Energy Saving and Carbon Reduction Targets in the 13th Five-Year Plan

To respond to the national energy conservation and emission reduction target during the 13th Five-Year Plan period of "national energy consumption per ten-thousand CNY of GDP by 2020 shall be reduced by 15% compared with 2015", our company hereby sets the "13th Five-Year Energy Conservation and Carbon Reduction Targets". All departments of our company shall implement various works according to the target plan, aiming at improving energy utilization efficiency and ecological environment quality, adhere to the policies of government-led, enterprise-dominated, market-driven, and social participation. We will accelerate the construction of resource-conserving and environment-friendly enterprise.

Plan Objectives:
1.By 2020, energy consumed per ton will be reduced by 15% compared with 697kGCE /t in 2015.
2.By 2020, carbon emissions per ton (including the emissions from fossil fuel combustion and net purchased electricity and heat) will be reduced by 15% from 1.75t/t in 2015.

Implementation Plan:
1.Optimize the industrial and energy structure, accelerate industrial transformation and upgrading, and reduce the proportion of coal consumption
2.Strengthen energy conservation in key energy-consuming processes to improve the energy efficiency of enterprises. 
3.Strengthen carbon emission management, focusing on carbon emission in the internal production process of the enterprise.

SHENGHUA GROUP DEQING HUAYUAN PIGMENT CO. LTD.
May 20, 2016