2003 JFE Environmental Report 2003 16 Communication with Society Links with Wider Society Environmental Management JFE believes that it is important to raise social awareness of the environment through communication. Environment-related Participation in Kanagawa Cooperation with NPO Environmental communication is also a tool for change within the JFE Group, for example, by heightening Support and Assistance Riverhead Forest Partnership in Oceanographic Survey the awareness of managers and employees and deepening understanding between divisions. The JFE Steel 21st Century Founda- As a water consumer, JFE under- Together with NKK Marine & Logistics tion is responsible for the JFE stands the importance of healthy Corporation, JFE is cooperating with Group’s direct social contribution. water circulation between water the NPO (nonprofit organization) VOS Concretely, the Foundation provides sources and urban areas, and is Nippon in a voluntary oceanographic Employees Local communities support for environmental purifica- therefore participating in Kanagawa survey by installing automatic tion and has prepared English and Prefecture’s Kanagawa Forest monitoring equipment on oceangoing Media Investors Japanese educational resources on Conservation Program for Water vessels operated by NKK Marine. the Japanese steel industry’s ad- Resource Regions as a Riverhead Data are collected each time vessels vanced environmental and energy- Forest Partner, contributing to the return to Japan and made available Dialogue with JFE Public relations saving technologies, which it don- creation of riverhead forests. to interested researchers. Research organizations local communities journals Customers Group ates to universities in Japan and Environmental Report Trade shows other countries as part of its effort to Homepage Ecological products make Japanese technology avail- Periodic reports Technical cooperation able to the world for global environ- Trade organizations Plant tours Technical reports Administrative agencies mental protection. Information on these educational resources and Consumers Suppliers NPO other activities can be found at the Foundation’s homepage. Symbol of Kanagawa Forest Conservation Program URL ： http://www.jfe-21st-cf.or.jp/ for Water Resource Regions program Oceangoing vessel M/V SUN FRONTIER

other industries, government agen- Information transmission

Environment and Energy Network Cooperation with industries

Works festival

JFE Cup Volleyball Tournament

15 JFE Environmental Report 2003 JFE Environmental Report 2003 16 Reducing Environmental Loads in Business Operations In responding to environmental problems, particularly in the steel division, JFE is reducing environmental loads by developing advanced technologies and implementing voluntary programs for energy conservation, air and water protection, and chemical substance control.

Efforts at JFE Steel Resource and Energy Recycling in the Steel Production Process

JFE Steel is contributing to a recycling-oriented society in close cooperation with local community and other industries with the world’s most advanced technologies for environmental protection, energy conservation, Flue-gas and recycling, which were developed in its steelworks. SOx, NOx, Dust Reducing Environmental Loads in Business Operations

■Energy supply Energy recycling in works To local community Power, Fuel gas, 75% 25% Hydrogen, Steam ■Recovered energy recycling Byproduct gas Waste heat recovery steam Power (BF Top pressure Recovery Turbine: TRT) Steel production process Power generating Oxygen plant ■Materials for steel plant production Coke oven gas ■Iron and steel Iron ore 40 million t/yr BF gas BOF gas products Coal 23 million t/yr Lime 8 million t/yr 26.5 million t/yr OUTPUT INPUT (crude steel base) ■Purchased energy Electricity+oil-type fuels 106,000 TJ (terajoules)/yr Raw material Coke oven Sintering plant Blast furnace BOF,EF CC Reheating Hot rolling Cold rolling Continuous Shipment ■Other products yard furnace annealing, Chemicals, Oxygen, ■Industrial water coating 220 million t/yr Nitrogen, Argon

Recycled water ■Byproducts Slag, Dust, Sludge Recycling ratio Steel scrap (BOF) 95% Total : 16.0 million tons

Waste plastic (BF) ■Marine & land civil Other Industries Local community, Toner (sintering) engineering materials On-site byproduct recycling To local community69% Material for cement, 30.5% roadbed material, fertilizer

Containers and packaging, Recycling facility ■Byproducts Electric appliance, Dust, Sludge, NF Board, PET material RDF (Refuse Derived Fuel) Gasifying & melting furnace (JFE THERMOSELECT type) Other Industries Local Community, Waste water, Evaporation loss 5% Landfill disposal 0.5%

Steel production process Raw material yard Coke oven Sintering plant Blast furnace BOF, CC, EF Reheating furnace Hot rolling, cold rolling Continuous annealing, coating Shipment Selection of transportation mode, Coke dry quenching Sintering cooler Waste plastics feeding, Primary pulverized coal injection, Gas recovery, Regenerative burner, Waste heat boiler, shortening of transportation energy (CDQ), waste heat recovery, gas sensible heat recovery, Endless rolling, distance, Counter- coal moisture control ignition furnace line top pressure recovery turbine, direct charging, rotary regenerative conservation nitrogen jet heater, process coupling improvement of load efficiency, measures (CMC), burner hot stove waste heat recovery, low-temperature extraction heat exchanger measures for modal shift, (facility) combustion control fuel gas preheating ladle heating steel produc- application of IT tion Gas turbine combined cycle power plant Power plant fuel preheating device High efficiency air saparation equipment

Generated Dust Flue gas, dust, wastewater Flue gas, dust, Flue gas, slag, dust, Flue gas, slag, dust, Flue gas, dust Rolling wastewater, Coating waste water Primary substance (ammonia liquor) wastewater wastewater wastewater pickling wastewater Exhaust gas environmental Environmental SS, waste oil, waste acid, Metallic ion, etc. NOx, SPM impact of impact Dust Dust, NOx, SOx, COD Dust, NOx, SOx Dust, SSDust, SS NOx iron salt (suspended particulate matter) steel produc- Coke oven gas desulfuri- Yard water spraying, zation, Gas recovery, Gas recovery, Waste acid & waste alkali tion, Countermea- belt conveyor dust col- Flue gas desulfurization dust collection, waste ammonia liquor dust collection, Low-NOx burner, treatment, Wastewater treatment Conversion to and counter- sures lection, COD treatment, & denitrification dust treatment, (facility) dust treatment, use of cleaner fuel waste oil recycling, low-emission vehicles measures laser dust monitoring chemical by-product slag recycling slag recycling coagulating sedimentation recovery

17 JFE Environmental Report 2003 JFE Environmental Report 2003 18 Preventing Global Warming Success of JFE Steel's Energy Conservation Measures Between the first Oil Crisis in 1973 and 1990, JFE and in line with the Japan Iron and Steel Federation's Global warming requires a long-term solution but it has also set a high target for global warming adopted an aggressive energy-saving policy, reducing Voluntary Action Plan, is working toward an energy- involving every individual and business. JFE Steel prevention measures under the Voluntary Action of consumption by a substantial 20%. Measures included saving target of –4.4%/ton-crude steel by 2010 against already boasts the world’s highest energy efficiency, the Japan Iron and Steel Federation. waste energy recovery, improved equipment efficiency, a 1995 baseline. In 2002, consumption was down 3.3% integration of production processes, and construction from 2001. JFE is also actively committed to new Voluntary Action Plan by Nippon Keidanren (Japan Business Federation) of a comprehensive energy management system. As a approaches to energy conservation, including next- global warming countermeasure, JFE has steadily generation ironmaking technologies and waste plastic In anticipation of the Kyoto Protocol, Nippon Keidanren reduced unit energy consumption (crude steel base), recycling.

established a Voluntary Environmental Action Plan in July (PJ) Japanese steel industry’s total energy Reducing Environmental Loads in Business Operations 1997, targeting voluntarily CO2 reductions in the industrial consumption and reduction target for 2010 2600 Energy consumption per ton CO2 emissions per ton and energy conversion sectors to 1990 levels by 2010. (Index) of crude steel production (1990=100) (Index) of crude steel production (1990=100) Under Japan’s Guidelines for Measures to Prevent Global 8.5% 10% 2200 Additional Warming, results are reviewed annually in the Industrial reduction target Structure Council. 100 100 In 2001, CO2 emissions showed a 3.2% reduction from 1.5% the 1990 baseline. Recognizing this achievement, a third 1800 party assessment report for 2002 praised participating businesses for “doing everything in their power, in the 50 50 face of various difficult circumstances.” 1400

1000 0 0 90 9500 01 10 (FY) 90 95 00 01 02 (FY) 90 95 00 01 02 (FY) (Source: The Japan Iron and Steel Federation)

Voluntary Action Program for Environmental Protection by Japanese Steelmakers

One distinctive feature of Japan’s steel industry, in comparison with the U.S. and Europe, is remarkably wide CO2 emissions originating (10 6t-CO2) adoption of energy-saving equipment, giving Japanese from energy consumption mills the world’s highest energy efficiency. Reflecting 200 Japan’s technical capabilities, in December 1996, the 16.9(106t-CO2) Japan Iron and Steel Federation established a Voluntary 180 8.7% 9% Additional Action Plan, which targets a 10% reduction in energy reduction target consumption in 2010 against a 1990 baseline. As a 160 Reduction 1.5% Environmental Contribution in CO2 supplementary goal, a 1.5% reduction by using waste emissions Effect of reducing CO2 emissions in view of LCA-based Products 6 plastic in blast furnaces (assuming creation of an (10 t-CO2) of LCA through using highly functional 140 15 adequate collection system) was later incorporated in JFE is contributing to energy conservation by devel- steel products the Plan. In 2001, energy consumption was 8.5% below oping high-performance steel products which reduce 12 the 1990 baseline, demonstrating the success of voluntary 120 both material consumption in the manufacturing pro- action. cess and final product weight. An LCA assessment of 9 During manufacture 100 six high-performance steel products estimated that 90 9500 01 10 (FY) CO2 emissions can be reduced by 3.1 million tons in 6 (Source: The Japan Iron and Steel Federation) manufacturing and 6.5 million tons in use, for a total of During use 3 9.6 million tons-CO2, by adopting high-performance products (estimate for FY2000, entire Japanese steel 0 industry). 90 95 00 05 10 (FY)

(Source: The Japan Iron and Steel Federation)

Product types surveyed are: ○H-beams for buildings. ○High-tensile steel plate for shipbuilding. ○Heat-resistant steel tubes for boilers. ○Electrical steel sheet for transformers. ○High-strength steel sheet for auto bodies.○Stainless steel sheet for railway carriages.

Terminology Terminology ●LCA ●PJ Life Cycle Assessment. Method of assessing the total environmental load (resource depletion, energy consumption, waste, pollutants, etc.) over the Petajoule, joule (heat unit) x 1015 (1000 trillion) entire product life cycle from raw material extraction through manufacture, use, recycling, and waste.

19 JFE Environmental Report 2003 JFE Environmental Report 2003 20 Preventing Global Warming Success of JFE Steel's Energy Conservation Measures Between the first Oil Crisis in 1973 and 1990, JFE and in line with the Japan Iron and Steel Federation's Global warming requires a long-term solution but it has also set a high target for global warming adopted an aggressive energy-saving policy, reducing Voluntary Action Plan, is working toward an energy- involving every individual and business. JFE Steel prevention measures under the Voluntary Action of consumption by a substantial 20%. Measures included saving target of –4.4%/ton-crude steel by 2010 against already boasts the world’s highest energy efficiency, the Japan Iron and Steel Federation. waste energy recovery, improved equipment efficiency, a 1995 baseline. In 2002, consumption was down 3.3% integration of production processes, and construction from 2001. JFE is also actively committed to new Voluntary Action Plan by Nippon Keidanren (Japan Business Federation) of a comprehensive energy management system. As a approaches to energy conservation, including next- global warming countermeasure, JFE has steadily generation ironmaking technologies and waste plastic In anticipation of the Kyoto Protocol, Nippon Keidanren reduced unit energy consumption (crude steel base), recycling.

1000 0 0 90 9500 01 10 (FY) 90 95 00 01 02 (FY) 90 95 00 01 02 (FY) (Source: The Japan Iron and Steel Federation)

Voluntary Action Program for Environmental Protection by Japanese Steelmakers

(Source: The Japan Iron and Steel Federation)

19 JFE Environmental Report 2003 JFE Environmental Report 2003 20 Building a Recycling-oriented Society Slag Reduction and Recycling Slag generated by blast furnaces, The transformation from a mass-production, mass-consumption, mass-waste society to a recycling-oriented BOFs, and electric furnaces ac- Sales of JFE slag in FY2002 Energy-saving effect society is causing a revolution in the basic paradigm of manufacturing. JFE is actively responding to the counts for about 80% of steel manu- Construction Others of BF slag cement Fertilizer/soil challenge of effective resource use, including the creation of new business to meet new social needs. facturing byproducts. JFE Steel has a On-site use long record of reducing steel slag by Energy consumption Concrete applying hot metal pretreatment and aggregate Zero Waste Activities in the Steelworks on-site reuse. Thanks to JFE’s efforts to develop product manufactur- 570,000 kcal/t JFE has implemented a program of “Zero Waste” activities downturn in cement production.) Future measures will energy saving for steelworks byproducts, which include slag, dust, include on-site recycling equipment. ing/use technologies and encourage Roadbed Reducing Environmental Loads in Business Operations sludge, waste oil, etc., and has already achieved 99.5% The synergy of outstanding environmental and energy standardization under the Japan material for civil Cement recycling. Landfill disposal has decreased to about 1/6 its technologies, plant operation know-how, and steelworks Industrial Standard (JIS), more than engineering 1990 level, meeting the Japan Iron and Steel Federation infrastructure is contributing to effective recycling of waste 99% of slag is now effectively used target of 1/5 the 1990 level by 2010. (This result includes a from local community and other industries, beginning with as roadbed material, aggregate for 10,000 ton increase in surplus dust in 2002 due to a waste plastic. concrete, material for cement, etc. Cement using BF slag powder also Portland cement BF slag powder Sludge Others Recycling results at JFE (dry base) contributes to energy saving and 4% 1% CO2 reduction. (%) Landfill, etc. (1000 t/yr) Recycling 100 1000 Dust Development of Advanced New Applications for Slag (Example) 17% 99 800 ○Use of slag to restore 98 600 shoreline environments 480 (1)Use of BF slag as sand capping Seawater Slag 97 400 material / shallows construction ma- Landfill, etc. terial for improvement of the marine 78% Recycling ratio 96 200 Marine Block 95 75 75 85 environment (2)Artificial reefs (Marine Block) for Capping sand (granulated slag sand) 95 0 Reef (lump steel slag) 90 95 00 01 02 (FY) seaweed / fish farming using CO2- Bottom mud absorbed slag solids Sea bottom Steelworks byproducts (16 million t/yr-dry base) Byproducts (16 million t /yr) (3)Breakwater blocks and other Model of seaweed habitat / shallows creation marine structures using hydration Water Recirculation hardening reaction (Ferro-Form) Average coverage with large Bottom-dwelling organisms (%) seaweed (after one-half year) No. of species/ Transition of industrial water recirculation rate no. of organisms Wet weight (g) Because steel manufacturing requires huge quantities of 96 in steel production process water, JFE has created a comprehensive water recycling (%) 50 100 system. Purification technologies include advanced Marine Block Breakwater biological and physiochemical processes. Off-site release blocks Artificial rocks Seaweed habitat base 40 95 Natural is minimized by recirculation and cascade techniques, reef

achieving a water circulation ratio of approximately 95%. 30 Granulated 1.0 slag 94 Port & Environ- Circulation ratio (%) = (Total consumption – makeup water) harbor mental 50 Sea sand construc- Granulated slag restoration / Total consumption Circulation ratio tion capping-sand material Concrete 20 Bottom block mud Examples of slag materials for port & harbor construction/ 0.5 93 marine environment restoration 90 95 97 98 99 00 01 02 (FY) 10

0 0 0 Top Average No. of No. of Wet Waste Plastic Recycling of sides species organisms weight (103t/yr) Transition of treated amount of waste plastics JFE entered the waste plastic recycling business in 150 ○Heat Island-Mitigating Paving Material ○Slow-release Potassium Silicate Fertilizer October 1996 and now has a treatment capacity of The heat-island effect can be mitigated by using a Slag fertilizer is released slowly into soil over long period. 120 190,000 tons/year. water-retaining solid composed mainly of fine BF slag in 90 asphalt pavement. The pavement retains water in rainy weather and is 60 Rainy weather Good weather cooled by evap- (or sprinkling) 30 oration in good Evaporation Cooling Water permeation/ by heat of weather, reduc- evaporation 0 retention ing the pavement Water-retaining layer Water-retaining layer JFE’s Potassium Potassium No potassium reated amount of waste plastics reated amount of waste 96 97 98 99 00 01 02 (FY) temperature.

T new fertilizer fertilizer A fertilizer B fertilizer ●Cooling by same principle as sprinkling ●Retains water in structure, maintaining effectiveness Slag fertilizer;slowly released over a long period of time to enrich the soil Cooling function of heat island-mitigating pavement

21 JFE Environmental Report 2003 JFE Environmental Report 2003 22 Building a Recycling-oriented Society Slag Reduction and Recycling Slag generated by blast furnaces, The transformation from a mass-production, mass-consumption, mass-waste society to a recycling-oriented BOFs, and electric furnaces ac- Sales of JFE slag in FY2002 Energy-saving effect society is causing a revolution in the basic paradigm of manufacturing. JFE is actively responding to the counts for about 80% of steel manu- Construction Others of BF slag cement Fertilizer/soil challenge of effective resource use, including the creation of new business to meet new social needs. facturing byproducts. JFE Steel has a On-site use long record of reducing steel slag by Energy consumption Concrete applying hot metal pretreatment and aggregate Zero Waste Activities in the Steelworks on-site reuse. Thanks to JFE’s efforts to develop product manufactur- 570,000 kcal/t JFE has implemented a program of “Zero Waste” activities downturn in cement production.) Future measures will energy saving for steelworks byproducts, which include slag, dust, include on-site recycling equipment. ing/use technologies and encourage Roadbed Reducing Environmental Loads in Business Operations sludge, waste oil, etc., and has already achieved 99.5% The synergy of outstanding environmental and energy standardization under the Japan material for civil Cement recycling. Landfill disposal has decreased to about 1/6 its technologies, plant operation know-how, and steelworks Industrial Standard (JIS), more than engineering 1990 level, meeting the Japan Iron and Steel Federation infrastructure is contributing to effective recycling of waste 99% of slag is now effectively used target of 1/5 the 1990 level by 2010. (This result includes a from local community and other industries, beginning with as roadbed material, aggregate for 10,000 ton increase in surplus dust in 2002 due to a waste plastic. concrete, material for cement, etc. Cement using BF slag powder also Portland cement BF slag powder Sludge Others Recycling results at JFE (dry base) contributes to energy saving and 4% 1% CO2 reduction. (%) Landfill, etc. (1000 t/yr) Recycling 100 1000 Dust Development of Advanced New Applications for Slag (Example) 17% 99 800 ○Use of slag to restore 98 600 shoreline environments 480 (1)Use of BF slag as sand capping Seawater Slag 97 400 material / shallows construction ma- Landfill, etc. terial for improvement of the marine 78% Recycling ratio 96 200 Marine Block 95 75 75 85 environment (2)Artificial reefs (Marine Block) for Capping sand (granulated slag sand) 95 0 Reef (lump steel slag) 90 95 00 01 02 (FY) seaweed / fish farming using CO2- Bottom mud absorbed slag solids Sea bottom Steelworks byproducts (16 million t/yr-dry base) Byproducts (16 million t /yr) (3)Breakwater blocks and other Model of seaweed habitat / shallows creation marine structures using hydration Water Recirculation hardening reaction (Ferro-Form) Average coverage with large Bottom-dwelling organisms (%) seaweed (after one-half year) No. of species/ Transition of industrial water recirculation rate no. of organisms Wet weight (g) Because steel manufacturing requires huge quantities of 96 in steel production process water, JFE has created a comprehensive water recycling (%) 50 100 system. Purification technologies include advanced Marine Block Breakwater biological and physiochemical processes. Off-site release blocks Artificial rocks Seaweed habitat base 40 95 Natural is minimized by recirculation and cascade techniques, reef

21 JFE Environmental Report 2003 JFE Environmental Report 2003 22 Protecting the Environment Control of Chemical Substances Historically, JFE Steel has developed or introduced PRTR system. JFE is reducing environmental PRTR numerous technologies to reduce loads on the loads while also developing new technologies Japan’s PRTR (Pollutant Release and Transfer Register) Law was enacted in March 2000. At the time, JFE was already atmosphere, water, and soil, and is now responding which satisfy the needs of both business and the participating in voluntary surveys by the steel industry as part of its commitment to controlling and reducing releases of to recent requirements to control and reduce releases environment. chemical substances. of chemical substances, for example, under the Substances reported under PRTR (FY2002, JFE steel division) (Unit: t/yr; dioxins: g-TEQ/yr)

1 Releases Sewerage

Air Quality No. Substance Reducing Environmental Loads in Business Operations Transition of SOx emissions 16 Air Public waters Soil on-site Landfill on-site Off-site Transfers SOx (106Nm3/year) 25 Zinc compounds (water-soluble) ０４.６００００ To reduce emissions of sulfur oxides (SOx), JFE has 40 40 2-aminoethanol １.２０.８０００２ 36.8 43 adopted low-S fuels and introduced the world’s first high- Antimony and its compounds ００００００ 63 Ethylbenzene ３５０００００ efficiency ammonium-sulfate flue gas desulfurization 30 68 Ethylene glycol ０.０７０００００ system. After addition of another de-S system in 2002, 69 Xylene Chromium and chromium (III) compounds ２７００００００ JFE reduced SOx emissions to 1/7 the 1973 level. 20 100 Chromium (VI) compounds ００.３０３８９０２７１ 102 NOx 8.7 Cobalt and its compounds ００００００.０３ 10 7.0 108 6.1 6.1 6.4 6.6 4.8 Vinyl acetate ００.０２００.３００.００２ For nitrogen oxides (NOx), JFE installed a sintering 132 Inorganic cyanogen compounds ００００００ furnace flue gas denitrification system which decomposes 145 0 1,1-dichloro-1-fluoroethane; HCFC-141b ００.１００００ NOx into nitrogen and water. Emissions have been 73 80 85 90 95 00 01 02 (FY) 177 Dichloromethane; methylene dichloride ７４０００００ 179 reduced by more than 50% since 1973. Styrene ３１０００００ 200 Dioxins １.２０００００ Dust Transition of NOx emissions 227 Tetrachloroethylene １５０.００００３００.００００２００.１ Sprinkling in ore and coal yards, sealed conveyor (106Nm3/year) 230 Toluene １９０００００ connections, and other measures prevent dust generation. 231 40 Lead and its compounds ５３００００３.６ 34.6 232 At coke ovens, sintering furnaces, blast furnaces, BOFs, Nickel ００００００.００１ 283 and other dust-generated facilities, high-performance 30 NickelHydrogen compounds fluoride and its water-soluble salts ００.０３０００３６ dust collectors minimize airborne dust. 299 Benzene ００.８０１０５０１１５ 304 Boron and its compounds 20 17.1 ０５２００００ 14.0 14.5 14.1 14.6 14.6 15.0 309 Poly(oxyethylene) nonylphenyl ether ６９０００００ 310 Formaldehyde ０８.９００.００１００ 10 311 Manganese and its compounds ０３００００ 346 Molybdenum and its compounds ００００００ 0 353 Tris (dimethylphenyl) phosphate 73 80 85 90 95 00 01 02 (FY) ０６.１０２７１０２１８０２.６０２.３００.４ Benzene and Other Volatile Organic Compounds００００００ Water Quality Beginning in 2001, the steel industry adopted a second Transition of COD stage voluntary control plan for atmospheric releases of Atomospheric Benzene release (1999 = 100) JFE has implemented thoroughgoing water recycling (t/day) benzene and other volatile organic compounds, continu- measures, achieving a recirculation rate of approximately 6 ing from its first stage plan (FY1997-99), with the aim of (Index) 100 95%. Before discharge, wastewater containing organic achieving further reductions. JFE set a target of reducing 100 4.3 matter is given biological treatment, and is then purified 3.9 4.2 4.1 4.1 benzene releases by 80% from the 1999 baseline by 80 4 as required by coagulating sedimentation, filtration, 2003 through company-wide improvement activities, and 60 adsorption with activated carbon (ammonia liquor), etc. had achieved a 70% reduction by 2002. JFE is also 42 40 30 to remove pollutants. 2 reducing releases of tetrachloroethylene and dichlorome- 20 thane. In addition to voluntary controls by industry unit, it 20 is also participating in a new voluntary control plan for 0 0 benzene by regional unit, which began in 2001, and is 99 01 02 03 (FY) (Target) 90 95 00 01 02 (FY) working to reduce benzene releases in cooperation with neighboring businesses in other industries. Soil Quality Dioxins The Law concerning Special Measures against Dioxins the standard values for all regulated steelworks facilities JFE has adopted measures to prevent releases of hazar- groundwater environment, the company fully complies implemented in January 2000 set standard values for in 2000, well in advance of the effective date, but is dous substances into the soil and checks soil and with the Soil Contamination Control Law enacted in Feb- steelworks facilities (sintering furnaces, electric furnaces, implementing additional voluntary measures to further groundwater to prevent pollution. To protect the soil and ruary 2003. and incinerators) effective December 2002. JFE satisfied reduce dioxin releases.

Terminology Terminology ●PRTR ●COD Pollutant Release and Transfer Register. A system of reporting to the government the amounts of designated chemical substances released into the Chemical Oxygen Demand. Index of water pollution, expressing the amount of oxygen necessary to chemically oxidize and stabilize pollutants in water. environment and transfers as waste. Annual reporting of quantified amounts in the previous fiscal year is required, beginning in FY2002.

23 JFE Environmental Report 2003 JFE Environmental Report 2003 24 Protecting the Environment Control of Chemical Substances Historically, JFE Steel has developed or introduced PRTR system. JFE is reducing environmental PRTR numerous technologies to reduce loads on the loads while also developing new technologies Japan’s PRTR (Pollutant Release and Transfer Register) Law was enacted in March 2000. At the time, JFE was already atmosphere, water, and soil, and is now responding which satisfy the needs of both business and the participating in voluntary surveys by the steel industry as part of its commitment to controlling and reducing releases of to recent requirements to control and reduce releases environment. chemical substances. of chemical substances, for example, under the Substances reported under PRTR (FY2002, JFE steel division) (Unit: t/yr; dioxins: g-TEQ/yr)

1 Releases Sewerage

23 JFE Environmental Report 2003 JFE Environmental Report 2003 24 Improving Transportation Efficient On-site Transportation Large on-site transportation vehicles Distribution-related environmental impacts On-site transportation such as the 100t U-frame vehicle include CO2, NOx, and SPM generated by fuel Large lot / short distance and 160t carrier can carry larger combustion during product transportation. single-trip loads than conventional Because these are all factors in global warming Works Berth trucks, helping to reduce CO2 and / or air pollution, distribution is an important emissions. environmental issue at JFE Steel. JFE endeavors Marine transportation to reduce environmental load through well- Large lot / long distance 100t U-frame vehicle 160t carrier Reducing Environmental Loads in Business Operations considered selection of transportation modes, Berth Distribution reduction in distance, improvements in load center Innovative Marine Transportation efficiency, and introduction of information Overland transportation technology ahead of the steel industry. JFE is RORO Ship FERO Ship Small lot / short distance RORO ships enable direct loading / unloading of pallet responding to stricter regulations on SPM in Similar to ferries, FERO ships are designed to carry loaded carriers and are used in scheduled service between trucks. Regular service across Tokyo Bay between JFE’s metropolitan areas beginning in October 2003 Works / Customer distribution center JFE’s steelworks and major cities. Chiba District and Negishi FERO base reduces truck traffic with a modal shift. in the heavily-congested Tokyo area.

Tokyo Chiba City Chiba District Tokyo Bay Arrival:19:00 Yo kohama Departure:05:00 Works Pallet carrier Distribution center Pallet Shuttle service for loading Negishi FERO and unloading Ship BaseArrival:08:00 of cargo Departure:16:00 Chiba

IT Applications and the Effect of the JFE Merger Viewpoint for improvement Specific measures Optimized Land Transportation Network Optimized Ship Operation Management ・ Promotion of modal shift by introducing innovative ships (RORO ships, FERO ships, etc.) (1)Selection of transportation mode ・ Avoidance of influence of weather by constructing all weather berths and using RORO ships (Cargo,Vehicle Request System) (JFE Coastal Ship Control System) and U-rack Ships This is a specialized, IT-based dispatching system for An integrated system, for control of ship status and load- heavy overland cargos, making maximum use of JFE’s ing / unloading progress at JFE’s works, reduces dead- (On-site) transportation and dispatching know-how for steel heading and ensures more efficient coastal transportation ・Use of larger transportation vehicles such as U-frame vehicles and carrier vehicles products and other heavy cargos. Optimum matching of by optimizing ship operation management. (2)Use of larger vehicles, ・Direct transportation from mill ends to berths for eliminating temporary storage effective use of information, cargo and vehicle information improves the vehicle and joint use (Off-site) operating rate and reduces the environmental impact of Works Communication satellite (more efficient transportation) ・Making land transportation more efficient by using IT and effective use of return trips fuel consumption. JFE takes justified pride in this ・Development of a simulation system for optimizing the load efficiency of trucks ・Reduction of transportation distances to customers by selecting optimum transportation routes industry-leading open system. Unloading site

・Improvement of operating efficiencies of ships by using the coastal ship operation Ship management system (JFE Coastal Ship Control System) Confirmation and matching of information, (3)Effective ship operation transmission of confirmation information Customer ・Maximization of mixed loading of multiple products Coastal Ship ・Joint transportation with other companies Information registration Confirmation information control Center ・Idling-stop operation (4)Measures for coping Confirmed Confirmed ・Use of vehicles with lower environmental impact information information with stricter exhaust gas ・Energy-conserving operation of coastal ships in view of loading & unloading schedules regulations and lowering Vehicle Cargo ・Use of ship-bottom paints containing no hazardous substances environmental impact request request ・Selective collection of wastes at unloading sites Internet Effect of the JFE Merger registration registration To maximize transport lots and minimize distance, the selection of manufacturing plants and distribution relay (5)Avoidance of truck transportation ・Use of dedicated RORO ships in the Inland Sea Vehicle request Cargo request through urban central areas ・Use of FERO ships for coastal transportation in Tokyo Bay registration registration bases was reviewed as part of the merger of NKK and Kawasaki Steel to create JFE. ・Use of long-life cushioning materials (conversion from rubber to felt) ・Reduction of retaining timber (RORO ships, U-rack ships, FERO ships) (6)Reduction of materials ・Reduction of wire and timber (promotion of hoop lashing) Terminology ・Repeated use of retaining materials ●SPM Simplification of packaging ・ Suspended Particulate Matter. Fine particulates under 10μm (1μm = 1/1000mm) which remain suspended in the atmosphere for long periods and tend to accumulate in the lungs and windpipe when inhaled. ●Modal shift Shift in transportation modes from truck to rail or ship to improve transportation efficiency and reduce environmental loads.

25 JFE Environmental Report 2003 JFE Environmental Report 2003 26 Improving Transportation Efficient On-site Transportation Large on-site transportation vehicles Distribution-related environmental impacts On-site transportation such as the 100t U-frame vehicle include CO2, NOx, and SPM generated by fuel Large lot / short distance and 160t carrier can carry larger combustion during product transportation. single-trip loads than conventional Because these are all factors in global warming Works Berth trucks, helping to reduce CO2 and / or air pollution, distribution is an important emissions. environmental issue at JFE Steel. JFE endeavors Marine transportation to reduce environmental load through well- Large lot / long distance 100t U-frame vehicle 160t carrier Reducing Environmental Loads in Business Operations considered selection of transportation modes, Berth Distribution reduction in distance, improvements in load center Innovative Marine Transportation efficiency, and introduction of information Overland transportation technology ahead of the steel industry. JFE is RORO Ship FERO Ship Small lot / short distance RORO ships enable direct loading / unloading of pallet responding to stricter regulations on SPM in Similar to ferries, FERO ships are designed to carry loaded carriers and are used in scheduled service between trucks. Regular service across Tokyo Bay between JFE’s metropolitan areas beginning in October 2003 Works / Customer distribution center JFE’s steelworks and major cities. Chiba District and Negishi FERO base reduces truck traffic with a modal shift. in the heavily-congested Tokyo area.

25 JFE Environmental Report 2003 JFE Environmental Report 2003 26 Efforts at JFE Engineering Efforts at Kawasaki Microelectronics Preventing Global Warming Preventing Global Warming Building a Recycling-oriented Society In its works and offices, JFE Engineering has introduced Utsunomiya Works is a modern plant which began opera- Recycling of wastes includes material recycling by wide-ranging energy and electricity conservation CO2 emissions in works and offices (1997 = 100) tion in October 1990 with a 2300-ton heat storage tank separated collection, use of waste oil as fuel, conversion (Index) measures through education, adoption of energy-saving and a large number of inverter-type air conditioning units. to raw material for cement, etc. Kawasaki Microelectronics’s lighting systems, and other measures, resulting in landfill disposal rate in 2002 was less than 2%. 100 In addition to improved control measures, Kawasaki continuing CO2 reductions since 1997. Microelectronics is continuing to introduce energy-saving

80 equipment and retrofit inverter-type equipment. Since Business-related wastes Reducing Environmental Loads in Business Operations 1998, unit energy consumption/sales, which is a control 60 index used in the semiconductor industry, has decreased Industrial waste Recycled products steadily, reaching about half the 1998 level in 2002. 40 Recycled resources Landfill disposal 20 Unit energy consumption/sales (1998 = 100) (Index) Landfill disposal rate (%) = Landfill disposal / Industrial waste 0 100 97 98 99 00 01 02 (FY) “Landfill disposal” means waste which cannot be recycled 80 as product or resource. 60 Building a Recycling-oriented Society (%) Landfill disposal rate 40 JFE Engineering implements waste control, reduction, 100 and recycling in accordance with the industrial waste (%) Landfill disposal rate of works waste 20 80 control sheet (manifest) system and large volume release 100 0 60 business control system of the Waste Management Law, 98 99 00 01 02 (FY) and Construction Recycling Law. 80 40 60 Reducing landfill disposal rate of works waste Reducing Environmental Loads 20 Examples of recycling in works include effective use of 40 Landfill disposal rate 0 slag and shot scrap as roadbed material, effective use of Some industrial chemicals used in semiconductor manu- 98 99 00 01 02 (FY) leftover paints (use of liquid component as recycled thinner), 20 facturing and utilities contain PRTR substances. To les-

and conversion of waste lumber to chips. The landfill Landfill disposal rate sen these loads, Kawasaki Microelectronics is reducing 0 consumption and switching to substitutes. The company disposal rate in FY2002 was reduced to 48%. 99 00 01 02 (FY) has been especially positive in adopting substitutes, and Landfill disposal rate = (Generated waste – (Recycling + succeeded in totally phasing-out four PRTR substances reduction)) / Generated waste in 2002. (%) Landfill disposal rate of construction Reducing landfill disposal rate of 100 sites waste construction sites waste Waste reduction / recycling efforts at construction sites 80 Efforts at JFE Urban Development include separated collection and reduction of mixed 60 waste to reduce incineration and enable easy recycling, Preventing Global Warming use of intermediate treatment contractors, etc. As a result, 40 landfill disposal rate in FY2002 was reduced to 26%. The “heat island effect” of abnormally high air tempera- 20 tures in urban areas has become a problem in recent

Landfill disposal rate years. JFE Urban Development stresses environment- 0 friendly urban development measures such as high 99 00 01 02 (FY) water-permeability pavement, rooftop greening, etc. Model room

Building a Recycling-oriented Society Reducing Environmental Loads Materials and equipment are selected with priority to Under the PRTR Law, JFE Engineering has implemented environmental considerations, and recycled materials measures to control and reduce releases / transfers of are effectively used by adopting paving materials which designated chemical substances. contain municipal waste molten slag, etc.

Reducing Environmental Loads JFE Urban Development was quick to introduce measures for the “sick house syndrome,” and provides pleasant, durable housing using JIS / JAS premium- grade materials and products. CITYWINDS Shinagawa Garden Court

27 JFE Environmental Report 2003 JFE Environmental Report 2003 28 Efforts at JFE Engineering Efforts at Kawasaki Microelectronics Preventing Global Warming Preventing Global Warming Building a Recycling-oriented Society In its works and offices, JFE Engineering has introduced Utsunomiya Works is a modern plant which began opera- Recycling of wastes includes material recycling by wide-ranging energy and electricity conservation CO2 emissions in works and offices (1997 = 100) tion in October 1990 with a 2300-ton heat storage tank separated collection, use of waste oil as fuel, conversion (Index) measures through education, adoption of energy-saving and a large number of inverter-type air conditioning units. to raw material for cement, etc. Kawasaki Microelectronics’s lighting systems, and other measures, resulting in landfill disposal rate in 2002 was less than 2%. 100 In addition to improved control measures, Kawasaki continuing CO2 reductions since 1997. Microelectronics is continuing to introduce energy-saving

27 JFE Environmental Report 2003 JFE Environmental Report 2003 28 Contributing through Products and Technologies JFE provides a large number of products, technologies, and services which contribute to the environment. In addition to its in-company environmental protection program, JFE is working to develop products and services which minimize environmental impacts in society as a whole while meeting diverse customer needs.

Contributing through Steel Products and Technologies Steel Ecological Products JFE has a long history of developing steel products to meet customer requirements for higher performance, including high strength, toughness, ductility, and corrosion resistance, elimination of toxic

substances, and recycling. Applying the concept of Life Cycle Assessment (LCA), JFE is making Preventing Global Warming important contributions to energy conservation and reduced environmental loads in society at every stage of product use. JFE was the world’s first steelmaker TMCP technology (Super-OLAC on- High Strength Automotive to provide total solutions for the auto line accelerated cooling). Products Steel Sheets (HITEN) Responding to Customers’ Green Procurement Programs industry from the viewpoint of the are used in large quantity in large- High strength steel makes it possi- auto life cycle from design to recy- scale crude oil tankers and con- Contributing through Products and Technologies cling. Its tailor welded blank (TWB) tainer ships, improving transporta- In addition to ecological products R&D, JFE has JFE has created a Green Procurement Network to ble to reduce part thickness without business is one example. TWB is a tion efficiency, and in columns and strengthened its marketing and created a marketing enable company-wide sharing of information on sacrificing strength. JFE's full line of technology for press-forming welded beams in high rise structures where system for ecological products. It is also actively customers’ green procurement programs and studies high strength automotive steel blank of different materials and seismic design is applied. responding to the entire range of customer needs related regulatory and social trends to better serve customers sheets (HITEN) contributes to im- thickness. Commercial production to ecological products, which include implementation of with product information and direct contact. As an proved fuel efficiency through began in October 2001 and is contri- EMS, reduction of toxic substances, submission of ultimate goal, JFE is working to establish a quantitative body weight reduction while also buting to auto weight reduction. environmental load data, development of judgment evaluation method based on Life Cycle Assessment improving collision safety. Galvan-

criteria for green procurement materials, and proposal systems. (LCA). nealed HITEN for inner and outer body panels includes virtually all High Strength, Light Weight,

JFE’s Approach to the Automotive Product Life Cycle grades and features excellent press High Formability Tubes for formability, coating adhesion, spot Trial production Automotive Applications Auto product Design Production Use Recycling weldability, and fatigue strength. life cycle and evaluation Weight reduction, which is indis- Shorter pensable for fuel economy, can be Automaker's Environmental needs Tanker constructed using TMCP development cycle achieved by substituting tubes for high strength steel plates objectives [Fuel efficiency, CO2 reduction] [Recycling] heavier sheets and solid bars. JFE’s

high strength, high formability

Conventional steelmaker functions HISTORY tube and ERW tube are Non-oriented Electrical Steel

Conventional products which can be formed into Material menu Sheets for High Efficiency Motors functions of parts with complex shapes, contri- steelmaker Material quality buting to weight reduction. Speed control drive systems dra- Example of application of HITEN (Door panel test produced with 1200t press at JFE) Seat frame matically improve motor efficiency. JFE's expanded range of functions Steering hanger beam While pursuing low core loss in Steering shaft JFE's target motor materials, JFE’s high efficiency From design / production to recycling non-oriented electrical steel sheets functions T ailor Welded Blank Power steering were developed with particular em- phasis on reducing high frequency Lower arm Shock absorber core loss. JFE has also led other JFE's basic ：Laser welding Rear axle housing Material development technology makers in developing reactor mate- technologies Propeller shaft Stabilizer Door impact beam rial products which prevent or re- 0.7mm 1.5mm duce power source noise, meeting Suspension member Drive shaft Processing & evaluation technologies Eco-energy Recycling 1.3mm High strength, high formability automotive tubes the requirements of new, high fre- 0.9mm 1.7mm Waste plastic Example of quency electrical products. Evaluation / analysis of collision deformation DME side panel (for BF feed) JFE's potential Body crashworthiness analysis (strength / rigidity) Forming simulation Press TMCP High Strength Steel High-pressure Scrap Tailor welded blank cylinders for eco-cars recycling The trend toward larger structures

in construction and shipbuilding requires high-strength, high- Life Cycle Assessment for Steel and Engineering Products toughness steel plates and high- Integrated press JFE has participated in studies of LCA in the International Iron and Steel Institute (IISI) since 1995 and in the MITI (now forming of efficiency welding and other properties. METI) LCA Project since 1998 as part of an effort to establish reliable methodologies and collect data. Data for 12 types of welded flat sheets TMCP (Thermo-Mechanical Con- steel products have been completed, and work to further expand product data and research on use of LCA data is trol Process) high strength steel continuing. In engineering, LCA is applied to environment-related plants as an engineering product, and independent Tailor Welded Blank (TWB): Technology for plates satisfy both of these perfor- databases have been constructed to support high-environmental performance plant design. press-forming welded blank of different materials and thicknesses, etc. mance requirements. JFE posses- Stator cores and rotors for motors ses the world’s most advanced

Terminology Terminology ●Ecological products ●Non-oriented electrical steel sheets JFE defines ecological products as products which contribute to energy saving and / or environmental protection in society, mobilizing the full resources Electrical sheets are steel sheets in which magnetic properties are improved by silicon addition, etc., and are used in transformers and motors. of the JFE Group. Examples include products and services which respond to social and customer needs for resource and energy conservation, Non-oriented electrical sheets are a class of electrical steel with a highly random crystallographic axis orientation. recyclability, low waste, long life, and/or low environmental loads, with environment-friendly eco-design and eco-processes as a precondition.

29 JFE Environmental Report 2003 JFE Environmental Report 2003 30 Contributing through Products and Technologies JFE provides a large number of products, technologies, and services which contribute to the environment. In addition to its in-company environmental protection program, JFE is working to develop products and services which minimize environmental impacts in society as a whole while meeting diverse customer needs.

criteria for green procurement materials, and proposal systems. (LCA). nealed HITEN for inner and outer body panels includes virtually all High Strength, Light Weight,

high strength, high formability

Conventional steelmaker functions HISTORY tube and ERW tube are Non-oriented Electrical Steel

29 JFE Environmental Report 2003 JFE Environmental Report 2003 30

sintering. However, energy saving in world’s first mass-production tech- painting. JFE has also developed helping expand the application of Grain-oriented Electrical Steel Sheets nology for manufacturing solar cell Weathering Steels Ni added high performance weather environment-friendly weathering for High Efficiency Transformers heat treatment processes is also needed. JFE therefore developed an substrates from molten metallic steels for use in environments with steels.

JFE produces grain-oriented electri- alloy steel powder which uses after silicon by a metallurgical refining high airborne salt concentrations, process. The product silicon is more which was impossible with conven- cal steel sheets with the world’s high- sintering as a heat treatment pro- est magnetic properties, and exports cess(sinter-hardening). Eliminating than 99.9999% pure and achieves tional weathering steels, expanding 14–16% conversion efficiency in sol- the range of applications and contri- more than half of these products to conventional heat treatment results foreign markets. Because core loss in substantial energy savings in part ar cells. Commercial production of buting to global environmental pres- silicon blocks for substrates began ervation. in high efficiency grain-oriented elec- manufacture.

trical steel sheets in April 2001 Contributing through Products and Technologies on a 200 t/yr Rust Stabilizer for Example of use of rust stabilizer has improved by 20-30% in the last scale and was Weathering Steels expanded to Oku-Aso Bridge constructed using weathering steel Clad Steel Plates 30 years, sub- Weathering steels, which use rust to Rust stabilizers preserve the good stantial long-term 400 t/yr in October 2002. prevent rust to possess good corro- appearance of structures by pre- Clad steel plates consist of a sur- energy savings sion resistance without painting be- venting rust streaks on weathering face cladding of stainless steel or ti- can be expected cause the steel is designed to form steels. For environmental protection, tanium, which provides improved in iron cores. World’s largest polycrystalline silicon ingot a protective rust film. Widely used in JFE developed a new rust stabilizer corrosion resistance, over a high- Cores for large transformers civil engineering and construction, which is 100% free of chrome, lead, strength carbon steel plate. Clad and particularly in bridges, weather- and other heavy metals and meets a steel contributes to saving energy Alloy Steel Powder Part for power tool ing steels extend the life of steel variety of requirements for formation consumption through saviing rare structures to 50-100 years without of a dense protective rust layer, earth metals. for Sinter-hardening Solar Grade Silicon The trend toward higher strength (High-purity Silicon for Solar Cells) levels in sintered mechanical parts, particularly for automotive applica- To meet the rapidly-growing demand Reducing Environmental Loads tions, requires heat treatment after for solar cells, JFE developed the Polycrystalline silicon solidification plant clude a special two-side organic film Chromate-free Coated Steel SheetStainless Steel Sheets and Tubes coating which gives excellent press for Automotive Exhaust Systems Building a Recycling-oriented Society The EU has set a deadline of July formability, weldability, corrosion 2006 for replacing hexavalent In the form of sheets and tubes, JFE resistance, and resistance to ga- chrome, lead, mercury, and cad- manufactures much of the ferritic soline-induced degradation. Blast Furnace Cement mium with substitutes. Because stainless steel which is now used in Heat-treated Rails Steel-framed House exported appliances must meet this (Granulated BF Slag) automotive exhaust system compo- Using a unique heat-treatment pro- JFE’s steel-framed house offers ex- requirement and similar regulations nents such as exhaust manifolds, cess, JFE has dramatically im- cellent earthquake resistance, safe- JFE produces high quality blast fur- are expected in Japan in the near converter cases, and mufflers. In nace slag powder from water-granu- future, JFE developed a coated particular, JFE manufactures a Example of use in auto fuel tank proved the hardness and wear resis- ty, and durability. With its extremely tance of railway rails, which show long life, this environment-friendly lated BF slag, which is a byproduct steel sheet which contains no unique high oxidation resistance improvement of approximately 60% housing product contributes to for- of ironmaking. Used as an admixture chrome (VI) but still offers excellent stainless steel, which the company Martensitic Stainless Steel Tubes corrosion resistance, surface con- itself developed, as a metal honey- in wear tests. The extended rail life est preservation and protection of in cement, it displays outstanding Natural gas is enjoying rising de- ductivity, paintability, anti-fingerprint comb carrier material for the catalytic resulting from improved wear resis- the global environment. properties including strengthening, mand as a countermeasure for glo- property, and lubricity. This prod- converter used to remove CO and tance reduces energy consumption reduced heat of hydration, and im- bal warming, but development of uct is now used in internal panels NOx from exhaust gas, and has won and waste accompanying rail main- proved chemical resistance. Envir- this resource requires steel tubes of appliances and vending ma- high marks from users for many tenance and replacement. These onmental advantages include ener- with high corrosion resistance in chines, internal components of OA such devices. heat-treated rails have been com- gy and resource saving, effective high temperature environments. equipment and copiers, chassis of mercialized for Japanese railways use of resources, and reduction of Martensitic stainless steel OCTG (oil televisions, VTRs, and audio and heavy axle-load railways in greenhouse gases. Exhaust manifold country tubular goods) and linepipe equipment, and other parts, and an North America and elsewhere. can be used in these environments expanded range of applications is without inhibitors (corrosion preven- expected. tion agents), contributing to environ-

Special chromate- mental protection. Steel-framed House Zinc-coating layer: free coating 20g/m2 ・Corrosion resistance, surface conductivity Lead-free Sheets for Fuel Tanks Steel sheet ・Anti-fingerprint Recognizing the need to reduce Heat-treated rails Granulated BF slag property ・Paintability lead use, JFE developed a 100% lead-free steel sheet as a replace- Terminology ment for the lead-tin coated steel sheet long used in auto fuel tanks. ●Grain-oriented electrical steel sheets Features of the Pb-free sheet in- Offshore oil field A type of electrical steel sheet with the easy axis of magnetization in the crystallographic structure oriented in the rolling direction. Displays excellent magnetic properties in the sheet rolling direction.

31 JFE Environmental Report 2003 JFE Environmental Report 2003 32

plates at the bottom end and is tant steel has the same properties Water-permeable Steel Sheet Pile Contributing through Engineering Products and Technologies placed by turning the pile. Dis- as conventional steel, but as a JFE is contributing to a low environmental load and recycling-oriented society by developing engineering Water-permeable steel sheet piles placed soil is compressed by the strength guarantee, it has a mini- are a novel type of sheet pile with wing plates and accumulates mum high-temperature (600°C) yield businesses in clean/recycled energy, water purification, soil preservation, and waste treatment and recycling. around the pile, solving the problem point of 2/3 the normal temperature precut water-passage holes. In revetments and embankments, they of surplus soil, which is among the standard. Fire resistant steel is widely

maintain water circulation between greatest problems in pile-driving used in semi-outdoor spaces, such Preventing Global Warming the land and water sides approach- work. As an additional advantage, as multi-level parking ramps, and in ing that in nature, preserving, creating, the pile-turning machine does not structures with large open spaces

cause the noise and vibration, re- and little flammable material, such Contributing through Products and Technologies and restoring the complex ecological safe, comfortable urban develop- and thermal storage tank size by systems around such structures. sulting in a quieter environment dur- as atriums. By reducing fire resistant Gas Engine Cogeneration ment with DHC. 50% or more.

Placing mattress works on the front ing construction work. coating work, this product also im- Since JFE delivered its first gas Roof-top CHS production system side and gabion works or stones on proves the working environment at Environment-friendly Existing engine cogeneration system in 1981, heat CHS the back produces a synergistic the site and reduces environmental source unit it has supplied systems with out- Regenerative Burner ecological preservation effect. loads in construction of buildings. standing reliability and durability The environment-friendly regenera- This type of composite construction using the WAUKESHA gas engine, tive burner heating system is an inno- can already be seen in project for Office VCS air conditioning area Lead-free Free-cutting Steel which has earned an extremely high vative “world’s first” technology which creation of rivers richly-endowed Office Demonstration reputation with users around the area with nature at the Nagara River, for Machine Structural Use realizes large energy savings in re- world. Because this is a high efficiency where it has proven its effectiveness heating furnaces (30% or more) and system which greatly reduces CO2 JFE developed a lead-free free-cut- at the same time, large reductions in in preserving the ecological system. ting steel offering a combination of emissions, and furthermore, burns flue-gas NOx concentration (60% or CHS air conditioning area good machinability and cold forging clean city gas made from natural Existing + demonstration system Plan view of 11th floor more). As a combustion system (object area: 233m2) "Tsubasa" Screw Pile properties, which had been consid- gas, it generates no dust or SOx, which makes a significant contribu- Air conditioning system using CHS ered impossible without Pb addition. while NOx is minimized using various tion to both environmental protection In spite of its high carbon composi- reduction technologies. and global warming prevention, it is Fire Resistant Steel Products Wind Power Generation tion, this steel has an excellent cold winning wide acceptance among for Building Structures forging property, and at the same users in Japan and other countries. Wind power generation has drawn

time, has better machinability than considerable attention as form of

Pb-added free-cutting steel be- clean energy and has been intro-

cause a graphite, which has a lubri- duced rapidly in recent years.

Example of use at Nagara River cant effect, is used in place of lead. JFE manufactures 750kW units fea-

It has a good balance of fatigue turing a variable rotor speed, direct

strength after quenching and tem- drive transmission, synchronous gen-

pering, giving it a particularly out- erator in Japan and supplies total en-

“Tsubasa” Screw Pile standing combination of properties gineering for wind power plants from Gas engine cogeneration package as an automotive steel material for Because conventional foundation Regenerative burner heating system site selection through design, manu-

processing by cold forging – machining facture, construction, and mainte- piles are placed during or after – heat treatment. District Heating and Cooling nance. JFE is Japan’s leader in the ground excavation, a large volume Energy Saving Air Conditioning Parking building using fire resistant steel (DHC) by Sewage Heat of surplus soil is deposited on the System Using Clathrate Hydrate field, with a record of orders received for 121 units, mainly of the 750kW surface. JFE’s Tsubasa Pile is a steel Under ordinary conditions, fire resis- Slurry (CHS) class, and a total installed capacity pipe pile with a screw-like wing CHS is a new thermal transportation of 84,000kW (end of March 2003). As

and storage medium first developed a clean power producer, JFE is par- by JFE as a substitute for cold water. ticipating in wind power projects in In comparison with conventional cold- Hokkaido and Mie Prefecture to encourage wider use, and has also in- water air conditioning, trial calcula- Circulation of Steel in Japan troduced a large-scale 2,000kW wind Each year, Japan produces approxi- Circulation of Steel in Japan (2001) tions show that a year-round energy DHC system using waste heat in sewage saving of approximately 50% is pos- power generator from Gamesa mately 100 million tons of steel, which is Accumulated used in construction, machinery, and steel(Japan) District Heating and Cooling (DHC) sible with CHS, offering great prom- (Spain), giving it a strong presence in 1,237 million tons Iron ore Steel production using sewage heat is an extremely ise as an energy saving / CO2 reduc- the large-generator sector. auto industry, and other fields. When Crude steel output Steel materials Construction/Shipbuilding/ products reach the end of their useful 126 million t/yr 102 million t/yr and products Machinery/Automobiles/ effective energy-saving technology. Civil engineering/ tion technology for general use. CHS life, virtually all of this steel is recycled to Tanks, etc. DHC utilizes a heat pump to convert is a two-phase fluid comprised of fine the steel industry, including materials Home scrap, the difference between atmospheric particles of clathrate hydrate and its with long lives of 100 years or more. processing scrap temperature and unused sewage aqueous solution and holds latent Recovered steel is used any number of Scrap consumption 19 million t/yr 44 million t/yr heat, which remains basically con- heat in the same temperature range times, demonstrating that steel is well- Obsolete scrap stant year-round, to a heat source. At (5–12 C) as water for air conditioning, suited as a basic material for a recy- ° Scrap 29 million t/yr its steelworks and waste treatment cling-oriented society. The total accumu- but its thermal density is more than Scrap exports/imports lation of steel in Japan is now more than plants, JFE has accumulated abun- double that of cold water. As a result, 1.2 billion tons and is a resource which dant experience and technical know- the pumping flow rate can be reduced how in using untapped energy sour- by at least half, reducing pumping can be passed on to future generations. (Source: ISIJ) Wind power ces and is continuing to contribute to power consumption by up to 80% plant

33 JFE Environmental Report 2003 JFE Environmental Report 2003 34