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the whole vehicle—not to mention better engine functioning.

Heavy Vehicle Fuel Consumption Standard

The R&D activities of Nissan Diesel are guided by the principle of “developing envi- ronmentally responsible products.” In the fall of 2004, we started sales of Quon trucks in our major model lines. In June 2005, we had completed the full Quon line- up. About 10,000 of these trucks are now in use. Quon can even meet the new Long-Term Diesel Emissions Regulation, one of the highest standards in the world.

Then, we improved combustion efficiency to achieve both outstanding fuel efficiency and clean exhaust. The lower fuel consumption equates to an annual reduction of more than 60,000 tons of carbon dioxide emissions (comparison with conventional trucks based on driving 100,000km annually).

Exhaust emission regulations are certain to become even stricter (the “post-new long-term regulations”). We will also consider fuel consumption standards for heavy vehicles incorporated in long-term environmental plans. This is why we are now at work developing technologies for vehicles that can become the global standard for the next generation of environmental protection.

We use the “3R (reduce, reuse, recycle)” design system in our development activi- ties. For components, we use materials that can be recycled and structures that can be easily taken apart. For example, we are studying ways to recycle bumper materi- als to make polypropylene products. We are making steady progress in reducing and eliminating the use of environmental impacting substances. In addition, we are taking steps to reduce VOC use in vehicle interiors to comply with new regulations.

As one of the world’s leading manufacturers of trucks and buses, Nissan Diesel will continue to seek ways to prevent global warming and other environmental problems while developing products that meet its customers’ expectations.

A number of Nissan Diesel models now incorporate FLENDS (Final Low Emission New Diesel System), the world’s first urea selective catalytic reduction (SCR) system for cleaning vehicle exhaust gases. The system is used in most models of the Quon GK series of heavy-duty truck tractors, SPACEARROW large intercity highway buses/tourist buses and most models of SPACERUNNER route and private-use buses. With FLENDS, these vehicles comply not only with the new Long-Term Diesel Emissions Regulation, but also with Japan’s fuel consumption standard for heavy vehicles, the first of its kind in the world.

The result of an amendment of Japan’s Law Concerning the Rational Use of Energy, the heavy vehicle fuel consumption stan- dard was enacted in April 2006. This standard applies to diesel- powered cargo vehicles with a gross weight of at least 3.5 tons and passenger vehicles with a capacity of 11 or more people.

The target for compliance with the standard is fiscal 2015. At that time, bus and truck manufacturers are to achieve fuel con- sumption levels prescribed for each vehicle weight class.

Furthermore, product catalogs must display fuel consumption data for all newly introduced vehicles beginning in April 2006.

Nissan Diesel is working vigorously to reduce carbon dioxide emissions, which are one cause of global warming, by further improving the fuel economy of its vehicles. The Company plans to steadily release vehicles fitted with the FLENDS urea SCR sys- tem that comply with Japan’s fuel consumption standard for heavy vehicles.

Type of vehicle Current fuel Target fuel

consumption consumption (in catalog)

Quon GK heavy-duty truck tractor 3.10km/l 3.09km/l SPACEARROW

large intercity highway bus/tourist bus 3.65km/l 3.57km/l SPACERUNNER route bus 4.25km/l 4.23km/l SPACERUNNER private-use bus 4.20km/l 4.06km/l

Progress Report on Compliance with Heavy Vehicle Fuel Consumption Standard

Tetsuji Nabeshima,

Executive Officer,

Environmental Subcommittee for R&D Department

Vehicles complying with the heavy vehicle fuel consumption standard can display this sticker.

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For increased fuel efficiency: Create a highly efficient engine that will run at low engine speed

Engine with good fuel efficiency

Engine with a large torque

Run the engine at an engine speed that will give fuel efficiency

Featuring a 12-speed transmission Reduce the gear ratio

of the drive system to reduce the engine speed

Choose the best gear for the specific driving conditions

Multi-stage transmission Improved shift operation

Featuring ESCOT Development of the GE13 engine

Optimum fuel injection with a unit injector

How New Technologies at Nissan Diesel Protect the Environment

Nissan Diesel places high priority on fuel efficiency as a means of protecting the environment. Vehicles that burn less fuel produce less carbon dioxide, thus helping to prevent global warming.

Our basic stance is to improve fuel consumption by combining efficient engines with multi-gear transmissions. This makes it possible to power vehicles by operating efficient engines at low speeds. Going farther, we view the entire vehicle as a means to improve fuel consumption. We reduce resistance within engines,

design aerodynamic cabs and bodies, use lightweight chassis and other parts, and take many other actions.

Small, medium and large Nissan Diesel vehicles all use clean and economical engines. In addition, some models (powered by the GE13 engine) are equipped with the ESCOT-ATIV, a 12- speed automatic transmission that maximizes engine perfor- mance. This transmission makes vehicles easy to operate while holding down fuel consumption.

GE13 engineUnit injector ESCOT-ATIV

Nissan Diesel regards the development of vehicles that use alter- native energy sources as an important means of protecting the environment and conserving resources. Projects include vehicles powered by compressed natural gas (CNG) and dimethyl ether (DME), as well as a hybrid vehicle that uses a capacitor to store electricity. All hold the promise of eliminating the need for diesel fuel, improving fuel efficiency and cutting emissions.

Development of Clean Energy Vehicles

The Nissan Diesel Approach to Improving Fuel Consumption

Comparison of Pollution Levels between Medium-Duty CNG Trucks and Diesel Vehicles

NOx (JE05 mode)

Indoor Noise (at a constant speed

of 40 km/h) Black Exhaust

(PM)

Note: Comparison was made by setting the new Long-Term Diesel Emissions Regulation for diesel vehicles at 100%.

Diesel

CNG

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Capacitor Hybrid Trucks

Nissan Diesel was first in the world in 2002 to develop a practical capacitor hybrid vehicle. This accomplishment was made possi- ble by the Company’s Super Power Capacitor, a high-perfor- mance electric double layer capacitor for power storage that uses exclusive Nissan Diesel technology. The vehicle is a big step toward the supply of next-generation vehicles that have a minimal environmental impact and conserve energy resources.

To improve fuel consumption and air pollutants, this hybrid system with the Super Power Capacitor can regenerate a large volume of braking energy with a high efficiency. The technology is used in the medium-duty Condor series of trucks with the par- allel system of diesel engine to create the capacitor hybrid truck (diesel), which has been sold since 2002.

CNG buses

Large non-step buses, large one-step buses, large buses for private use, medium-sized non-step buses, medium-sized one-step buses and medium-sized buses for private use

CNG trucks

Aluminum vans, winged trucks, freezer trucks, refrigerator trucks, flatbed trucks, garbage trucks, container trucks, service vehicles, etc.

Heavy-duty trucks (5 tons, 7 tons, 10 tons, 12 tons and 15 tons);

Medium-duty trucks (4 tons); Light-duty trucks (2 tons and 3 tons)

CNG vehicles

Fuel efficiency CO2

Note: Compared with conventional vehicles

Conventional vehicles

Capacitor hybrid vehicles

50%

improvement (km/l)

–33%

Features of the Capacitor Hybrid Truck

First gearbox

Electronically controlled transmission

Super Power Capacitor

Fuel tank Inverter Cooling unit Second gearbox Brake unit

Diesel engine

its Condor CNG trucks. These trucks feature stoichiometric

Condor CNG medium-duty truck

Consequently, these trucks can even meet the standards of the post-new long-term regulations.

Currently, we use CNG buses for employees and visitors at Company facilities.

CNG heavy-duty truck CNG large bus

Capacitor hybrid truck

CNG bus

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R&D Involving Dimethyl Ether (DME) Vehicles

To supply environmentally responsible vehicles, Nissan Diesel is performing R&D in the field of DME vehicles along with its work on CNG and capacitor hybrid vehicles. DME is a petroleum-sub- stitute fuel that can be produced from coal, coal bed gases, bio- mass and many other types of carbon resources. It liquefies at a comparatively low pressure. Furthermore, DME contains no sul- fur and generates no black smoke. Due to these advantages, DME is attracting much attention as a clean fuel that can replace diesel fuel. Nissan Diesel participated in a development project for the next generation of low-pollution vehicles sponsored by the Ministry of Land, Infrastructure and Transport. With the

Super Power Capacitor System for Stabilization of Wind Power Generation

Nissan Diesel has developed its super power capacitor system as a power storage facility for electric power stabilizers for wind power generation, which is attracting attention as an environment-friendly power generation alternative using natural energy. The Company deliv- ered its first device to Fuji Electric Systems Co., Ltd. in November 2005. This is the first time an electric double layer capacitor has been adopted for an electric power stabilization device for an operational wind power generator anywhere in the world.

By adopting an electric double layer capacitor as an electrical storage device, it is possible to discharge a larger volume of power at a higher efficiency than is possible with other types of rechargeable batteries. And there are many other advantages: the ability to accurately monitor the amount of power stored; a long service life due to minimal deterioration in performance; easy maintenance; and no need for accessories. All these attributes make this electric power stabilizer superior in terms of expenses over its entire life cycle.

Nissan Diesel plans to introduce more variations of this wind power generation electric power stabilization device and to explore more ways to utilize electric double layer capacitor technology.

Energy comparison against regulation level allowed in 1971

Noise regulation values and noise energy

Regulation value

FY1971 ’76 ’79 ’85 2001

In order to reduce the regulated noise value by 3dB, the noise energy must be reduced by 50%.

From the start of control in 1971 to present:

Noise energy: Reduced by 92%

Sound pressure level: Reduced by 11dB

Current regulation

Japan first imposed vehicle noise regulations in 1951 by estab- lishing standards for constant speed pass-by noise and exhaust noise. Standards for acceleration noise were added in 1971.

Regulations have been tightened many times over the following years, giving Japan the world’s strictest noise regulations. For engines, Nissan Diesel takes many actions to hold down noise, such as improving combustion, raising rigidity and adding soundproofing for noise-generating components. Further reduc- ing engine noise is the use of soundproofing covers and materi- als in the optimal amounts and locations. To cut exhaust noise, vehicles use mufflers that are larger and have improved struc- tures. Through these measures, we have consistently complied with Japan’s increasingly tighter regulations on external vehicle noise. While taking these measures to reduce noise, we have also exercised care to minimize any additions to vehicle weight.

We will continue to make current noise-reduction measures even more effective while developing CNG trucks and buses, which have a low environmental impact and clean emissions, and other vehicles to further lower noise levels.

Truck Acceleration Noise Regulations

Current acceleration noise regulations are 92% less than the Reduction of External Vehicle Noise

first imposed. In terms of sound pressure, a reduction of 11dB has been achieved. Due to this progress, the acceleration noise of one truck in 1971 is now equivalent to the collective noise of about 12 trucks using today’s technology. In our commercial vehicle lineup, both our medium-duty Condor trucks and heavy- duty Quon trucks comply with the current acceleration noise standards.

Truck Acceleration Noise Regulations in Japan

National Traffic Safety and Environment Laboratory, Nissan Diesel developed the world’s first large DME vehicle that hold exhaust emission levels to less than 10% of Japan’s new Long- Term Diesel Emissions Regulation. We exhibited this vehicle in March 2006 at an international symposium in Washington, D.C., an event that generated much media exposure. In 2006, the vehicle is undergoing tests on public roads to evaluate perfor- mance and environ-

mental characteristics under actual driving conditions.

TOPICS

DME truck

How New Technologies at Nissan Diesel Protect the Environment

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Reduction in the Use of Environmental Impacting Substances

Recognition of Environmental Impacting Substances Nissan Diesel recognizes 2,477 substances in 87 groups that have been scientifically shown to pose a significant risk to people and the environment. All of these substances have been regis- tered on the Global Automotive Declarable Substance List (GADSL), which is prepared by representatives of the automo- tive, automotive parts and chemical and plastics industries.

Nissan Diesel has always carefully managed the use of these environmental impacting substances in its automotive materials.

Activities to Reduce Environmental Impacting Substances Since 2005, the automobile industry has been working on meet- ing goals for the reduction and elimination of the use of lead, mercury, cadmium and chromium (hexavalent) in new models.

Since these substances are an effective means of improving per- formance in many ways, they are used in a large number of automotive components. Nissan Diesel is working with suppliers

Activities to Reduce Volatile Organic Compounds (VOCs) in Cabins

Adhesives, coatings, plastic parts and other items used in motor vehicle cabins include VOCs that can be released into the air.

These compounds can trigger allergic reactions by vehicle occu- pants. To prevent this problem, the automobile industry has established guidelines for the reduction of 13 substances

Outline of IMDS

to identify substitute materials that can achieve the same levels of performance. Chromium (hexavalent) is widely used as rust- preventive plating for automotive components. Many actions are now under way with companies in the plating industry, including revisions to plating machinery, to switch to other plating materials.

Data Management for Materials Used in Parts

Nissan Diesel began using the International Material Data System (IMDS) for materials used in automotive parts with its Quon series of heavy-duty trucks. Backed by major automobile manu- factures and suppliers worldwide, IMDS is the de facto standard for materials databases. The system supplies a broad range of detailed information by covering the types and quantities of materials used in all automotive components. Using IMDS has raised the efficiency and accuracy of data prepared by suppliers.

We plan to start using IMDS for all of our new models.

Major Manufacturers Major Manufacturers

Secondary suppliers

Primary suppliers

Based on publicly available information

Establishment of materials database

 Information on materials and substances in components

 Recycling ratio

 Certification as environmental impacting substance

 Calculation of recycling fee based on ASR weight

IMDS server (Germany)

Efficient worldwide data collection is possible using the Internet

In-house download system

Table of parts

associated with VOC problems in vehicle cabins. Actions are under way to lower these VOCs to less than the guidelines of the Japanese Ministry of Health, Labour and Welfare. Nissan Diesel is evaluating the materials used in its truck and bus interiors.

Based on measurements of VOCs released, we are monitoring benefits of measures to reduce VOCs in specific materials in order to determine ways to achieve the required reductions.

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How New Technologies at Nissan Diesel Protect the Environment

Recycling Programs

Nissan Diesel begins working at the development stage to improve the ability to recycle its motor vehicles. The Voluntary Action Plan for Recycling that was announced in February 1998 provides one set of guidelines. This plan is designed to ensure the proper disposal of end-of-life vehicles and to improve the recyclability.

The Voluntary Action Plan for Recycling

This plan has two core elements. First is the achievement of a recycling rate of at least 90% for all newly developed models beginning in 2002. Second is the establishment of targets to reduce and eliminate environmental impacting substances in new models.

Currently, the recycling rate is at least 90% for chassis and cabs of all new models. We plan to use even more recycling technologies to raise the recycling rate to at least 95% for all our models. Regarding environmental impacting substances, we are working closely with suppliers to be certain that guidelines for voluntary reductions and eliminations are observed. We have already completely eliminated the use of mercury and have been steadily raising since 2005 the number of models that meet our lead-reduction targets.

lighter components); and (3) emphasize safety and environmental protection (safe removal of air bags and other systems, compli- ance with internal regulations for use of environmental impacting substances). Our goal is to use 3R* designs to improve the recy- clability rate of our vehicles.

* The 3Rs:

Reduce: Reduce the volume of waste Reuse: Reuse products and parts Recycle: Recycle items as raw materials

Nissan Diesel’s 3R Design Activities

Reduce: We recognize that the less than 10% of parts and materials not included in our vehicle recycling rate may eventually be sent to landfills. These parts and materials are non-metallic items. They include most thermosetting plastic and rubber parts as well as materials in which recyclable plastics are combined with other compounds and cannot be separated. One obvious solution is replacing these materials with substances that can be recycled. But we must also exercise care to create components that are structured for easy disassembly by standard tools and machinery. Another important point is ensuring that recycled materials contain no environmental impacting substances.

Recycle: Polypropylene parts like under covers and inner fend- ers use a recycled material made from recovered bumpers. In Quon trucks, this recycled material is used for a growing number of cab interior parts, enabling us to use an increasing volume of recovered bumpers.

Use of Recycled Polypropylene Bumpers

Status of recycling other materials (Quon trucks in FY2005) Recycled felt (interior noise suppression): 9 tons

Recycled PVC (production processes) and materials (floor mats): 8 tons Recycled PET (door handles, etc.): 1 ton

Increasing use in under covers and inner fenders Increasing use in Quon cab interiors (tons)

FY2002 ’03 ’04 ’05

Reduction in lead: 2006 lead use is less than 25%

the 1996 level (heavy-duty trucks)

Elimination of mercury: No longer used since 2005 (except in eliminated parts)

Elimination of cadmium: Use to be terminated by 2007

Elimination of hexavalent

chromium: Use to be terminated by 2008 Reductions and eliminations of environmental

impacting substances in new models

Actions on New Models Development

Nissan Diesel started using design guidelines and preliminary evaluation systems in 1994. These systems are a set of internal regulations based on Japan’s Law for the Promotion of Utilization of Recycled Resources. Preliminary evaluations cover items that affect the eventual disposal of a vehicle. Among them are (1) make parts and materials easy to reuse (select easily recycled resins, clearly identify materials, simplify disassembly, etc.); (2) reduce the weight of items to be disposed (design

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visions to promote the proper recycling and disposal of end-of- life vehicles, prevent illegal dumping and reduce the environmental impact of vehicle disposals. When disposing of vehicles, automo- bile manufacturers are obligated to remove automotive shredder residue (ASR), air bags and fluorocarbons used in car air condi- tioners for recycling or proper treatment. To perform these tasks efficiently, we have taken several actions. For ASR, we helped form the Automobile shredder residue Recycling promotion Team (ART), which brings together 12 automobile manufacturers, including Nissan Motor. For air bags and fluorocarbons, we par- ticipated in the establishment of the Japan Auto Recycling Partnership (JARP), in which all Japanese automobile manufac- turers take part. The table to the right summarizes the vehicle recycling and disposal performance of Nissan Diesel in fiscal

reduce the amount of waste sent to landfills.

Additionally, we conducted a voluntary program for the recov- ery and recycling of automotive glass. We took part in a joint trial with seven other Japanese automobile manufacturers to demon- strate the program’s feasibility. In fiscal 2005, about 44 tons of glass was recovered.

ASR Air bags Fluoro-

carbons

Number of vehicles 2,951 38 1,400

collected

Total weight of vehicles 925,000 7.5 714 collected (kg)

Recycling rate 63 95 ―

Fiscal 2005 Recycling and Disposal at Nissan Diesel

Recycling of Commercial Vehicle Rack Equipment

The rack equipment of our trucks is manufactured by companies that specialize in this field and is not covered by the Automobile Recycling Law. We recognize the need for the proper disposal of our entire vehicles. With this in mind, we cooperate with these

manufacturers to conduct voluntary initiatives for the proper dis- posal of wood, plastics and other materials generated during the disposal process.

Encouraging the Use of Reusable and Rebuilt Parts

In order to increase the recycling of end-of-life vehicles, Nissan Diesel cooperates with its business partners to promote the use of reusable and rebuilt parts. We make reusable and rebuilt parts available at the servicing departments of sales companies. This allows customers to select parts that precisely match their needs when vehicles undergo maintenance and repair work.

Growth in Shipments of Reusable and Rebuilt Parts FY2000 = 100

Monetary value of shipments

FY2000 ’01 ’02 ’03 ’04 ’05

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We established Green Procurement Guidelines in fiscal 2004 to begin working with suppliers to reduce our environmental impact through procurement activities. These guidelines involve the fol- lowing three forms of assistance from suppliers to help us make environmentally responsible vehicles.

1. Provision of data on environmental impacting substances in parts and materials

We ask suppliers to provide data on environmental impacting substances so that we can eliminate these substances from our vehicles and take other measures as required.

Green Procurement

2. Establishment of certified environmental management system We ask suppliers to establish an environmental management system by March 2008 that meets ISO 14001 or other stan- dards. At the end of March 2006, 76% of our major suppli- ers had earned this certification and 10% were preparing for certification.

3. Appointment of environmental officer

We ask suppliers to name an environmental officer who can handle all communications with us concerning environmental activities.

How New Technologies at Nissan Diesel Protect the Environment

Green Purchasing Activities

When conducting green purchasing, we believe that it is important to use our position as the buyer to demand improvements regarding the environmental impact. We define green purchasing as follows: “Making purchases based on a true need for items, and taking into consideration not only quality and price but also environmental issues. Giving priority to purchasing products and services with the small- est possible environmental impact from vendors who work on lowering their own environmental impact.”

Our green purchasing activities even extend to the purchase of paper, pens and other office supplies that contribute to environmental protection. To contribute to the creation of a recycling-based society, we believe it is vital to promote the use of recycled items both as a supplier and a user. This is why our expense and purchasing system is designed to clearly identify “green” items.

TOPICS

Green Procurement Guidelines

Nissan Diesel Suppliers

Develop products that comply with restrictions on environmental impacting substances

Earn ISO 14001 certification

Lowering the Environmental Impact of Nissan Diesel Products

Establish environmental management system Appoint environmental officer

Provide data on environmental impacting substances

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