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Environmental targets and performance

The table below shows DSM’s environmental reduction targets for 2010 and the progress relative to 2005.

The environmental targets are based on the principle that all DSM’s sites in the world, should as a minimum meet the standards as applied in the European Union or the United States. New plants and major plant modifications should meet this requirement right from the start, whereas existing plants should meet it within five years.

Environmental targets and performance

1. Assuming the same production volumes and product types as in the reference year 2005.
2. DSM intends to ban the landfilling of hazardous waste for all situations where feasible alternatives exist, which has been expressed via the 100% reduction target.
3. Initial target of 1% per year has been increased to 2% per year as from 2008.

Issues for which we have already achieved the target 2010 or are on track are indicated green in the table. Issues that are considered achievable with foreseen additional effort are indicated yellow. The issues that require substantial additional effort to be realized are marked in red.

In the following paragraphs we will give DSM’s total emissions and energy-consumption and comment on the progress against the nine reduction targets for 2010.

Emissions to air

Dust
Emissions of dust were considerably reduced due to dust removal projects at DSM Fibre Intermediates Nanjing in 2006 and at DSM Anti-Infectives Zhangjiakou in 2007, both in China. Both projects are successful, and their realization accords fully with our intentions in 2005. Based on the improvements realized, we consider the target 2010 as achieved.

N2O
Emissions of dinitrogen oxide have decreased, partly due to reduction projects that were realized in the nitric acid plants of DSM Agro in Geleen and Ijmuiden, Netherlands, at the end of 2007. Measurement of dinitrogen oxide in the plants of DSM Fibre Intermediates proves to be very difficult and causes uncertainty in the reported values. Results of improved measurements in the coming years may lead to corrections, which might then also need to be applied retrospectively.

On the basis of the projects at DSM Agro, which will become fully effective during 2008, we will achieve the target for 2010.

DSM Fibre Intermediates will start technological investigations into the possibilities for reducing its N2O emissions as well. Measures as a result of these investigations will be implemented as soon as possible, but will not be effective before 2010.

SO2
Emissions of SO2 have decreased significantly since 2005, mainly due to the desulphurization project that was realized at DSM Nutritional Products Wuxi, China, in 2006. No significant changes were realized in 2007. Anticipated reduction measures, particularly at DSM Fibre Intermediates Nanjing, China, and several sites of DSM Anti-Infectives should result in the realization of the target of 75% reduction in 2010.

NOx
No significant changes have occurred in the emissions of NOx. Reduction projects, particularly at the sites of DSM Fibre Intermediates Nanjing and DSM Nutritional Products Wuxi, China, are needed in order to realize the target of a 20% reduction in 2010.

VOC
Total emissions of Volatile Organic Compounds (VOCs) have reduced. A significant reduction was realized at DSM Anti-Infectives Toansa, India. Reduction projects are in progress at the Dyneema sites in Heerlen, Netherlands, and Greenville, USA. Furthermore, the production volume at several sites of DSM Anti-Infectives increased at constant or even decreased VOC emissions. These changes are relative improvements, which also contribute to realization of the reduction target.

In order to achieve the target for 2010, several additional reduction projects must be realized, particularly at the sites of DSM Elastomers Triunfo (Brazil), DSM Fibre Intermediates Augusta (USA) and several DSM Anti-Infectives sites in India, Mexico and China.

Emissions to water

COD
The discharge of waste water (measured as COD, a measure for the amount of oxidizable organic compounds) was reduced very strongly. The largest contribution to this major improvement is the reduction that was achieved at DSM Fibre Intermediates Nanjing, China. Other major contributions are from the waste water treatment at DSM Food Specialties Seclin, France, which has come fully on stream in 2007, and improvements at DSM Anti-Infectives Zhangjiakou, China. As a result of these improvements the target for 2010 has already been achieved and is in fact greatly surpassed. On top of that, a new waste water treatment plant at DSM Anti-Infectives Zhangjiakou will result in a further reduction.

Waste

Non-hazardous waste
The landfilling of non-hazardous waste was reduced significantly. As already indicated in our previous report, this was mainly caused by the closure of DSM Nutritional Products vitamin C plant in Belvidere, USA, and reductions at DSM Fibre Intermediates Nanjing, China, and DSM Pharmaceutical Products Linz, Austria. As a result of these reductions the target for 2010 has already been amply achieved.

DSM aims to further reduce the total amount of waste it generates. To measure the progress, we use the amount that is being land filled as an indicator. Other outlets than landfilling, such as land farming, incineration (with or without heat recovery) or recovery are generally more attractive, and the borderline between waste and by-products is somewhat ambiguous for these outlets.

Hazardous waste
DSM intends to ban the landfilling of hazardous waste for all situations where feasible alternatives exist, which has been expressed via the 100% reduction target. Landfilling is only accepted within DSM if there are no technical or legally allowed alternatives.

In 2007 a total amount of approx 600t hazardous waste was landfilled. In more than 95% of cases it concerned materials or situations for which it was shown that no technical or legally allowed alternatives exist. For the remaining part, it will be investigated whether feasible alternatives exist or landfilling is really inevitable.

Most of this (475t) was realized at DSM Anti-Infectives Toansa, India, and comprises waste that had previously been stored on site. All waste originating from chemical or pharmaceutical industry is classified by definition as hazardous in India, regardless of its composition and properties. Alternatives to landfilling have been examined, but were not possible. The landfill is fully equipped and compliant with applicable laws.

Another significant amount (54 t) stems from DSM Nutritional Products Sisseln, Switzerland and comprises cinders from combustion processes. This type of waste is also classified as hazardous by definition and there is technically no alternative to landfilling.

The remaining part consists of relatively minor amounts, mainly asbestos-containing materials (from asbestos remediation or demolition projects) for which no technical alternatives exist.

Climate Change (energy and Greenhouse Gases)

Due to higher production volumes of relatively energy-intensive products, the total energy consumption has increased slightly.

In the course of 2007, DSM has strengthened the energy efficiency target (energy consumption per ton of product) from 1% per year in 2006 and 2007, to 2% per year for the period 2008-2010.

In 2007, the energy efficiency has improved by approximately 4% relative to 2005. The most important changes contributing to the improved efficiency are improvements at DSM Anti-Infectives (2%, due to a shift of production to more efficient technologies), and process improvements at the Rotterdam site (1%). A further 2% reduction is due to several small improvements and a net shift within several Business Groups to products/sites with lower specific energy consumption, including the closure of Vitamin C in Belvidere in 2006. On the downside, technical problems in the utilities plants at the Geleen site, the Netherlands, caused an increase of 1%.

The total emission of Greenhouse Gases has reduced. This is the result of a significant reduction of N2O emissions and an increase in the emissions of CO2, which increased in proportion to the increase of the energy consumption. The absolute value of the CO2 emissions is about half a million ton/year higher than reported previously because of emissions from utilities plants in Geleen that were not included in the reports in previous years.

In 2008 we expect a further reduction of greenhouse gas emissions, mainly due to the N2O- removal at the plants of DSM Agro in Geleen and IJmuiden that was realized end 2007 and further improvements of the energy efficiency in our plants.

In 2008 we will review our climate strategy targets and new ambitious long term (2008-2020) targets will be set for the reduction of greenhouse gas emissions.

Environmental Complaints

The total number of environmental complaints was 96, which is about the same as in 2006 (92), but significantly lower than in 2005 (122). Just like previous years, most complaints were about odor (64) and noise (25).

The sites that received most complaints were DSM Food Specialties Seclin (35, of which 20 odor and 11 noise), DSM Nutritional Products Dalry (21, of which 14 odor and 7 noise) and DSM Food Specialties/DSM Anti-Infectives Delft (15, of which 14 odor and 1 noise).

Non-compliances and penalties

In 2007 11 DSM sites were given environmental penalties by the competent authorities. Five of these 11 were fined. The total amount paid in fines amounted to approximately €185,000, compared to €160,000 in 2006.

The main fines were imposed on DSM Anti-Infectives Zhangjiakou (€110,000, for exceeding of the standards for waste water discharge), DSM Pharmaceutical Products Greenville (€32,000, for not meeting air emission standards) and DSM Fibre Intermediates Nanjing (€28,000, for a violation of the procedure for transportation of a certain waste stream and exceeding of the standards for waste water discharge).

Environmental incidents

The total number reported in 2007 was 540, compared to 530 in 2006 and 648 in 2005. Three of these incidents were rated as serious.

This category of incidents comprises all “non safety” incidents that have had, or could have had, an adverse impact on the environment or acceptance by the community.

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