Greenhouse Gas Emissions Reporting in China

In 2008, Ford became the first automaker to release a greenhouse gas emissions report in China. The report covers the Chongqing facility operated by Ford's joint venture in China – the Changan Ford Mazda Automobile Co., Ltd. (CFMA). The CFMA's innovative GHG monitoring and reporting activities demonstrate the Company's commitment to the overall sustainability of its manufacturing operations in China.

Our first GHG report for the Chongqing facility was submitted to China's State Environmental Protection Administration in April 2008. This report will be updated annually and will be publicly available.

The GHG report was developed using internationally accepted GHG emissions reporting standards developed by the World Resources Institute (WRI) and World Business Council for Sustainable Development (WBCSD). The CFMA developed the report using their best-in-class energy monitoring system and the recently implemented Global Emissions Manager, a database used throughout Ford's global operations. This database can be used to calculate carbon dioxide emissions and create customized emissions reports.

The Chongqing report measures both direct and indirect GHG emissions from the use of natural gas, gasoline and electricity. Direct and indirect emissions are measured based on the WRI/WBCSD protocol. It includes data on energy intensity (i.e., tons of CO2 per vehicle built) as well as total emissions. Emissions intensity is an important measurement because it allows us to track how efficiently we are using energy to make each vehicle. In 2007, we reduced our energy intensity by 34 percent compared to 2005 baseline and by 22 percent compared to 2006. This shows that the Chongqing CFMA facility is operating more efficiently and emitting lower emissions per vehicle produced than previously. In 2007, the total CO2 emissions at this facility increased by 50 percent compared to 2005. However, this emissions increase was considerably lower than the 123 percent increase in production experienced over the same time period.

The Chongqing facility has implemented a range of energy-saving measures to continue to decrease energy intensity and total emissions. For example, the facility has installed:

• New power conditioning equipment in the welding and painting processes, resulting in annual electricity use reductions of 1 percent (approximately 288,000 kWh) in the welding process and a 1 percent (approximately 345,000 kWh) in the painting process
• Humidification control in the paint shop, which allows humidity (an important factor for paint quality) to remain constant throughout the year while varying the temperature (lower during winter and higher during summer). This system reduces the energy required for winter heating and summer air conditioning
• Heating and air conditioning controls that provide constant temperatures throughout the facility
• Automatic roll-up doors at each production station that reduce the amount of heat and air-conditioning losses to the outside
• Automated lighting controls throughout the facility – including on the street and in parking lots and workshops – which help ensure that lights are off when they are not needed

Ford's CFMA Chongqing facility is realizing a range of benefits from GHG reporting. First, the process of monitoring both overall GHG emissions and emissions per production unit helps the CFMA gain a better understanding of its environmental footprint. In addition, by accurately measuring energy consumption, we can raise awareness and direct our efforts to improve energy efficiency and reduce CO2 emissions. This proactive approach will make the Company less dependent on critical energy resources, will minimize environmental impacts of manufacturing operations and will reduce the Company's operating costs.

The CFMA's Chongqing GHG report adds another element to Ford's leadership in GHG emissions tracking, reporting and reduction activities. Ford is undertaking similar initiatives at our facilities in Australia, Canada, Mexico, the U.S. and Europe.