Environmental protection is a key part of our company's commitment to society. In strict conformity with environmental laws and regulations, we actively promote clean operations and do everything we can to build an environmentally friendly company that operates in harmony with the environment.

We have adopted the ISO14001 Environmental Management System to continuously improve our environmental management performance. By the end of 2007, CNPC's 216 affiliates had received ISO14001 certification. We issued environmental management rules and plans, including Management of Environmental Monitoring, Statistical Environmental Management and the Plan for Establishing an Online Pollution Source Monitoring System. These plans were aimed to ensure that affiliates maintain an effective environmental management system, a pollution-reduction indicator system, a monitoring system and an evaluation system.

Environmental factor identification and selection programs have been carried out across the whole group, and the Technical Guidelines for the Identification and Selection of Environmental Factors were issued and environmental management plans and emergency plans were compiled to control and monitor hidden hazards and handle emergencies. In addition, we established an environmental protection fulfillment accountability system and included environmental protection indices, e.g. pollution control and rate of standard discharge, into the comprehensive performance assessment for enterprise management and operation. An annual environmental protection index system was established to ensure the effective monitoring of total pollutant discharge, and responsible persons were identified at each level to control standard pollutant discharges and handle emergencies.

In terms of ensuring clean operations, we attach great importance to on-site environmental protection. We launched a "green operation" demonstration activity and a clean production technology innovation program. In addition, a series of new technologies and new equipment were developed, including clean operation in well drilling, ecological protection during pipeline construction, recycling of refinery sewage and the reduction of greenhouse gas emissions.

We have adopted a strict environmental impact assessment for all construction projects and carried out the "Three-tier HSE Management" system to ensure that environmental protection facilities and major engineering projects are designed, constructed and completed simultaneously. In 2007, We inspected the implementation of three-level prevention and control practices in terms of drinking water source protection, operation and engineering in environmentally sensitive areas, and refining and chemical plants. Building on successes in 2006, we completed 13 emergency prevention and control projects at four affiliates, and the objective of the three-level prevention and control program was basically achieved.

A total of 2,780 plans for clean operation were carried out in the year. Environmental protection measures were further improved and new technologies promoting environmental protection were popularized. As a result, no major incident of environmental pollution or damage occurred in 2007. And in the context of the sustainable growth of oil and gas output, crude runs and chemical products output, discharges of COD and oil-based pollutants fell 4.4% and 13.2% respectively. Although emissions of sulfur dioxide increased 0.77% over the past year, the rate of growth sharply decreased.

Dealing Positively with Climate Change

CNPC has always attached great importance to the control and reduction of greenhouse gas emissions. We actively support China's National Climate Change Program and shall continue to take effective measures to reduce emissions, sequestrate carbon dioxide and tackle global climate change.

  Jointly initiate and establish the China Green Carbon Fund

On July 20, 2007, CNPC jointly initiated and established the Green Carbon Fund with the State Forestry Administration and China Green Foundation. It is a special national public fund managed by CGF aiming at providing a platform for businesses, organizations and individuals to participate in voluntary activities such as tree planting and forest protection. The fund was launched on the basis of a RMB 300 million donation by CNPC. All money collected shall be used to carry out forestry carbon sink activity. It is estimated that the fund can help absorb and fix 5-10 million metric tons of carbon dioxide over the next 10 years.

  Cooperatively develop forestry biomass energy

In Jan. 2007, CNPC signed a biomass energy framework agreement with SFA and decided to jointly build 68,000 hectares of raw material exemplary bases for biodiesel production in seven provinces and autonomous regions. Following that, we signed strategic cooperation framework agreements or memorandums with seven provinces and municipalities on developing biomass energy. By the end of 2007, CNPC had launched the construction of the first batch of forest biomass energy bases in seven provinces, municipalities and autonomous regions including Yunnan and Sichuan provinces. After their completion, these bases can provide 100,000 metric tons of raw materials for biomass energy annually.