ENVIRONMENTAL SOLUTIONS

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The JFE Group is promoting customer-oriented businesses targeted at environment-related and eco-energy areas, while drawing upon the Group's collective strength.
The needs of national and local governments and private companies in the fields of the environment and environmentally friendly energy sources are growing. In this situation, the JFE Group is developing its environmental solutions business by taking advantage of its collective strength as well as its technology and expertise. Within JFE Holdings, we have created the Environmental Solutions Center as a Group-wide organization to maximize synergies within the Group. This Center's mission is to explore environmental needs, plan and propose solutions, and at the same time create new kinds of environmental solutions businesses. We, at the JFE Group, aim to cultivate our environmental solution business into a next-generation business that contributes to maximizing the Group's earnings.

 INITIATIVES FOR SUSTAINABLE DEVELOPMENT
A prime example of our leading-edge environmental solutions is our efforts to work with local governments in environmentally conscious urban planning activities. JFE takes an active part in local governments' environmentally conscious urban planning programs from the initial stages. Drawing on the proximity of our steelworks to recycling markets in large cities and the technology possessed by our steel and engineering businesses, we are actively involved in operations to recycle the waste products generated by other corporations and local communities. Specifically, our activities involve recycling waste plastic as feed in our blast furnaces, utilizing plastic from containers and packaging in making board for concrete forms, recycling vinyl chloride, PET bottles and household appliances, gasifying and melting combustible wastes, developing a bio-gas business based on food waste, and using recycled materials as resources in steelmaking.
  Furthermore, through alliances with nearby companies, we promote resource recycling and the reuse of energy in the industrial complexes where our steel mills are located. We are actively engaged in creating new forms of cooperative businesses that will help contribute to a recycling-oriented society.

 DME PROJECT: NEW CLEAN FUEL FOR THE 21ST CENTURY
People are beginning to take a closer look at DME (dimethyl ether) as a clean fuel for the 21st century. DME can be manufactured from a variety of hydrocarbon source materials and has very low impact on the environment, emitting no sulfur oxide (SOx) gases or particulate matter (PM) when burned. DME is non-toxic, with superior handling characteristics, and can be used in a wide range of applications, from electric power generation (thermoelectric, cogeneration and fuel-cells) to transport applications (in diesel engines and fuel-cell vehicles), household fuels (as an alternative to LPG) and as a raw material in the chemical field.
  Based on our proprietary technology for the direct synthesis of DME in large volumes at low cost, the JFE Group and its partner companies established DME Development Co., Ltd. in December 2001. Since July 2002, we have been making advances in research and development with support from the Ministry of Economy, Trade and Industry's Agency of Natural Resources and Energy. In January 2004 we succeeded in our test operation of one of the world's largest demonstration plants for this technology, with a daily production capacity of 100 tons (completed in November 2003 as a scaled-up version of a previous test plant which had a daily production capacity of five tons). Over the next three years, we will continue to focus strongly on research and development with the aim of building a commercial-scale plant with a daily production capacity of about 3,000 tons, conducting repeated test runs and verification tests.
  In April 2004, a group of seven companies including JFE established a DME Promotion Center, which actively promotes the early introduction and popularization of DME.

100t/day DME Demonstration Plant
100t/day DME Demonstration Plant

 NEW DEVELOPMENTS IN THE ENERGY BUSINESS
The JFE Group is actively engaged in various energy businesses. These include businesses related to wholesale and retail sales of electricity using high-efficiency self-generation electric power facilities, as well as a thermal recycling business which employs RDF (refuse-derived fuel). We are also involved in wind power generation using a farm of 124 wind turbines with a total power of 91,850 kilowatt.
  In addition to these businesses which are already in operation, we are actively engaged in the development of the next-generation clean fuel DME, as well as its applications such as environmentally friendly, high-efficiency power generation facilities, and in the development of solid-oxide fuel-cells. By creating customer-oriented businesses based on our expertise and technologies in new electric power and energy fields, we expect to be able to develop unique energy businesses which take advantage of our collective strength.