GEP and Environment. 3.1 Environment Management Management Structure Management Guidelines

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1 GEP and Environment 3.1 Environment Management Management Guidelines Management Structure Preserve Natural Environment Comply laws, regulations, and standards. President/Vice President Reduce waste and recycle. Efficient resources management Environment Management Committee Promoting Dapartment Execution Dapartments Continuous improvement Periodical review Energy Efficiency& Clean Production Committee Promoting Dapartment Execution Dapartments Certificates The Company received ISO 144 Environmental Management Standard in Dec. 2 to set up environmental management system to perform internal audit and external review to ensure continuous improvement. To reach the goal of Protecting the Nature, Managing a Green Mill, the Company strives to develop recycle economy in product design, raw material purchase, production control, and waste management to mitigate the impact on the environment. Chart:Certification 7 Corporate Social Responsibility Report 29

2 3.2 Production Management Rapid economic growth in China leads to over consumption of resources and pollution and the Government of China proposed to reduce 2% resources consumption in terms of gross domestic production in the China Environmental Protection Plan in the Eleventh Five Years. Therefore, the Company adopted principles of scientific development and recycle economy and targeted on water saving, energy saving, waste-reduction, carbon-reduction, pollution-reduction, and efficiency-improvement Water-Saving The Company spares no efforts in protecting emission of COD 1 tons that was 14% lower than 28. As a result of efforts in water waste management, the Company received recognitions and awards from the Government and was labeled as Water-Saving Enterprise by Jiangsu province in Water Consumption Per Ton of Paper water resources. To produce one ton of paper, the Company consumed 7.2 tons of water in 28 and 7 tons in 29 while the international average is 1-18 tons. Aside from effective water resources management, the Company monitors water waste standards that are higher than normally required. Producing one ton of paper generated 5.87 tons of water waste in 28 and 5.36 tons in 29 that are 27% lower than the country s standards. In 29, the Company pioneered in setting up the first water waste reverse osmosis plant and total recycle water amounts to 18 tons and reduced Industry Avg Water Waster Per Ton of Paper National Corporate Social Responsibility Report 29 8

3 3.2.2 High Efficiency, Low Energy Consumption As one of 1 Energy Enterprise, the Company is dedicated to low energy consumption and involves and implements alternative solution. The Company saw great improvement in 29, total energy consumption dropped from 458 kgce in 28 to 448 kgce in 29, a decrease of 2.18% that equals to 2.35 million tons of coal. In addition, to reduce green house effect, the Company invited an independent institution to conduct carbon footprint audit based on PAS 25 and the Company successfully became the first enterprise to pass the audit in the industry in China. Moreover, the Company initiated the use of bioenergy as alternative to further reduce carbon emission. In 29, the Company won 14 awards from Zhenjiang Municipal Government QC Committee for Outstanding QC Managing. In Nov. 29, the Company exceeded national energy conservation standards for 2 consecutive years in 1 Energy Enterprises China. GEP Total Energy Consumption Per 47 Ton of Paper Chart:Total Energy Consumption Type of Engergy Unit Total Consumption29 Coal ton 1,218,4 Gas 1K/m 3 5,96 Petro ton 162 Diesel ton 4282 LPG ton 5,62 Petro Coke ton 11,298 Heat M kj/m 2 8,26,856 Electricity 1K Kilowatt 147, Reduce Packaging Materials In 28, the Company saved 529 million RMB by reducing consumption of Kraft paper and pallets, lowering the heights of paper rolls Monitor Emission The Company established three levels of monitoring systems. First, a 24-hours water waste and carbon emission monitoring system linked to municipal environmental protection bureau. The Company set dedicated environmental protection unit for daily operation to monitor smog, NOx, SO2, SS, BOD5, PH, CODc. Municipal monitoring office ensures that the Company complies with national standards at all times Corporate Social Responsibility Report 29

4 National mg/nm COD&SS Emisson Concentration 1.2 COD # SS Circular Economy SO 2 &Smog Emisson Concentration 2# 6 11 In June 29, GEP was approved to execute the project - "Reuse of Reverse Osmosis Waste Water" as pilot model of circular economy in Jiangsu Province. According to the principles of "Reduction, Reuse, Recycling and Standardization, the company established a set of recycling-based standard system to reuse reverse osmosis water waste to develop a circular economic model for the paper industry. It was a benchmark for other paper companies and GEP the paper industry to a healthy development and aimed for a resource-conserving and environmental friendly society Reuse of Gas, Reduction of Waste Gas Emission Our carbonate factory has installed advanced environmental facilities to synthesize Precipitated Calcium Carbonate (PCC) by using CO² from exhaust emission. In 29 the reduction of exhaust emission was 2 million cubic meters; the reduction of SO² 45 National National COD&SS Emisson Per Ton COD mg/nm SS NO X Concentration on #1&#2 SO 2 Smog mg/l 12 2 emissions was 388 tons, and the reduction of CO² was 59, tons Utilization of Marble Waste The marble waste from GCC and PCC plants and the waste from other production the Company conducted customer satisfaction surveys in 29 departments comprehensively utilized for desulphurization. It means we reuse the marble waste by producing GCC and put into the power plants for desulfurization. It not only reduces the cost of limestone, but also reduces the solid waste production. This greatly reduces the pollution from solid waste Utilization of Fly-ash In 29, our power plant produced around 31, tons of fly-ash. The fly-ash was truned into building bricks by Zhenjiang Shenghua Fenmeihui.This product was approved by the provincial experts and was regarded as a key recommended product for Zhenjiang City Wall Materials Innovation Office. The quality and price of the Corporate Social Responsibility Report 29 1

5 fly-ash bricks can replace loess bricks Reuse of Waste-water Treatment The sludge from wastewater treatment plant is directly transported through a special conveyor the Company conducted customer satisfaction surveys in 29to Circulating Fluidized Boiler (CFB) so that the CaCO in the sludge could be desulphurized and reduces extra input of de-sulphurized raw materials. In 29 our usage was around 6, tons; the rest was sold to the downstream companies to be reprocessed into industrial products. By doing this, the Company comprehensively reduced solid wastes Outsource Processing of All Used Packaging Materials The Company made a public tender for processing all used packaging materials, such as waste chemical packagings, waste palettes, scattered pulp debris, waste cables etc. In 29, the amount of usage was around 22, tons Biomass Energy Utilization In the straw utilization project from municipal government in 29, GEP was regarded as a pilot unit and helped to solve the industrial service system problems of collecting and delivering straws. The Company strengthened the links among local biomass energy and related industries. 3.4 Bio-Diversity The Company designed a green mill by planting more than 5 different kinds of plants and over 5, flowers and tress that covered the Company conducted customer satisfaction surveys in 29about 63 percent of the mill. The greening of the mill creates a comfortable micro-climate and plays an important role in de-dusting, reducing noise and radiant heat and so on. The Company used the open spaces in the mill to plant organic vegetables and developed Eco-farming. In 29, the organic vegetables were around 23,5 kg and eco-farming produced around 3,2 chickens. 3.5 Environmental Investment With more governmental supervision on environmental protection, the Company invested 1.25 billion RMB, about 5% of the total company s investment. The total investment in environmental protection in 29 was about 13 million RMB. Chat:29 Environmental Cost Classificati Description Expense (RMB) Purchase of Disc Filter for Paper Machine Drainage System Reformation and Monitor setting Replacement of Blower Motor Cover for the Department of Water Water Saving and Waste Decreasing Management Replacement of M-413 Blender Cable for Water Plant Cabling and Intubation for Dehydration Room in Water Plant Connection of the Main Pipe in O pool Reformation of Drainage System Reformation of RO Pipe Oil-proof Reconstruction in Hazardous Waste Material Warehouse 1, 8, 887 Capacitor Compensation for the Cutters Maintenance of Boiler ESP (No. 1 and No. 3) Recycle of Heat Energy for Boiler No.2 Energy Cooling Water System Upgrading for Boiler No.1 and No. 2 Conservation Conditioning in Power Plant Ribbon Skylight Replacement in the Pallets Warehouse Reactive Power Compensation for OMC#2 Environmental Protect Cost Total 71, 856, 92 3, 77, , 638, Corporate Social Responsibility Report 29