Fluid Technologies For A Better World ™

1. Fluid Technologies For ABetter World™

2. Our Growth Plan • We will create technologies to make the world a better place. • We will invest in the development of high performance fluid technologies resulting in products that work better, last longer and benefit the environment.

3. Lubrizol at a Glance • Business: A global, fluid technology company concentrating on high-performance chemicals, systems and services for industry and transportation. • Founded: 1928 in Cleveland, Ohio USA • World headquarters: Wickliffe, Ohio USA • Employees: Approximately 4,000 worldwide • Manufacturing Plants: 29 facilities in 15 countries • Sales and Technical Service Offices: 46 worldwide • Research Centers: Wickliffe, Ohio USA; Hazelwood, England U.K.; Kinuura, Japan • Annual Sales: US$1.7 billion

4. Lubrizol Today(2000 Sales) Chemicals for Transportation Chemicals & Systems for Industry $1,460 million $314 million 6% Fuel Products 9% Performance Systems 28% Specialty Fluids Performance Chemicals 36% Additives for Engine Oils • Heavy-duty diesel • • Passenger cars • • Marine diesel • • Stationary power • • Small engines 66% Industrial Fluids 55%

5. Lubrizol Technologies Emulsifiers/ Surfactants Dispersants Rheology Control Friction Modifiers Viscosity Modifiers Fluid Sensors Surface Modifiers Fluid Metering Fluid Technologies Monomers/Polymers Water-based Fluids Emission Control Corrosion Protection Anti-wear Mist Control Oxidation Control Combustion Modifiers Detergents Extreme Pressure Agents

7. Systems Services Chemistry Fluid Technology For A Better World • Focused on applications to: • Improve operating performance • Extend equipment life • Improve environmental impact

8. Ethical, trustworthy conduct Our Vision Leverages Our Strengths Innovative technologies that result in significant benefits to our world Loyal employees and customers Can-do problem solving VISION

9. 12 10 1988 8 , g/hp-hr 6 x NO 1994 4 1998 1991 1990 2 2002 0 0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 Particulate, g/hp-hr HD EMISSION REQUIREMENTS Expected Emission Requirements for 2007 : NOx : 0.2 g/hp-hr Particulates.: 0.01 g/hp-hr 2007

10. PuriNOx™

11. PuriNOx™ PuriNOx™ low-emission water-blend diesel fuel developed with support from Caterpillar Benefits Considerations • Reduces emissions • NOx 5-20% • PM 20-50% • Fill-n-go • No equipment changes • Provides quick, easy solution • for EPA non-attainment regions • Cost the same as conventional • fuel • Lower fuel economy by 12-13% • but yields more output per unit • of hydrocarbon • Tax relief

12. PuriNOx™ Worldwide Diesel Fuel Consumption 200 billion gallons worldwide 1/3 central fueled = 66 billion gallons

13. PuriNOx™ Progress  Global fleet testing under way - 16 fleets  Durability testing completed  Tax incentives in place in Italy, France and U.K.  Ten blenders in place around the world by December 2000  Several major marketers have approached Lubrizol about possible alliances  EPA certification filing under way  Texas EPA proposed PuriNOx™ be mandated for nine counties

14. PuriNOx IN USA Latest Developments February 2001

15. Market Update • Caterpillar Engines & PuriNOx Fuel • Joint development began in 1997 • Caterpillar undergoing field trials

17. Market Update • CARB approval • Received 31 January 2001 • Reduced NOx emissions by 14% • Reduced particulate matter emissions by 62.9% • No net increase in toxic emissions

19. PuriNOx IN EUROPE Latest Developments January 2001

20. CONTENTS • KEY ENVIRONMENTAL BENEFITS • EUROPEAN MARKET DEVELOPMENT FOR EMULSION FUELS; Fiscal/Specification • MARKET DEVELOPMENT PROCESS • UPDATE ON PuriNOx SUPPLY POSITION

21. EUROPEAN MARKET SUMMARY FOR EMULSION FUELS • There is great variability in the level of market development for emulsion fuels within Europe. • The degree of acceptance is different from country to country as it is driven by national factors. • The European Commission is supportive but passive - allowing member states to make national decisions.

22. PURINOX MARKET DEVELOPMENT PROCESS Cost-Benefit Data, Proof of Operability Lubrizol Additive, Equipment Fuel Supplier Emulsion Fuel Proof of Operability, Comfort viz OEMs Obligation, or Support End User Public Authority Tax Incentive Cost-Benefit Data Government

23. EARLY INTERMEDIATE ADVANCED STAGES OF MARKET DEVELOPMENTRepresentation; Emulsion Fuels Each stage currently takes 12-18 months. This will decrease in countries adopting this technology later on.

24. STAGES OF MARKET DEVELOPMENTEarly Stage • Characterised by; • Lack of established competitors. One ‘market leader’. • Need for tests to prove emissions benefits under local circumstances • No fiscal incentives. Fuel is more costly to user. • Interest from Public Authorities. • Opportunities only in ‘hotspots’ where environmental improvement considerations outweigh fuel costs.

25. STAGES OF MARKET DEVELOPMENTIntermediate Stage • Characterised by; • Some competition in market making activities. • Need for tests to prove operational robustness in the field. • Agreement not to tax water. Fuel is marginally more costly to user. • Support from Public Authorities. • Semi-commercial trials in ‘hotspots’.

26. STAGES OF MARKET DEVELOPMENTAdvanced Stage • Characterised by; • Market established with competition. • Regular Field usage, creating wider awareness. • Tax incentives granted by Government to achieve cost neutrality/ advantage. • Tax incentives based on a National Fuel Specification. • Roll out to other locations/ applications. • Further commercial trials in additional ‘hotspots’. • Most major fuel suppliers wanting an emulsion offering.

27. STAGES OF MARKET DEVELOPMENTCurrent Status of European Countries; Jan 2001 Market Making Market Development Commercial Sales INTERMEDIATE ADVANCED EARLY Spain Germany Switzerland UK France Sweden Netherlands Italy

28. NATIONAL DEVELOPMENTS; Fiscal/Specification • ITALY • 36% less than diesel tax from 01/01/2001 (739 vs 474 ITL/litre) • Based on Draft Fuel Specification of 12-15% m/m water. • FRANCE • 32% less than diesel tax (161.80 FF vs 238.46 FF/100 litres) • Based on proposed EEG (Emulsion d’Eau et Gazole) Specification (9-15% m/m water).

29. ITALIAN EMULSIONFUEL SPECIFICATION

30. NATIONAL DEVELOPMENTS; Fiscal/Specification • SWITZERLAND • Government agreement not to tax water or additives. • UK • Government agreement not to tax water (effective since 01/08/2000). • NETHERLANDS • Government agreement not to tax water

31. NEW ENGINE DATA FOR PuriNOx • Perkins 1000 series engine testing: • European Transient Cycle (ETC) • Off-Highway Certification Cycle ISO 8178 • R24

32. ETC;Data on emulsion fuels compared to ULSD - Perkins 1000 series engine (g/kW-hr) - 14 - 27 - 15 - 24

33. ISO 8178;Data on emulsion fuels compared to ULSD - Perkins 1000 series engine (g/kW-hr) - 10 - 21 - 26 - 39

34. - 9.8 - 20 - 6.9 - 13.3 R24;Data on emulsion fuels compared to ULSD - Perkins 1000 series engine

35. - 50 - 64 - 78 - 81 R24;Data on emulsion fuels compared to ULSD - Perkins 1000 series engine

36. ILLUSTRATION OF CO2 REDUCTION BENEFITExample for Purinox 10E (10% m/m Water) 1.00 km 1.00 kg Diesel 1.03 km 1.11 kg Purinox 10E 0.93 km 1.00 kg Purinox 10E

37. KEY ENVIRONMENTAL BENEFITS • For Emulsion Fuel containing X% m/m H20; • Smoke Reduction = 4X-5X % i.e. 50-80% • Particulate Reduction = 2X % • NOx Reduction = X % • Power Loss = 0.7X-0.8X % • Fuel Consumption Increase = 0.7X-0.8X % • Reduction in Formaldehyde/Ozone forming HC species of 20-40% • CO2 Reduction = 2-6%

38. UPDATE ON PuriNOx SUPPLY POSITIONManufacturing Units • 2 alternative PuriNOx batch manufacturing units are commercially available; • Large Scale Fuel Production Unit (40 M litres/yr) • Intermediate Scale Fuel Production Unit (10 M litres/yr) • A continuous PuriNOx manufacturing unit is under development.

39. UPDATE ON PuriNOx SUPPLY POSITIONOperational Experience • Europe; 2 Fuel Blending Units in commercial operation at Bromborough, UK and Italy. 4 more being manufactured. • USA; 3 Fuel Blending Units running commercially. 4 more in manufacture/installation.

40. Our Future is Full of Promise