Socioenvironmental Performance

Environmental Performance

The management of environmental performance at Embraer is based on the awareness and training of all employees, on continuously improved actions regarding the subject, and on monitoring processes, activities and results in the Environmental, Occupational Health, Safety and Quality Integrated Management System (SIG-MASSQ). (see page 37)
SIG-MASSQ integrates all of the data referring to the environmental impact of the units in Brazil, and their aggregate indicators are: liquid effluents, solid wastes, atmospheric emissions, water, electrical power and greenhouse gases (GHG).

As a reflection of its environmental initiatives, the Company has held ISO 14001 certification since 2002 and is evaluated annually by ABS – Quality. Furthermore, since December 2007, Embraer has promoted the corporate management of its environmental guidelines, through the Environmental Master Plan.

Our commitment to protecting the environment and natural resources is also extended to an unrestricted compliance with all of the environmental legal requirements and standards in all of the countries in which Embraer has units or sells its products.

In 2010, based on the Embraer Enterprise Excellence Program (P3E) and on the Behavioral Program, new requirements were included that are connected to the environment and occupational health and safety, by establishing targets for reducing the use of natural resources and the number of job-related accidents.

Regarding eco-efficiency, in 2010, a survey began of possible energy-efficiency projects and of rationalizing water consumption in the various production and administrative processes. During the current year, Embraer is evaluating long-term goals regarding the environmental aspects of its operations and processes.

As for product development, a project was begun in the second half of 2010 to introduce environmental requirements to Embraer's products, throughout their life cycle.

During 2010, Embraer continued to support several projects for developing bio-kerosene for aviation, through various technological partnerships, besides being a founding member of the Brazilian Alliance for Aviation Bio-Kerosene (Aliança Brasileira para Bioquerosene de Aviação – ABRABA).

Product Development

GRI 4.17 | EC2 |EN6 | EN26 |EN27

The global air transportation industry is responsible for about 2% of the greenhouse gas emissions generated by human action⁶. The growth of this industry over the past several decades, allied with increased efficiency, has avoided making the current scenario more significant. However, with the constant growth in air traffic, it is forecast that this proportion will increase in the coming years.

In response to that, civil aviation in general – airline companies, aircraft manufacturers, airports and air traffic control systems – has been working in a coordinated fashion on a series of goals for reducing its environmental impact (footprint), so as to continue to be an instrument for economic growth. The goals include: improve fuel burn efficiency by 1.5% by 2020, limit industrial emissions as of 2020 and reduce industry emissions by 50% by 2050, based on 2005 figures.

To that end, we consistently invest in technological development, in order to meet the challenge. Embraer's plan for technological development gives priority to initiatives that seek to improve the performance of the products and mitigate their environmental impact.

Among the innovation and increased efficiency initiatives are the following projects:

Improvement of airplane aerodynamics
Intensively use of lighter materials to reduce the structural weight of the aircraft
Develop aircraft with more electrical systems that are less dependent on power from the engine
Research alternative fuels, including bio fuels
Work to develop new-generation engines, in conjunction with propulsion system manufacturers
Research new technologies for reducing internal and external noise levels, for the purpose of increasing passenger comfort and causing less noise impact in the vicinity of airports

During the second half of 2010, a project was begun to introduce environmental requirements and evaluate the impacts of Embraer's products on the environment during their entire life cycle, which consists of:

Conception
Certification
Production Process
Customer Operation
Disposal

Development of Biokerosene

Companies and institutions connected with the aviation, agricultural and energy sectors have been carrying out a variety of activities and projects, in order to contribute to the development of sustainable alternative fuels for aviation.

The industry's objective is to develop effective solutions for reducing its environmental impact and to ensure the sustainable growth of this important means of transportation, by using sustainable biofuels that do not contribute to deforestation, or cause other possible harm to the environment.

Embraer supports the development and introduction of biofuels as a long-term sustainable alternative for aviation. As an integrating element, the Company must assess the impact of new fuels on its platforms.

In November 2009, Embraer, General Electric and Amyris signed a memorandum of understanding to evaluate the technical and sustainability aspects of renewable fuels, starting with sugar cane. The initiative will result in a demonstration flight, in 2012, with an Embraer E-Jet owned by Azul Linhas Aéreas and using GE engines.

Embraer has participated in different industry initiatives that seek to make the development and production of biokerosene more dynamic, including: ABRABA – Brazilian Alliance for Aviation Biofuels (Aliança Brasileira para Biocombustíveis na Aviação); the international SAFUG – Sustainable Aviation Fuel Users Group; the European consortium SWAFEA – Sustainable Way for Alternative Fuels and Energy for Aviation; and the American CAAFI – Commercial Aviation Alternative Fuels Initiative.
GRI 4.13 | 4.17 | SO5

Brazilian Alliance for Aviation Biofuels
(Aliança Brasileira para Biocombustíveis na Aviação – ABRABA, www.abraba.com.br )

Moved by the growing demand to meet the requirements for reducing greenhouse gas emissions in aviation, as well as providing energy safety in Brazil, ABRABA has become a forum for discussing the various aspects of developing sustainable aviation biofuels, positioning Brazil as one of the world's main protagonists of this technology, similar to what has already happened with ground transportation.

ABRABA believes that the use of sustainable biofuels produced from biomass is fundamental for maintaining the growth of the aviation industry in an economy of low carbon emissions. The goal is to obtain biofuels of equivalent quality, safe use, cost and adequate production capacity, compared to petroleum-derived fuels.

In different regions of the world, airline companies and airplane manufacturers have performed flights using alternative fuels, mainly biokerosene mixed with conventional aviation gas (kerosene), with the objective of showing the technical feasibility of these renewable fuels. From 2008 to 2010, eight demonstration flights were taken with biofuels produced from several raw materials, one of which, in Brazil, used domestically produced pinhão-manso.

Domestic Technological Capacity

GRI EN18 | EN26

The engagement of Brazil in projects for developing alternative fuels will make agriculturalists, technicians and industries able to create a consistent technological base. Among the benefits brought by establishing a specific policy and with an eye to the future of aviation are:

Technological development between educational institutions, regulatory agencies and private organizations
The insertion of the nation's industry in the alternative fuels market
The engagement of the agricultural sector and research institutes for the purpose of seeking highly productive genetic material and the productive development of agro-energy cultures that are adequate for Brazil's soil and climate conditions
Bringing value to biomasses produced in the country
An assessment of the impacts of using sustainable biofuels for aviation
Safety and energy independence for defense aviation

Environmental Management System

The Environmental, Occupational Health, Safety and Quality Integrated Management System (SIG-MASSQ) is responsible for managing and monitoring the processes related to this subject, while always working for continuous improvement. The efforts put forth throughout the years resulted in the Company receiving OSHAS 18001 and ISO 14001 certification, and maintaining them year after year. In 2010, all of the Company's units in Brazil had objectives and goals aligned with managing atmospheric emissions, wastes and natural resources.

Embraer reinforced its environmental management system through P3E, by adopting the eligibility requirements for the certifications (bronze, silver and gold) for each cell group, required for the environment, occupational health and safety, highlighting: having no pending nonconformities or lacking of action plan; fully complying with all legislation; maintaining spreadsheets of updated and monitored environmental aspects and impacts; and performing a SIG-MASSQ self-evaluation.

The cell groups responsible for projects or results directly linked to the Environmental Master Plan have indicators for accompanying the evolution of the actions carried out.
Embraer develops its activities with a focus on the efficiency of its processes and on the high quality of its products. In line with these guidelines, it takes into account the issues of health and safety, quality of life of its employees, and the socioeconomic development and well-being of the communities with which it is related, via educational and management improvement programs for civil organizations

Eco-Efficiency

Besides all of these actions, Embraer also has an Internal Electrical Power and Water Committee (CICEA) that puts out ideas, information and technologies for the purpose of raising the awareness of employees regarding the need for economizing these resources.

Consumption of Electrical Energy

GRI EN4 | EN7

In Brazil, Embraer's units purchase electrical energy from the power companies in the regions where they are located. In 2010, 421,000 GJ were purchased.

As for the projects for reducing energy consumption, we began substituting light fixtures in 2010, at the Faria Lima unit (São José dos Campos), where 80% have already been changed, bringing savings of 16 GJ/year. The approximately 3,000 remaining fixtures will be changed later this year.

Another investment in 2011 will be to change 750 air conditioning units, which will bring a reduction in consumption of 6 GJ/year. Furthermore, other projects will be evaluated within the plan for establishing Embraer's eco-efficiency goals.

In this context, the work is being done in partnership, since 2008, with the School of Electrical Engineering of the Universidade Estadual Paulista Júlio de Mesquita Filho (UNESP) in Guaratinguetá.
GRI EN5

Energy Consumption [GJ thousand]

The Environmental, Occupational Health, Safety and Quality Integrated Management System (SIG-MASSQ) is responsible for managing and monitoring these processes, while always pursuing continuous improvement.

Direct Energy Consumption Listed According to Primary Energy Source

GRI EN3

Sources [Gj – Unit]	2010	2009	2008
Heavy Fuel Oil	2.600	4.143	7.272
Diesel Oil	358	687	1.061
Gasoline	2.111	1.662	297
Diesel	6.293	14.745	5.726
Aviation Gas	32	49	429
Aviation Kerosene	361.868	359.904	495.142
Ethanol	1.934	5.019	5.633

Water Consumption

Embraer has been identifying and intensifying actions for reducing water consumption in its production and administrative processes.

In 2010, consumption was reduced by 40,450 m3 at the Brazil units. This savings came from investments in production processes, from installing timed faucets in the restrooms (bringing as much as a 60% reduction in water consumption) and from implementing projects for reusing water. For 2011, plans include continuing these projects, intensifying improvement studies and modernizing the paint shops.

There is a reuse rate of 831 m3/month in various production processes of the Faria Lima and Gavião Peixoto units.

The ideal total water consumption at the Brazil units, in 2010, was 564 m3 x 1000.

During 2011, we will continue assessing alternatives for reducing water consumption, also as part of the plan for establishing Embraer's eco-efficiency targets.
GRI EN8 | EN10

Unit	Initiative	Reuse
Gavião Peixoto	Irrigating trees and gardens with reused water	281 m³/month (during the dry season)
Faria Lima (São José dos Campos)	Reused in the towers for washing gases and in the paint shop of F-113	550 m³/month

Protecting Biodiversity

The Faria Lima, Eugênio de Melo, Botucatu, Taubaté, and ELEB plants do not have protected areas. Only Gavião Peixoto (GPX) had a demand that was finalized in 2010 (according to Pre-License 000373, of December 8, 2000), which requested a Permanent Preservation Area (PPA) of 200 hectares, for a total area of 1,693.39 hectares.

Since 2001, at the GPX plant, Embraer has been reconstituting an area of 356.71 hectares, by planting 91 species of seedlings native to the region. This environmental recovery process is backed by the Forest Restoration Project approved by the State Natural Resources Protection Department of the Department of the Environment of the State of São Paulo (DEPRN).

In the recovered area, 32.38 hectares are a permanent preservation area and 328.74 hectares are a legal reserve. Twenty-three hectares were planted with 35,200 trees, in 2010, for a total of 594,200 trees, or 100% of the total area set aside for the project (356.71 hectares). The reforestation of the area permits the reconstitution of the local ecosystem and the return of the region's wildlife.

Another preservation area is located near the Botucatu plant, where Embraer acquired three hectares of cerrado, in order to perform the environmental compensation requested by the DEPRN, due to the impact caused on the vegetation by the building expansions that occurred there. Therefore, Embraer began a project at that site, in 2009, to create a Private Reserve of Natural Assets (Reserva Particular do Patrimônio Natural – RPPN). The RPPN is private conservation unit legally established by public authorities. This is a voluntary act by the landowner, who transfers the ownership of the land to the State, but maintains control of the area, and who is then exempt from paying property tax.

At the RPPN, scientific research can be done, as well as visits for touristic, recreational and educational purposes, supported by universities, organizations and public agencies. For organizing the use and preservation of the nature area, Embraer has had a management plan in place since 2009, including a survey of the flora and fauna, and as soon as the process is finished, it will make the community aware of the area's existence.
GRI EN11 | EN12 | EN13

In 2011, the Embraer Institute for Education and Research launched Embraer's Jequitibá Center for Environmental Education, covering 250,000 square meters and named for a jequitibá tree that is over 500 years old on the site. The project is done in a partnership with the departments of education and of the environment of the city of São José dos Campos, along with local universities and NGOs. The objective is to promote environmental awareness among public school students and contribute to the professional qualification of teachers and local residents.
GRI EN14

Emissions, Effluents and Waste

Greenhouse Gas Emissions

The emission of greenhouse gases (GHG) is also of concern to Embraer. Based on a process established in 2007, we do a GHG inventory annually, according to WRI/WBCSD standards. In 2010, for the second consecutive year, Embraer audited its GHG emissions inventory for the purpose of validating the data and improving its survey process. This audit follows ISO 14064 – Greenhouse Gases: Part 1 – Specifications for Quantifying, Monitoring and Reporting Emissions and Removing Entities. The audit was performed by Lloyd's Register Quality Assurance.

We continuously seek to reduce our emissions through different projects for improving efficiency, like lowering electrical consumption, improving the internal logistics of products being manufactured, and the consumption of kerosene during technical and corporate flights.

Embraer's Brazil units recorded the following GHG emissions:

Tons of CO₂ Equivalent	2010⁽²⁾	2009⁽¹⁾	2008
Scope 1 – Direct Emissions	41,728	36,990	48,100
Scope 2 – Indirect Emissions	6,360	2,951	6,215
Scope 3 – Other Indirect Emissions	22,390	23,249	22,390

1. The amounts published in the previous report, with reference to the 2009 inventory, were estimated and then adjusted, after the audit for the ISO 14064 process.
2 . A preliminary estimate. It can be altered by a review of the data entrance date or the expansion of the inventory limits, during the audit.
GRI EN16 | EN17 | EN19

Volunteer Reporting Initiatives on the GHG Inventory

By joining different voluntary initiatives for reporting GHG emissions, Embraer has participated, since 2007, in the Brazilian GHG Protocol Program as one of its founding members, and in 2010, we obtained the silver seal. In 2008, the Company also joined the Carbon Disclosure Project.

Besides providing a better understanding and positioning regarding the subject, joining these initiatives gives the Company a better relationship with stakeholders and an increased capacity to participate in defining public policies for the carbon market, among other competitive advantages.
GRI EN18

MP, SOx, NOx and VOC Emissions

Embraer's objective, by 2012, is to reduce VOC emissions by 20% compared to 2008. During 2010, the chemical milling facilities were transferred from the Faria Lima plant to the Botucatu plant, following the installation of a new control and exhaust technology, which will allow expected VOC emissions to be reduced by 7 tons/year.

For the coming years, a plan has been established for investing in different processes:

Automation of the painting process, by installing robots in the larger paint shop of the Faria Lima plant
Installation of a solvent recovery system in the area for painting primary parts with reusing the solvent in processes for cleaning parts at the Faria Lima plant

The total discharge of particulate materials, composed of VOCs, and sulfur and nitrogen oxides during the operations of all of the Brazil units are shown in the following table.

Atmospheric Emissions [Brazil units]	2010⁽²⁾	2009⁽¹⁾	2008
Particulate Material – MP	17.68	7.34	6.67
Sulfur Oxide – SOx	3.29	1.95	4.90
Nitrogen Oxide – NOx	55.75	16.04	16.96
Volatile Organic Compounds – VOC	24.30	25.05	21.83

The results of the ELEB plant began to be reported in 2010, along with monitoring the emissions of its paint shops and gas washers. The 2010 amounts are within legal limits. Opportunities for improvement for 2011 are being assessed, regarding NOx emissions (25 tons in 2010).
GRI EN20

%of the hazardous wastes from the Brazil units go to companies that co-process or recycle them

Effluents and Wastes

The effluents and waste generated during the various production processes are treated according to the most stringent standards in effect. As for waste, the main generating processes are: production of composite materials, surface treatments, aircraft painting and the milling of parts.

Hazardous materials are given special attention when disposed of. Approximately 99.3% of the hazardous waste of the Brazil plants go to companies that co-process or recycle them. The following are examples of the disposal of these wastes:

Discarded florescent bulbs are recycled. The mercury in them is used to produce thermometers, the aluminum is reused to make cans and the chemical powder is used to make ceramics
Cans, filters, cleaning cloths and leftover paint are used in ovens for manufacturing cement for the construction industry
Cans, filters, cleaning cloths and leftover paint are used in ovens for manufacturing cement for the construction industry
Chemical sludge and leftovers from surface treatments

In 2010, the Brazil units generated approximately 12,800 tons of waste, a drop of 6% compared to 2009.

As for non-hazardous materials, Embraer generated 10,000 tons, of which 80% is sent for recycling, 3% for recovery, 16% to the sanitary landfill and 1% to make compost.

Embraer generated 2,700 tons of hazardous waste, which was 5% less than in 2009. The Company's main guideline is to not send these wastes to industrial landfills. Therefore, 54% of the hazardous waste go for co-processing in cement ovens; 44% are reused as raw materials for other production processes outside of Embraer and the rest is decontaminated, recovered or sterilized.

Waste Disposal Methods, by Type and Weight [Kg]	Type of Waste	2010	2009	2008
Recycling	Hazardous	1.187.967	1.422.931	4.445.899
Recycling	Non-hazardous	8.115.998	8.134.672	11.996.495
Decontamination	Hazardous	21.984	12.651	23.305
Recovery	Hazardous	11.323	14.505	14.319
Recovery	Non-hazardous	324.000	331.000	247.00
Sterilization (autoclave)	Hazardous	1.588	1.598	300
Sanitary Landfill	Non-hazardous	1.627.735	2.416.923	2.900.797
Compost	Non-hazardous	134.240	0	0
Co-processing	Hazardous	1.449.824	1.366.860	1.477.041
Total		12.874.659	13.701.140	21.105.156

GRI EN22 | EN24

Total Water Disposal, by Quality and Destination

GRI EN21 | EN25

As for industrial effluents, the Faria Lima, Eugênio de Melo, ELEB and Botucatu units use the public sewer system, run by Sabesp, to dispose of them, after giving them proper treatment according to Decree No. 8,468 (September 8, 1976), Article 19A. The volumes disposed of by these units are shown in the following table.

In 2010, the Botucatu unit aggregated new surface treatment and chemical milling processes, which is the main cause of the 13% growth in effluents generated compared to 2009.

At the Gavião Peixoto unit, a physical-chemical treatment is done to industrial effluents, for later disposal in the Córrego da Mulada stream, according to Decree No. 8,468 (September 8, 1976), Article 18A. The volumes disposed of by this unit are shown in the following table.

In 2010, the Gavião Peixoto unit aggregated two new paint shops to its production process, bringing the total to four shops in operation. Furthermore, it began the technical cleaning process of these shops, which also contributed to an increase of 89% in the industrial effluents generated.
I

Improvements Related to the Environment, by Unit

Embraer modernized the galvanization process by substituting wood crates for devices that can be returned to the ELEB unit and by substituting the bright shot and shot peening equipment, thus reducing the generation of glass microspheres and employee exposure to noise.

At the Faria Lima plant, the internal route for transporting materials and aircraft was optimized, with less distance covered and a resulting reduction in CO2 emissions.
GRI EN18

Among the improvements made in the Botucatu unit, the main ones were: changing the energy matrix from OC4 gas to LPG; reducing electrical consumption; substituting the exhaust of the paint shop by removing the axial exhaust units; installing centrifugal exhaust units with a controlled speed; improving the performance of the compressed air distribution circuit by interconnecting the central air units; reducing water consumption, reusing it in the effluent treatment plant and using the treated effluents at the ETEI to fill the gas washers; and changing the hot water tables for dry heat in the dining hall.
GRI EN5 | EN10

Industrial Effluents [m³/year]	Industrial Effluents [m³/year]
Main disposal parameters: pH 6 to 10, Sulfite 1.0 mg/lt, Hexavalent chromium 1.5 mg/lt, Total Suspended Solids up to 20ml/lt and total Chromium 5.0 mg/lt.	Main disposal parameters: pH 5 to 9; DBO: 60mg/lt or 80% reduction, Total Suspended Solids up to 1.0 ml/lt and total Chromium 5.0 mg/lt .

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