Our refineries discharge exhaust gases and wastewater subject to control by the Air Pollution Control Law and the Water Pollution Control Law, respectively. Additionally, our refineries handle chemical substances that are specified in the Pollutant Release and Transfer Register (PRTR) law. The Cosmo Oil Group works to properly control and reduce the environmental impacts of these emissions and substances. Also, we undertake environmental impact assessments when installing large facilities or undertaking large-scale engineering work. For industrial waste, we set our own targets to reduce the volume of waste generated and reduce and recycle excess sludge.

Prevention of Air Pollution At our refineries, we use fuels with low sulfur and nitrogen content and have introduced flue gas desulfurization and denitrification equipment, and electrostatic precipitators so as to reduce the generation of air pollutants. We have also installed floating roof tanks and introduced equipment collecting the hydrocarbons that evaporate when petroleum products are shipped in order to reduce the emissions of volatile organic compounds (VOC). Prevention of Water Pollution Seawater and industrial water are used in the oil refining process at our refineries. As wastewater from refining process contains oil, odorants substances (such as ammonia or hydrogen sulfide), suspended solids and organic matter, we endeavor to prevent water contamination by appropriately treating the wastewater with sour water treatment units, oil-water separation units, coagulation sedimentation units (to extract suspended solids), and activated sludge process units. Management of Chemical Substances Petroleum products contain substances such as benzene and toluene, and catalysts used in the refining process contain cobalt, molybdenum, etc.
We reported the amount of releases and transfers of these chemical substances for fiscal 2006 to the government in accordance with the PRTR Law.

Fiscal 2006 Release and Transfer of Substances Subject to the PRTR Law
   (at Four Refineries)

Substances Subject to the PRTR Law	Amount Released				Amount Transferred	Total Transfer Amount
	Air	Water	Soil	Total
Asbestos (kg/year)	0	0	0	0	10,200	10,200
Ethylbenzene (kg/year)	1,340	0	0	1,340	0	1,340
Xylene (kg/year)	5,470	0	0	5,470	0	5,470
1,3,5-trimethylbenzene (kg/year)	9.8	0	0	9.8	0	9.8
Toluene (kg/year)	20,700	0	0	20,700	0	20,700
Nickel compounds (kg/year)	0	0	0	0	20,400	20,400
Benzene (kg/year)	5,100	0	0	5,100	0	5,100
Zinc compounds (kg/year)	0	4,600	0	4,600	0	4,600
Antimony and its compounds (kg/year)	0	0	0	0	1,000	1,000
Cobalt and its compounds (kg/year)	0	0	0	0	80	80
Molybdenum and its compounds (kg/year)	0	0	0	0	240	240
Dioxins (mg-TEQ/year)	0.57	18	0	19	8.60	28

Note1: In addition to the above, more than 1,000 kg/year of 2-aminoethanol, ethylene glycol, ethylene glycol monomethyl ether, cresol, chromium and chromium(III) compounds, cyclohexylamine, 1,2-dichloroethane, 1,2-dichloropropane, tetrachloroethylene, nonylphenol, hydrazine, and alkyl ether are handled, but all of their release and transfer are 0 kg/year.

Note2: The above data includes figures for the Yokkaichi Kasumi power station.

Dioxins Emission Control Strict controls are in place at our refineries that have waste incineration facilities, and we comply with relevant regulations.

Maintenance and Control of PCB (Polychlorinated Biphenyl) PCB was used as an insulator for electric appliances in the past, but now due to its toxicity it is neither manufactured nor used. Equipment containing PCB used in refineries or service stations in the past is managed in an appropriate manner in a quarantined environment, and the maintenance status is reported to the government annually according to law.
In order to comply with regulations reguiring all equipment to be environmentally-sound by 2016, we have already registered all equipment with external agencies for treatment in fiscal 2005.

Reducing Industrial Waste In fiscal 2006, increases in industrial waste resulted from such factors as industrial waste generated by the accident and fire at the Chiba Refinery and the generation of asbestos-bearing waste material that resulted from the application of the Asbestos Removal Law. To reduce landfill and offset such increases, we promoted the recycling of asbestos-bearing waste material, combustion residue from incinerators, and waste asphalt. These activities resulted in 402 tons^* of landfill produced in fiscal 2006, which corresponds to a landfill rate of 0.7%^*, well below the target of 1% specified in the Consolidated Medium-Term Environmental Plan. Our affiliated companies have also individually established their own targets and made efforts to reduce industrial waste materials.

* The landfill rate covers four refineries, the Yokkaichi Kasumi Power Station (IPP) facility, oil depots, and the Research & Development Center. Reducing Excess Sludge Excess sludge discharged from wastewater treatment facilities accounts for the largest portion of all industrial waste in Japan. Sludge also makes up 56% of industrial waste generated at Cosmo Oil's refineries, and therefore managing this sludge is extremely important. To the present, we have been researching^* technologies for reducing excess sludge generated at our refineries and have achieved large reductions in excess sludge at our Chiba and Sakaide refineries.

* Research is being carried out as a project supported by the Japan Petroleum Energy Center (JPEC).

In fiscal 2005, we surveyed the state of asbestos usage in buildings at our refineries and service stations that the Cosmo Oil Group either owns or leases. As a result, we confirmed that sprayed asbestos was exposed at 16 locations. In fiscal 2006, we completed the removal of this asbestos at 15 of these locations, and in fiscal 2007 we plan to remove the asbestos at the one remaining location, a closed-down service station.
Besides asbestos that is sprayed, asbestos is contained in such building materials as slate as well as in heat insulators installed in production equipment. Because these are molded products, we believe no asbestine powder is emitted during normal usage. Nonetheless, we are sequentially replacing these with asbestos-free materials at the time of repairs. For other asbestos-bearing products, we undertake measures according to applicable laws.