TOYODA AUTOMATIC LOOM WORKS, LTD.

Environmental ReportsSpinning the Dreams of Tomorrow

Corporate Profile

Corporate name: Toyoda Automatic Loom Works, Ltd.

Date of establishment: November 18, 1926

Capital: ¥40.1 billion (As of March 31, 2000)

Number of employees: 9,580 (As of March 31, 2000)

Stock exchange listings: First sections of the Tokyo, Osaka, and Nagoya stock exchanges

Principal products: Textile machinery, compressors for automobile air conditioners, industrial equipment, material handling systems, automobiles, engines, and semiconductor & electronics equipment

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Toyoda Automatic Loom Works, Ltd. puts a high priority on environ-

mental protection activities and is proud to have made significant

strides in this area. We are pleased to take this opportunity to report

on our environment-related goals and achievements to our

shareholders, customers, vendors and employees around the world.

Without question, Japan’s manufacturing sector has achieved

remarkable growth in the last half century, contributing greatly to the

nation’s economic development and the enrichment of people’s lives

and society. Nevertheless, we cannot deny the fact that the cycle of

mass production, mass consumption and mass waste has led to

the emergence of such pressing issues as global warming and

waste management.

As a manufacturer of automotive transport equipment and

components, Toyoda Automatic Looms Works understands the

gravity of this situation. Together with other companies in our

group, we have been actively engaged in a variety of activities both

in Japan and overseas aimed at achieving a harmonious balance

between economic development and environmental protection.

In the medium term, under our corporate vision of “working through

our business activities, to build a wholesome global environment

and an affluent society while also offering products that are clean,

safe, and of superior quality,” we announced our Third Environmental

Action Plan in August 2000. Putting the action plan into practice,

we are now pursuing the challenge of achieving zero emissions of

landfill waste at our major plants in Japan as well as developing

other environment-friendly technologies for a sustainable society.

Let me cite some specific examples. At the product level, one

focus of our development efforts has been to create lighter, more

compact products that are clean, safe, fuel efficient, and recyclable.

These efforts have borne fruit with products like the recently introduced

GENEO-B (7FB), the world's first electric-powered forklift equipped

with a specially-developed AC drive system as standard equipment.

We are also implementing life cycle assessment (LCA) methods to

evaluate the environmental impact of each stage of a product’s life,

from selection of raw materials through manufacture, use, and final

disposal. In addition, we have introduced product design guidelines

aimed at reducing the use of environmentally harmful materials and

improving recyclability.

In the production area, we are actively promoting energy saving

activities through such means as installing co-generation systems in

each plant. In addition, we are reducing industrial waste through the

reduction of materials used as well as reuse and recycling, while

maintaining high voluntary standards for factory wastewater and

emissions that are more rigorous than mandated legal requirements.

Each of us at Toyoda Automatic Loom Works is involved in

Companywide efforts to improve our products, factories, and offices

for a better environment. We encourage employees to learn more

about environmental issues and make suggestions about

improvements in this area, and we also strive to be a good

corporate citizen by contributing to society and undertaking external

communications activities.

The various activities described here are intended to secure and

further improve on the ISO 14001-based environmental

management systems at the Company and our domestic and

overseas affiliated companies.

As we implement our Third Environmental Action Plan, Toyoda

Automatic Loom Works will continue to develop environment-friendly

technologies and systems to promote a harmonious balance

between economic activities and environmental protection.

I sincerely hope that this report will help readers deepen their

understanding of our environment-related activities. I thank our

employees, affiliated companies, vendors, and customers for their

continuous support in these important endeavors.

A Message from the President

President

1

Notes: 1) The data in this report covers fiscal 1999 (April 1, 1999 to March 31, 2000). (Some activities through August 2000 are also included.) The environment-related activities described are those conducted as part of the operations of the Company in the fields of textile machinery, compressors, industrial equipment, material handling systems, vehicles, engines, and semiconductor & electronics equipment.

2) The report begins with a description of environmental activities from a Companywide perspective. The section on environmental action presents the Company's basic philosophy, policies, and related matters. Pages 4 through 15 report on the accomplishments of environmental protection activities.

3) Pages 16 through 27 then present details on the environmental activities of the Company's business divisions. Each of these sections begins with a description of the operations of the division, which is followed by sections on development and design, production, distribution, and recycling as well as the impact of the product on the environ-ment during its life cycle.

4) The final section of this report, on pages 28 and 29, contains environmental data by plant.

5) With the intent of promoting interactive communication with the readers of this report, we have included a questionnaire inside the back cover. The final page of the report provides the Company's Web site URL and a telephone number for those seeking additional information.

2

Table of Contents

A Message from the President

Domestic Production Operations

Environmental Action Plan

System for Environmental Activities

ISO 14001

Environmental Accounting

Environmental Training and Education

Environment Protection Activities

Social Contributions, Safety and Health

Activities of Business Divisions

Textile Machinery Division

Compressor Division

Industrial Equipment and Material Handling System Divisions

Vehicle Division

Engine Division

Semiconductor & Electronics Equipment Division

Environmental Data

1

3

4

7

8

10

11

12

15

16

18

20

22

24

26

28

Head Office/Kariya PlantHead Office, Textile Machinery Division, Compressor Division

Address: 2-1, Toyoda-cho, Kariya, Aichi 448-8671Site area: 176,000 square metersBuilding area: 145,000 square metersMain products: Textile machinery, automobile

air-conditioning compressorsEmployees: 3,090

Obu PlantCompressor Division Engine Division

Address: 1-1 Ebata-cho, Obu, Aichi 474-8668Site area: 156,000 square metersBuilding area: 61,000 square metersMain products: Foundry, die castingEmployees: 540

Nagakusa PlantVehicle Division

Address: 9-2 Yamaguchi, Nagakusa-cho, Obu, Aichi 474-8686

Site area: 269,000 square metersBuilding area: 134,000 square metersMain product: AutomobilesEmployees: 2,250

Takahama PlantIndustrial Equipment Division, Material Handling System Division

Address: 2-1-1 Toyoda-cho, Takahama, Aichi 444-1393Site area: 327,000 square metersBuilding area: 185,000 square metersMain products: Industrial equipment, material

handling systemsEmployees: 1,630

Hekinan PlantEngine Division

Address: 3 Hama-cho, Hekinan, Aichi 447-8507Site area: 271,000 square metersBuilding area: 124,000 square metersMain product: Engines (For use in automobiles

and industrial equipment)Employees: 1,220

Kyowa PlantSemiconductor & Electronics Equipment Division

Address: 8 Chaya, Kyowa-cho, Aichi 474-8601Site area: 164,000 square metersBuilding area: 107,000 square metersMain products: Semiconductors and electronics

equipment, automobile press moldsEmployees: 850

Board of Directors

Chairman

Executive Vice Chairman

President

Executive Vice President

Board of Auditors

Auditors

Domestic Production Operations

Organization Chart

Consolidated Companies

3

Overseas

Michigan Automotive Compressor, Inc. (MACI)

Toyota Industrial Equipment Mfg., Inc. (TIEM)

Toyota Industrial Equipment, S.A. (TIESA)

Toyota Industry Kunshan Co., Ltd. (TIK)

Kirloskar Toyoda Textile Machinery, Ltd. (KTTM)

Toyoda Textile Machinery Inc.

TD Deutsche Klimakompressor GmbH (TDDK)

BT Industries AB

TIBC Corporation

Toyoda Sulzer Mtg., Ltd.

Altex Co., Ltd.

Sun River Co., Ltd.

Izumi Machine Mfg. Co., Ltd.

Tokyu Co., Ltd.

Toyoda High System, Inc.

Nishina Industry Co., Ltd.

Tokaiseiki Co., Ltd.

Logistec Co., Ltd.

SKE, Inc.

SK Maintenance, Inc.

Iwama Loom Works, Ltd.

Kawamoto System Corporation

ARTI, Inc.

Hara Corporation

Mizuho Industry Co., Ltd.

Sun Valley, Inc.

Sun Staff, Inc.

Mino Tokyu Co., Ltd.

Tokai System Laboratory Co., Ltd.

Shine’s, Inc.

Esaka Sports Land Co., Ltd.

ST Liquid Crystal Display Corp.

Taikoh Transportation Co., Ltd.

Domestic

Head Office

Textile Machinery Division

Compressor Division

Industrial Equipment Division

Material Handling System Division

Vehicle Division

Engine Division

Semiconductor & Electronics Equipment Division

4

Environm

ental Action P

lan

Under the basic guideline to “Work through our business activities, to build a wholesome global environment and an affluent society while also offering products that are clean, safe, and of superior quality,” Toyoda enacted its First Environmental Action Plan in March 1993, thereby engaging in the protection

of the global environment. However, from the perspective of forming a society capable of sustainable growth, environmental responsiveness has become more important than ever.

Embracing environmental soundness as a crucial business issue as the 21st century approaches, Toyoda has

completely revised its Environmental Action Plan to achieve harmony with the environment and contribute to the formation of a recycling-oriented society through top level management on a Groupwide basis.

Environmental Action Plan Revision

Third Environmental Action Plan (Fiscal 2001 to 2005)

1. Conduct corporate activities that are considerate of the environment at every stage of the product's life cycle, from development through design, production, use, and disposal, so as to provide clean and safe products to society and the environment.

2. Strive to intensify environmental management, including that of consolidated affiliates, for the further advancement of corporate activities that support environmental protection.

3. Conduct social contribution efforts, information disclosure, and knowledge promotion through wide-ranging cooperation with society on environmental protection with the ultimate aim of achieving a better global environment.

L Environmental Policies

Basic Guidelines for Corporate Activities

1. Develop and provide clean products with minimal environmental impact(1) Thoroughly implement environmental

considerations in development and design

(2) Promote Green Procurement

2. Promote manufacturing that strives for zero emissions(1) Further reduce environmental impact

through resource and energy conservation

(2) Voluntary goal setting, execution, and monitoring through the Environmental Committee

3. Expansion of environmental management systems(1) Strengthen cooperation between the

Company and its affiliates and trans-action partners

(2) Firmly grasp environmental protection expenses and their effectiveness

4. Active participation in public environmental protection efforts as an upstanding corporate citizen(1) Engage in the formation of a recycling-

oriented society(2) Thoroughly implement active informa-

tion disclosure and communication with local communities

L Action Guidelines

Continually S

triving for Grow

th

Toyoda has revised its Environm

ental Action P

lan to promote harm

ony with the global environm

ent as the world

embraces the 21st century.

P Abide by the spirit of internal and external rules and regulations as well as undertake our activities fairly and transparentlyP Respect the culture and customs of the countries and regions in which we work and contribute to their economies and societiesP Work through our business activities, to build a wholesome global environment and an affluent society while also offering products that are clean, safe, and of superior quality P Endeavor to be ahead of the times in R&D and create new value-added to offer products and services that satisfy our customersP Based on mutual trust between management and labor as well as the acceptance of responsibility, work to develop the individuality and ability of each employee, and create an atmosphere where we can draw fully on the Company's capabilities and resources

Environmental Action Plan

5

Third Environmental Action Plan

ItemAction Guideline Action Policy

1. Develop and provide clean products with minimal environmental impact

(1) Thoroughly implement environ-mental considerations in develop-ment and design

(2) Promote Green Procurement

2. Promote manufacturing that strives for zero emissions

(1) Further reduce environmental impact through resource and energy conservation

(2) Voluntary goal setting, execution, and monitoring through the Environmental Committee

3. Expansion of environmental management systems

(1) Strengthen cooperation between the Company and its affiliates and transaction partners

(2) Firmly grasp environmental protection expenses and their effectiveness

4. Active participation in public environmental protection efforts as an upstanding corporate citizen

(1) Engage in the formation of a recycling-oriented society

(2) Thoroughly implement active information disclosure and communication with local communities

Improved fuel efficiency

Reduced exhaust emissions

Development of clean energy vehicles

Improved recyclability

Control and reduction of volumes of substances with environmental impact

Noise reduction

Prevention of global warming due to automobile air conditioners

Thorough implementation of environmental assessment at the development and design stages

Strengthened cooperation with transaction partners

Global warming preventative measures

Intensified control and reduction of substances with environmental impact

Waste reduction and resource conservation

Curtailed water usage

Logistics streamlining

Expansion of environmental management systems

Thorough implementation of environmental accounting systems

Efforts for the formation of a recycling-oriented society

Promotion of social contribution activities

Promotion of public relations activities and information disclosure

h Achieve best-in-class fuel efficiency in all countries and regions and reduce CO2 emissionsh Improve fuel efficiency and reduce CO2 emissions through the development of technologies essential

to energy conservation

h Appropriately respond to individual usage environments

h Promote effective introduction of vehicles to the market while considering their usage conditionsh Develop clean products that meet market needs

h Promote recyclable designs to contribute to the goal of a 95% recycling rate by fiscal 2015h Expand the use of recyclable materials

h Lead the world with global control of chemical substances

h Further reduce all noise sources in automobiles and forklifts

h Develop compressors that are compatible with new alternative coolants to HFCs

h Conduct prior assessments of all environmental impact throughout products' life cycles, from the very first stages of development and design

h Promote environmentally sound Green Procurement through strengthened cooperation with transaction partners

h Active promotion of CO2 reduction initiativesCO2: Reduce total emission volume by 5% of fiscal 1990 levels by fiscal 2005 year-end (10% by fiscal 2010)oPromote thorough energy saving programs o Develop CO2 reducing production technologies

h Heighten proper control and voluntary reduction of chemical substances used in production processesPRTR: Reduce total emission volumes of targeted substances by 50% of fiscal 1998 levels by fiscal 2005 year-endVOCs: Promote total emission volume reduction and reduce emissions from paint-coating lines by 50% of fiscal 1998 levels by fiscal 2005 year-end

h Reduce waste for achievement of zero emissionsZero emissions: elimination of landfill disposal at all plants by fiscal 2003Promote paperless operations through the advancement of internal IT network systems

h Engage in water saving initiatives

h Improve transport efficiency and promote CO2 reduction and resource conservation through the reduction of packing materials

h Organize fundamental policy development and administration systems for Group companiesh Attain ISO 14001 certification at all Group companies

h Organize environmental accounting systems

h Participate in public efforts aimed at the achievement of a 95% recycling rate by 2015

h Expand communication with local communities and participate in greenery activities

h Expand environmental communication activities

6

Environm

ental Action P

lan

For each item of its Second Environmental Action Plan, enacted in fiscal 1996, Toyoda set annual goals aimed at the ultimate fulfillment of all goals by fiscal 2000, the final year of the plan. As a result of its efforts, nearly all goals have been met, as detailed in the table below.

Organization of an environmental management and auditing system• Organization of a management system based on ISO 14001 certification attainment• Implementation of internal auditing

• Certification at all domestic manufacturing plants• Auditing conducted at each plant

• Certification at three plants

• Conducted once at each plant for a total of six sessions

• Hekinan, Kyowa, and Obu plants attained certification, completing domestic certification• Auditing conducted once at each plant and twice each at the Hekinan and Kyowa plants for a total of eight times

Organization of a system for prior environmental assessment

• Organize prior LCA systems for principal products

• Prior inspection systems at the production preparation stage

• LCA systems introduced and implemented• Prior inspection systems established at production preparation stages• Preuse inspection systems for chemical substances upgraded

Development of environmentally sound products • Further reduction of engine exhaust emissions• Improve energy efficiency of all components

• Further reduction of engine exhaust emissions• Improve energy efficiency of all components

• Cleaner exhausts achieved for forklift and automobile diesel engines• Superior fuel efficiency achieved for automobiles through the development of a variable capacity compressor• Electric power consumption with air jet loom reduced

Reduction of environmental impact • Strengthen voluntary chemical substance controls and reduce emission volumes

• PRTR business compliance• VOC reduction

• Pilot business organization established• Paint and thinner emissions reduced

Promotion of energy consumption • Stabilize CO2 emissions at fiscal 1990 levels

• Total CO2 emission volume: 101,471 tons

• Total CO2 emissions volume reduced to 93,515 tons through introduction of co-generation systems and fuel conversion• Reduction to 92% of fiscal 1990 levels achieved

Restrain the volume of waste and promote the reuse of resources

• Reduce waste to 75% of fiscal 1990 levels

• Total waste emission volume: 14,000 tons

• Total waste emission volumes reduced to 9,500 tons 82% of fiscal 1990 levels, through the recycling of metal shavings and the introdu- ction of waste liquid condensation equipment

Logistics streamlining• Enhance efficiency through improved routes• Promote resource conservation in packing and packaging materials

• Enhance efficiency through improved routes• Promote resource conservation in packing and packaging materials

• Transport routes improved and mixed shipments implemented• Forklift component packing materials simplified

Environmental consideration in overseas operations • ISO certification at overseas facilities• Support through personnel exchanges

• Attain ISO certification at two facilities

• MACI and TIEM certified

Employee training programs • Expand training programs through monthly environmental topics in in-house newsletter • Expand training programs through management training program

• Publish six features

• Hold two training sessions

• Seven features, including one on environmental management published in in-house newsletter

• Five training sessions held, including training for newly appointed managers

Development of PR Activities • Maintain environmental campaigns through participation in community environmental events

• Publish environmental report• Participate in environmental events

• Environmental reports published• Company participated in the November Kariya Industrial Festival

Promotion of forestry preservation and planting activities

• Expand factory gardens• Promote paperless operations

• Expand factory gardens• Promote paperless operations

• Tree planting and care for natural surroundings of factories promoted• Bamboo forests tended at Toyoda City's Nature Observation Park

Promotion of social contributions • Support technological research for environmental protection• Support employee volunteer activities

• Grant five financial support packages • Support six volunteer programs

• Donations made to Keidanren's Nature Preservation Fund. Support given to four causes, including the Committee for Dialogue on Chubu Area Development and Water Resources• Support provided for the Kenaf Project and 11 other programs including Wild Rabbit-Eared Iris Community Nature Preservation activities

Action Policy

1. Estab

lish the necessary internal system

s2. M

anage o

ur business activities w

ith concern fo

r the environm

ent3. C

ontrib

ute to so

ciety

Fiscal 2000 Goals Fiscal 1999 Goals Results

Results of the Second Environmental Action Plan

Continually S

triving for Grow

th

Toyoda has revised its Environm

ental Action P

lan to promote harm

ony with the global environm

ent

as the world em

braces the 21st century.

System

for Environm

ental Activities

7

System for Environmental Activities

Product Technology Subcommittee

Masazumi Konishi, Managing Director

Energy SubcommitteeShinji Takeuchi, Managing Director

Pollution Prevention Subcommittee

Shiro Endo, Senior Managing Director

Waste Minimization Subcommittee

Shinjiro Kamimura, Managing Director

Communications and Public Relations Subcommittee

Tetsuro Toyoda, Senior Managing Director

P Development of products reflecting concern for the environmentP Facilitation of product recyclingP LCA systems

P Proposal of plans for increasing energy efficiency and promotion of related activities

P Promotion of pollution prevention activitiesP Management of chemical substancesP Management and phase-out of materials that have a significant environmental impact

P Preparation and promotion of plans for restraining the volume of waste materials and promoting the reuse of materials

P Preparation and promotion of plans for environmental communications, public relations, and contributing to the community

Specialized Subcommittees at the Plant Level

P Implementation of matters decided by the specialized subcommittees listed aboveP Promotion of environmental protection at the plant level

Role: �

P Final decision-making group for environmental protection matters

Specialist Subcommittees Roles

Environmental Committee

Established in December 1991

Internal Organization and Roles

Role: �

P In overall charge of environ-mental protection matters at each plant based on Company policy

Plant Environmental Committee

Chairman: Tadashi Ishikawa, President

Vice Chairman: Takamasa Yoshida, Executive Vice President

To maintain its environmental efforts in a continuous and organized manner, Toyoda maintains an Environmental Committee, chaired by the Company president. Its infrastructure comprises five specialized subcommittees, organized according to individual activities.

Furthermore, the Company maintains a Plant Environmental Committee in each of its plants along with specialized subcommittees at the plant level to deal with environmental issues concerning individual manufacturing facilities.

Responding to International Environmental Standards

8

Current State of ISO 14001 Certification

Domestic

Plant Name Date of Registration Certifying Agency

Nagakusa October 22, 1997 JARI-RB

Kariya (Compressor Division) October 28, 1998 JARI-RB

Takahama December 28, 1998 JARI-RB

JARI-RB

JARI-RB

JARI-RB

Hekinan November 15, 1999

Kyowa January 12, 2000

Obu March 27, 2000

Note: JARI-RB: Japan Automobile Research Institute; DNV: DET Norske Veritas Certification, Inc.

Outline of ISO 14001

ISO

14001

Environmental Action Plan

Basic PhilosophyEnvironment Policies

of Manufacturing Plants

Plan

PlanningDo

Implementation and operation

Check

Checking and corrective

action

ActManagement

review

Continual Improvement

Upward to the Next StageWe have created environmental manage-ment systems, and, to meet our responsibilities as a corporation working for environmental protection, we are actively working to meet ISO 14001 requirements, the globally recognized certification of adherence to international standards. In October 1997, our Nagakusa Plant was the first of our facilities to receive ISO 14001 certification. This was followed by certification of the Kariya Plant and the Takahama Plant in fiscal 1998, then by the certification of the Hekinan, Kyowa, and Obu plants in fiscal 1999, completing certification for all of the Company’s plants in Japan. The plants that achieved certification during 1999 added their own improve-ments to the basic system used by the preceding plants, thus creating superior systems and winning high marks during the certification process. Thus certified, each plant now has established systems for environmental management, and energy conservation, waste reduction, and environmental impact reduction are now strongly promoted. Our next tasks will be to ensure the efficient running of these internal systems through continual upgrading and providing support for certification at our consolidated affiliates.

JARI-RB

JARI-RB

Domestic (Consolidated)

Toyoda-Sulzer Mtg., Ltd. January 12, 2000

TIBC Corporation January 12, 2000

ST Liquid Crystal Display Corp. Scheduled for November 2001

All others scheduled for certification by fiscal 2003

Plant Name Date of Registration Certifying Agency

DNV

DNV

Overseas (Consolidated)

TIEM (U.S.A.) June 23, 1999

MACI (U.S.A.) September 15, 1999

TIESA (France) Scheduled for November 2000

KTTM (India) Scheduled for 2001 or later

TIK (China) Scheduled for 2001 or later

TDDK (Germany) Start-up in April 2000 Scheduled for 2001 or later

Plant Name Date of Registration Certifying Agency

Aim

ing for Continual Im

provem

ent

To implem

ent corporate activities that reflect concern for the environment m

ore systematically and enhance

the transparency of Com

pany activities to outside interests, we are m

oving forward w

ith preparations to obtain

ISO

14001 certification.

ISO 14001

Environmental audits based on the Company's environmental management system are of two types: internal and external. These audits are conducted with the objective of checking to determine whether environment-related activities are being carried out according to regulations.

Internal audits combine painstaking plant auditing conducted by each plant’s own auditing team, and head office audits, which are conducted on plants that are targeted for ISO 14001 screening by teams of specialists thoroughly familiar with plant operations. In both types of audit, results are reported to management and audited plants are responsible for preparing remedial plans with results confirmed by auditing personnel.

We have confirmed that there were no significant environment-related incidents

or complaints during fiscal 1999. As ISO 14001 certification has been received by all of Toyoda's plants in Japan, audits will be converted from those confirming the implementation of existing systems to those with improved checking functions aimed at identifying environmental issues and promoting improvement, thus enhancing overall environmental performance.

Moreover, in addition to internal audits, twice annually the Environmental Committee’s chairman conducts audits of the state of environmental efforts at all plants. Through these audits, each plant's compliance with legal regulations, subcommittee activities, and energy conservation results are all confirmed, and concrete instructions for improvement are given.

Environmental Audits

9

The Company's Internal Auditing System

Request for Audit

Report audit results

Conduct audit

Environmental Protection Managers at Plants

Auditing Team(Internal Auditors) Plants

GInternal auditing

Fiscal 1997

Internal Auditing Implementation

*Figures in parentheses are months when internal audits were implemented.

Fiscal 1998 Fiscal 1999

Nagakusa Plant

All plants(May and November)

All plants(May and November)

All plants(May and November)

Kariya PlantTakahama Plant

Takahama PlantNagakusa Plant

Plants audited by the head office

Plants audited by internal auditors

Plants inspected by Environmental Committee’s chairman

Hekinan Plant (June)Kyowa Plant (July)Obu Plant (September)

Hekinan Plant (May, September)Kyowa Plant (July, October)Kariya Plant (July)

Directimprovement

10

Environmental Accounting

One method of quantitatively evaluating environmental protection activities is environmental accounting, which is used to grasp investment sums and expenses and analyze the effectiveness

of investments and results against expenses. Environmental investments and running costs were calculated based on the Environmental Agency's Toward the Establishment of

Environmental Accounting Systems (2000 Report) during 1999. In addition, economic effectiveness was computed.

The Concept of Environmental Accounting and Results for Fiscal 1999

* For items that are being implemented for other purposes as well, the portion applicable to environment-related issues has been estimated.

Classification Actual Expenses in Fiscal 1998 Amount

(¥ billion)

(¥ billion)

Environmental Preservation Expenditures

Direct expenses for reducing environmental impact, including pollution prevention and waste disposal 0.9

Indirect expenses for reducing environmental impact, including environmental measurement and analysis 0.3

Expenses for community activities, such as planting greenery and improving the environment 0.2

1.4

1.6

1.7

3.3

4.7

Subtotal

Environmental Investments*

Direct expenses for capital equipment, such as that related to global warming prevention, pollution prevention, waste disposal, and other issues

R&D expenses on products that reduce environmental impact

Subtotal

Total

Item Amount

0.4

0.5

0.9

Economic Effectiveness

Environmental Costs

Cost reductions due to energy conservation

Cost reductions resulting from recycling efforts

TotalE

nvironmental A

ccounting

•Environmental costs are examined and calculated on a cash flow basis. Therefore, investments in equipment and facilities are considered investment sums and depreciation costs are not calculated or recorded. •Calculations of effectiveness are based on firm reasoning and comprise all ascertainable items. Hence, because the range of calculation differs for cost and effectiveness, such calculations are recorded separately rather than in comparison to each other.

Business A

ctivities to Enhance E

nvironmental E

fficiency

To make accurate m

anagement judgem

ents, we are preparing an effective environm

ental accounting system.

11

Environmental Training and Education

To promote the implementation of environment-related activities and create a better environment it is important to raise the consciousness of each and every employee. To this end, we are emphasizing employee training and education in this area. Environmental training programs being conducted

include graduated courses for employees, courses for ISO 14001 internal auditors, and instruction for personnel operating important environment-related equipment. In addition to these programs, we also have lectures on the environment, prepare special features for our in-house

newsletter, and publish a monthly news- letter on the environment with the goal of promoting environmental awareness among employees.

Environmental TrainingPGraduated courses for employeesEmployees are divided into groups for the purposes of these courses (general environmental training, training for environmental auditors, and courses for managers) and courses are conducted that are appropriate for each group. PTraining for ISO 14001 Internal AuditorsTo prepare certain employees to act as environmental auditors and train others as leaders for internal ISO 14001 purposes, we call on external research institutes to conduct these courses. Forty employees underwent training in fiscal 1999 and, as of the end of March 2000, 318 employees had earned qualifications as internal auditors.

Environmental Education«Activities in fiscal 1999 included»PEnvironmental Report Published December 20, 1999PEnvironmental management lectureOctober 26, 1999: "About Environmental Accounting"PPromotion of awareness through the in-house newsletterEnvironmental Management special featureKenaf special feature

Environment-Related QualificationsTo encourage compliance with environmental rules and regulations in the workplace and greater awareness of environmental issues, the Company supports employees studying to obtain various officially issued environment-related qualifications. PEmployees currently holding such qualifications include:Environmental inspectors: 3People successfully completing inspector course: 7Pollution prevention managers:

Air: 49Water: 64Noise: 122Vibration: 58

GEmployees participating in a graduated training course

GTraining session to deal with hypothetical environmental accident

Environm

ental Training and

Ed

ucationA

ll Staff P

articipate and

Achieve R

esults

The goal of these activities is to heighten the awareness of environm

ental issues among all staff m

embers

and create a framew

ork where our full capabilities can be tapped.

GIn-house newsletter: Kenaf special feature

12

Toyoda actively promotes the development of environmentally sound products, and its Product Technology Committee is now introducing the LCA method of product assessment. In fiscal 1999, we commenced

a substance balance survey on the life cycle (all stages from the selection of a product's materials, through procurement, final disposal, and recycling) of our existing products. As the first stage of

this survey, studies were made of CO2 emission volumes related to energy consumption and the weights of individual components according to material type.

Adoption of LCA

Efforts to Reduce Environmental Impact

Toyoda conducted a survey of the number of substances in the structural components of its products that have an environmental impact, in particular

sodium azide, mercury, cadmium, lead, vinyl chloride, arsenic, hexavalent chromium, asbestos, nickel, boron, and fluorine. In the months and years ahead,

we will work on initiatives for the prohibition or reduction of the use of these substances from the design stage.

Application of Recycling Design Guidelines

To make easily recyclable products, it is necessary to take recycling needs into consideration as early as the develop-ment and design stages. Toyoda's

Recycling Design Guidelines are a compilation of design requirements for making easily recyclable products. We are actively implementing these guidelines

in conjunction with the adoption of LCA systems.

Bolstering Environmental Management Systems of Associated Firms

Just as corporate accounting has undergone a conversion to consolidated reporting with the inclusion of associated firms, it has become necessary to handle environmental management and produce results as a Group on a similar basis. Toyoda works to establish communication

frameworks and conducts briefing sessions for its associated firms that are included in consolidated accounting to strengthen their environmental management systems.

GBriefing session

Environment P

rotection Activities

Procurement and Production

Development and Design

MLCA Process

Resource collection Materials refining

Product manufacture

Recycling of Materials

Product distribution Product use Recycling

or disposal

Aim

ing For Stead

y Progress, S

tep b

y Step

Com

panywide environm

ental protection activities are showing m

any good results.

Reuse

13

Emvironmental Protection Activities

P*Refer to page 23 for more information on waste thinner collection equipment.

PRTR provides the framework for "ascertaining the extent of the release of harmful chemical substances into the environment and making this information publicly available." PRTR makes it possible for government agencies to follow the emission of harmful substances into the air and water, based on the reports and estimates of the relevant parties as well as determine the movements of such substances released from waste, process this information, and make it public. In July 1999, the PRTR Law (The Law on Improvement in the Management and

Control of Emissions of Selected Substances) was enacted, marking the beginning of full-fledged anti-pollutant efforts in Japan. Toyoda has long since engaged in the reduction of hazardous chemicals. We also participated in a pilot project of the Environment Agency that began in 1997 in the Nishimikawa Region and in PRTR surveys conducted by the Keidanren through various industry associations (in our case, the Japan Automobile Body Industries Association,INC) and have developed systems for determining the volume of such chemicals transferred.

Toyoda participated in the Environmental Agency's pilot project in fiscal 1999. In the future, in keeping with the spirit of the PRTR Law, the Company will implement further efforts to reduce the use of hazardous chemical substances, enhance its control systems, continue to experiment with new information disclosure methods, and make all necessary preparations to meet its goal of a 50% reduction in the total volume of PRTR targeted substances compared with fiscal 1998 levels by fiscal 2005 year-end.

Management of Chemical Substances through PRTR System(PRTR: Pollutant Release and Transfer Register)

Since such VOCs as cleansing thinner and coatings containing organic solvents are used in the painting of the outer body shells of automobiles, Toyoda has undertaken the implementation of voluntary measures to reduce VOC emission volumes under the guidance of the Japan Automobile Manufacturers Association Inc. and the Japan Automobile Body Industries Association, INC.

However, due to such factors as the increase in the production of cars with metallic finishes, VOC emission volumes

increased 3% in fiscal 1999 compared with the volumes of fiscal 1998. Therefore, we have set a new target of reducing VOC emission volumes by 50% compared with fiscal 1998 levels by fiscal 2005 year-end. To this end, we have implemented numerous initiatives, including the introduction of hand-operated electrostatic paint guns that yield superior adhesion and the use of waste thinner collection equipment,* through which we are striving to reduce VOC emission volumes.

VOC Emission Volume Reduction Efforts(VOCs: Volatile Organic Compounds)

▲Hand-operated electrostatic paint gun

1998 1999 2000 (April - May) (FY)

0

40

60

80

20

100

MVOC Emission Volumes

Index (Fiscal 1998 = 100)

Monthly em

ission volumes

14

Promoting Energy Conservation: Reducing CO2 Emissions

Restraining the Volume of Waste and Promoting Reuse of Resources

Toyoda has been working to promote energy conservation through such initiatives as the active introduction of cogeneration systems, and has striven to reduce CO2 emissions. As part of these efforts during fiscal 1999, the Company introduced a product-by-product energy monitoring system and switched from heavy oil to LNG in metal heaters and boilers. However, due to an

increase in production volumes for the term, total CO2 emission volumes amounted to 93,515 tons, an increase of 5,907 tons compared with fiscal 1998. On the other hand, CO2 emission volumes per ¥100 million in sales declined 1.26 tons, to 17.93 tons. Moreover, the CO2 emission volume targets of the Second Environmental Action Plan were met for fiscal 1999,

and are well on their way to being met for fiscal 2000. However, since there is concern about CO2 emission volume increases due to rises in production volumes, we have set new reduction targets of a 5% reduction compared to fiscal 1990 levels by fiscal 2005 year-end and 10% by fiscal 2010 year-end.

Toyoda promotes waste recycling and the curbing of waste generation, and has achieved excellent results. In fiscal 1999, we endeavored to reduce volumes of wastewater sludge and other waste liquid emissions by stabilizing the water quality of wastewater treatment stations and

improving the capacity of waste liquid condensing equipment. As a result, we successfully cleared the target figures of our Second Environmental Action Plan with a waste emission volume for fiscal 1999 of 9,500 tons. Furthermore, we fully expect to meet our Second Environmental Action Plan targets for

fiscal 2000 as well and have set a new goal of eliminating landfill disposal waste from all plants by fiscal 2003 as part of our efforts to achieve the ultimate goal of zero emissions.

The goal under the Second Environmental Action Plan is to stabilize CO2 emissions at the fiscal 1990 level (101,490 tons) by fiscal

1990 1991 19961995199419931992 1997 1998 1999 (FY)0

80,000

60,000

40,000

20,000

100,000

120,000

LCompanywide CO2 Emissions

(tons)

The goal under the Second Environmental Action Plan is to reduce emissions by 75% from the fiscal 1990 levels (which were 53,360 tons) by fiscal

1990 1991 19961995199419931992 1997 1998 1999 (FY)0

10,000

20,000

30,000

40,000

50,000

60,000

LCompanywide Waste Emissions

(tons)

Goal for 2000: 75% Reduction from fiscal 1990 Levels

Environment P

rotection Activities Goal for 2000: Same Levels as in fiscal 1990

Aim

ing for Stead

y Progress, S

tep b

y Step

Com

panywide environm

ental protection activities are showing m

any good results.

15

Social Contributions, Safety and Health

As a fundamental member of society, Toyoda puts its energies not only into environmental protection programs, but also into social contribution efforts to

help create and develop a sustainable community. The Company also strives to ensure the health and safety of its employees as part of its environmental

protection efforts and works both to improve the internal plant environments and protect the environment surrounding its facilities.

Contributing to the CommunityPSupport for academic research on the theme of environmental protectionActivities in this area include contributions to the Keidanren's Natural Preservation Fund and participation in and support for its managerial council, participation in and support for the Japan Eagle and Hawk Research Center, participation in the Committee for Dialogue on Chubu Area Development and Water Resources, participation in the Wild Rabbit-Eared Iris Community Nature Preservation Program, and support for the Kenaf Project.

PVolunteer activitiesVolunteer activities in which Toyoda is active include the river cleanup efforts of manager-level employee associations and oceanside cleanup activities carried out by vocational school students.

Improving the Workplace Environment (Employee Safety and Health)PReducing the concentration of VOCs through the superior adhesive properties of multi-sprayingBecause air spraying was used on the coating lines of internal equipment in the past, large amounts of paint were necessary. Also, the environment surrounding the workers was adversely affected by the scattering of VOCs con-tained in the paints used. By converting to a multi-spray process—which yields much better adhesion—we were successful in simultaneously enhancing quality and reducing the concentration of VOCs scattered into the air by more than 70%, thus lowering the impact on both workers and the environment. Also, multi-spraying uses less paint and air, thus contributing to energy and resource conservation and helping to reduce operation noise. In other areas of workplace improvement, the Company sealed off certain pieces of machinery as a countermeasure against oil mist, thereby achieving both lower levels of mist concentration and less excess noise.

PDust control measuresIndoor airborne dust caused by construction sand escaping from conveyor belt junctions has been a problem. To improve this situation, we installed sand collection vessels and chutes underneath the junctions. Sand recovered in this way is now sealed in collection containers. This innovative process has helped improve the workplace environment by eliminating sand loss and reducing dust concentration. It also makes use of processed materials, thus contributing to resource conservation and reducing waste generation.

PImproved noise suppression for pressesAlong with the full automation of the metal pressing process, we have been able to isolate pressing machinery within soundproof walls. This shuts out the sounds accompanying the manufacturing process (such as those emitted by punching operations, the dropping of scrap metal, and the intake of air by automated material handling systems) and dramatically reduces noise levels. Also, previously, during the transport of pressed components, excess noise was caused when the components passed over the vertical gaps between conveyors. To improve this situation, we installed cushioning in these problem areas, which significantly reduced excess noise and improved operational efficiency.

Communication ActivitiesPLocal eventsToyoda participated in the Kariya Industrial Festival.PDialogue with members of local communitiesWe also periodically exchange views with members of the local communities near out plants. At these meetings we explain our environment-related activities and listen to the views of local citizens.

Social C

ontributions,

Safety and

Health

GSand collection chute

What W

e Can D

o for the Com

munity

As citizens of the global com

munity, w

e are making num

erous efforts to create a better environment.

GOceanside cleanup activities

16

Textile Machinery D

ivision

Development and Design

Low-Water-Consumption Water Jet Loom: LW600 Series

A water jet loom is a loom that weaves cloth by propelling the weft (horizontal thread) through the warp

(vertical thread) on a jet of water that is ejected from a nozzle. Since water is diffused during the

process, greater volumes of water and ever higher water pressure had previously been used to achieve

high-speed weaving.

Toyoda’s newly developed LW600 Series features an improved nozzle that yields a more focused jet

and minimizes water consumption. With

these advances we have achieved water

consumption volume reductions of as much

as 30% compared with conventional water

jet looms. At the same time, thread damage

due to excess water dispersal is also

reduced, thus enhancing cloth quality.

The new LW601 model features an improved water jet focus through more effective nozzle flow

rectification. Since the weft must be inserted along with the water jet between the jouncing warp within

a limited time span, a sharpened focus creates more leeway in terms of both space and time, thus

enabling high-speed weaving while using smaller volumes of water.

New LW601 Water Jet Loom

Managing Director & General Manager Textile Machinery Division

Tatsuro Matsuura

Just as for other types of machinery, the need is growing year by year for environment-friendly textile machinery that makes yarn and weaves cloth while conserving energy and emitting little vibration or noise.

Our Textile Machinery Division has structured environment-friendly production processes, beginning with the selection of raw materials used in its products and is exerting its fullest efforts to offer products that meet the environmental requirements of its customers.

G New improved nozzle

Textile Machinery D

ivision

17

Activities of Business Divisions

Improved Recyclability in the RX240 Ring Spinning FrameA ring spinning frame is a machine that produces thread by aligning bundles of fiber in a prescribed thickness and then twisting them into

thread. In conventional ring spinning frames, the pneumatic flutes were joined to the flute shafts and intake shafts with adhesive. However,

with the RX240 frame, we have adopted a adhesiveless construction that fits the flute shafts directly into rubber sockets. This advance has

simplified the disassembly process, thus enhancing recyclability and the individual disposal of separate components. Moreover, the elimination

of adhesive agents contributes to resource conservation and the reduction of VOC usage.

New Internet TTCS(Toyoda Total Computer System)

Our original TTCS was a centralized production and quality control

system for air jet loom factories that enabled reciprocal

communication between a host computer and specific machinery.

However, although it allowed access from anywhere within the same

plant, data sharing and communication between plants was not

possible without installing special wiring, and data was viewable only

with a special TTCS terminal computer. Our new Internet TTCS

solves these problems and enables access regardless of location,

whether within the plant or elsewhere. It also allows access from an

ordinary PC, eliminating the need for specialized terminals. These

improvements enhance user friendliness as well as contribute to

resource and energy conservation by eliminating the need for

exclusive lines between plants. Moreover, quality control functions

strengthened in this way help raise overall product quality, and newly

enhanced planning maintenance features help reduce the need for

supply components, thereby further contributing to resource and

energy conservation.GHome page of the Toyoda Total Computer System

L Improved pneumatic flute joint sections

Before improvement

G RX240 Ring Spinning Frame

▲Pneumatic Flute section

Pneumatic flute

Flute shaft

Intake shaft

Rubber socket

Rubber socket

Adhesive

After improvement

18

Com

pressor D

ivision

New 6SEU12 External Variable Displacement Compressor

Development and Design

Conventional internal variable displacement compressors respond to a car's interior heat burden and

detect only the intake pressure of the compressor, thereby controlling displacement with the compressor

itself. With this design, control settings remain fixed, thus wasting energy. With Toyoda's new external

variable displacement compressor, such data signals as interior temperature and humidity, and external

temperatures are fed to the air conditioner's pump externally, enabling more precise displacement control

and contributing to enhanced vehicle fuel efficiency. Compared with internal variable displacement

compressors, the 6SEU12 external variable displacement compressor enables a reduction of approximately

60% in fuel consumption when automobile air conditioners are in use.

M Fuel economy effectiveness of Toyoda's external variable displacement compressor

Internal variable displacement

*Outdoor temperature: 0˚ to 30˚C, Speed: Idling to 100 km/h

External variable displacement

0

20

40

60

80

100

Index

Annual air conditioner fuel consum

ption

100

40

60% improvement

Fuel consumption due to air conditioner use was calculated based on average year-round commuter

driving conditions* in the Nagoya district.

Conventional 10PA model

10S

0

20

40

60

80

100

Index

Weight differential

100

85 15% improvement

G 6SEU12

New 10S Series of Ultralightweight Fixed Displacement CompressorsIn what is now our core product line of fixed displacement swash-plate compressors, we have also made

strides in resource conservation and fuel efficiency with the development of the 10S Series of ultralightweight

fixed displacement compressors. The Series’ unique features include compact size made possible through

limit-straining design and an 85% reduction in weight compared with previous models, through the benefit of

our thin material technologies. Furthermore, the 10S Series features five different displacement variations, thus

contributing to increased automobile fuel efficiency by supplying compressors with the most suitable

displacements for each vehicle size.

M Weight reduction

G 10S13

Director & General ManagerCompressor Division

Masafumi Kato

The rising level of attention being directed to environmental protection issues has led to increasingly strict regulations related to automobile energy consumption and the use of chlorofluorocarbon (CFC) refrigerants. Thus, responding to environmental issues has become one of the most important tasks facing manufacturers of automobile air-conditioning compressors. The Compressor Division is engaged in R&D programs aimed at reducing fuel consumption, lowering product weights, and developing new refrigerants. At all stages, from R&D through manufacturing, we are maintaining efforts to reduce environmental impact.

Com

pressor D

ivision

19

Activities of Business Divisions

Production

Energy Conservation through the Introduction of Gas-Type Heat Pump (GHP) Air ConditioningWhen Toyoda expanded the air conditioning on its assembly lines, in

consideration of energy conservation and reduction of environmental

impact, it decided to adopt GHP air conditioning. GHP air conditioning

is an air-conditioning system that uses a compressor using gas as an

energy source. In Toyoda's case, city gas (13A) is used. City gases

are flammable gases whose primary component is methane. They

contain no impurities and emit only very low levels of NOX and other

contributors to air pollution and acid rain when combusted. Emissions

of CO2, which cause global warming, are also 20% to 40% lower with

city gas than with carbon fuels or petroleum, making them a clean

energy alternative to other fossil fuels. GHP air conditioning also

enables a 7% reduction in CO2 emissions compared to electric heat

pump air conditioning.

Energy Conservation through Improved Aluminum Die-Cast Trimming ProceduresTraditionally, a motorized revolving cutter has been used in the gate stub cutting section of the aluminum die-cast trimming process. We have converted this process to one that uses an air cylinder to power an arm that folds the gate stub. By converting from a motorized revolving process that uses large quantities of energy to a low energy consumption air cylinder arm system we reduced electricity consumption by 60% and lowered operating noise by 5dB.

Traditionally, Toyoda has used the color green on the equipment and machinery of its mechanized processing lines. However, the green paint eventually darkened with age, adversely affecting the workplace environment. Along with recent changes to our production lines, we took the opportunity to repaint the equipment, machinery, and buildings with a light, reflective whitish gray. The result was a brighter, much improved workplace environment. The added brightness also contributed to a 20% reduction in energy use.

G Improved aluminum die-cast trimming procedures

TypeElectricity usage 130kWh

LNG usage

CO2 annual emission volume(at 3,000h/year full capacity operation)

Energy consumption

Electric heat pump Gas-type heat pump

70.2t

26kWh

27.2Nm3/h

65.6t

M Electric heat pump air conditioning and gas-type heat pump air conditioning comparison

Brighter Atmosphere through New Color Scheme on Equipment, Machinery, and Buildings

G Before improvement G After improvement

20

The New GENEO-B Electrically Powered Forklift Reduces Environmental Impact

Development and Design

G Original AC controller

G GENEO-BG Conventional models

Battery

Battery

L Comparison with conventional forklift models

G GENEO-B 1.5 ton model

LCounter Battery Share

L Operation efficiency improvement

Conventionalmodels

GENEO-B0

100

150

50

25% Improvement

3093 94 95 96 97 98 99 2000*

(*January–September)(Y)

(%)

40

45

35Sales of GENEO begin

Electrically powered forklifts are characterized by

zero exhaust emissions and low noise levels. Their

share among all forklifts sold in 1999 was 40%, a

much higher figure than the market share of electric

automobiles. Since its introduction in August 1998,

Toyoda's GENEO-B has enjoyed phenomenal

market share growth among counter-type electrically powered vehicles. The number of customers

purchasing these vehicles as a means of reducing environmental impact is already on the rise, but the

GENEO-B has also been highly praised as a next-generation electrically powered vehicle for its user

friendliness, due to its improved running times and improved power output, which are now on a par with

engine-powered forklifts. GENEO-B also represents a 40% reduction in CO2 emissions compared with

engine-powered forklifts. To enhance its basic performance as an electrically powered vehicle, GENEO-B

features the world's first AC motor drive system that is specially designed for use with forklifts. Since the

construction of AC motors is simple and their design is compact, they offer a 20% to 30% increase in

power compared with conventional DC motors. Furthermore, leveraging the drive system's wide range of

motor control, we have developed a new control system for maintaining performance during battery

discharge, with which we have achieved a 25% increase in efficient operating times. In addition to

providing revolutionary operator comfort by housing GENEO-B's batteries in its floor, we have further

enhanced operator-friendliness by incorporating a low seat position, which affords more legroom.

Index (conventional models = 100)

Industrial E

quip

ment and

M

aterial Hand

ling System

Divisions

Senior Managing Director & General Manager

Industrial Equipment and Material Handling System Divisions

Morio Kawamura

As companies proceed with the building of logistics systems that are more compatible with the global environment, the environmental friendliness of forklifts and material handling systems is becoming a key product specification. Responding to this trend, our division has accumulated various technologies for reducing exhaust emissions from engine-powered forklifts and for improving the performance of electrically powered forklifts. While continuing to emphasize the development of the next generation of environment-friendly technologies, we are working to supply products that assist our customers in building the logistics systems of the future.

Industrial E

quip

ment and

M

aterial Hand

ling System

Divisions

21

Activities of Business Divisions

Natural Gas Forklift

Plant Afforestation

In 1998, Toyoda developed a forklift that runs on the alternative energy source CNG (Compression Natural Gas). Our CNG forklift delivers superior fuel efficiency and low emissions with 1/33 of the CO (carbon monoxide) and 1/3 of the HC (hydrocarbon) emissions of gasoline-driven models and a 10% reduction in NOX and a 20% reduction in CO2 emissions.

G CNG forklift

ProductionReduction in VOC Emission Volumes through Process RevisionsBy implementing the recycling of paint thinner, revising cleaning times during repainting, and the conversion to finer tipped paint hoses and lower pressure paint guns, in fiscal 1999 Toyoda achieved a 10% reduction in VOC emission volumes compared with fiscal 1998.

Waste Reduction through Waste Liquid Condensation EquipmentIn an effort to reduce waste liquids and oils, Toyoda has installed waste liquid condensation equipment, the application of which resulted in a 54% reduction in waste generation in fiscal 1999, compared with fiscal 1998, to 289 tons. In other areas, we stabilized the water quality of on-site wastewater treatment stations, reduced wastewater sludge—which is reused in cement—by 199 tons compared with fiscal 1998, and lessened paint usage volumes, which resulted in a reduction in paint cake—which is reused in fuels—of 66 tons compared with fiscal 1998. These and other efforts contributed to a 30% reduction in total waste generation compared with fiscal 1998.

The Lush Greenery and Environmental Consideration of the Takahama PlantVerdant Harmony with Nature

The grounds of our Takahama Plant have become an area of lush greenery, embellished with an arbor of 400 camphor trees—our corporate symbol—and more than 2,000 other trees and bushes comprising 70 varieties, including zelkovas. Especially noteworthy are the verdant parks to the north and south of the plant that are open to the public and used as recreation areas. The northern park is also used as a golf course, and the park to the south is used as a strolling course for the neighboring senior citizens' home and the community in general. As a result of these efforts, the plant won a special commendation (the Aichi Prefecture Governor's Award) at the 15th Annual Aichi Prefecture Plant Environment Afforestation Contest.

Superb Wastewater Control System

Toyoda implements a system by which rainwater from plant grounds is drained through special wastewater ducts and is constantly scanned for oil content and the presence of dirt. When abnormalities are detected, the rainwater is temporarily retained and then treated, after which it is released once again. At our large scale wastewater treatment station, household wastewater is treated with active sludge, after which, together with industrial wastewater, it undergoes catalytic oxidation, concentration and precipitation, sand filtration, absorption with activated charcoal and wastewater checking treatment. These facilities are situated underground. The grounds above are used as miniature golf and employee recreation grounds.

L Exhaust emission volumes in comparison with gasoline-powered modelsIndex (gasoline-powered models = 100)

Index (Fiscal 1998 = 100)

Index (Fiscal 1998 = 100)

3%

33%

90%

80%

CO HC NOX CO2

0

50

100

CNG Gasoline

L Takahama Plant VOC emission volumes (fiscal 1998 comparison)

１００�

1998 1999

９０�

0

40

60

80

20

100

L Takahama PlantTotal waste generation trends

1998 1999 (FY)

(FY)

0

75

50

25

100

DisposedRecycled

29% reduction

Emission Volum

esVolum

e generated

G Parks of Takahama Plant G Grounds above wastewater treatment facilities

22

Plastic Windows That Contribute to Lighter Weight Vehicles

Development and Design

The polycarbonate windows developed by Toyoda were used in the sunroofs of Toyota Motor's Celica

model in 1999. In May 2000, further improved sunroofs with fewer individual parts were also used in the

restyled RAV4 models. These windows are 30% to 40% lighter than glass windows, thus yielding lighter

vehicles and greatly contributing to energy conservation. Toyoda windows also feature superb impact

absorption and safety, and easily accommodate decorative customization, allowing for enhanced design

appeal. In the future, we will continue to develop these windows and strive for further market penetration.

G Vitz body processing

"Spatterless" Planning and Results

Production

"Spatterless" initiatives—which prevent the scattering of sparks

in the welding stage of the body assembly process—are not

only crucial to quality control and production, they also

contribute greatly to energy conservation and the reduction of

waste in the form of metal scrap. Toyoda has established

appraisal levels according to the distance of spatter travel. Our

ultimate goal is to curtail spattering to "sparkler" level (which

indicates a distance of spatter travel similar to that of spark

travel from a handheld sparkler firework) in 90% of all plant

zones. To thoroughly implement our spatterless initiative, we have established an action project covering

the entire plant that continually conducts trial runs of measures against the causes of spattering through

process design alterations. In measures against the causes of spattering, the ascertaining of conditions,

identification of causes, and Failure Tree Analysis (FTA) are

conducted with the assistance of video cameras. Through

the subsequent setting of evaluation standards, preparation

of assessment sheets, and standardization of trial procedures,

such changes to process design as equipment upgrades

and welding electric current revision can be implemented.

We are also raising employee awareness by posting a

progress map for each piece of machinery, and keeping

strict control of results in a comprehensive database.

L Assessment Level

Level Distance spatter travels (m)

５�

４�

３�

２�

１�

０�

０～０.５�

０.５～１.０�

１.０～５.０�

５～�

Analogy

Spatterless

"Sparkler"

Reaches operator

Reaches next process stationReaches hallway

or ceiling

G RAV4 Sunroof G RAV4

Vehicle D

ivisionDirector & General Manager,

Vehicle Division

Akira Imura

The Vehicle Division is striving to produce compact cars in an environment-friendly manner through such measures as those aimed at increasing recycling activities related to manufacturing processes and reducing volumes of environmentally harmful substances. In view of the rising demand for environment-friendly automobiles, the division is dedicating itself to the goal of developing and manufacturing cars in a way that is in harmony with the global environment.

Vehicle D

ivision

23

Activities of Business Divisions

Adoption of Energy Measurement SystemTraditionally, the volume of energy consumed in manufacturing

processes was roughly calculated on a division-by-division basis,

which made it difficult to obtain detailed data for each manufacturing

station. Therefore, Toyoda took the initiative of adopting a system by

which energy usage volumes from all processes, including paint-

coating and pressing, can be scanned in real time from anywhere

in the plant by individual machinery piece according to energy type.

From now on, we will continually upgrade these monitoring programs,

set target figures for each individual work section, and minimize

fluctuation and loss factors.

Our spatterless programs have also contributed to an improved working environment by reducing electric power consumption by welding

operations and lessening metal scrap.

L System mechanism

Waste Thinner Recovery EquipmentTo help reduce VOC emission volumes from paint-coating

processes, Toyoda has installed a device that collects used

cleansing thinner from top paint-coating booths. Thinner is used

during the use of automated painting machines, changing of paint

color, and maintenance machinery. The new device collects used

thinner from these and other processes and stores it in drums for

transport to the manufacturer, where it is recycled. This helps

increase the rate of recycling and reduce the volume of VOCs

emitted into the atmosphere. We have set ourselves the goal of

reducing VOC emissions by 25% by fiscal 2000 year-end.

L Thinner recovery synopsis

L Energy usage volumes

Energy use per unit

Volume generated

1998 1999 (FY) (FY)0

25

50

75

100

0

25

50

75

100

Index (fiscal 1998 = 100)L Metal scrap generated by spatter

1998 1999

Index (fiscal 1998 = 100)

Reduction of2.4 tons/month

Recycling by the manufacturer

Paint mixing room

Return to manufacturer

Delivery

Drum

Top paint-coating booth

Hand painting process

Base liquid recovery hopper Base liquid recovery tank Recovery pump　�

Office: managerProcess manager

Server room

Energy measurement

server

OA PC

OA ethernet

Measurement ethernetData

gathering sequencer

(parent)

Data gathering sequencer (child)

Items1) Electricity gauge installed, current sensor, electricity measurement unit2) Gas current measurement gauge3) Air current measurement gauge4) Steam current measurement gauge

10085

Automated process

24

Development of Engines That Are More Environmentally Friendly

Development and Design

The 1CD-FTV diesel engine was developed for use in the Toyota Avensis compact car to achieve cleaner

exhaust emissions and lower noise and vibration levels while maintaining power comparable to gasoline-

powered vehicles. This achievement is due to the incorporation of the world's first use of an intake-

regulating common rail system on a high-pressure injection regulation device, four-valve center injection,

and high-precision EGR regulation. A common rail system enables the constant maintenance of

optimum combustion conditions under any driving conditions through the electronic control of fuel

injection pressure, volume, and timing. Thanks to these advancements, we successfully achieved an

enormous reduction in HC and NOX emissions of 25% compared to the previous 2C-TE model. Smoke

density during initial start-up and acceleration has also been reduced. In terms of noise reduction,

combustion noise has been reduced by 6dB with the application of a pilot injection. Advanced

soundproofing has also enabled even greater reductions in noise and vibration. Furthermore, we used

aluminum alloy as cylinder head material and increased the copper content to achieve greater heat

stress resistance and increased reliability. Through these efforts, we have raised engine safety and are

working to contribute to product longevity and resource conservation.

Product Design Using Computer SimulationTo promote further advances in fuel efficiency and resource conservation, Toyoda is working to achieve

lighter weight engines through higher quality, smaller, thinner, and lighter cast components achieved

with Computer-Aided Engineering (CAE), and the use of such lightweight materials as aluminum and

resin. By applying a computer simulation, we are able to predict the results of prototype models in

terms of such criteria as solidification, fluidity, and residual

stress without having to perform actual casting. Through

such efforts, we are working to reduce the waste generated

during prototype creation and conserve materials used in

the process as well as promote a better working environment

and energy and resource conservation. We are especially

concentrating our efforts on the die cast method of

casting (a method for mass producing highly precise

castings in a short time frame through the high-speed

injection of molten aluminum into a high precision die).

G Engine incorporating thinner and lighter cast components

�

Pressure sensor

Fuel filter

Supply pump

Fuel pump Sensor

Common rail

Injector

ECU

ECU(Inj.)

Pressure limiter

L Common rail system layout

G External view of engineE

ngine Division

Managing Director & General Manager,

Engine Division

Shinjiro Kamimura

Engines, the most important components of vehicles, have such environmental protection imperatives as improved fuel efficiency, lower exhaust emissions, and reduced noise levels. In the Engine Division, every staff member is making efforts to develop and manufacture engines that are friendly, both to people and the natural environment, as well as to supply products that have enhanced basic and environmental performance.

Engine D

ivision

25

Activities of Business Divisions

Improved Scrubber Waste Liquid Treatment System

Production

Toyoda has added a surplus steam action circuit as a co-generation

supplemental system to its vacuum evaporation equipment for the

condensation of waste liquid and recycling of waste oil generated by

its scrubbers. As a result, we succeeded in reducing the volume of

boiler gas usage in fiscal 1999 by 59,000 Nm3 (36.7 tons of CO2

emissions), compared with fiscal 1998.

Reuse of Engine ComponentsShip engines and supply engines are produced on the same line as

automobile engines. Certain components are attached temporarily

during engine testing and then discarded afterwards. However,

Toyoda has elected to carefully select the components that are

suitable for reuse and continues to use them in further testing. By

applying this policy, we were able to reduce waste generation in

fiscal 1999 by 8.4 tons compared with fiscal 1998.

Interior Environmental Measures Taken through Improvements to Air-Conditioning Operation SystemsBy implementing exact control of plant air-conditioning equipment

and maintaining a balance between air intake and exhaust volumes,

Toyoda strove to prevent the interfusion of outside air and achieve

efficient air conditioning. Due to these efforts, in fiscal 1999 we

reduced electricity usage by 1,057 MWh (CO2 conversion: 190 tons)

while maintaining comfortable levels of air conditioning, thus

improving both the workplace environment and reducing CO2

emission volumes.

Recycling of RefractoryHitherto, the refractory waste products of varying sizes generated by

cast iron smelters were disposed of in landfills. Now, Toyoda

removes any impurities that may have adhered to these waste

products, after which they are ground, classified, blended, and

recycled. Through these efforts, we reduced landfill disposal in fiscal

1999 by 50 tons compared with fiscal 1998.

G Co-generation system

G Monitor screen

Reducing Cupola Coke ContentThe size of choice for nuggets of coke fuel used in cupola (smelters

used in casting and refining) has traditionally been 1/10 the diameter

of the cupola in size (100mm to 200mm). However, this ideal has

been revised from the standpoint of CO2 emission volume reduction.

Experiments were conducted on the solubility of coke nuggets of

different sizes, the results of which indicated that nuggets of 150mm

to 250mm yielded the most efficient combustion. By converting to

this size, Toyoda reduced CO2 emission volumes in fiscal 1999 by

280 tons.

L Cupola construction

L Recycling Process

Grinding

Waste refractory Recycled product

ClassificationBlending

Coke nuggets

26

DC-DC Converters of HVs (Hybrid Vehicles)

Development and Design

The Prius hybrid vehicle developed by Toyota Motor Corp. is a highly environment-friendly vehicle that

contains two differing power units, a gasoline engine and a three-phase current motor, making highly

efficient use of both electricity and gasoline. Since the dynamo of the Prius hybrid system is a high-

voltage one, it cannot directly recharge the batteries of the vehicle's lamps, air conditioner, and other

accessories. The DC-DC converter is a device for converting the dynamo's high voltage and charging

accessory batteries. To implement minor model changes to the Prius model, Toyoda has developed a

compact, low-cost, high-performance DC-DC converter, which has helped lower costs and enhance the

performance of the Prius and contributed to the proliferation of this environment-friendly vehicle.

Furthermore, by delivering compactness and low costs, we have achieved resource and energy

conservation in the manufacturing process.

G Prius

G DC-DC converterS

emicond

uctor &

Electronics E

quip

ment D

ivision

Managing Director & General Manager,

Semiconductor & Electronics Equipment Division

Shinji Takeuchi

Semiconductor manufacturing processes involve the use of numerous chemicals, and the Semiconductor & Electronics Equipment Division is working to promote resource utilization, resource recycling, and waste chemical reduction for each of its semiconductor manufacturing processes. We are also striving to help protect the global environment by developing the power source technologies that are vital to such quintessential next generation clean automobiles as battery-powered and hybrid cars.

Sem

iconductor &

Electronics

Eq

uipm

ent Division

27

Activities of Business Divisions

Production

Noise-Reduction Measures at Electronic Components PlantThe surrounding district of the division's Kyowa Plant have

undergone administrative rezoning, and as a result, what had

previously been forestland has been converted into a residential

district. Since this development led to concerns over the effects of

noise from plant operations on the surrounding environment, we

implemented voluntary monitoring surveys, the results of which

indicated some sections emitted noise levels that exceeded

residential regulations. Therefore, we installed soundproof walling

around the plant's pumps and cleaning tower which were likely

sources of excess noise, thus reducing noise levels and preventing

negative effects on the surrounding neighborhood. Subsequent

surveys taken after the installation of soundproofing indicated that all

regulation levels were cleared. Thereafter, we have continued to

work in close communication with the local administration (City of

Obu) to maintain operations within regulation levels.

Sludge Generation Reduction through Installation of Vacuum DrierAt our wastewater treatment facilities, in the past wastewater

treatment sludge was hydro-extracted using a diatomite vacuum

spin drier. However, it was difficult to reduce sludge moisture

content below 75% using this method, and we were unsuccessful in

reducing sludge generation volumes. However, with the installation

of a vacuum drier, we were able to hydro-extract and then dry

wastewater treatment sludge, thereby containing moisture content

at 35% to 40%. Through this development, we succeeded in

reducing sludge generation in fiscal 1999 by 43% in comparison

with fiscal 1998 volumes.

Energy Conservation through Truncated Operating HoursThrough improvements in the tools and technologies used in the

boring and die sinking processes, we reduced operating hours by

7% to 10%. These truncated operating hours are another way in

which we are contributing to energy conservation.

G Vacuum drier

Source liquid

Condensed water

Separated water

Dried solids

L Wastewater treatment flow chart

Coagulationtank

Separator

Boiler

Vacuum drier

Wastewater pit

G Soundproof wall

* Condensed slurry is churned in a decompressed state and then heated with the boiler.

28

Actual Measurement(Maximum)Control ValueEquipmentItem

961047314466150Boiler74171NOx

862375296Heating/cooling units for

rooms and water

4450Gas turbine110200Incinerator

0.0040.1Boiler

0.110.20.0030.1Heating/cooling units for

rooms and water P.M.0.0020.05Gas turbine0.10.5Incinerator240700Incinerator

Incinerator 0.2980Dioxins (in exhaust gas)Hydrogen chloride

Item ControlValue

Actual MeasurementAverageMaximum Minimum

pH 5.8~8.6 6.97.5 6.7COD ---------- 5.315.7 1.1BOD 25 (20) 4.610.8 1.0SS 30 (20) 0.83.4 N.D.Oil 5 0.52.3 N.D.

Copper 1 0.020.06 0.002Zinc 5 0.0090.05 N.D.

Soluble iron 10 0.3070.95 0.03Soluble manganese 10 0.0640.2 0.02Total chrome 2 0.0050.05 N.D.

Fluorine 15 0.030.1 0.01Total nitrogen (15) 3.394.86 1.2Total phosphorus (2) 0.050.1 N.D.

Lead 0.1 0.0110.05 0.001Hexavalent chromium 0.5 0.010.01 N.D.Cadmium 0.1 N.D.N.D. N.D.

●Air Pollution Data (Conforming to the Air Pollution Control Law and Prefectural Ordinances)

●Water Pollution Data (Conforming to the Water Pollution Prevention Law and Prefectural Ordinances)

Actual Measurement(Maximum)Control ValueEquipmentItem

91120542372535

Boiler

Gas turbine

Drying furnace38184

NOx

<5218130200Incinerator

0.0320.10.0480.30.0060.05Gas turbine

Oven

Boiler

0.0750.20.0780.5

P.M.

2707000.3180

IncineratorIncinerator

IncineratorHydrogen chlorideDioxins (in exhaust gas)

Item ControlValue

Actual MeasurementAverageMaximum Minimum

pH 5.8~8.6 6.97.3 6.4COD ---------- 6.110.1 1.8BOD 25 (20) 3.612.3 N.D.SS 30 (20) 0.87.8 N.D.Oil 5 0.71.9 N.D.

Copper 1 0.0160.04 0.002Zinc 5 0.0090.05 N.D.

Soluble iron 5 0.2811.0 0.11Soluble manganese 5 0.140.7 0.008Total chrome 2 0.0060.05 N.D.Total nitrogen (15) 5.718.2 2.6

Total phosphorus (2) 0.030.1 N.D.Lead 0.1 0.0110.04 N.D.

Hexavalent chromium 0.5 0.010.01 N.D.Cadmium 0.1 N.D.N.D. N.D.

●Air Pollution Data (Conforming to the Air Pollution Control Law and Prefectural Ordinances)

●Water Pollution Data (Conforming to the Water Pollution Prevention Law and Prefectural Ordinances)

Head Office, Textile Machinery Division,

Compressor Division (Kariya Plant)

Industrial Equipment Division,Material Handling System Division

(Takahama Plant)

Actual Measurement(Maximum)Control ValueEquipmentItem

110142110144Boiler

Gas turbine

Gas turbine

69171

NOx 211847380

15218Oven

523778200Incinerator

Boiler

0.0020.20.0070.25

P.M.

0.0060.3

0.0560.2

0.0070.05

0.150.35Oven0.0150.4

Incinerator 0.130.5IncineratorIncinerator

31700Hydrogen chloride0.5580Dioxins (in exhaust gas)

Item ControlValue

Actual MeasurementAverageMaximum Minimum

pH 5.8~8.6 6.46.9 5.9COD ---------- 10.218.5 4.2BOD 25 (20) 1.84.5 0.1SS 30 (20) 5.813 N.D.Oil 5 0.40.9 N.D.

Copper 1 0.0180.05 0.003Zinc 5 1.1042.2 0.4

Soluble iron 5 0.3251.15 0.11Soluble manganese 5 0.4331.05 0.12Total chrome 2 0.0060.04 N.D.

Fluorine 15 0.550.84 0.4Total nitrogen (15) 2.764.7 1.5

Total phosphorus (2) 0.281.34 0.1Lead 0.1 0.0140.05 N.D.

Hexavalent chromium 0.5 0.010.01 N.D.Cadmium 0.1 N.D.N.D. N.D.

●Air Pollution Data (Conforming to the Air Pollution Control Law and Prefectural Ordinances)

●Water Pollution Data (Conforming to the Water Pollution Prevention Law and Prefectural Ordinances)

Vehicle Division (Nagakusa Plant)

Environm

ental Data

Air Pollution Units and Figures1. The units used are as follows—NOx, ppm; P.M., mg/Nm3; hydrogen chloride, mg/Nm3 (O2 12%); dioxin, ng-TEQ/Nm3

2. The figures used to represent the actual measurement are the maximum values recorded during measurements.

29

Environmental Data

Actual Measurement(Maximum)Control ValueEquipmentItem

6810051100

74100

BoilerHeating/cooling units for

rooms and water

Incinerator1335Gas turbine

BoilerHeating/cooling units for

rooms and water

0.0070.1

P.M.

Hydrogen chlorideDioxins (in exhaust gas)

NOx

0.0140.1

Incinerator 947003.180Incinerator

Gas turbineIncinerator

0.0020.050.0320.1

Item Control Value

Actual MeasurementAverageMaximum Minimum

pH 5.0~9.0 7.07.6 6.6COD 25 (20) 2.010 0.5BOD ---------- 2.413 0.1SS 30 (20) 1.28 N.D.Oil 5 0.20.7 N.D.

Copper 1 0.0170.043 0.003Zinc 5 0.0550.2 0.001

Soluble iron 5 0.2230.5 0.07Soluble manganese 5 0.0730.274 0.004Total chrome 2 0.0060.05 N.D.Total nitrogen (15) 3.658.5 0.7Total phosphorus (2) 0.050.1 0.01

Lead 0.1 0.0120.04 N.D.Hexavalent chromium 0.5 0.010.01 0.01Cadmium 0.1 N.D.N.D. N.D.

●Air Pollution Data (Conforming to the Air Pollution Control Law and Prefectural Ordinances)

●Water Pollution Data (Conforming to the Water Pollution Prevention Law and Prefectural Ordinances)

Actual Measurement(Maximum)Control ValueEquipmentItem

7318051180

0.060.30.0030.1P.M.

NOx

0.0320.20Heating furnaceMelting furnace

BoilerHeating furnace

BoilerItem Control

ValueActual Measurement

AverageMaximum MinimumpH 5.8~8.6 6.97.4 6.4

COD ---------- 9.418.9 3.1BOD 25 (20) 9.219.6 1.3SS 40 (30) 3.416.3 0.1Oil 2 0.20.9 0.1

Copper 1 0.0150.03 0.005Zinc 5 0.4594.3 N.D.

Soluble iron 10 0.3620.7 0.16Soluble manganese 10 0.1280.25 0.03Total chrome 2 0.0070.08 N.D.

Total nitrogen (20) 5.169.84 1.2Total phosphorus (0.5) 0.030.1 0.01

Lead 0.1 0.010.05 N.D.0.5 0.010.01 N.D.

Cadmium 0.1 N.D.N.D. N.D.Hexavalent chromium

●Air Pollution Data (Conforming to the Air Pollution Control Law and Prefectural Ordinances)

●Water Pollution Data (Conforming to the Water Pollution Prevention Law and Prefectural Ordinances)

Actual Measurement(Maximum)Control ValueEquipmentItem

4012066120

<0.0020.1

BoilerHeating/cooling units for rooms and water

BoilerHeating/cooling units for rooms and water <0.0020.1

P.M.

NOx

Item ControlValue

Actual MeasurementAverageMaximum Minimum

pH 5.8~8.6 6.87.4 6.5COD ---------- 1.85.1 0.2BOD 25 (20) 2.48.4 0.1SS 30 (20) 2.814.8 N.D.Oil 5 0.20.9 N.D.

Copper 1 0.0250.04 0.009Zinc 5 0.030.1

Soluble iron 10 0.2770.6 0.1Soluble manganese 10 0.080.15 0.05Total chrome 2 0.010.05

Fluorine 15 0.450.74 0.2Total nitrogen (15) 6.1310.2 2.2Total phosphorus (2) 0.160.69 N.D.

Lead 0.1 0.0120.032 N.D.Hexavalent chromium 0.5 0.0120.02 N.D.Cadmium 0.1 N.D.N.D. N.D.

N.D.

N.D.

Water Pollution Units and Figures1. Except for pH, all items are measured in terms of mg/L.2. Limit figures in parentheses represent the maximum permissible daily average level.3. Items marked as “N.D.” were not present in detectable concentrations.4. The meaning of abbreviated items are as follows—pH, concentration of hydrogen ions; COD, chemical oxygen demand; BOD, biochemical oxygen demand; SS, suspended solids; oil, n-Hexan extractable matter.

Period covered: April 1, 1999 through March 31, 2000

●Air Pollution Data (Conforming to the Air Pollution Control Law and Prefectural Ordinances)

●Water Pollution Data (Conforming to the Water Pollution Prevention Law and Prefectural Ordinances)

Engine Division(Hekinan Plant)

Compressor Division, Engine Division

(Obu Plant)

Semiconductor & Electronics Equipment Division

(Kyowa Plant)

Thank you for reading the Environmental Report of Toyoda Automatic Loom Works,

Ltd. Through its operations, the Company is striving to contribute to increases in both

societal affluence and the quality of the global environment. We view this as our

corporate mission, and we plan to sustain our efforts to realize that mission.

In addition, we plan to continue publicizing our environmental protection efforts

through the publication of environmental reports.

We are distributing this report together with a questionnaire. We hope that you will

complete the questionnaire and return it to us, so that we can improve our

environmental reports in line with the wishes of readers. Thank you very much for

your cooperation.

December 2000

For additional information regarding the environmental protection activities of Toyoda Automatic Loom Works, please feel free to contact the Company’s Safety and Environment Division.

Tel: 81-566-27-5120http://www.toyota-shokki.co.jp/company/environment/

In Conclusion

30

This Environmental Report is printed on officially certified recycled paper.

This Environmental Report incorporates fiber made from the kenaf plant, which contributes to the preservation of forest resources through the absorption of large volumes of carbon dioxide.

This Environmental Report was printed with ink derived from a vegetable source—soy beans—to minimize the impact on the environment.

Printed in Japan