Fiscal 2007
The Cosmo Oil Group began environmental accounting in fiscal 2000, and the practice is now in its eighth year.
In order to create an environmental accounting, we reference the Ministry of Environment's "Environmental Accounting Guidelines (2005 Edition)" and "Environmental Conservation Cost Categories Guideline 2003 Edition," and tabulated environmental conservation costs and environmental conservation benefits. In addition, in tabulating the environmental conservation costs, all accounting items in the financial accounts were covered, the same as in the past. The following characteristics must be taken into consideration when considering the environment in relation to the petroleum industry:
1. In order to control the substances with environmental impact generated when products are used (at the time of combustion) by the customer, an enormous cost must be incurred (refer to upstream/downstream costs).
2. Since petroleum products from Middle Eastern crude oil are high in sulfur content, a tremendous amount of investment has been made for many years in terms of environmental conservation (refer to year-end acquisition costs).
In order to make it possible to ascertain these characteristics in value terms, we created "upstream/downstream costs" accounting items in the environmental conservation costs. Furthermore, in order to make it easier to understand the aggregate cost in the past, we also tabulated "year-end acquisition costs."
Period and Boundary
Calculation Period:
Fiscal 2007 (from April 1, 2007 to March 31, 2008)
Boundary of Calculation:
Four refineries owned by Cosmo Oil, Yokkaichi Kasumi Power Station, Head Office, branch offices, R&D center, Cosmo Matsuyama Oil Co., Ltd. and Cosmo Oil Lubricants Co., Ltd. For affiliates, only those costs and benefits which are closely related to our refineries are identified and compiled.
| Company | Site | Remarks |
|---|---|---|
| Cosmo Oil Co., Ltd. | Chiba Refinery | Calculated all data at the site |
| Yokkaichi Refinery | Calculated all data at the site | |
| Sakai Refinery | Calculated all data at the site | |
| Sakaide Refinery | Calculated all data at the site | |
| Yokkaichi Kasumi PS |
Calculated all data at the site | |
| Head Office Branch offices |
Environment-related donations, sustainabilty report production costs and electricity bills | |
| Costs of recycled paper, environmental remediation costs | ||
| R&D Center | Only environmental conservation costs and benefits of R&D | |
| Cosmo Matsuyama Oil Co., Ltd. | Costs for environmental impacts of products, etc. | |
| Cosmo Oil Lubricants Co., Ltd. | Chiba Plant | Green purchase costs of lubricant raw materials (other than those which are included in the figures of Cosmo Oil Chiba and Yokkaichi refineries) |
| Yokkaichi Plant | ||
Changes from the Previous Year
There is no particular change compared with the previous year for environmental accounting.
Methods of Compiling Environmental Costs
Investments/Expenses Difference: Fiscal 2007 - 2006
Investments---Capital investment for depreciable assets acquired for the purpose of environmental conservation.
Expenses---Expenses during the period associated with environmental activities (including depreciation)
1. Business Area Costs
Pollution Prevention
- Air pollution prevention costs (Sulfur recovery units, nitrogen oxide control units, etc.)
- Water pollution prevention costs (Wastewater treatment equipment, sour water treatment equipment, etc.)
- Soil contamination prevention costs (Soil contamination investigation costs, etc.)
- Levies under the Law concerning pollution-related health damage compensation and other measures
- Costs associated with establishment of energy conservation equipment such as cogeneration facilities
Resource Circulation
- Costs associated with waste treatment and recycling
2. Upstream and Downstream Costs
Green Purchasing
- Costs associated with the financial difference in purchasing environmentally friendly products instead of regular products
Reducing Sulfur Content of Products
- Costs associated with reducing sulfur content in products to reduce sulfur oxides emitted when products are in use
Replacement of Toxic Substances in Gasoline
- Costs associated with reduction and refinery of toxic substances in gasoline such as benzene and lead
Reduction of Aromatic Substances of Petrochemical Products
- Costs associated with removal of aromatics and olefins from raw materials used in petrochemical products
3. Administration Costs
Costs associated with environmental education for employee, management and maintenance of the environmental management system, plant maintenance and afforestation of offices and monitoring and assessment of environmental impacts
4. Research and Development Costs
Costs associated with environment R&D activities
5. Social Activity Costs
Costs associated with non-business activities, such as afforestation
6. Environmental Remediation Costs
Costs associated with soil decontamination at service stations
Methods of Compiling Environmental Benefits
Reduction: Amount of fiscal 2006 - Amount of fiscal 2007
1. Benefits Corresponding to Business Area Costs
Concentration/Unit Values
- Environmental impact per crude oil equivalent throughput
Environmental Impact
- Environmental impact originated from business areas
Note: Yokkaichi Kasumi Power Station and Cosmo Matsuyama Oil Co., Ltd. are excluded from the concentration/unit values calculation, as crude-based processing volume estimation is impossible with these facilities where crude process is not carried out.
2. Benefits Related to Upstream and Downstream Costs
Benefits of reducing environmental impacts of products
Concentration/Unit Values
- Reducing sulfur content of products: sulfur content in products
- >Replacement of toxic substances in gasoline (low-benzene gasoline): benzene concentration in gasoline
-
CO2 emissions from product use: value obtained by dividing the environmental impact (see below) by the output of petroleum products Environmental Impact- Potential environmental impact: Potential environmental impact expected to occur from product use
- Reducing sulfur content of products: amount of potential SOx emissions obtained by multiplying the average sulfur content of products by production volume
- Replacement of toxic substances in gasoline (low-benzene gasoline): value obtained by multiplying average benzene concentration of gasoline by production volume
- Reduction of aromatics in petrochemical products: volume of aromatics in petrochemical products eliminated in business areas
- CO2 emissions from products use:value obtained by multiplying per unit CO2 emissions of each product by production volume
We do not take into account the desulfurization of flue gas at our customers' sites: therefore the actual SOx emissions are lower than the potential SOx emissions.As we select the optimum production method based on the relationship between cost and environmental conservation, the sulfur content value in each product is lower than the JIS specification.Naphtha is used as petrochemical raw material and fertilizer raw material and does not emit SOx or CO2; however it is included in the value.In relation to CO2 emissions, we calculate the data by the method recommended by "Guidelines for accounting for greenhouse gas emissions from the industry" issued from Ministry of Environment and Ministry of Economy, Trade and Industry.We calculated the difference of reduction benefits of environmental impacts between fiscal 2006 and 2007 without rounding off the raw data. So as a total, the last figure may differ by one. The same method is applied for the site data.Methods of Compiling Economic Benefits
Energy Conservation (cogeneration)Conservation by cogeneration = Conservation by steam generation + conservation in electricity - fuel costs (LPG, heavy fuel oil, etc.)
Catalyst RecyclingPurchase cost of new catalysts saved by recycled catalysts in oil refining, plus disposal costs of waste catalysts
Gypsum SalesSales proceeds of gypsum, a by-product of fuel-gas desulfurization at Yokkaichi Kasumi Power Station
Ammonia RecyclingPurchase price of ammonia saved by recycled ammonia at Yokkaichi Kasumi Power Station, plus disposal costs of waste alkali
R&D (royalties)Income received for royalties, and cost conservations realized through R&D activities
Electricity Expenses (Head Office)Year-on-year difference in electricity expenses at the Head Office between fiscal 2006 - 2007
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