Protecting the environment and using resources wisely

Vallourec constantly strives to reduce the environmental footprint of its industrial activity. The Group has set itself three priorities:

· Respecting our environment and protecting biodiversity by preventing pollution of any kind, reducing water consumption, recovering waste and reducing disturbance;

· Limiting use of natural resources and using clean and safe technologies;

· Improving plant energy efficiency and reducing carbon emissions from our production process.

Environmental audits are organised regularly in every country in which we operate in order to assess regulatory compliance, environmental performance and ecological risks. Most of Vallourec's industrial sites (98% of the Group's total production) have achieved ISO 14001 certification.

Water: mainstreaming best practice

· Water withdrawal

Water withdrawal has decreased over the past decade, from 11.5 million m3 in 2002 to 8.6 million m3 in 2013.

Relative consumption has also improved steadily. It stood at 1.67 m3 per tonne processed in 2013.

· A new approach: the "water footprint"

The plants that consume the most water have to measure their water footprint and outline ways in which they will conserve water and improve its quality.

The indicator is calculated based on the volume and quality of water that is consumed and discharged, and also takes into account the ecological status of the water source and water scarcity in the drainage basin.

· Quality of effluents

Industrial water from the majority of plants is discharged into municipal sewer systems, and then treated at the municipal water treatment station. These plants must strive to reduce the volume of effluents, while at the same time maintaining their quality.

At other sites, industrial water is treated at the on-site water treatment station before being discharged into the natural environment. This is the case for Vallourec's plants in Déville-lès-Rouen, Saint-Saulve and Aulnoye-Aymeries, VAM Drilling in Tarbes (France), Vallourec Deutschland in Düsseldorf-Rath (Germany), Vallourec Star in Houston (USA) and PTCT (Indonesia).

Improving waste recovery

The Group has a proactive waste reduction policy that involves:

· acting at source in the manufacturing process;

· constantly improving recycling and recovery rates.

Waste recovery rates have improved constantly since 2010.The Group aims to achieve a waste recycling / recovery rate of 95% in 2014.

Noise Reduction

The Group has a structured, comprehensive system in place that enables it to improve protection for its employees and residents against the noise impact of its operations. The system uses noise monitoring campaigns and collates indicators that supply source profiles.

The solutions subsequently adopted are of two types:

· noise reduction at source through using quieter equipment

· Soundproofing solutions (e.g. containment of machines and noise barriers).

Soil monitoring

In France, the Group has – on its own initiative – carried out soil tests around all its main operating sites.

As a result of these investigations and with the agreement of local authorities, eight facilities introduced programmes to monitor groundwater using piezometric sensors. This has also been the case for two of the plants in Germany.

In Brazil, the potential risks have been identified and are either being monitored or have been brought up to standard.

In the United States, the analyses carried out at the vast majority of production sites revealed no significant impact.

Monitoring of atmospheric emissions

To preserve air quality around its plants, Vallourec measures atmospheric emission levels and applies specific solutions for each type of emission, vapour or particle, in order to contain them.

Reducing Carbon Emissions

To prepare for a "low carbon" economy, Vallourec has developed the GreenHouse programme, which aims to improve the energy performance of its processes while reducing CO2 emissions.

Outline of the GreenHouse Project

Vallourec's industrial activity requires significant electricity, gas and charcoal consumption.

The objective of the GreenHouse project: a 20% reduction in total gas and electricity consumption by 2020, calculated using 2008 as the reference year and on a like-for-like basis with an equivalent product mix and level of activity.

The potential gains in terms of energy savings have been identified and quantified:

· 50% could ensue from the implementation of best practice, combined with a more accurate measure of contemporary industry;

· 50% of the remaining gains will come from investment, not least in plant renewal and renovation.

Four key actions have been identified:

· sharing best practice, particularly as regards thermal and electrical processes, compressed air usage and steam production;

· achieving furnace heat balance, which reveals potential sources of improvement and suggests action or investment to enhance heat efficiency, such as better insulation, more efficient refractories or upgrading temperature monitoring systems in the different zones of the furnaces.

Example: In Düsseldorf-Rath-Plug (Germany), 35 regenerative burners have been installed. Result: a 20% reduction in energy consumption and an 8% increase in capacity.

· using energy consumption measuring systems in real time to ensure they can be managed better, identify any potential issues and progress required, and to estimate accurately the amount of energy to be supplied. Successfully installed in Mülheim (Germany) in 2011, they were rolled out across all sites in 2012 and 2013.

· using energy efficiency diagnostics to enable the most energy-intensive sites to draw up action plans based on numerical results. Example: in the Aulnoye-Aymeries pipe mill, the electric motors of large fans have been replaced by high efficiency motors with electronic speed variation.Result: specific consumption has been halved.

Renewable energies, recyclable energies

Nearly 40% of the energy consumed by Vallourec (i.e. 2,800 GWh) is renewable.

The main renewable energy sources are charcoal and blast furnace gas.

In Brazil, the charcoal produced by Vallourec Florestal accounted for 75% of plant consumption at Vallourec Tubos do Brasil in Belo Horizonte in the state of Minas Gerais. This renewable resource helps to reduce the plant's carbon footprint significantly.

Vallourec Florestal manages 250,000 hectares of eucalyptus plantation. A native forest, representing one third of the total area, is maintained in its natural state whereas the rest is exploited.

Every year, about 1/7th of the cultivated area is cleared to produce charcoal. This area is then reforested, the principle being that the CO2 emitted during charcoal combustion is absorbed by the growing trees.

The thermal power plant in Barreiro, with a capacity of 12.9 MW, reuses some of its blast furnace gases to produce electricity. It thus covers a third of the needs of the Vallourec Tubos do Brasil plant.

Other blast furnace gases are used to replace, in part, natural gas for heating billets in the furnaces.

Sustainability Report