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Initiatives at Sea        Initiatives at Terminals        Initiatives at Offices

Initiatives at Sea

During a voyage, we give top priority to safe navigation and cargo operations and we take a number of steps to

protect the global environment. We have facilities and structures to help prevent incidents, and we naturally

use eco-friendly equipment.

Measures Against Climate Change

Ship Operations for Higher Energy Efficiency

Ocean transport: an eco-friendly mode of transport and the main artery of international logistics

Among the many modes of transport, ocean transport is the most energy-efficient and effective for reducing

CO2 emissions in logistics. It is also the main artery of global logistics, best suited for transporting large

volumes of cargo long distances. To allow this efficient mode of transport to continue to exist in the future,

eco-friendly ship operations are essential. That is why we are committed to continuing to improve our ships'

energy efficiency and to reviewing our operating systems to maximize the efficiency of our entire fleet.

Sailing speed, power output, and fuel consumption

Given the relationship between sailing speed and the required power output (horsepower), doubling the sailing

speed requires an increase in engine output and fuel use by a factor of up to 23 (i.e., 8). It means, however,

that reducing the speed only 10% reduces the necessary power output and fuel consumption by as much as

27%, an eco-friendly voyage that reduces CO2 emissions.

Eco Slow Steaming (ESS) - An eco-friendly way to sail

Lower speed means that it takes longer to reach the destination. For this reason, we add one extra ship to

retain the same frequency of services: once a week, for example. We use an extra ship, but it consumes

significantly less fuel because it sails more slowly. Consequently, the fuel consumption of the entire fleet is

reduced, allowing an eco-friendly voyage.

We call this eco-friendly way of sailing "Eco Slow Steaming." We are introducing Eco Slow Steaming -

which permits the reduction of CO2 emissions while retaining the quality of services - mainly to containership

services on major routes.

Improving Energy Efficiency through Engine Refurbishment

Operating with reduced use of turbochargers

A turbocharger is an important piece of equipment that sends pressurized air to the engine to increase power

output and improve energy efficiency. As a measure for reducing CO2 emissions, we refurbish the engines

of our ships so that each one of them will stop one of its turbochargers during an ESS (eco-friendly voyage).

This concentrates the power of the engine's exhaust gas on the other (working) turbochargers.

Their rotating speed is increased and the air is sent to the engine at higher pressure, resulting in greater

energy efficiency compared with low-speed operation using all of the turbochargers. This retains the same

fuel combustion state and same level of energy efficiency as in high-speed operations, enabling a reduction

of CO2 emission of approx. 3%.

A Constant Commitment to Reducing CO2 Emissions

Reducing CO2 emissions with an exhaust gas economizer and turbo generator

The exhaust gas from engines has sufficient thermal energy, given its heat of up to 350 degrees centigrade.

The exhaust gas is used to turn the boiler water, led by the exhaust gas economizer, into steam, which

in turn is used to operate turbo generators driven by the steam turbine. This effective use of the thermal

energy of exhaust gas saves fuel for generators and reduces CO2 emissions, too.

Cutting CO2 emissions with energy-saving appendages

A spherical bulge and fins attached to the rudder behind the propeller convert the water stream generated

by the propeller into power to move the ship forward. The extra power reduces fuel consumption and

CO2 emissions.

Using heat shield paint to reduce power consumption

Ships are made of metal, which transfers heat readily. Walls and ceilings become hot because of solar heat,

and this reduces the cooling efficiency of air-conditioners.

We therefore use heat shield paint for ceilings and other parts of our ships, to prevent heat transfer. This

reduces the power needed for air-conditioners, which in turn means smaller CO2 emissions.

Reduction of Sailing Speed in Specific Waters

Green Flag awarded from the Port of Long Beach

As a measure for reducing the total amount of exhaust gas from ships, the port authority of the Port of

Long Beach is running a program encouraging ships to sail at 12 knots or less within 20 nautical miles

(approx. 37 kilometers) or 40 nautical miles (approx. 74 kilometers) of the harbor. We actively participate

in this program, achieving an extremely high rate of compliance every year. We were awarded the

"Green Flag" from the port authority for the fifth consecutive year in 2009.

Reduction of sailing speed at Ise Bay and Mikawa Bay

As a voluntary measure, we reduce the speed of our car carriers to 12 knots or less when passing in Ise

Bay and Mikawa Bay. This enabled us to reduce CO2 emissions by 659 tons in 2009.

Preventing Air Pollutions

Regulations on Sulfur Content in Fuel Oil (in Emission Control Areas)

Revision of the upper limit of sulfur content

The main component of heavy fuel oil used for ships is residues of crude oil, from which gasoline, kerosene,

and light oil have been taken. The sulfur content of the fuel varies from less than 1% to 4.5%, the upper limit.

However, the impact of sulfur content on the environment is substantial in some regions, and its upper limit

is 1.5% in the North Sea of Northern Europe and Baltic Sea. This will be further reduced to 0.1% in 2015.

Similar regulations will come into effect in 2012 within 200 nautical miles (approx. 370 kilometers) from the

coastlines of the United States, some of the Hawaiian Islands and Canada. We are making preparations for

the introduction of these regulations.

Measures for Preventing Marine Pollution

Measures for Preventing Oil Leakage

A fleet of double-hull tankers

Our tankers feature a double-hull structure, which prevents the leakage of cargo oil into the sea if the ship

is damaged in a collision, for example. Transportation by single-hull tankers will be prohibited in 2015 under

the . We also use the double structure for fuel tanks to reduce risks.

The MARPOL Convention is an international convention that sets out rules for preventing marine and air

pollution caused by ship operations, etc.

Using the Air Seal for the Stern Tube

We apply an air seal for the stern tube of our ships. An air seal is a device that continuously sends

compressed air into the space in the stern tube where the propeller shaft penetrates out of the ship.

This creates a sealed area inside the stern tube, which prevents leakage of lubricating oil and stops

seawater from getting into the ship.

Use of electric powered deck equipment

We now use electrically driven deck equipment such as winches and ramp ways, instead of hydraulic

powered equipment. This has eliminated the risk of hydraulic oil leaks.

Central Cooling System (Indirect Cooling System)

The Central Cooling System cools the engine coolant and lubricating oil indirectly by exchanging heat

with seawater via dedicated freshwater. Use of this system prevents leakages or spills of lubricating oil

into the sea, because seawater does not become contaminated with lubricating oil in this system. In the

event of the cooling system failure, leaked lubricating oil remains in the freshwater circuit only and

never contaminates seawater and is never discharged into the sea.

Installation of remote tank level gauge, tank level alarming system, and overflow pipes

Checking the tank level during bunkering is a highly important task. It is checked by crew members, who

measure ullage; i.e., the distance between the deck and surface of the oil in the tank. To prevent overflows,

we double-check the tank level continuously using a remote tank level gauge. We have also installed tank

level alarm systems, which issue an alarm when the surface of oil reaches a specific level. Even if the

surface of the oil rises, overflow pipes transport the oil to other tanks. We take these and other steps to

prevent spills of fuel oil into the sea.

Waste Treatment

We treat bilge and sludge properly

We separate the bilge (oily water) at the ship's bottom, such as the engine room, into water and oil using the

oily water separator. We burn the separated oil onboard by using the waste oil incinerator, while the water

is discharged into the sea in a clean state. We properly treat the sludge (impure substances in fuel and

lubricating oil which have been separated by purifier) either by burning it onboard in the waste oil incinerator

or discharging it onto shore facilities.

Preserving Biodiversity

Use of Anti-Fouling Paint for Ship Bottom

Promoting the use of environmentally friendly paints

The adherence of marine organisms to the surface of a ship increases fuel consumption and CO2 emissions,

since they increase the resistance of the ship's surface against seawater. The organisms are also introduced

into remote waters, which may affect local eco-systems. The use of paints containing tributyltin (TBT) is

a highly effective way to prevent the adherence of marine organisms. However, we pioneered the use of

tin-free paints, which do not contain TBT, since TBT was found to be harmful to eco-systems. We also

promote the use of non-toxic silicone paints and polymer paints. The use of ship bottom paints containing

TBT has been prohibited by Anti-Fouling System Convention since 2008.

Ballast Water Management Convention

Managing ballast water properly

Ballast water, which is used to retain the balance of the ship, contains marine life and may influence the

eco-system in the area where it is discharged. We minimize the influence by replacing ballast water in

ocean areas with less marine life, while ensuring the stability and safety of ships.

We are also studying ballast water treatment systems, installation of which will be mandatory after the Ballast

Water Management Convention comes into effect. Meanwhile, we are taking other steps to minimize the

impact on eco-systems, such as the introduction of large containerships that use the smallest possible

volume of ballast water and car carriers with fixed ballast made from concrete.

Resources Recycling

Ship Recycling (Demolition of Ships)

Recycling in accordance with the Ship Recycling Convention

The Ship Recycling Convention, adopted in May 2009, will make it mandatory to retain a list (inventory)

showing quantities of hazardous substances and their locations when a ship is dismantled.

The Convention will also set out rules for facilities for demolishing ships, so that occupational health and

safety and the environment will be considered in demolition of ships.

This Convention has yet to come into effect, but we have started to dismantle ships in accordance with the

rules in the Convention, by choosing facilities in consideration of the environment and occupational health

and safety.

The Muroran Project

Taking part in the establishment of a developed-country-type ship recycling system

Ships consist of very large quantities of iron and copper, and can be recycled at the end of their effective lives.

However, full safety considerations are needed when dismantling a ship, a very complex process. A pilot project

for establishing a safe, efficient, developed-country-type ship recycling system has been initiated by Japan's

Ministry of Land, Infrastructure, Transport and Tourism. This project involves a demonstration experiment in

ship demolition, being undertaken in Muroran, Hokkaido. The ship used in this experiment is the New York

Highway, a car carrier formerly operated by "K" Line.

Initiatives at Terminals

We strive to reduce our environmental footprint, including exhaust gas, noise, and drainage water from berthed

ships and terminal equipment, through the introduction and effective use of state-of-the-art equipment.

For Reducing CO2 Emissions

Introduction of Hybrid Cranes

Adopting energy-saving cargo-handling devices

"K" Line is installing eco-friendly, energy-saving hybrid at its self-managed terminals

in Tokyo and Yokohama. This crane reuses the energy generated when hoisted containers are set down,

by converting it into electricity. This halves fuel consumption and CO2 emissions compared with conventional

cranes. In addition, the improved engines of the cranes permit a significant reduction in noise.

A hybrid transfer crane

A transfer crane is a self-propelled crane used in a container terminal for moving containers.

Measures to Prevent Air Pollution

Adoption of Cold Ironing

Providing shore electricity power to ships at berth

We supply electricity from land to ships at berth at the container terminal of the Port of Long Beach in the

United States. Because all power used by the ships at berth is supplied from the land, exhaust gas is not

emitted from the ships' diesel generators. This helps improve the air conditions in the surrounding area.

Measures at the Port of Long Beach

ITS wins "Leadership at the Corporate Level" Award

International Transportation Service, Inc. (ITS), our wholly-owned U.S. subsidiary providing container terminal

operations, has been awarded the "Leadership at the Corporate Level," part of the San Pedro Bay Ports Clean

Air Action Plan Air Quality Award, issued by the Port of Los Angeles and Port of Long Beach. ITS earned high

marks from the port authorities for its environmental activities in its terminal operations at the Port of Long

Beach. The "Leadership at the Corporate Level" is granted to companies recognized as having contributed

significantly to the prevention of air pollution. It is the highest honor in the San Pedro Bay Ports Clean Air

Action Plan Air Quality Award.

President Kawamata of ITS making a speech on receiving the award

Measures for Preventing Water Pollution

Drainage Water Surveys at Terminals

Undertaking regular water surveys

We regularly have an inspection agency conduct surveys on the quality of drainage water from our terminals,

in addition to checking the quality visually on our own through daily observations.

This enables us to confirm that the drainage water is not affecting the environment around each terminal and

that its quality complies with the environmental standard in each region.

Initiatives at Offices

We take steps to reduce the environmental footprint of our offices, setting as our targets reduced resource

consumption and less waste. We are also pursuing initiatives to reduce CO2 emissions in our offices.

Offsetting CO2 with the Use of Renewable Energy

Promoting the purchase of renewable energy

"K" Line America, Inc. (KAM) has affirmed its environmental commitment by purchasing renewable energy

credits from Renewable Choice Energy since 2008, to offset office electricity consumption. After offsetting

60% of office electricity in 2008 and 80% in 2009, KAM expanded its environmental commitment to a 100%

offset level for 2010. Renewable Choice Energy will indirectly offset 100% of KAM's nationwide office

electricity usage for 2010 with clean wind energy and will help avoid nearly 1.5 million pounds (approx. 702

tons) of CO2 from entering the Earth's atmosphere.

This commitment is similar to:

• Planting 6,366 mature trees

• Not driving approx. 1.5 million miles (approx. 2.4 million kilometers) annually

• Taking 123 cars off the road for one year

Green Power Partner mark entitled by the EPA      Renewable Energy certificate

This renewal also allowed KAM to remain a U.S. Environmental Protection Agency (EPA) Green Power Partner.

With this purchase of renewable energy credits, KAM remains committed to reducing our dependency on fossil

fuels, promoting cleaner air, and fighting climate change.

Measures for Conserving Resources

Paperless recording of reefer container temperature control

Temperature control of reefer containers is a critical task. The temperature within a container is recorded

continually during transportation, and the record is important evidence of the temperature control undertaken.

Traditionally, a sheet of paper for recording the temperature would be attached to each container and then

removed and stored after transportation. In 2009, we switched to a system for downloading electronic data

from temperature controllers and abolished the use of recording paper. This saves us about 100,000 sheets

of paper each year.

Reduction and Recycling of Waste

Endeavoring to reuse waste

We separate waste generated at offices and reuse it as much as possible. When we dispose of waste, we

consider ways to recycle it in an effort to minimize volumes.

Green Procurement

Promoting the procurement of eco-friendly goods

For office products, we use an ordering system that gives priority to products in compliance with the Act

on Promoting Green Purchasing and Eco Mark-certified products.

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