To effectively carry out environmental conservation initiatives, the Cosmo Oil Group initiated environmental accounting in fiscal 2000 to ascertain environmental conservation costs and benefits, as well as economic effects.

Boundary of Coverage

The boundary of environmental accounting covers Cosmo Oil's four refineries, the Yokkaichi Kasumi Power Station, the Head Office and branch offices, the Research & Development Center, Cosmo Matsuyama Oil Co., Ltd. (affiliate), and Cosmo Oil Lubricants Co., Ltd. (affiliate).

Summary

Environmental conservation costs in fiscal 2007 consisted mainly of business area costs as well as upstream/downstream costs. During the fiscal year, expenses amounted to ¥94.9 billion and investments totaled ¥2.8 billion. The economic benefits totaled ¥1.0 billion. As a result of environmental investments over the long term, the Company's aggregate acquisition costs as of the end of fiscal 2007 reached ¥176.9 billion.