contents · source: ministry of economy, trade and industry "yearbook of production, supply...

1Sustainability Report 2007

C o n t e n t sIwatani environmental policy

Environmental Charter

This report contains details of Iwatani Group's activities in FY 2005.(It includes certain activities through to the end of June 2006). 【Guidelines used for reference】Ministry of the Environment: Sustainability Report Guidelines (FY2003 Version)Ministry of Economy, Trade and Industry: Environmental Reporting Guidelines2001 with Focus on StakeholdersGRI: Sustainability Reporting Guidelines 2002

Iwatani environmental policy ……………1

Environmental Charter ……………………1

Liquefied Natural Gas（LNG）……………2

Hydrogen Energy …………………………4

LPG ……………………………………………6

Various Activities …………………………7

Eco-Friendly Products ……………………7

Contribution to Local Communities……8

International Activities,Support for Energy Technology ………9

Environmental Management System …10

Summary of EnvironmentalPerformance in FY 2006 ………………11

Iwatani's Material Balance ……………12

Supply Chain Management System,Logistics ……………………………………13

Compliance with Laws & Regulationsand Negative Information,Environmental Accounting ……………14

FY2007 Environmental Objectives and Targets…………………………………15

Environmental Chronology………………16

Feature StoryBest Energy Mix and More...

Social Performance

Environmental Performance

"Gas and Energy" is a key concept for Iwatani. Whilst LP gas andvarious industrial gases remain our core business, Iwatani hasbeen developing interests in a comprehensive range of industriesincluding general consumer products, foods, machinery, weldingmaterials, electronic equipment, metals, chemicals and minerals.Iwatani strives, in all its business activities, to work in harmonywith local communities and to contribute to a more recycling-ori-ented society, in the spirit embodied in the Iwatani GroupEnvironmental Charter.

We will endeavour to reduce burdens on the environment,notably those which contribute to global warming, throughnew technologies allowing us to use our natural resourcesmore effectively, research and development of newsources of energy contributing to a more viable society andthe wider use of Eco-friendly products.

We will save resources and energy and keep waste to aminimum through our business activities.

We will comply with environmental laws and regulations, andfollow environmental requirements we consider workable.

We will continuously improve our environmental manage-ment systems and be more effective at preventing pollutionby setting and regularly reviewing of environmental objec-tives and targets.

We will ensure that all company and group employees areaware of environmental issues, and that environment-relat-ed training and education are provided.

1st May, 2003

IWATANI INTERNATIONAL CORPORATIONAkiji Makino President

1.

2.

3.

4.

5.

2 Sustainability Report 2007

Feature Story : Best Energy Mix and More....― Liquefied Natural Gas （LNG）

Natural Gas has a much smaller environmental impact

than oil, reserves are huge, and it is clean. Iwatani has so far

supplied Natural Gas to large industrial customers and, in

order to meet a wider range of demands, established a

Natural Gas supply company, Koga Energy Co., Ltd. (Koga

City, Shiga Prefecture), jointly with Kansai Electric Power

Co., Inc. and Koga Kyodo Gas Co., Ltd. The company start-

ed full Natural Gas supply in May 2007.

Koga Energy built necessary facilities, including a satellite

base and gas pipelines, within its Natural Gas delivery area. It

will expand the use of Natural Gas in households, shops and

small factories by supplying Natural Gas to Koga Kyodo Gas,

a general gas operator, while directly delivering Natural Gas

to large industrial consumers for stable and smooth supply.

This Natural Gas supply business model by Koga Energy

is the first such attempt in the nation, and has attracted atten-

tions as a new business model for converting regional energy

sources to Natural Gas.

Iwatani Starts New Supply BusinessResponding to Increasing Demand for Natural Gas

Natural Gas Supplier Koga Energy Co., Ltd. Started Full Natural Gas Supply in May 2007

Overview of Natural Gas supply company Koga Energy

Lorries are a fundamental means of delivering LNG. Iwatani already owns several dozen.

Three LNG tanks (100 kiloliters) were installed in the satellite base and additional tanks willbe built for more stable supply.

Iwatani has expanded its LNG sales base and know-how by

establishing joint ventures with Kansai Electric Power Co., Inc.,

Chubu Electric Power Co., Inc., and Hokuriku Electric Power

Co., Inc., and will start a satellite supply to consumers in the

Kanto district using Iwatani LNG lorries at the end of FY 2007.

The LNG will be supplied from the Tokyo Electric Power

Company's Futtsu Thermal Power Station.

The sale of LNG in the Kanto district will be an

independent Iwatani business. The latest

growth in our sales area will expand cover-

age from the Tokyo metropolitan area to

the Shizuoka and Koshinetsu districts,

as well as the north Kanto, in

addition to the already

established the west

from Aichi and

Hokuriku dis-

tricts.


As Natural Gas has been distributed mainly through existing

city gas pipelines, we had to establish supply infrastructures and

overcome geographical restraints in order to expand the use of

Natural Gas. Koga Energy suggested a new way of supplying

Natural Gas, called "Satellite Supply." This has enabled us to be

more flexible in delivering Natural Gas to more users.

In the Natural Gas supply business of the company, the LNG

transported from the Sakai LNG Center of Kansai Electric Power

by lorry is gasified at the satellite base and delivered to con-

sumers. The Natural Gas is directly delivered to large con-

sumers like factories through the main pipelines, while being

supplied wholesale to Koga Kyodo Gas, a city gas operator,

which delivers Natural Gas to households and various facilities

through its low-pressure pipelines.

Koga Energy plans an annual supply of around 12,000 tons

for direct supply and around 3,000 tons for wholesale supply as

initial goals.

To maintain the safe supply of Natural Gas, reliable handling

techniques and experience are indispensable. Iwatani has

sophisticated techniques and abundant experience in handling

low-temperature gases, which is the key to the supply of

Natural Gas. In addition, we already operate several dozen lor-

ries to transport LNG, and built a group-wide system that cov-

ers all aspects of the Natural Gas supply business, including

logistics, and the production, engineering, security and mainte-

nance of supply facilities. Our accumulated know-how is effec-

tively applied to the supply business of Koga Energy. Iwatani

will increase its role in promoting the use of Natural Gas.

"Satellite Supply" by Koga Energy Opens UpNew Possibilities of Natural Gas Supply

Demand for Natural Gas is growing every year in Japan.

70 percent of Natural Gas is used for power generation, 30

percent for city gas (where industrial use rate is highest), and

the rest for domestic use. Demand for this environmentally

friendly, stable energy source will increasingly grow in the

future.

Growing Demand for Natural Gas

Iwatani Has the Nation's Most AdvancedNatural Gas Handling Technology

Sale of LNG in Kanto at the End of FY 2007 is PlannedExpansion of Annual Sales to 300,000 Tons

■ Demand for Natural Gas (by use)

■ Iwatani's Natural Gas Supply Business Model

■ Source: Ministry of Economy, Trade and Industry "Yearbook of Production, Supply and Demand of Petroleum, Coal and Coke," and Ministry of Finance "Japan Exports & Imports" Expanding supply area


Iwatani, as the leading supplier of hydrogen in Japan, has

focused on the development of hydrogen supply infrastruc-

tures in order to realize a hydrogen energy based society.

Our "operation center", Hydro Edge Co., Ltd., is the nation's

largest liquid hydrogen production plant. It started operation

in April 2006.

Hydro Edge was founded as a joint venture by Iwatani and

Sakai LNG Co., Ltd., a member of the Kansai Electric Power

Group. It has the Japan's first innovative plant for combining

the production of liquid hydrogen and air-separation gases.

Liquid hydrogen production capacity is the highest in Japan,

with two lines each capable of producing 3,000 liters/h by liq-

uefying gaseous hydrogen obtained from natural gases

through steam reforming.

Liquid hydrogen, which has better transportation and stor-

age characteristics than compressed (gaseous) hydrogen,

will bring innovation to the distribution and application of

hydrogen. With Hydro Edge as our operation center, Iwatani

is building hydrogen supply infrastructures while looking

ahead to the future of a hydrogen energy based society.

Feature Story : Best Energy Mix and More...― Hydrogen Energy

Operation of a New Infrastructure Model Starts in aMove Towards Hydrogen Energy Based Society

A Hydrogen Supply Network Expanding from "Hydro Edge"― the Nation's Largest Capacity Liquid Hydrogen Production Plant

Liquid hydrogen loaded into a lorry for long-distance transportationA lorry can transport approx. 16,000 cubic meters hydrogen at a time.

Two tanks each having astorage capacity of 300kilo liters of liquid hydro-genStable supply has beenachieved in response toincreasing demands forhydrogen

"Hydro Edge" (Sakai City, Osaka Prefecture)

Expanding liquid hydrogen supply areas

■Infrastructure network for hydrogen fueled vehicles expanding from Hydro Edge

Hydro Edge

Satellite stationLiquefied Hydrogen storage type mobile refueling station

Liquid hydrogen transportation lorry

Satellite station

Off-site station

Liquefied Hydrogen storage type mobile refueling station

Iwatani has also promoted the

development of new applications

for hydrogen, achieving steady

results. For example, the fuel cell

powered bicycle, equipped with

our hydrogen occlusion alloy

(metal hydride) tank, is capable of

generating 300 watts of output

power. It is expected to be used as

a convenient and clean means of

transportation.

The "hydrogen fuel cell type

power generation system," which

combines a lightweight high-pres-

sure hydrogen supply system,

developed by Iwatani, with the "FC

Box" fuel cell power generator

from Ebara Ballard, is capable of generating 850 watts of power,

quietly and free of greenhouse gases, with a start time of a minute

or so. This could be useful for power generation during disasters

and emergencies.

We are also developing Japan's first "mobile fuel cell power sup-

ply vehicle" equipped with an on-board 10kW pure hydrogen-type

fuel cell, aiming at a wide variety of applications, including emer-

gency power supplies during disasters, and power supplies for out-

door construction and events. As these examples show, Iwatani's

activities exploiting the possibilities of hydrogen extend to every cor-

ner of society and people's lives.


As part of the JHFC (Japan Hydrogen & Fuel Cell Demonstration

Project) led by the Ministry of Economy, Trade and Industry, Iwatani

constructed a "JHFC Kansai Airport Hydrogen Station" at Kansai

International Airport on May 7, 2007 in order to start a demonstra-

tion project for supplying liquid hydrogen to the hydrogen fueled

vehicles and mobile power supply vehicles in the airport. Liquid

hydrogen is delivered from Hydro Edge using a "Liquefied Hydrogen

storage type mobile refueling station" co-developed by Iwatani and

Kansai Electric Power.

The JHFC Kansai Airport Hydrogen Station is a small-sized satel-

lite supply station that can be expanded in line with future increases

in hydrogen demand. At present, it is capable of filling one or two

fuel cell vehicles at a time, but can be developed to a full-scale

hydrogen station by adding facilities.

"The Liquefied Hydrogen storage type mobile refueling station" is

an on-board installation designed for providing a hydrogen delivery

service. Efficient use of a mobile station will allow hydrogen to be

delivered to demand

locations spread over

wide areas.

As we are still at

the dawn of a hydro-

gen energy based

society, Iwatani will

steadily promote the

use of hydrogen by

proposing suitable infrastructure models that meet the hydrogen

demands of the times, and will improve hydrogen supply infrastruc-

tures in phases as our proposals bear fruit.

Infrastructure models meeting the needs of the timeｓ"JHFC Kansai Airport Hydrogen Station" and "LiquefiedHydrogen storage type mobile refueling station"

JHFC Kansai Airport Hydrogen Station

Development of HydrogenApplications

Japan's first offsite hydrogen station"JHFC Ariake Hydrogen Station"

Mobile fuel cell power supply vehicle

Hydrogen fuelcell type powersupply system"FC Box"

Liquefied Hydrogen storage type mobile refueling station

Fuel cell powered bicycle


Feature Story: Best Energy Mix and More...― LPG

We Promote Stable Supply �and Efficient Use of Clean Energy LPGWe Promote Stable Supply �and Efficient Use of Clean Energy LPG

Replacing Gas Delivery Trucks with LPG Vehicles Compliant withthe new Long-Term Exhaust Emission RegulationsFuel Facility Secondary production Transportation Production

Basic unit of greenhouse gas emissions (g-C/K-Mkcal)

Coal

Oil

LNG

City gas

LPG

0 20 40 60 80 100 120The first LPG-fueled vehicle wasdelivered to Home Energy Tokai.

From Households to Factories, Promotingthe Use of LPG

Source: LPG Reader

Iwatani is the sole organization in Japan providing an inte-

grated network from import to delivery of LPG to home users.

We deliver LPG to about 3 million households nationwide

with the brand name "Marui Gas." Having a history of more

than 50 years, "Marui Gas" is the most familiar LPG brand

among consumers.

About three quarters of the LPG consumed in Japan is

imported from overseas. Iwatani has four stockpiling bases in

Japan for assuring stable supply. To reduce CO2 emissions,

we have also promoted the introduction of high-efficiency

equipment and cogeneration systems utilizing the environ-

mental properties of LPG, as well as offering a simple LPG

filling system to disseminate the use of LPG-fueled vehicles.

The LPG (liquefied petroleum gas) is a compound of car-

bon and hydrogen, consisting mainly of propane and butane.

Its gross calorific value per volume is high, about 2.2 times

that of city gas. Other excellent characteristics include very

low CO2 emissions in combustion.

Comparing various energies in terms of their environmen-

tal burdens throughout their life cycles, from production to

consumption (life cycle assessment), shows that LPG has

the smallest carbon (C) emissions per calorie. It is a proven

energy which, along with natural gas, has a small impact on

global warming.

LPG, used in 25 million households around the nation as

domestic energy, draws our attention again as a very familiar

clean energy.

LPG, Clean Energy the Public is Familiar With

Our 19 regional home energy companies for house-to-house delivery of LPG

nationwide have been replacing their gas delivery

trucks with environmentally friendly LPG-fueled

vehicles, and the first such vehicle, compliant with

the new Long-Term Exhaust Emission Regulations,

was introduced this July. Existing trucks will be

replaced at the time of renewal, step by step, at a

rate of about 100 vehicles a year.

■ Environmental burdens of various energies in relation to global warming


Biogases are a clean gas energy recovered from methane

gas produced by organic waste materials or manure etc., and

are typically used for fueling compressed natural gas vehi-

cles and in power generation. Biogases can also be reformed

to hydrogen for use as the raw hydrogen material used for

fuel cell vehicles. Iwatani has participated in the construction

and operation of various biogas facilities as part of our efforts

for the practical application of biogases.

Feature Story: Best Energy Mix and More.... ― Various activities

Pursuing the Possibilities of Clean Energies through Various Activities

Biogases

The 15th World Solar

Car Rally was held at

Solar Sports Line in Ogaki

Village, Akita Prefecture

from July 27 to 29. This is

the fifth meet since the

fuel cell car section was added, and six of the 32 teams

joined in the fuel cell car section this year. Since its inception,

Iwatani has offered hydrogen to the participating teams and

cooperation with the rally.

Iwatani Offered Hydrogen to Fuel Cell Carsin the 2007 World Solar Car Rally

Special Co-sponsorship of the Osaka ScienceFestival for Youngsters, "Science Festa".

The "JHFC Ariake Hydrogen Station" is the nation's first liquid

hydrogen station jointly operated by Iwatani and Showa Shell

Sekiyu. Since its launch in June 2003, the station has filled many

fuel cell vehicles with hydrogen for the purpose of various demon-

strations and accumulating data relating to hydrogen stations.

On January 18, 2007, the total number of vehicles fueled at

this station reached 2,000, and the volume of refilled hydrogen

about 4,300 kg. With this amount of hydrogen, a fuel cell vehicle

could travel around the earth about 11

times. The hydrogen station served as

a meaningful way towards a hydrogen

based society by ensuring the safety

of hydrogen supply facilities.

A Total of 2,000 Vehicles Fueled at theAriake Hydrogen Station

DME (dimethyl ether) is a

fuel synthesized from natural

gas, coal or biomass. It is

expected to be a new clean

energy source because it is

easy to handle, and does not

emit black smoke or particulate matter (PM). Iwatani is devel-

oping technologies for applying DME to diesel engines and

cogeneration systems using diesel engines, while taking part

in a national proof test project for LPG composite fuels.

Synthetic Fuel DME

"The 1st Iwatani Hydrogen Energy Forum - Towards the Future

Hydrogen Based Energy Society," was held on December 11, 2006.

This is the first hydrogen forum held by the private sector. The

forum provided a "place" for forging close ties among participating

companies and organizations for the realization of a hydrogen-

based energy society, and drew larger numbers of participants than

expected from associated industries-

390 participated in the forum. The par-

ticipants actively exchanged opinions

and information for early realization of

a hydrogen based society.

The 1st Hydrogen Energy Forum

In line with the objectives of the festival, which is to help stop the falling

numbers of children interested in science - as Japan's future depends on

them - Iwatani participated in the Science Festa from last year as a special

co-sponsor. We chose "Hydrogen, A Future Energy - Feel the Power of

Hydrogen!" as the theme for this year's

festival (held on July 25 and 26).

Children enjoyed learning about the

future energy, hydrogen, through elec-

trolysis experiments using water and

handmade fuel cell driven mini-cars.

Fuel cell cars running at the maximum speedof 70 km/h.

Iwatani defines products that contribute to environmental improvements as "eco-friendlyproducts", and aims at improving the environment through everyday business activities.

ECO-FREEZE Bead Dry

Iwatani's high-purity carbon hydride coolant "ECOFREEZE" is a natural refrigeration medium that replaceschlorofluorocarbons. We have supplied ECO FREEZE toall the domestic refrigerator manufacturers, and offered atotal of 910 tons both in Japan and overseas, therebycontributing to a decrease in CO2 greenhouse gas emis-sions equivalent to about 2,080,000 tons.

Dry ice is pelletized into beads with diameters of approximately6mm in order to enlarge the total surface area, thus improvingthe cooling effect. This allows meticulous low-temperature con-trols of foods and other goods. We also provide thermal insula-tion containers for preventing the mixture of goods having differ-ent storage temperatures. This makes on-board refrigeratorsunnecessary thereby reducing the number of delivery trucks.

We provide a broad range of eco-friendly products from various business operations in Iwatani, including "MIX-GT" leak-resistive tire filling gas, the "Cassette-Feu Eco" - portable cooking stoves with good

thermal efficiency, the "Kansai Meijin Jr." canister-crusher for the safe release of flammable gases remaining in used gas canisters, and the "Aqua-Make" waste water processing system using oyster shells.

Eco-Friendly Products

The 2,000th car was a Nissan"X-TRAIL FCV".

Sponsoring the "Environmental Photo Contest"

Iwatani is sponsoring the "Environmental Photo Contest",

held under the auspices of PRESIDENT Inc. The contest

invites participants to submit photos on themes proposed by

sponsoring companies. Many photos were entered under the

Iwatani theme "Hometown" in 2007, and the "Iwatani

International Corporation Awards" was awarded to Mr. Kenji

Kuwabara for his photo entitled "Welcome Fires."

The "Hometown" theme is the starting point for a process

of rejuvenation that can enrich our minds. Our hometowns

may be gradually changing as a result of environmental dete-

rioration, but we hope that the warmth of the people commu-

nicated by "Hometown" will stimulate people's awareness of

the importance of environmental protection.

Cooperation with NHK Symphony Orchestra activities

Iwatani supports the objectives of the NHK Symphony

Orchestra as they "Aim to enhance and develop the musical

art of our country through symphonies, and accomplish the

orchestra's mission in society", and has cooperated in many

aspects of their activities

throughout the country

for 20years. A mainstay

of our activities is spon-

soring the classical music

concert "NHK Symphony

Orchestra "Summer"".

"ALALA" eco-friendly prod-

ucts are a range of environ-

mentally friendly detergents

and soaps made using with

100% natural ingredients.

Part of the proceeds from

Alala eco-friendly products


Social Performance

Contribution to Local CommunitiesIwatani contributes to the security of local communities and environmental conservation, making the fullest use of human andinformation networks throughout the country, including our LP gas dealers. Such cooperation is helping to foster a rich culture.

"Marui Gas Emergency Taskforce" Contributing to RegionalDisaster Prevention and Post-disaster Restoration

The "Marui Gas Emergency Taskforce" is a disaster relief

support organization immediately mobilized in the event of

earthquakes, storms, floods, and other disasters. An emergency

disaster prevention network has been formed by Iwatani LP gas

dealers, with 3,000 qualified staff members standing by in 10

regional block branches throughout the country.

In the Niigata-ken Chuetsu Earthquake in October 2004, the

"Marui Gas Emergency Taskforce" metropolitan area branch

was mobilized, beginning work on the following day. In tough cir-

cumstances, and suffering frequent, strong aftershocks, a total

of 224 members of "Marui Gas Emergency Taskforce" participat-

ed in restoration activities for two weeks. They completely

restored LP gas operations for 1,960 customers, thus helping

secure their lifelines.

The "Marui Gas Emergency Taskforce Disaster Drill Day" is

observed on October 15 every year. On this day, nationwide

drills are carried out based mainly on field exercises which

include equipment inspections which focus on strengthening the

taskforce and education. In the event of a disaster, the "Marui

Gas Emergency Taskforce" can be mobilized immediately, in

any part of the country, to carry out LP gas restoration work, gas

equipment inspections, and gas leak detection. This approach,

unique to Iwatani (which delivers Marui Gas throughout the

country), provides customers with safety and security as well.

Support for cultural activities

Nationwide ALALA Club

sales are donated to the Association of National Trusts in Japan,

to be utilized for natural environment protection such as "100 m2

Movement Forest Trust" for the Shiretoko Peninsular.

Environmental protection cannot be achieved in a short space

of time. Iwatani intends to continue with its down-to-earth activi-

ties and local environmental protection activities.

Marui Gas Emergency Telephone Nationwide drills by the Marui Gas Emergency Taskforce

Activity of the environmental protectiongroup "100 m2 Movement in Shiretoko"

"NHK Symphony Orchestra": Iwatani supportstheir activities.

Photo that received the "Iwatani International Corporation Award" in the Environmental Photo Contest 2007

"Iwatani Research Grants for International Students", fund-

ed by the Iwatani Naoji Foundation, are provided to support

students studying natural sciences from East and Southeast

Asian countries who are funding themselves whilst studying

at graduate schools in Japan. The objective of this scheme is

to provide individuals who are expected to maintain close

relations with Japan, and who embody the fruitful outcomes

of friendship and exchange, with opportunities and research

support, thereby deepening international mutual cooperation

and understanding and contributing to the improvement of

peoples' lives in both countries.


International ActivitiesWe focus our support on engineers and overseas students studying in Japan, so that theycan drive development in their own countries.

Support for Energy TechnologyThe Iwatani Naoji Foundation supports scientific and technical research and developmentwith the themes of resources, energy and the environment.

Iwatani Naoji Memorial Prizes / Iwatani Science and

Technology Grants

The Iwatani Naoji Foundation grants funds for and promotes sci-

ence and technology research through the "Iwatani Naoji Memorial

Prizes", awarded for excellent achievements in research and

development in the field of resources, and through the "Iwatani

Science and Technology Grants" for natural science researchers

in colleges and universities throughout Japan. Issues relating to

resources, energy, and the environment, which have been adopted

as themes for more

than 30 years since

the Foundation was

established in 1973,

have been increasing-

ly highlighted since

the start of the 21st

century.

Scholarships for international studentsDalian City - Iwatani Japan-China WeldingTechnology Seminar and Contest

Since 1997, Iwatani has held Dalian City - Iwatani Japan-

China Welding Technology Seminar and Contest for the pur-

pose of further improving welding technology in Dalian, and

contributing to the development of Dalian. (A welding skills

contest for the "Iwatani Prize" and a welding seminar are

held alternately every other year.).

In the 10 years from 1997 to 2006, a total of 30,000

welders applied to the test & selection process, 1,200 were

qualified to participate in the city level competition, and the

top 42 were selected for study tours to Japan. These activi-

ties have contributed in a big way to improving welding tech-

nologies and fostering human resources.

■Winners of the 33rd "Iwatani Naoji Memorial Prizes" (2006) (Honorific titles omitted)

■Recipients of the 33rd "Iwatani Science and Technology Grants" (2006)

Organization

Tokyo Electric Power Company. Construction Dept, Electric Engineering Group for Hydro Power Plants

Development and practical use of mass production system of high-efficiency solar cells

Development and application of new type runner with splitter blades to pumped storage power plants

Division General manager Tatsuo Saga

Assistant manager Shigenori Watanabe

Representative researcher Theme of achievementSharp Corporation.�Solar Systems GroupNew Technology Development Center

OrganizationKitami Institute of TechnologyFaculty of Engineering

Tokyo Institute of TechnologyGraduate School of Science and Engineering

Novel, low cost and high performance hydrogen permeation alloys

Prof. Kiyoshi Aoki

Mechanical behavior and fracture mechanics of zirconia and ceria electrolytes for solid oxide fuel cells

Assistant Professor Wakako Araki

Osaka Prefecture UniversityGraduate School of Engineering

Hydrogen production using anaerobeAssoc. Prof. Hiroyasu Ogino

Keio UniversityFaculty of Science and Technology

Development of catalysts and electrolyte membrane for polymer electrolyte fuel cell

Assistant Akiyoshi Kuzume(Ph.D.)

Nagasaki UniversityFaculty of Engineering

Development of recyclable oligo-urethane elastomers

Assoc. Prof. Ken Kojio

Researcher R&D theme

(Excerpts from 19 presenters (in random order))

Dalian Welding Seminar

Environmental Management System



Iwatani is engaged in environmental activities throughout companies in the group. To further improve results, we are reinforcing theorganization and systems in an effort to enhance employees' awareness.As a result we were able to achieve steady results in FY 2005.

Environmental Management System

Iwatani's Environmental Management System (EMS) at our

Head Offices in Tokyo and Osaka, the Shiga Technology

Center, and other major 7 operational bases in the country

(which accounts for more than 70% of our employees), have

obtained ISO14001 certification. Other branch offices and sales

offices have also developed the management system under

Head Office and major operational base guidance. The "Disaster

& Environment Control Committee" discusses the implementa-

tion of important items concerning environmental management.

The Group's ISO Promotion Staff Meeting

"The Group's ISO Promotion Staff Meeting", with representa-

tives from major subsidiaries and affiliates that have acquired

ISO certification, has been regularly held since FY 2001.

Agreements over future directions, information exchange, and

guidance, strengthen the environmental management system of

the Iwatani Group. Our overseas companies are also working

towards obtaining ISO certification.

Internal audits of EMS are carried out twice a year for all units

in the company. Any non-conformities found are dealt with

immediately. In FY 2006, they were carried out in July and

January, and no major non-conformities were found. In

November 2006, a re-certification assessment of ISO14001 was

carried out by the High Pressure Gas Safety Institute of Japan,

and we were assessed as effectively running the EMS.

ISO14001 assessment in 2004

Environmental education using internal LAN

Overseas companies that acquired ISO certification ISO9001…20 companies／ISO14001…7 companies　

ISO14001 Sub-committee 21 companies

ISO9001 Sub-committee 19 companies

Secretariat(Safety and Environment Department,

Global Environment)

Chairman (Executive Officer; Environmental Issues)

Time ContentEducation Courses

Introductory training

Education by rank

Group training

Follow-up

Recruit training

Management training

At beginning of fiscal year

As required

General environmental issues, summary of EMS, advantages of environmental activitiesSelection of environmental aspects, setting of targets and goals, sustainment of EMSEnvironmental goals, procedures of environmental activities, compliance proceduresInformation supplement via internal LAN, awareness confirmation tests

■The Group's ISO Promotion Staff Meeting

Internal audit / Assessment by an external organization

Iwatani provides the following

education to enhance employees'

awareness of the environment.

Environmental education

For our affiliated companies who have not acquired ISO certi-

fication, we conduct onsite assessment and point out items

requiring improvement in order to enhance levels of compliance

with environmental laws and regulations. Assessment is made in

accordance with priorities determined after studying the environ-

mental impact of each company. In FY 2006, assessment and

guidance were provided for 3 business operations. We continue

to carry out assessments and guidance in FY 2007 to ensure

compliance throughout the Group.

Complete Compliance of Affiliated Companieswith Environment Related Laws and Regulations

Range covered by ISO14001 certification

President

EMS office (Safety and Environment Department, Global Environment)

Branch offices、 Sales Offices Branch offices、 Sales Offices Branch offices、 Sales Offices

Branch block (8 units)

Osaka block (15 units)

Tokyo block (17 units)

Risk Management Committee

Internal environment auditors

Disaster & Environment Control Committee

Chairman of the Disaster & Environment Control CommitteeThe environmental management Representative

(Executive Officer; Environmental Issues)

■EMS operation organization


FY 2006 Summary of Environmental PerformanceIwatani strives to check and improve environmental performance in order to reduce theburden of our business activities on the environment.

Results of environmental activities in FY 2006

In the Iwatani EMS, environmental objectives are set every

year with the aim of attaining the environmental targets for

the 3-year medium-term plan. We have activities relating to

10 items in our environmental objectives for FY 2006 to FY

2008. The actual achievements regarding environmental tar-

gets in FY 2006 are shown in the table below.

Eco Office

The status of the "Eco Office Activities" we have been con-

ducing since 1999 is shown in the graphs below.Burnable

garbage is steadily decreasing. Electricity use is tending to

decrease, but still remains high.

■Results of the environmental activities in FY 2006

3,088

2,896

2,973

2,848

2,912

3,005

2,762

2,864

2,9922,965

2,933

2,841

2,8102,779

2,996

3,088

，99

，00

，01

，02

，03

，04

，05

，06

35000

39000

43000

47000

51000

55000（Unit: kg）�

，99

，00

，01

，02

，03

，04

，05

，06

2600

2700

2800

2900

3000

3200

3100

（Unit: MWh）�

ActualTarget

ActualTarget

53,49653,496

48,146

47,174

45,421

45,471

42,796

45,471

43,86742,797

43,425

47,495

52,304

45,00143,863

42,802

■Amount of burnable garbage ■Electric power consumption

Iwatani's Material BalanceThe "Material Balance" indicates the overall picture of the impact of Iwatani on the environment.

We also started researching the burden of the whole Iwatani Group on the environment in FY 2003. We will make efforts to

improve environmental efficiency in our business activities by reducing resources and energy input as well as the amount of

waste and energy-derived CO2 emission.




※ Law concerning the Rational Use of Energy:

A law that specifies the rational use of energy.

Supply Chain Management SystemCooperation with customers and suppliers is also important for environment-conscious business activities. Iwatani is making efforts in the area of supply chain management such as green procurement and quality assurance.

Green procurement

EU directives regulating chemical substances such as RoHS

and ELV are applied to all products sold in Europe including

those exported from Japan. Therefore, manufacturers doing

business in the European market must examine the records of

components and raw materials used, and stringently control pur-

chased materials so that finished products do not include chemi-

cal substances restricted by regulations. (Green procurement)

Iwatani also examines substances with a potential environ-

mental burden in goods supplied to us so that we can meet

requirements demanded by our customers, such as Sony Green

Partner Standards. At the same time, we carry out green pro-

curement from suppliers, and provide our customers with quality

assurance and certificates for non-use of environmentally harm-

ful substances, thus contributing to a greener supply chain.

Target reduction setting for CO2 emitted in the context of logistics

Iwatani has strived for improving the efficiency in freight transporta-

tion consigned to cargo carriers inside and outside the group by merg-

ing/abolishing existing logistics centers, using transportation means with

less environmental burden and, eco-driving. The volume of freight trans-

portation in FY 2006 as a specified consigner provided in the Law con-

cerning the Rational Use of Energy was around 210 million tons, and

CO2 emissions involved this transportation were 32,000 tons.

Quality assurance

supports analysis by the Gas Technology Department [Quality

Management] for their quality assurance of industrial gases (i.e.

analysis of various gases, instructions for gas analysis, and the

selection of analysis equipment).

The separate gas plants in the Iwatani Group have acquired

ISO9001, the international standard for quality management, and

have established a high level quality control system, thereby pre-

venting environmentally harmful substances from being mixed in.

Iwatani is a gas manufacturer as well as a trading company, and

pays utmost attention to the quality of gases we ship as our own

products. In order to assure the purity of gases required by our cus-

tomers, respective Divisions, Safety & Environment Department,

and Technology Development Department [Quality Management]

cooperate together to establish a quality assurance system. In

implementing the system, with industrial gases for example, the

Technology Development Department [Shiga Technology Center]

Iwatani's Measures to the environment

LogisticsThe transportation sector accounts for over 20% of total CO2 emission in Japan, making it essential to reducetheir emissions. Iwatani also strives to reduce environmental burdens from logistics throughout the group.

Iwatani's Measures to the environment

ISO9001Plant ISO14001

Iwatani Industrial Gases Corp. Kofu Plant

Air Chemicals Corp. Kitsuregawa Plant

Sanyo Air Chemicals Corp. Ohtake Plant

Hokuriku Air Chemicals Corp. Tsuruga Branch

○�

○�

○�

○�

○�

○�

─�

─�

Suppliers�

Customers�

Consumers

Deliver compliant product

Certificates for non-use of environmentally harmful substances

Sell environmentally friendly products

Indicating required items(Green procurement)

Communication of requirements Examine / Instruct

■Green supply chain

■Separate gas plants of the Iwatani Group

Environmental AccountingIn order to reflect costs for environmental measures and their effects on the environmental management system of the compa-

ny, as well as to widely disclose relevant information, we are compiling "Environmental Accounting" that can quantitatively assess

efforts by the company towards environmental conservation.



Iwatani's Environmental Action(s)

Septic tank maintenance costs etc.

Introduction of low-emission vehicles

Costs of recycling and disposal of waste

Commission based on the Containers and Packaging Recycling Law

Commission based on the Home Appliance Recycling Law

Supply chain management costs

Costs for developing and operating the EMS

Environmental information disclosure / Environmental advertisement

Environmental burden measurement

Costs for environmental education

Environmental maintenance around business sites

Research and development of products concerning environmental conservation, etc.

Donation to groups conducting environmental conservation activities*

Costs for environmental restoration work etc.

0

0

772

27,492

3,456

2,286

961

8,000

61,284

2,500

7,452

2,697

1,537

678,227

300

32,800

829,764

Business area costs

　　①Pollution prevention costs

　　②Global warming prevention costs

　　③Resource circulation costs

Upstream/Downstream costs

Administration costs

Research and development costs

Social activity costs

Environmental remediation costs

Total

Category Summary of major actions and results Investments Costs

(Period: April 1, 2006 to March 31, 2007 [Units: 000 yen])

*Donation to the Association of National Trusts in Japan, etc.

Compliance with Laws & Regulations and Negative InformationIwatani strives to comply with environmental laws and regulations as well as requirements of others concerned. Should any problems be identified, we will promptly disclose relevant information.

Compliance status in FY 2006

We have been urging our employees to be aware of environment

related laws and regulations and compliance in their areas of responsi-

bility. However a case of violation of the law (the Cabinet Order of the

Labor Safety and Sanitation Law) was found in FY 2006.

Furthermore, two cases of soil contamination were found on our

properties which were being sold; we took appropriate measures for

decontaminating the land before selling the properties. Otherwise there

were no cases of incidents that affected the environment either inside

and outside premises.

Talc powder in violation of the Cabinet Ordinance

concerning the revised Labor Safety and Sanitation Law

On September 13, 2006, the Osaka Central Labor Standards

Iwatani's commitment to the environment

■Status of compli-ance with FoodRecycling Law

■List of environment related laws and regulations

Examples applicable Major laws and regulations concerning our business Compliance status

High Pressure Gas Safety Law

Poisonous and Deleterious Substances Control Law

Containers and Packaging Recycling Law

Waste Disposal and Public Cleansing Law

Air Pollution Control Law

Soil Contamination Countermeasures Law

Labor Safety and Sanitation Law

LP gas sales

Ammonia sales

Cassette-Feu sales

Disposal of business waste

Use of boilers

Investigation of soil contamination

Rules concerning Asbestos

Yes

Yes

Yes

Yes

Yes

Yes

No

＊The objective of the law is to decrease total food waste by 20% by FY 2006. We have reduced the amount of waste by restraining waste generation.

Waste（kg）�FY vs.2002

2002

2003

2004

2005

2006

86,833

54,256

18,918

29,052

28,361

─�

-37％�

-78％�

-67％�

-67％�

Supervision Office of Osaka Labour Bureau pointed out that our talc

powder （raw material from Shuen, China） for use in electronic materi-

als sold after September 1, 2006 had contained more than 0.1%

asbestos, which was in violation of the Cabinet Order concerning the

Labor Safety and Sanitation Law revised on September 1, 2006.

Immediately after that, we took appropriate measures under the

supervision of the Osaka Central Labor Standards Supervision Office of

the Osaka Labour Bureau. However, we are deeply regret for any inad-

equacies in confirming and in understanding the new law enforced on

September 1, 2006, and will make companywide efforts to prevent this

kind of incident in the future.


No.

Expansion of use of eco-friendly products

Promotion of environmental activities

Reduction in electricity and energy use

Reduction in burnable garbage

①�

②�

③�

④�

⑤�

⑥�

⑦�

⑧�

⑨�

⑩�

⑪�

390 points (cumulative in 3 years)

13,500 points (cumulative in 3 years)

Proportion of LPG vehicles : 72.8%

1% reduction (from FY 2005 level)

Efficiency improvement 3%

130 points

4,500 points

Reduction of 292 million pages.

Proportion of LPG vehicles : 66.9%

Introduction of additional 100 LPG vehicles

1% reduction (from FY 2005 level)

Efficiency improvement 2% Reduction of greenhouse gas emissions by the Iwatani Group (Energy efficiency improvement in air separation factories)

Thorough compliance with environmental laws and regulations in constructing factories and equipment work.

Reduction of environmental burdens by rationalization of logistics

Reduction in forms output at the center as a result of ERP

Reduction in environmental burdens by business vehicles (Iwatani International companywide)

Reduction in environmental burdens by delivery trucks, etc. (affiliated companies)

Thorough compliance by affiliated companies with environmental laws and regulations

Research into compliance with laws and regulations and support for taking measures : 9 business operations (cumulative in 3 years)

Thorough compliance with environmental laws and regulations

Reduction of 7.56 million pages (3 years cumulative total)

Replacement with 200 LPG vehicles(cumulative over two years)

Research into compliance with laws and regulations and support for taking measures : 3 business operations

Thorough compliance with environmental laws and regulations

2% improvement in transportation efficiencyIn terms of energy use ratio to the volume of transportation (ton-kilo) in FY 2006

1% improvement in transportation efficiencyIn terms of energy use ratio to the volume of transportation (ton-kilo) in FY 2006

①1% reduction (from. FY 2005 level) ②Sorting 100% achievement

①1% reduction (from. FY 2005 level) ②Sorting 100% achievement

Item Environmental Objectives (FY2006 to FY2008) Goals in FY 2007

Number of issues: �3,000 copies

Businesspartners

48％

Seminars, etc.15％

In-house use31％

PR, IR　6％

FY2007 Environmental Objectives and Targets

Assessment of FY 2006 activities

The "Environmental Objectives" we set out to achieve over the 3-year period up to FY2008, and our FY2007 "Environmental Targets", are

described in the table below. The targets were set, taking into consideration the reductions of environmental burdens at Iwatani offices and logistics

operations, the beneficial environmental activities and compliance with laws and regulations, and the environmental burdens at group companies.

Environmental communication

To raise awareness of Iwatani's environmental initiatives,

we distributed the "Sustainability Report 2006" and included

environment-related information on our web site in FY2006.

Safety & Environment Department (Global Environment) has

responded to the questions and opinions put to the public

information office and other enquiries.

As a result, there were no complaints regarding Iwataniﾕs

environmental activities in FY2006. We have also worked

hard to disclose information in good time, and have regularly

updated our website content.

Obtaining ISO certification

Iwatani supports the business of obtaining ISO certification

for the quality and/or environmental management, fully utiliz-

ing know-how obtained in the experiences of obtaining

ISO9000 and ISO14001, for our company and companies in

the Iwatani Group. We have a good reputation for construct-

ing compact systems appropriate for company size and line

of business, as well as sophisticated follow-ups. Please con-

tact us if you are studying how to obtain ISO certification for

purposes such as green procurement.

In "The 10th Environmental Management Survey of

Companies" (Nihon Keizai Shimbun Inc.), we were ranked

6th in the trading company sector. We were as highly rated

as the year before (7h in the trading company sector).

Iwatani's Environmental Action(s)

■Sustainability Report distribution and use in FY2006.


Company Name �Incorporated �Established �President �Paid-in Capital �Net Sales �Number of Employees �Number of Business Operations ��Number of Shareholders�Fiscal Year Ended

Corporate DataIwatani International Corporation�February 2, 1945�May 5, 1930�Akiji Makino�¥20,096million. �¥544.3 billion (in March 2007)�1,376 (as of April 1, 2007)�95 [89 in Japan, 6 overseas]� (as of April 1, 2007) �28,436 (as of March 31, 2007)�March 31

We aim to produce even better reports reflecting readers'opinions.�If you have any opinions or questions about the "Sustainability Report 2007", please contact us.��Information on Iwataniﾕs environmental initiatives can be found on our web site as well as in this report. The site has information updates subsequent to the publication of this report, as well as a PDF version of this report.

Safety and Environment Department - Global Environment�Mail address: [email protected]�TEL: 03-5405-7027 FAX:03-5405-7028 Tokyo, Japan

Information service (concerning environmental measures) on the Internet at: �http://www.iwatani.co.jp/jpn/company/ecology/index.html

Environmental Chronology1953

1970

1973

1978

1980

1991

1994

1996

1997

1998

1999

2000

2001

2002

2006

Oct.

Oct.

June�Dec.

Dec.

Apr.�Dec.

Mar.�Apr.�May�Aug.�Nov.�

�Dec.

Dec.

Apr.

●First to start sales of LP gas for domestic use in Japan, �　under the brand name "Marui Propane"

●Announced the corporate slogan "Our aim is to making the Earth a good place to live" �　in commemoration of the Company's 40th anniversary.

●Established the Iwatani Naoji Foundation�　Started providing awards and grants for science and technology research and development, �　including environmental conservation, and established a scholarship system for international students

●Started first liquid hydrogen production for commercial use in Japan.

●Sakai LPG terminal was completed and started operation

●Opened the first automobile LPG filling station on an expressway in Japan in the Tomei Ashigara service area.

●Kashima L．P．G． Joint Stockpiling Terminal was completed and started operation

●Held the 1st Environment Committee

●Established the "Iwatani Group Environment Charter"�●Exhibited at "Eco Japan '97", jointly held with the 3rd Session of the Conference of the Parties �　to the United Nations Framework Convention on Climate Change (COP3) in Kyoto. �●Joined the Green Purchasing Network

●Tokyo Head Office and the Metropolitan Block Branch received "Recycle Promotion Commendation; � Recycling Council Chairman's Award"�●Started publishing the Environmental Report

●Osaka Head Office and the Kinki Block Branch received "Osaka Environmental Prize・Special Commendation Award"�●The 4th Environmental Management Survey by Nihon Keizai Shimbun Inc.� Obtained "A"rank in all items in the trading company sector (non-manufacturing sector)

●The 5th Environmental Management Survey by Nihon Keizai Shimbun Inc.� Ranked No.1 in the trading company sector (non-manufacturing sector) and No. 4 out of all companies

●The 6th Environmental Management Survey by Nihon Keizai Shimbun Inc.� Ranked No.2 in the trading company sector (non-manufacturing sector) and No.5 out of all companies

●Started operation of the "Hydro Edge" liquid hydrogen manufacturing plant.

●Launched the premiere issue of "PASSPORT", the environmental information bulletin (in-house bulletin) �●Established "Iwatani's Environmental Policies"�●Held first environmental seminar as part of personnel training course �●Started the operation of the environmental management system�●Sakai LPG terminal �　received "Tree Planting Award of the Osaka Chamber of Commerce and Industry"�●Acquired ISO14001 certification

contents · source: ministry of economy, trade and industry "yearbook of production, supply...

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