Newport Annual HSE Review and

Environmental Statement 2016

POLICYHealth, Safety and Environment (HSE) StatementOur industry is essential to the products and services that help make our lives safer, healthier and better. Through theResponsible Care® initiative and the Responsible Care® Global Charter, our industry has made a worldwide commitmentto improve our environmental, health, safety and security performance. As a member of the Chemical Industries Association,we manage all aspects of our activities so that we provide a high level of protection for the health and safety of employeesand associates, customers, and the public; and for the environment. Accordingly, we believe and subscribe to the followingprinciples:

● To lead our Company in ethical ways that increasingly benefit society, the economy and the environment● To design and develop products that can be manufactured, transported, used and disposed of or recycled safely● To work with customers, carriers, suppliers, distributors and contractors to foster the safe and secure use, transport

and disposal of chemicals and provide hazard and risk information that can be accessed and applied in their operations and products

● To design and operate our facilities in a safe, secure and environmentally sound manner● To instil a culture throughout all levels of our organisations to continually identify, reduce and manage process safety

risks● To promote pollution prevention, minimisation of waste and conservation of energy and other critical resources at

every stage of the life cycle of our products● To cooperate with governments at all levels and organisations in the development of effective and efficient safety,

health, environmental and security laws, regulations and standards● To support education and research on the health, safety, environmental effects and security of our products and

processes● To communicate product, service and process risks to our stakeholders and listen to and consider their perspectives● To make continual progress toward our goal of no accidents, injuries or harm to human health and the environment

from our products and operations and openly report our health, safety, environmental and security performance● To seek continual improvement in our integrated HSE Management System to address environmental, health, safety

and security performance● To promote Responsible Care® by encouraging and assisting others to adhere to these Guiding Principles

The culture at Eastman is one of commitment to safety, accountability for actions, and feedback on performance. Workingsafely is a condition of employment and is a basic responsibility of every employee and contractor.

Management Leadership & Accountability: Each manager establishes clear safety expectations and goals, providesresources, establishes processes, and monitors overall progress.

Employee Involvement: Each employee is committed to working safely and to protecting the safety of others. Employeesparticipate fully in all elements of the safety program.

Regulatory Compliance: Complying with applicable laws and regulations is an integral part of Eastmanʼs safety program.

Inclusive Scope: Prevention of workplace incidents, injuries, and illnesses for employees, contractors, visitors, suppliers,and customers is our safety objective. Providing the skills and attitude to work safely off the job is our expanded goal.

Incident Prevention: Work-related incidents are prevented through several layers of protection, including safe design, safework practices, safe behaviour, and the use of appropriate engineering, operating, and administrative controls.

Safety Education: Each employee is provided with the knowledge and skills necessary to work safely.

Hazard Control: Exposures to potential hazards in the workplace are identified, assessed, controlled, and monitored.

Assessment: Assessment and benchmarking against the worldʼs safety leaders drives continual improvement through theadoption of best practices.

Emergency Preparedness: Emergency response plans and capabilities are maintained to manage emergencies relatedto Eastman facilities and operations.

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INTRODUCTIONBy Stephen Hampson, Site Manager"Welcome to the 2016 Health, Safety, and Environment (HSE) annual review for Eastman's SolutiaUK Ltd site at Newport. It describes our: performance, achievements, and plans in each of the HSEareas.

During 2016, we safely and steadily completed the commissioning of the new 'Therminol 3' productionunit. This was not without its technical challenges, but it was done without significant incident or injury.The unit is now supplying material for commercial sales. Sadly, late 2016 saw the closure of theSanticizer process unit which we have run for a number of years for firstly Ferro, and more recentlyValtris. During 2017 we will work to decommission & demolish the unit, with the prime objective to dothis safely.

In our effort to do things the right way, Eastman has won a number of awards during 2016 related toethics & social responsibility:

● Eastman Chemical Company has been honoured with a Glassdoor Employees ChoiceAward recognizing the Best Places to Work in 2016

● Eastman celebrates fifth consecutive ENERGY STAR® Partner of the year award forcontinued leadership in protecting the environment through superior energy efficiency achievements

● The Solutia UK Ltd Newport site has also received the CIA's (Chemical Industries Association) prestigious'Responsible Care' award for an unprecedented 4th time

We understand that we need to continually improve in all areas to meet the challenges of todayʼs world. This need forimprovement is most certainly true in the area of HSE, and we understand the value this brings to all our stakeholders,employees, neighbours, customers, suppliers, and regulators. Therefore, we challenge ourselves every day to work saferand to protect our environment"

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Eastman, as a chemical manufacturer in the UK, is a member of the Chemical Industries Association (CIA). A condition ofmembership of the CIA is commitment to Responsible Care®. We have incorporated Responsible Care® guiding principlesinto our HS&E policy.

We are very proud to have received the ChemicalIndustries Associationʼs ʻResponsible Careʼ award in2016, having been shortlisted for a further 4 categories.The main award is given to the company which hasdemonstrated the highest level of commitment to theprinciples of Responsible Care

PRODUCTSThe products made at the Newport site are not sold directly to the general public. They are, however, used in the manufactureof many items destined for everyday use such as washing powders, floor coverings, safety windows and windscreens.

Biphenyl is produced by the pyrolysis of benzene. It is sold as an intermediate for the production of optical brighteners andis also a constituent of heat transfer fluids.

The polyphenyls produced at Newport are mainly sold as Therminol ® heat transferfluids. Therminol VP1 is increasingly being used in concentrated solar power plants(see photo below right).

Solusolv®2075 is used as a plasticiser or coalescing aid in coatings and sealant formulations. It allows formulators to createlow-odour, environmentally-friendly products without compromising on performance.

Saflex®2075 is used as the plasticiser for the safety interlayer in car windscreens and side windows toprevent shattering and allows absorption of head impact in the event of an accident. Saflex is also usedin bomb-proof and security windows. Recently it has been used in Photo- Voltaic (PV) cells for makingelectricity from solar power.

Italmatchʼs Dequest business offers unique specialty additives to meet the needs ofindustries that deal with water / oil management, or which deal with processes or applicationswhere water plays a crucial role, these additives include Dequest phosphonates. Majorcustomer applications include industrial water treatment, household, industrial andinstitutional cleaners, enhanced oil recovery operations and various industrial processessuch as desalination and pulp and paper.

Santicizer® phosphate esters are flame retardant plasticisers. These weremanufactured by Eastman for Valtris in 2016. They are particularly used in PVC andother polymers as highly efficient plasticizers giving fire retardancy and low smoke.

Skydrol® is a fire resistant hydraulic fluid used by most airlines around the world.It has been distributed from the Newport site since 2006 and in September 2010the in-service analysis became available at Newport when we relocated our testingfacility from Belgium.

Hydrochloric acid is a by-product of site operations. It is both used within Eastman,and is also sold through a distributor. It is a common inorganic chemical used inmany chemical processes.

Associated CompaniesThree manufacturing companies in addition to Eastman were present on the site in 2016. Eastman operated themanufacturing facilities owned by two of the companies and one company operated its own manufacturing facility:

Advanced Elastomer Systems Ltd (AES) , a subsidiary of Exxon Mobil, owns and operates units onthe site that manufacture a range of thermoplastic elastomers. These products combine the elastomericperformance of vulcanised rubber with the processing performance of thermoplastic polymers and areused in a wide range of industrial parts including gaskets, bellows, electric cables, medical goods, vehicleparts and in household appliances.

Valerus Specialty Chemicals is a leading manufacturer of specialty chemicals primarily usedas additives in the production and processing of plastics. These chemicals impart criticalattributes to plastics including: resiliency, flame retardency and ease of processing. In 2015,Valtris also took ownership of the Santicizer® plant, which Eastman operated on their behalfup until the end of 2016.

Italmatch owns the Dequest plants on site, which Eastman operates on its behalf. Customerapplications were in a variety of markets such as pharmaceuticals, hygiene, industrial andhousehold cleaning, food and feed additives, beverages, and crop protection.

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INFORMATIONWhere we are – what we do

Eastman site looking North-west across the River Usk to the centre of the City of Newport. The two WindTurbines and part of National Cycle Route are visible on the south (left) side

Eastmanʼs 124 hectare site (306 acres) in Newport, Walesis a chemical manufacturing operation that currently occupies40 hectares (400,000 m2) of the site total. This equates to32% of our land ownership in Newport. The registered officeof Solutia UK ltd is also at our Newport site.

Five production plants using organic and/or inorganicprocesses operated at the Newport site in 2016.Manufacturing processes used include pyrolysis, aqueous oranhydrous reactions, esterification, hydrogenation, drying,distillation and filtering.

About 40% of our employees are involved in continuous 24-hour shift operations. A range of services support productionactivity – maintenance teams, engineering specialists andanalytical laboratory staff. Administrative support includesFinance, Personnel and Computing. Other servicedepartments include: Boiler-house operations, EffluentTreatment, Purchasing, and Logistics.

92529t of materials, excluding fuel and packaging, werepurchased in 2016 for manufacture of 84055t of product. Thisequated to a ratio of 1.10t per t of production.

Our site turnover was £79 million, which equated to about1% of Eastman sales in 2016 ($9.0 billion total sales).

Our 180 employees are about 1.2% of the companyʼsapproximately 15000 staff worldwide. HSE employed theequivalent of three people at Newport in 2016. We alsoemployed approximately 50 full time site-based contractors,who assist with specialist activities.

We spent £1.8 million in 2016 on environmental monitoringand management, waste disposal, effluent handling andtreatment that was equivalent to 2.3% of site turnover.

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MANAGEMENT SYSTEMEMAS and ISO14001EMAS

EMAS (Eco-Management and Audit Scheme) is a European Union programme to encourage

business to take the initiative in protecting the environment and promote greater public disclosure

of environmental performance. The scheme is voluntary and applies across Europe. Individual

sites can participate in the scheme if they comply with existing pollution control legislation and

have established the following:

An environmental policy

An environmental review, covering all aspects of the site

An environmental programme, which sets quantified objectives

An environmental management system, to give effect to the policy and programme

(Eastman Newport Site is certified to ISO14001 standard)

An environment audit cycle, to provide regular information on the progress of the programme

A concise and comprehensible environmental statement (this document)

Validation by an independent verifier (in our case, this is BSI)

We were the 24th site to be registered in Britain and the first in Wales (Ref: UK-000024 in 1996). At the time of writing, this

will be the 21st consecutive year of registration with the scheme.

ISO14001

We manage our environmental performance using an ISO14001 Certified EMS (Environmental Management System). Thisis an internationally recognised standard that can be applied to all types of businesses, including chemical manufacture. Itis a structured system used to implement an Environmental Policy. To ensure we focus on the important environmentalissues, as part of our EMS we have an internal procedure for evaluating the significance of our environmental aspects(available on request).

Our EMS helps ensure that that environmental performance is both: effectively managed, and continually improved by thesetting of ʻObjectives and Targetsʼ. Many of our customers require that we have ISO14001 certification so that they can beassured of our commitment to sustainability and the environment. Our ISO14001 certification reference is: EMS34690

To ensure the EMS is working effectively, routine audits are carried out in order to assess i) the elements of the managementsystem, and ii) the effectiveness of the documented control procedures. As such, internal auditing is a key aspect ofcontinuous improvement. The three main elements to our site audits comprise:

1. Management system audits: 52 of these were done by 32 employees2. Department inspections to identify hazards: 90 of these were done in 20163. Permit-to-work audits: 335 of these were done by the SLT (site leadership team) in 2016. An additional 274 were doneby other site staff

Other auditing activities include:

Major engineering projects (including Therminol 3)

Process Hazard Reviews

Checks of portable electrical equipment, radioactive sources and emergency response

Insurance inspections

British Standards Institute Natural Resources Wales inspections

(Energy-related) emissions verification by DNV Health and Safety Executive inspections

Actions arising from these various audits are recorded in a computer database, enabling us to track progress and improve

our performance

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LEGACY ISSUESSafeguarding the Environment

Performance vs 2016 Environmental Improvement Plan Planned Status

Review of the costs and benefits of further measures to reduce emissions to water of PCP

In dialogue with NRW regarding various trials as options. Way forward to be agreed in early 2017

Reduce energy usage in line with corporate target No headline energy projects completed in 2016, but a slight improvement observed in energy performance

Complete phase 2 of the CWx research project to remove CO2 from CHP boiler 16 stack Project Completed

Develop long term strategy to improve bio-treatment plant reliability Not now applicable

Develop a flood protection strategy for the site The most significant potential improvement to reduce flood risk is via a tidal defence scheme being looked at by Newport Council & NRW

Vary the Environmental Permit to reflect site operations

Various changes to the permit have necessitated an NRW agreed date of ~ 05/2017

Environmental Improvement Plan - for completion in 2017 Legacy Issues Following cost benefit analysis - Initiate the next project phase to further

reduce emissions of Pentachlorophenol (PCP)

Energy & Climate Change Set up Energy Improvement Team to identify projects that can achieve energy scheme targets in-line with Corporate Energy Target.

Waste Optimize TH3 efficiency to reduce hazardous waste produced per tonne of product

Atmospheric Progress the preferred option to reduce NOx emissions from the No16 Boiler

Effluent Develop plans to achieve compliance with new Common Waste water BREF in-particular; Suspended Solids & COD in effluent (likely to extend into 2018)

Permits & Regulation Vary & consolidate the environment permit to accommodate removal of the Santicizer operation, and to better reflect current operations

Management Systems Achieve certification of the environmental management system to the new 2015 revision of ISO14001

In the past, PCB (polychlorinated biphenyls), PCP(pentachlorophenol), and chlorine were manufactured onsite. These historical activities left a legacy of thesesubstances at the site.

Consultants completed a comprehensive risk assessment in1992, to determine if these activities had resulted in anyunacceptable risks. This assessment concluded that the sitewas stable and did not pose a threat to health or to theenvironment as defined in the Contaminated LandRegulations.

Since that time, we have replaced underground drains andcapped areas in a phased manner to reduce movement ofthese legacy substances.

Residues in the soil contribute to legacy substances beingpresent in wastewater discharges from the site through thesite drainage system. These discharges are closelymonitored against the site discharge consent limits, androutinely reported to the regulatory authorities.

In line with the improvement activities undertaken, somedischarge consent limits have been reduced in order to giveadditional confidence that there is no unacceptable risk tothe environment.

As per our annual Environmental Improvement Plan,additional options are currently being evaluated.

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HSE ENGAGEMENT DAYS 2016

SAFETYThree ways we keep it a priorityTo help ensure our operations are safe as declared in our HSE policy, we have three full-time HSE professionals on site.The main aim is to provide advice and guidance to everyone on site to enable them to work in a safe and correct manner.The work is split into three main areas:

1. Personnel Safety

In 2016, there were four recordable injuries reported, with investigations completed to identify root causes and define actionsto prevent recurrence of a similar type of event. There were 2 RIDDOR reportable injuries, which comprised: a twisted anklewhilst stepping off a ladder, and a broken finger whilst carrying out a manual maintenance activity.

In order to improve on our safety performance, 5150 proactive ʻperson to personʼ safety discussions between employeestook place in 2016. The purpose of these being to raise awareness of hazards.

2. Process Safety

There were 2 Process Safety events recorded in 2016: a release of glacial acetic acid, and a small release of benzenewhilst commissioning a new item of plant. These were duly reported to the regulator(s), with the events being fullyinvestigated and closed out.

We have a culture whereby we actively seek to identify and investigate potential shortfalls and improvements opportunities(near misses) such that measures can be put in place to avoid incidents occurring / re-occurring. In 2016, a total of 153 ofthese ʻnear missesʼ were identified.

3. Property Protection & Emergency Response

The site has comprehensive systems for fire-detection and fire-fighting. These systems range from automatic sprinklers anddeluge systems in the process areas to manually-operated fire hydrants, hoses and portable extinguishers located in allareas. People on site, including contractors, receive regular training in the use of fire extinguishers. In addition, TheEmergency Response Team (ERT) completed a full year of training, with separate training having been completed for FireTeam Leaders.

Our emergency response plan is designed to deal with a range of incident scenarios and involves deployment of a trainedemergency response team. Emergency Assembly Points are provided throughout the site for people in the event of anincident. The site Emergency Response team is available 24 hours a day to respond to an emergency incident, with allmembers being fully qualified first aiders and firemen. In 2016, a new electronic roll call system was installed & successfullytested to assist with the Emergency Response effort.

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2016, as per previous years, was an opportunity to hold a series of ʻHSE Engagement Daysʼ. These involve a schedule ofevents for the purpose of: teambuilding, workplace engagement in safety related tasks, and activities related to our widercommunity. These events are always well supported, and 2016 was no exception.

A selection of safety training and team-building exercises beingcarried out throughout the course of the HSE Engagement Days

Eastmanʼs corporate safety team leads a number of initiatives to continue ourprogress with regard to personnel and process safety, reliable operations andleadership development. A corporate-wide safety brand, ALL IN FOR SAFETY,communicates the companyʼs desire that team members keep safety top of mindat all times and give their total commitment to safe behaviour at work and awayfrom work.

The Newport HSE team develops and maintains the site safety managementsystem which is certified to BS18001. We have procedures in place for safetyresponsibilities, monitoring, hazard identification, risk assessment, plant operatinginstructions, permit-to-work systems, safety inspections, incident investigation andauditing. We also review our safety performance regularly with the Site LeadershipTeam to highlight issues as they arise.

Occupational Health and HygieneWorking in conjunction with Industrial Hygiene and Safety, the Occupational Health Department (OHD) performs apreventative role as well as giving day-to-day treatments. Whilst keeping up-to-date with the latest changes and advancesin medicine, it monitored the health and welfare of the workforce through mandatory and voluntary health surveillance. Thissurveillance included medical checks such as lung function evaluation and hearing tests, based on possible exposure andIndustrial Hygiene monitoring.

The OHD was also involved in aspects of training and assessments of workplace practices helping to prevent injury orillness. Pert of the service offered included lifestyle and health assessments, together with fitness and exercise programmesand use of the in the ʻin-houseʼ gym. Eastman also supported sports and charity sports activity of its employees.

Eastman continues to provide a confidential employee assistance resource, which is an external information and counsellingservice to support employees and their families.

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An exercise of the ExternalEmergency Plan was conducted in2016, led by Newport City Councilwith input from the emergencyservices. This helps ensure aneffective response in an emergencysituation

Legacy Substances in Effluent

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ENVIRONMENTAL IMPACTThe Effect of our OperationsHistorically, the significant direct impact of our site has been associated with the effluent discharge effect on water quality

of the Severn Estuary. A report published by the Environment Agency summarised the results of their estuary study performed

in 1998. Our discharges since then have been reduced over time as shown in the charts on the following pages.

We also emit carbon dioxide (CO2) to the atmosphere from the burning of natural gas to make steam for use in our

processes. Climate scientists have concluded that CO2 contributes to global climate change. In addition, CO2 resulting from

the burning of fossil fuels for the generation of electricity we buy from Power Stations is an indirect environmental aspect of

our manufacturing operations. Our actions to help reduce this aspect are described further under “energy” later in this

Environmental Statement.

All discharges from the site were regulated by Natural Resources Wales, who are responsible for our Environmental Permit

issued in 2004 under the Environmental Permitting Regulations. During 2016 we Notified Natural Resources Wales for an

exceedance against a limit for NOx on our Boiler Plant. Whilst this was the only breach of an emission limit, we also submitted

a further 5 Notifications related to a number of plant failures & breakdowns, as required by our site Permit.

ENVIRONMENTAL INDICATORSLegacy SubstancesAt the site, we have four legacy substances in our effluent:

PCB, TCB (trichlorobenzene), PCP, and mercury (Hg), which

have not been used on the site for many years, but are

discharged in our effluent from residues of past

manufacturing activities dating back to the 1950s. For this

reason, we refer to these as ʻlegacyʼ substances. The total

amount of these four legacy substances discharged in 2016

was 7.0kg, which is approximately 7ppb (parts per billion) in

our final effluent. We are pleased there were no exceedances

of our Environmental Permit discharge limits for these legacy

substances in 2016.

In 2004, we employed consultants to assess the risk of

environmental impact from the legacy PCB in our discharge.

Their report concluded the PCB level in the discharge from

our site is unlikely to pose any significant environmental or

ecological risk.

We also discharged 0.09kg cadmium. Cadmium has not

been a significant raw material on-site and is not considered

a legacy substance. It is however regulated by our permit

with a limit of 50 g/week and our average discharge is about

one nineteenth of this (~1.8g).

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WasteWe take care to ensure that we meet all legal requirements associated with our waste streams. In 2016 we despatched a

total of 1974t of waste from the site, which equates to 0.023t per tonne of production. This amount included 1197t of

Hazardous Waste (0.014t/t), a slight increase over the preceding yearʼs 1114t of hazardous waste.

Air emissions

The amount of substances released to air in 2015 totalled

39.3t (excluding carbon dioxide which is described in the next

section). The substances included in this annual indicator

are: oxides of nitrogen & sulphur (NOx and SO2), carbon

monoxide, acetone, benzene, biphenyl, and chloromethane.

The significant decrease in 2005 was due to the closure of

the Santoflex process during the previous year. These

substances equate to a release to atmosphere of 0.47kg per

tonne of production, and for SO2 & NOx specifically, this was

0.22kg/t. There were no measured discharges of particulates

from site during 2016.

There were no hazardous wastes consigned to landfill;

rather, the majority of Hazardous waste generated (primarily

distillation residue known as Santotar®) were dispatched to

an off-site facility to be converted into Cemfuel®, which can

then be used in place of traditional fuels to generate heat in

such applications as the cement industry. This waste stream

totalled 1029t in 2016.

Of the remaining wastes, 183t of recyclables were sent for

recovery the remainder that could not be recovered was sent

for landfill or incineration.

In order to help ensure that our legal ʻduty of careʼ obligations

were met, Eastman remained a member of the Waste

Facilities Audit Association (WFAA), which serve to conduct

independent audits of waste facilities.

Most of these substances have consent limits set by Natural Resources Wales and are routinely monitored and reported.

In 2016 we submitted a Notification to Natural Resources Wales to advise on a breach of consent limit of Nitrogen Oxides

(NOx) from our main site boiler. In order to ensure compliance, we have an environmental project plan in place for 2017 to

install new burner technology on the boiler, which will result in much lower emissions.

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Effluent and Effluent ToxicityThe most significant developments in terms of site effluent and associated toxicity have been the introduction of additional

effluent treatment capability in the form of the Formose and Bio-Treatment Plants. These plants came online in 2006, and

2009 respectively. The effect of these processes on effluent quality was a substantial reduction in both formaldehyde and

phenol concentrations, and the corresponding reduction over time of overall toxicity. The following graphs show the trends

in these important parameters:

The capability of the effluent treatment plants is subject to ongoing review and assessment, with a view to further optimising

performance, thereby helping to ensure that impacts are maintained to an acceptable level and, where feasible, further

improved.

The 0.8mg/l HCHO (formaldehyde) average for 2016 above shows the continued excellent performance of the Formose plant and help contribute to the reduced toxicity of the effluent.

Phenol is the next most toxic substance in our effluent discharge. The sustained reduction in effluent toxicity is partly a result of the success of the bio-treatment plant to destroy >90% of the phenol. The total phenol discharged in 2016 was 2.5t

Effluent Chemical Oxygen Demand (COD) is a measure of the oxygen depleting potential of the organic chemicals in water. The discharge averaged 15.6t/week, which was less than a quarter of the permitted limit of 65t/week. The chart shows our annual effluent average COD.

A sample programme to determine the toxicity of our effluent was conducted between 2004 – 2014 using ‘Direct Toxicity Assessment’ (DTA) tests developed for the Environment Agency. These tests showed that Tisbe and Algae to be the more sensitive species to our effluent. The graph above shows the trend of toxicity over the test period.

Energy

Site Energy Performance

Our energy performance measured in Gigajoules per tonne of production (GJ/t) continues theyear on year improvement in performance at 7.6GJ/t in 2016 Vs 7.9GJ/t previously (The 1998ʻbase-lineʼ years energy performance stood at 18.9GJ/t). Our total imported ʻPrimaryʼ energy forthe year (including: gas, electricity & kerosene) was 195640MWh.

Renewable Energy

The two Wind Turbines located on the site supplied 7393MWh of electricity to the site in 2016.Even though the turbines were off-line for a period, to undergo a major 10-year service, they stillsupplied a good proportion (37.2%) of the sites electricity requirements, and 4.1% of the sitestotal energy usage.

EU Greenhouse Gas Permit

Under the EU Emissions Trading scheme (EU ETS), we are required to report CO2 emissions from our combustionprocesses. These CO2 emissions have seen a year-on-year decrease in recent years, to 31899t in 2016.

Total Greenhouse Gas Emissions

Our actual site Greenhouse Gas emissions (which include CO2 emissions outside the scope of the GHG permit) totalled36862t, or 0.44tCO2 per tonne of production for the year. We report only CO2 as a GHG, as no other site activities emit anyother GHG in measurable quantities.

WaterIn 2016, the site used 782628m3 (cubic metres) of mains water. This is equivalent to 9.31m³ of water per tonne ofproduction, compared to 10.7m³/t, 12.3m³/t, and 13.0m³/t in the preceding years.

COMMUNITYThe Community Liaison Panel has representatives from various organisations including wildlife and conservation groups,schools and colleges, regulatory authorities, City Council, as well as our local residents. The group continued to meet during

2016, to discuss and obtain updates on a wide range oftopics such as: site environmental performance, localdevelopment activity, emergency planning, etc.

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There is widespread awareness that climate change is asignificant environmental issue and that emissions of CO2,which is a Greenhouse Gas (GHG), are a consequence ofenergy usage in factories, homes, and transport. In Britain,all three of these sectors are substantial contributors. We arepleased that our wind turbines help to reduce our carbonfootprint.

To encourage industry to reduce energy usage, theGovernment introduced a ʻClimate Change Levy.ʼ This iseffectively a tax with a partial rebate for companies that havea Climate Change Agreement (CCA) and meet their agreedreduction targets. We must also comply with the EUEmissions Trading Scheme (ETS) for GHGs, and the CarbonReduction Commitment (CRC) Energy Efficiency Scheme.

In May 2016, Eastman were one of the sponsors for theʻRace for Wildlifeʼ which took place on the nearby GwentLevels. A small group of employees entered the competition,and received an award for the team finishing in the shortesttime

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Surrounding Land

Good CausesEastman donated £8370 to various local causes and national charities in 2016. Recipients included:

The Kids Cancer Charity

Gwent Wildlife Trust

Engineering Education Scheme Wales

Blind Children UK

Llanyrafon AFC

Latch Welsh Childrens Charity

Other beneficiaries included various local sports clubs, as well as various charities chosen by employees using matchfunding in the ʻGive As You Earnʼ scheme. This totalled £1170 for the year.

Public ComplaintsAll public complaints are logged, investigated, and the complainant and / or the applicable regulator informed of our findingsas appropriate. Only those complaints that can be confirmed as attributable to our operations are included in our complaintsstatistics. During 2016 we received two public complaints, both of which related to a minor site incident which involved arelease of odorous fume.

Eastman is a corporate member of Gwent Wildlife Trust(GWT) to whom we have leased our southern fieldsoccupying 31 hectares to manage as a Nature Reserve,edged in red (above). This Reserve occupies 36 hectares intotal, the yellow line indicates the two fields owned by NaturalResources Wales.

For more information, see http://www.gwentwildlife.org.

We allowed Sustrans to build a safe, traffic-free part ofNational Cycle Route 4 on our fields to Pye Corner on NashRoad. On our property, the cycle-track runs beside our plantsite before reaching fields on the Caldicot Level where it canbe seen running west/east shown in blue in the aerialphotograph. The Wales Coastal Path also intersects ourland. We feel that these environmental features are of benefitto both the environment, and our local and widercommunities.

GLOSSARY

BREF Best Available Techniques Reference Document

BSI British Standards Institute (an independent organisation who verified this statement)

Cemfuel® Fuel used in cement manufacture; Trademark of Castle Cement, part of Hanson PLC

CIA Chemical Industries Association (trade body for the Chemical sector)

COD Chemical Oxygen Demand (in water)

Dequest® A detergent chemical produced at Eastman, Newport; Trademark of Italmatch

EMAS Eco-Management and Audit Scheme

EUETS European Union Emission Trading Scheme (for carbon dioxide)

GHG ʻGreenhouseʼ gas – a gas causing climate change including carbon dioxide (CO2)

HSE Health and Safety Executive (the British Regulator)

HSE Health, Safety & Environment (within Eastman)

NOx Nitrogen oxides; acidic gases emitted from combustion processes including car engines

NRW Natural Resources Wales (incorporates the former Environment Agency Wales)

PCB Polychlorinated biphenyl

PCP Pentachlorophenol

PVC Polyvinylchloride (a plastic)

Santicizer® Plasticiser made at Eastman, Newport; Registered trademark of Valerus

Solusolv2075® Plasticiser made at Eastman, Newport

SO2 Sulphur dioxide; an acidic gas emitted when burning fuels containing sulphur

TCB Trichlorobenzene (used to be blended with PCB);

Therminol® A range of heat transfer fluids produced at Eastman, Newport.

Saflex, Solusolv2075 and Therminol are trademarks of Eastman Chemical Company or one of its subsidiaries.

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This statement has been validated by T. Moss of BSI which isaccredited for EMAS verification with the registration reference UK-V-00024

The validation was completed on: 05/04/2017

Solutia UK Ltda subsidiary of Eastman Chemical Company

Corporation Road NEWPORT

GwentNP19 4XF

Newport