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Sustainable development and environmental precaution

The acceptance of social responsibility has special significance and a long tradition at Heidelberg- Cement. In May 2005, for the first time, we published a Group Sustainability Report which pro- vides an overview of our activities and of the way in which we accept our social responsibility. The report covers the economic, ecological and social aspects and provides information about our goals.

 Good partnerships

HeidelbergCement is a member of the World Business Council for Sustainable Development (WBCSD) and is committed to sustainable cement production. For this reason, we have drawn up guidelines at an international level, together with other cement companies, for the areas of climate protection, raw materials and fuels, occupational health and safety, emissions and the impact on the environment at production locations. They were published by the “Cement Sustainability Initiative” in June 2005 and are currently being implemented at the companies involved. This includes, for instance, collecting key figures, which we will publish regularly from the end of 2006. Within the Group, we use these key figures to identify possibilities for improve- ment, to direct measures and to monitor the achievement of goals.

 Greenhouse gas emissions

The Kyoto Protocol, which sets binding upper limits for greenhouse gas emissions for the first time, came into force on 16 February 2005. The focal point for the cement industry is the reduction of carbon dioxide (CO2) emissions. HeidelbergCement has made a commitment to reduce by 2010

its specific net CO2emissions by 15 % compared with 1990.

In the reporting year, we were able to reduce gross CO2emissions by 0.9 million tonnes com-

pared with 2004. Specific gross CO2emissions decreased from 721 kg CO2/tonne of cement in

2004 to 708 kg CO2/tonne of cement in 2005. Specific net emissions dropped from 691 kg

CO2/tonne of cement to 677 kg CO2/tonne of cement. HeidelbergCement is clearly well on the

way to fulfilling its voluntary commitment.

Our Clean Development Mechanism project in Indonesia, which intends to reduce CO2emis-

sions by introducing low-clinker cement types and using alternative fuels, has cleared another hurdle. The Executive Board of the United Nations authorised the methods we proposed for de- termining the emissions. In the Ukraine, we are planning another project to reduce greenhouse gases, which is based on the flexible mechanisms of the Kyoto Protocol, known as a Joint Im- plementation project. With both these projects, we are taking a pioneering role in introducing measures to reduce CO2in developing and transition countries.

 Lower environmental pollution

Our aim is to continuously reduce all emissions. To achieve this, on the one hand, we are optimis- ing production processes, e.g. in Citeureup/Indonesia, where we are reducing the specific energy consumption of the kiln line and the emissions associated with it thanks to extensive modernisa- tions. On the other hand, we are investing in post-production environmental protection, i.e. in exhaust gas purification facilities. We have replaced old kiln filters with new ones in the Vác plant

40 in Hungary, the Fieni plant in Romania and the Burglengenfeld plant in Germany. The kiln in the

Cesla plant in Russia was equipped with a bag filter for the first time. In order to increase the dedusting level of existing electrostatic precipitators we have improved the exhaust gas cleaning in Ketton/United Kingdom, Vác/Hungary and Çanakkale/Turkey.

To reduce NOXemissions, SNCR systems have been installed in Beremend/Hungary, Ketton/

United Kingdom, Mason City/US and Wetzlar/Germany. In Mason City, we have also put a wet scrubber into operation in order to reduce SO2emissions. The latest environmental protection

technology was also deployed in the new plant constructed in Guangzhou/China and in the new kiln line in the Padeswood plant/United Kingdom.

 Focus on preserving resources

Thanks to the increasing use of substitute raw materials and alternative fuels, we are both pre- serving natural resources and strengthening our competitiveness. The Büyükçekmece plant was one of the first Turkish cement plants to successfully deploy used tyres in continuous operation. The Turkish Çanakkale plant has started using waste oil and oil sludge. In Sokoto/Nigeria, we have increased the proportion of alternative fuels by using rice husks and cotton hulls. The Hungarian Beremend plant increased its proportion of alternative fuels, in particular by increasing the use of animal meal. In the American Mason City and Union Bridge plants, the use of biomass was a central focus of activity in 2005. In Mason City, around half of the thermal energy is created from discarded corn. In Germany, HeidelbergCement has already achieved a substitution level of almost 50 %.

In total, we were able to replace 17 % of fossil fuels with alternative fuels in 2005. This corre- sponds to an absolute increase of three percentage points compared with the previous year.

 Environmental management

As planned, we have pressed ahead with the introduction of environmental management systems. During the past year, they were successfully introduced in the plants in Katowice/Poland, Glens Falls/US and in Bangladesh. Over 83 % of the cement we produce is now manufactured in plants with environmental management systems. For clinker production, the proportion is almost 90 %. We have prepared or planned the introduction of these systems in other plants.

Net CO2emissions: all direct emissions less the savings that are achieved through the use of alternative fuels and which are assessed to be CO2

neutral. Gross CO2emissions: all direct emissions including those arising from the use of alternative fuels.

90 47 .3 46.8 00 43.8 42.5 03 40.8 39.3 04 43.2 41.4 05 42.3 40.5 gross net 90 792 783 00 754 732 03 721 695 04 721 691 05 708 677 gross net

Absolute gross and net CO2emissions million tonnes CO2

Specific gross and net CO2emissions kg CO2/tonne cement

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Occupational health and safety

Accident frequency rate1) Accident severity indicator2) Fatality rate3) 11.9 169 2.0 8.1 167 2.4 2004 10.5 281 1.1 2003 2005

1)Number of accidents (with at least one lost working day) suffered by Group employees per 1,000,000 working hours 2)Number of lost working days resulting from accidents suffered by Group employees per 1,000,000 working hours. 3)Number of fatalities of Group employees per 10,000 Group employees

 Natura 2000

In 2005, we were once again intensively involved with Natura 2000, the European protected area network. In many cases, the processing of nature conservation data has contributed to clarifying difficult local circumstances. At locations where quarrying areas overlie Natura 2000 areas, the processes are supported by expert groups; external scientists are also involved in this.

 Occupational health and safety

We continuously improve our high standard in occupational safety further by means of training and technical measures. Many plants have developed management systems for occupational health and safety. Since 2003, we have collected uniform occupational safety data across the Group for the cement business line. The table below shows that we are still recording too many accidents, unfortunately including some fatalities. In order to tackle this problem, we have established an expert group at Group level comprising members from all regions. The focal areas are the ex- change of expertise concerning accidents, measures to prevent accidents and the information about best practice examples. Occupational health and safety guidelines, applicable across the Group, are also being compiled.