The Company's power plants will emit pollutants, waste water and residuals during the production process. In terms of environmental protection or pollution control, each power plant is committed to implementing the following Company policies:

1. Various policies to control the amount of fly ash and sulfur dioxide emission have been adopted, such as utilizing high-efficiency electrostatic precipitator to reduce the amount of fly ash emission and using coal of low sulfur content to reduce the amount of sulfur dioxide emission.
2. Every power plant has waste water treatment facilities for treating waste water coming out from the operating units before it goes into the river or sea.
3. A large portion of ashes, a residual of coal burning, is used in manufacturing the by-products of bricks and other multi-purpose construction materials, with the remainder being transported to designated ash depots.
4. The Company has set up an Environmental Protection Leader Group, which leads the Environmental Protection Offices or designated professionals of respective power plants to monitor the operation of each plant's environmental protection policies and facilities.

   The Company has contributed to local governments total sums of "emission charges" of RMB 8.80 Millions,RMB 8.40 Millions and RMB 9.70 Millions in 1998,1999 and 2000 respectively.