Sumitomo Chemical Participates in the World Bank “BioCarbon Fund”
Sumitomo Chemical announced today its contribution of US$2.5 million, by 2017, to theBioCarbon Fund, an initiative launched by the World Bank. With this contribution,
Sumitomo Chemical can expect to acquire 400,000 Carbon Credits (*1) over the periodof the next thirteen years through 2017.
The World Bank founded the BioCarbon Fund in May 2004, a mechanism that enables
its participants to obtain Carbon Credits in return for investment in projects such as
the use of biofuel, afforestation and forestry management.

The Fund utilizes two ofthe platforms available under the Kyoto Mechanisms (*2) of the Kyoto Protocol; theClean Development Mechanism (CDM)(*3) and Joint Implementation (JI)(*4).
Sumitomo Chemical’s decision to contribute to the Fund was prompted not only for theacquisition of Carbon Credits, but also to broaden the company’s environmental andsocietal contributions, through the Fund’s projects, such as preserving the naturalenvironment, bettering the livelihood in developing countries, etc.
Sumitomo Chemical places one of its top management priorities on the contribution to
the sustainable development of society by providing environmentally friendly andeconomical products through innovations in chemical technology.

Among other things,

Sumitomo Chemical is striving to reduce its carbon dioxide emissions, as part of its
environmental preservation activities, by promoting thoroughgoing thermal recovery
and utilization and vigorous measures to attain energy saving within respective
manufacturing complexes, and developing innovative production processes thatgenerate no undesired by-products by the use of its proprietary high performance
catalysts.
Sumitomo Chemical will continue to actively work on various measures, while fullyutilizing the Kyoto Mechanisms, towards its ultimate aim of preventing globalwarming,.

1*1 Carbon Credits
Carbon Credits are awarded upon implementation of a project to reduce greenhouse gasemissions. The amount of emission reductions or absorption increments resulting fromthe project is converted to credits that can be used to meet emission reduction targets.
*2 Kyoto Mechanisms
Mechanisms enacted by the Kyoto Protocol that will permit flexible implementation of
the reduction targets for greenhouse gases.

In an energy efficient country such as

Japan, the volume of emission reduction that can be achieved domestically is limited.
Therefore, such a country can make investments to reduce emissions in other countries
and earn credits, which are computed in whole or in part on the basis of the resultant
emission reductions and are designated as its own country’s credits.
*3 Clean Development Mechanism (CDM)
The Clean Development Mechanism is one of the Kyoto mechanisms under the Kyoto
protocol whereby a developed country financially assists a developing country to
implement projects that reduce greenhouse gas emissions.

Carbon Credits accrued

from the project, computed on the basis of the resultant emission reductions orabsorption increments, are allocated among individual participants in the project.
*4 Joint Implementation (JI)
One of the Kyoto mechanisms provided by the Kyoto Protocol whereby developed
countries jointly undertake a project to reduce gas emissions in each country. Carbon
Credits accrued from the project, as computed on the basis of the resultant emission
reductions or absorption increments are allocated among individual participants in theproject.

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