A year after the Kyoto Protocol took effect on February 16, 2005, Veolia Environmental Services has signed its second contract for the sale of emission credits resulting from its first two Clean Development Mechanism (CDM) projects to reduce greenhouse gas (GhG) emissions. The second project is located in Alexandria, Egypt whereas the first project is taking place at its landfill located in Tremembe, Brazil. Altogether, the two CDM projects represent over
4.4 million metric tons of CO2 equivalent generated.

For its first CDM project, VES (and its Brazilian subsidiary SASA Sistemas Ambientais) entered into a tender process launched by the Netherlands and was amongst the 18 international
GhG-reduction projects that were selected. Under the project, investments will be made in a system to recover and beneficially use the methane as a renewable energy source at the VES landfill in Tremembe, Sao Paolo State, Brazil. The Dutch Government agreed to purchase 490,000 metric tons of CO2 emission credits saved through the project (out of a total of 700,000 metric tons) for the period 2003 to 2013.
By the end of June 2006, the first Certified Emission Reductions (CER) should be issued and will be transferred to the Netherlands to use towards its GhG emissions target.

The second CDM project put forward by VES (scheduled for CDM registration in July 2006) is located in Egypt and involves landfill gas recovery at two landfills. The CDM project should enable a GhG-emission reduction of approximately 3.7 million metric tons of CO2 equivalent over a 10 years period 2005-2015. VES has already signed an agreement with the World Bank, acting on behalf of the Spanish Carbon Fund, involving the purchase of 30% of the emission reductions credits that the project will generate. Furthermore, a signing ceremony was held on March 8 in Alexandria during which VES committed to contribute 19% of the value of the generated credits to the Governorate of Alexandria.

This voluntary contribution has to do with the nature of the Alexandria global waste management contract that VES commenced 4 years ago. In 2003, the project won the municipality a "World's Cleanest Arab City" award, and in 2005 the Métropolis prize for the Governorate. A multi-disciplinary training center for environmental services was created and all of the contracted services have been certified according to ISO 9001, 14001 and 18001.

Motivated by a keen awareness of the importance of climate change, these two projects have allowed Veolia Environmental Services to gain solid expertise in the development and certification of CDM GhG reduction projects. We can now implement similar projects more broadly, to meet this unprecedented global challenge.

In a Group perspective, Veolia Environnement participates actively in the development of the carbon market either through projects mechanisms and their resulting emission credits or though its 230 sites which are included in the European Union emission trading scheme.


Veolia Environnement now operates its water, waste management and environmental services, energy services and passenger transportation businesses under a single name. Onyx becomes Veolia Environmental Services.

Veolia Environmental Services, the Waste Management business of Veolia, is the only operator working with local authorities and private companies that covers all segments of the waste market (solid, liquid, non-hazardous industrial and hazardous waste). With a presence all along the supply chain, Veolia Environmental Services provides waste management and logistics services (e.g. waste collection, sewer, street cleaning and waste flow management services) and processes or treats waste to extract value.
In 2005, Veolia Environmental Services' sales amounted to €6.6 billion.
www.veolia-environmentalservices.com

Veolia Environnement (Paris Euronext: VIE and NYSE: VE) is world leader in environmental services. With more than 270,000 employees the company has operations all around the world and provides tailored solutions to meet the needs of industrial and municipal customers in four complementary segments: water, waste management and environmental services, energy services and passenger transportation.
Veolia  Environnement  recorded revenue of €€25.2 billion in 2005.   ww.veolia.com

 

ANNEXE


The Clean Development Mechanism (CDM) is one of the flexible mechanisms defined in the Kyoto Protocol designed to help its signatories lower their GhG emissions from 2008 to 2012 by 5.5% from 1990 levels. CDM projects enable industrialized countries (with emission targets) to invest in "clean" technology projects in developing countries that reduce GhG emissions. CDM projects must also contribute to sustainable development and the transfer of technology. These projects generate certified emission-reduction units that are factored into the emission register of developed countries. To qualify as a CDM project, it must first be audited then registered by the CDM Executive Board of the UNFCCC (United Nations Framework Convention for Climate Change). 

> GREENHOUSE GASES
Greenhouse gases heighten the natural greenhouse gas effect of our atmosphere. When GhG concentrations are too high, they prevent solar energy from radiating back into space and accelerate global warming. GhGs include carbon dioxide, methane, dinitrogen oxide, perfluorocarbons, sulfur hexafluoride, hydrofluorocarbons, water vapor and ozone. The Kyoto Protocol regulates emissions of the first six.

> FLEXIBLE MECHANISMS
The Kyoto Protocol gives the 39 countries required to reduce their emissions three mechanisms that can help them do so "artificially": emission quota trading, joint implementation (JI) and clean development mechanisms (CDM).

> CLEAN DEVELOPMENT MECHANISM (CDM)
This mechanism allows industrialized countries to finance projects to reduce their GhG emissions in developing countries. The investor receives emission credits, in exchange.

> JOINT IMPLEMENTATION (JI)
The joint implementation system is very similar to CDMs. It primarily applies to Central and Eastern European countries.

Analyst and institutional investor contact: Nathalie Pinon - Tel. +33 1 71 75 01 67
US investor contact: Brian Sullivan - Tel +(1) 630  371 2749