The Juhua CDM (Clean Development Mechanism) business of JMD Greenhouse Gas Reduction Co., Ltd. (hereafter: JMD) has been officially sanctioned and registered by the United Nations (UN)'s CDM Executive Board on March 3, 2006, following government approval received from the investor country, Japan (on November 11, 2005), and from the host country, China (on December 12, 2005.)

The aim of the Juhua CDM business is to recover and dissolve greenhouse gas, an equivalent of 40 million tons of CO2 and among the world's largest volumes. Juhua CDM is China's first large-scale CDM enterprise operating with the approval of the UN's CDM Executive Board.

The Juhua CDM business is to be operated by JMD, which was established by JGC, Marubeni Corporation and Daioh Construction, with JGC in a leadership role. JMD will participate in the recovery and dissolution of the global-warming gas HFC23, emitted by Zhejiang Juhua's HFC (hydro fluorocarbon) production plant in Chuchou City, Zhejiang Province, China. Through the operation, JMD will earn emission rights credits.

After being approved by the governments of Japan and China, and having undergone a CDM project validation examination by the UN's CDM Executive Board's designated operational entity (DOE), JMD and Zhejiang Juhua submitted on January 4, 2006 an application to the Board for approval and registration of the CDM business.

Registration with the Board is the final hurdle in the CDM business approval process subsequent to receiving government approval in the host and investment countries, along with the validation examination. Upon final approval, all requirements needed to operate the business will have been obtained from respective governments and the UN.

Moving onward, JMD will construct HFC cracking units in Zhejiang Juhua's HFC production plant. A ground-breaking ceremony at the site is scheduled for March 10, 2006. Through operation of the units, JMD will earn CER (Certified Emission Reduction) credits, a type of emission rights credit, for 7 years beginning in 2007 and running through 2013.

This business will enable JMD to contribute toward achieving Japan's greenhouse gas reduction commitment as set forth in the Kyoto protocol.