Greenhouse Gas Emission Reduction Goals

Across our operations, fuel combustion and purchased energy are the principal sources of greenhouse gases. Our focus on the following energy and productivity improvement programs has helped us improve the strategic management of greenhouse gases attributed to our operations by:

• Reducing fossil fuel use and capturing biogas through BERS
• Improving energy efficiency across our operations and evaluating renewable fuels
• Capturing additional carbon dioxide (CO2) from fermentation through CO2 Advance  Purification Systems
• Implementing the Transportation Advantage Initiative, which reduces greenhouse gas emissions and provides numerous other environmental and business benefits
• Partnering with industry, government and other stakeholders to establish benchmarks and best practices

Anheuser-Busch is managing its carbon footprint by maintaining an inventory, reducing emissions, and reporting results publicly. Using as guidance the Greenhouse Gas Protocol developed by the World Resources Institute and the World Business Council for Sustainable Development, Anheuser-Busch updated its inventory of greenhouse gas emissions in 2006. This inventory addresses direct and indirect companywide emissions of carbon dioxide, methane and nitrous oxide. Our next step is to expand our inventory to include direct emissions for the remaining greenhouse gases. In addition, we are continuing to review our supply chain to identify additional emissions sources.

In 2006, our direct emissions of greenhouse gases in the U.S. totaled 1.43 million metric tons in CO2 equivalents, and indirect emissions were 1.60 million metric tons. For our U.S. operations, we established a 2010 goal of reducing total greenhouse gas emissions, on an absolute basis, by 5 percent from our 2005 baseline. This goal was announced as part of our partnership with the U.S. EPA’s Climate Leaders program. In 2006, through a focused effort on energy savings, we reduced our emissions by 2.8 percent from the 2005 baseline.

Voluntary Partnerships

Anheuser-Busch participates in a number of initiatives focused on greenhouse gas emission reductions and responsible energy management. These partnerships provide the tools necessary to help us meet our goals while reinforcing our commitment to reducing emissions. Voluntary initiatives also provide the opportunity to share best practices with other peer companies and to enhance our reputation as an environmental leader. Our memberships include:

• U.S. EPA Climate Leaders is the largest voluntary greenhouse gas emissions reduction partnership in the United States, with more than 100 corporate members. Our commitment under this program is to reduce absolute greenhouse gas emissions by 5 percent from 2005 to 2010.
• California Climate Action Registry is a voluntary program established by the state of California as a non-profit registry for greenhouse gas emissions.
• U.S. EPA Landfill Methane Outreach Program is a voluntary program that promotes the use of landfill gas as a renewable, green energy source.
• U.S. EPA SmartWay Transport is a voluntary program for freight transportation, focusing on advanced vehicle technologies, improved logistics and fuel reduction. Our Transportation Advantage Initiative is a leading example of the strategies that companies are employing under this voluntary initiative. Anheuser-Busch has met the goal of having at least 50 percent of our carriers be SmartWay members. There are nearly 500 corporate members in the SmartWay program.
• WestStart-CALSTART is a program dedicated to supporting and accelerating the use of advanced transportation technologies. The objectives of the program are improving energy efficiency and reducing air pollution.
• National Biodiesel Board is the primary trade association for biodiesel research and development in the United States, with more than 350 members.

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CO2 Advance Purification Systems

At Anheuser-Busch we evaluate all of our processes for efficiency improvement. CO2 is naturally produced from the fermentation process. An innovative approach called CO2 Advance Purification Systems (CAPS) captures and subsequently reuses more CO2 earlier in – and throughout – the fermentation process than would otherwise be feasible. These efficiency gains in CO2 capture mean fewer emissions and lower costs. We use CAPS technology at our breweries in Fort Collins, Colorado; St. Louis, Missouri; Baldwinsville, New York; Newark, New Jersey; Mortlake, U.K.; and Wuhan, China. We plan to expand our use of this technology to additional locations in the future.

Transportation Advantage Initiative

This program, which began in 1997 and was fully implemented in 2000, allows Anheuser-Busch to centrally manage, review and reconfigure the movement of raw materials and finished goods to and from our U.S. breweries. Through the Transportation Advantage Initiative in partnership with our wholesalers, we are able to improve the utilization of available vehicles, identify when and where lighter weight vehicles can be used and maximize the use of trucks that would otherwise return empty to transport other materials, such as recyclables.

European Operations

The company's Mortlake, U.K., brewery was granted an "opt-out" for the Phase 1 period 2005 through 2007 of the European Union Emission Trading Scheme (EU ETS) because of its participation in the U.K. Climate Change Agreement program. The carbon reduction target for the U.K. emission trading initiative was used during this opt-out period. The final year of participation in the U.K. ETS was 2006. During the five-year program, the brewery met its reduction target.

The Mortlake brewery will be participating in the EU ETS Phase 2, 2008-2012. The annual site allocation under the National Allocation Plan is 12,766 metric tons carbon dioxide equivalents. In 2006, the brewery's emissions were 13,673 metric tons of carbon dioxide equivalents.

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