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1. Environmental Activities & Performance (3)

Reducing Hazardous Substances

The Kobe Steel Group is implementing tight controls on chemical substances, reducing the quantities of hazardous materials used, and substituting safer alternatives. In line with international trends in the control of hazardous and chemical substances, we are continuing efforts to reduce hazardous substances, ensuring full compliance with regulations, and sharing information among all members of the Group.

Uncompromising Control Toward Reduction

Kobe Steel set up the Kobe Steel Group Policy on Controlling Hazardous Substances and strives for thorough control of chemical substances. For example, a Management Sheet for Designated Chemical Substances is used in all workplaces. This Sheet sets out usage and control methods for each substance, and enables quantities transferred or released to be calculated accurately for notification in accordance with the PRTR Law. It is also utilized in our efforts to reduce quantities consumed and limit emissions. All Group companies use the Management Sheet for chemical substance control. The reported figures for fiscal 2007 under the PRTR Law showed that 34 substances were handled at Kobe Steel works and plants, 282 metric tons were released, and 621 metric tons were transferred. For Group companies, 34 substances were handled, 925 metric tons were released, and 786 metric tons were transferred. *PRTR Law: Pollutant Release and Transfer Register: Legislation that requires notification of releases of designated chemical substances into the environment and promotes improved controls.

Control of PCBs

In accordance with government regulations on the proper handling of wastes containing polychlorinated biphenyls (PCBs), equipment such as transformers and condensers that contain PCBs are placed in special storage facilities when no longer used, with notification made to government authorities. The Kobe Steel Group is striving to ensure appropriate disposal through early registration with the Japan Environmental Safety Corporation (JESCO), a body that manages the disposal of PCBs.

Measures to Control Dioxins

Generation of dioxins from waste incinerators is limited by thorough maintenance of facilities and proper operating control of combustion temperature. Proper operating control and maintenance is undertaken of sintering furnaces, aluminum alloy manufacturing facilities, electric furnaces for steelmaking, and wet exhaust gas scrubbers and their wastewater. Through these measures, any unintentional generation of dioxins that occurs during manufacturing processes is kept well within regulatory limits.

Protection of the Ozone Layer

At Kobe Steel all chlorofluorocarbons (CFCs) that were once used for cleaning purposes were disposed of at the end of fiscal 1994. Since then, we have worked toward the systematic reduction of all substances that damage the ozone layer.

Asbestos

Appropriate replacement of asbestos is proceeding in accordance with the lndustrial Safety and Health Law and guidelines on waste disposal from the Ministry of the Environment. All emergency renovations to buildings to eliminate asbestos that can circulate in the air have been completed. Sprayed and pasted materials, which might release asbestos into the air, are currently the subject of a program of countermeasures. Building materials as well as facilities and equipment that contain asbestos of the type that does not circulate in the air are also now being removed or replaced. Appropriate handling and disposal of asbestos, including keeping logs and labeling is in progress at all locations.

Group Companies

Group companies are working towards tighter control and reduction of hazardous materials.

	Examples of Activities

Group company Location Activity Shinko Wire Company, Ltd. Amagasaki Works Amagasaki, Hyogo Prefecture Use of tetrachloroethylene and trichloroethylene prohibited Tesac Wirerope Co., Ltd. Kaizuka, Osaka Prefecture Method established to replace lead alloy with plastic for wire rope terminal treatment Kobelco Construction Machinery Co., Ltd Ogaki Factory Ogaki City, Gifu Prefecture Use of electrostatic paint guns improves coating efficiency, reducing quantities of solvents and coating materials PRO-TEC Coating Company Ohio, USA Use of hexavalent chromium in plating processes prohibited Kobe Precision, Inc. California, USA Processing upgraded to eliminate use of toluene

	Hazardous Substance Control: Annual Transfers and Releases of PRTR-Controlled Substances (FY2007)

Unit: kg(for dioxins: mg-TEG)

Goverment ordinance No. Substance Kobe Steel Group companies Release Transfer Number of locations Release Transfer Number of locations 1 Water-soluble salts of zinc 4,700 0 2 580 24,000 2 16 2-aminoethanol 0 0 1 - - - 30 Bisphenol-A epoxy resin (liquid) - - - 0 8,200 2 40 Ethylbenzene 3,300 180 3 78,000 4,000 9 43 Ethylene glycol - - - 61,000 180 2 44 Ethylene glycol monoethyl ether 48 14 1 - - - 59 p-octyl phenol - - - 0 0.2 1 63 Xylene 99,000 3,300 8 470,000 14,000 16 64 Silver and silver compounds - - - 0 100 2 66 Glutaraldehyde 0 0 1 - - - 68 Chrome and trivalent chrome compounds 59 72,000 5 150 77,000 8 69 Hexavalent chrome compounds 0 350 3 0 0 1 99 Vanadium pentoxide 8 35,000 1 - - - 100 Cobalt and cobalt compounds 0 0 1 0 0 2 101 Ethylene glycol monoethyl ether acetate 62 18 1 4,800 0 1 108 Inorganic cyanide compounds (except complex salt and cyanic acid) - - - 0 1,300 2 132 1,1-dichloro-1-fluoromethane 5,300 0 1 - - - 145 Methylene chloride 64,000 940 2 21,000 180 5 177 Styrene - - - 1,700 16 1 179 Dioxins 760 66 5 530 0 2 198 Hexamethylenetetramine 0 0 1 0 50 3 200 Tetrachloroethylene - - - 16,000 1,500 2 202 Tetrahydromethyl phthalic anhydride - - - 0 3,400 1 207 Water-soluble salts of copper 600 0 1 0 13 1 211 Trichloroethylene - - - 19,000 5,200 2 224 1, 3, 5-trimethylbenzene 2,800 2,700 3 5,900 1,100 5 227 Toluene 67,000 2,000 4 210,000 8,900 13 230 Lead and lead compounds 5 140 1 14 6,800 7 231 Nickel 6 1,700 5 0.3 520 5 232 Nickel compounds 120 5,900 4 160 46,000 2 243 Barium chloride - - - 230 1,400 1 244 Picramic acid - - - 0 0 1 253 Hydrazine 1,300 0 2 0 0 1 266 Phenol 0 2,200 1 10,000 68 2 283 Hydrogen fluoride and its water-soluble salts 22,000 7,500 4 14,000 500,000 6 299 Benzene 10 0 1 5,300 0 1 304 Boron and boron compounds 1,300 190 4 140 420 4 307 Poly (oxyethylene) alkyl ether 5,100 0 2 - - - 308 Poly (oxyethylene) oktylphenyl ether 29 2,900 1 - - - 309 Polyoxyethylene nonylphenyl ether 450 1,900 2 - - - 310 Formaldehyde 0 0 1 - - - 311 Manganese and manganese compounds 3,000 450,000 6 2,500 71,000 7 345 Mercaptoacetic acid 0 0 1 - - - 346 Molybdenum and molybdenum compounds 2,000 29,000 6 520 9,300 4 353 Phosphoric acid tris (dimethylphenyl) 0 0 2 - - -