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VER+ Verification Report

LANXESS INDÚSTRIA DE PRODUTOS QUÍMICOS E PLÁSTICOS LTDA.

Initial and First Periodic Verification of the Registered VER+ Project

“Lanxess Biomass Generation Project (hereafter referred to as LBG – Project): Retroactive Verified Emission Reductions”

VER+ Project No. 39-1

Monitoring period: 01-07-2002 to 31-12-2007

Report No. 600500472

16 December 2010

TÜV SÜD Industrie Service GmbH Carbon Management Service

Westendstrasse 199 - 80686 Munich - GERMANY

PERIODIC VERIFICATION “Lanxess Biomass Generation Project (hereafter referred to as LBG – Project): Retroactive Verified Emission Reductions.” Page 1 of 19

Report No. Date of first issue Version No.: Revision date No. of pages

600500472 09-12-2010 01 16-12-2010 19 (excluding cover page and annexes)

Subject: Retroactive VER Verification

Executing Operational Unit:

TÜV SÜD Industrie Service GmbH, Carbon Management Service Westendstrasse 199 - 80686 Munich, Federal Republic of Germany

Project Participant (client):

Lanxess Indústria de Produtos Químicos e Plásticos Ltda, 18540-000 - Sao Paulo SP, Brazil

Project Title: “Lanxess Biomass Generation Project (hereafter referred to as LBG – Project): Retroactive Verified Emission Reductions”

Registration number under Blue Registry: 39-1 https://www.netinform.de/BlueRegistry/ProjectInfo.aspx?ID=24

Validation report details: TÜV SÜD Report No. 976350; Revision 01, dated 25-02-2009

Methodology (name / version): AMS-I.C. / version 9

Scope(s): 1 Technical Area(s): 1.2 Revised Monitoring Plan: N.A.

Monitoring period: 01-07-2002 to 31-12-2007

First Monitoring Report (version/date) Version 02 / 02-08-2010

Final Monitoring Report (version/date) Version 06 / 15-12-2010

Project documentation link: http://www.netinform.de/KE/Wegweiser/Guide2.aspx?ID=3787&Ebene1_ID=49&Ebene2_ID=1153&mode=4


Summary: TÜV SÜD Industrie Service GmbH has performed the verification of the retroactive emission reductions of the registered VER+ project: “Lanxess Biomass Generation Project (hereafter referred to as LBG – Project): Retroactive Verified Emission Reductions”. The project involves installation of biomass based boiler (20 TPH using wood chips) to replace steam and heat generated using heavy fuel oil in the baseline scenario. The new biomass boiler has been in operation since June 2002 and has gradually replaced the fossil fuel based boiler (which acts as a stand-by unit now). The management of Lanxess Indústria de Produtos Químicos e Plásticos Ltda (hereafter referred as Lanxess) is responsible for the preparation of the GHG emissions data and the reported GHG emission reductions. A document review, followed by a site visit was conducted to verify the information submitted by the project participant regarding the present verification period. Based on the assessment carried out, the verifier confirms the following:

The project has been implemented and operated in accordance with the description given in the registered PDD (version 4, dated 31-10-2008).

As per registered PDD, the estimated emission reductions (ERs) is 152,568 tCO2e, however the verified ERs for the whole monitoring period is only 94,871 tCO2e. This reduction in verified ERs is because of accounting of emission reductions only for biomass usage in the boiler and not the Calciner; the biomass usage in the boiler has only been accounted after the date of obtaining the operating license for the Boiler i.e., March 2003; and correction in the approach of calculating the ERs taking into account more conservative approach.

The monitoring plan complies with the applied methodology (AMS I.C., Version 09, Thermal energy for the user) and the monitoring has been carried out in accordance with the monitoring plan.

Installed equipment essential for generating emission reductions run reliably and the meters are calibrated appropriately.

The project is generating emission reductions as a VER+ project. The verifier can confirm that the GHG emission reductions are calculated without material misstatements. Our opinion refers to the project’s GHG emissions and resulting GHG emission reductions reported, both determined using the valid and registered project’s baseline, its monitoring plan and its associated documents. Based on the information we have seen and evaluated, we confirm that the implementation of the project resulted in 94,871 tCO2e of emission reductions during the verification period 01-07-2002 to 31-12-2007. Assessment Team Leader: Sandeep Kanda Assessment Team Members: Wellington Almeida Praveen Tekchandani

Technical Reviewer: Thomas Kleiser Certification Body responsible: Thomas Kleiser


Abbreviations AMS Approved Methodology Small scale CAR Corrective Action Request CDM Clean Development Mechanism CDM-EB CDM Executive Board CER Certified Emission Reduction CMP Conference of the Parties serving as the Meeting of the Parties to the Kyoto

Protocol CO2e Carbon dioxide equivalent CR / CL Clarification Request DNA Designated National Authority DOE Designated Operational Entity EF Emission Factor EIA / EA Environmental Impact Assessment / Environmental Assessment ER Emission Reduction FAR Forward Action Request GHG Greenhouse Gas(es) GWP Global Warming Potential IPCC Intergovernmental Panel on Climate Change IRL Information Reference List KP Kyoto Protocol MP Monitoring Plan MR Monitoring Report PDD Project Design Document PP Project Participant TÜV SÜD TÜV SÜD Industrie Service GmbH UNFCCC United Nations Framework Convention on Climate Change VVM Validation and Verification Manual


Table of Contents Page

1 Introduction ........................................................................................................................... 5

1.1 Objective ........................................................................................................................ 5

1.2 Scope ............................................................................................................................. 5

1.3 GHG Project Description ................................................................................................ 5

2 Methodology .......................................................................................................................... 7

2.1 Verification Process ....................................................................................................... 7

2.2 Verification Team ........................................................................................................... 7

2.3 Review of Documents .................................................................................................... 7

2.4 On-site Assessment and follow-up Interviews ............................................................... 8

2.5 Quality of Evidence to Determine Emission Reductions ................................................ 8

2.6 Resolution of Clarification and Corrective and Forward Action Requests ..................... 8

2.7 Internal Quality Control .................................................................................................. 9

3 Verification Results ............................................................................................................. 10

3.1 FARs from Validation ................................................................................................... 10

3.2 Project Implementation in accordance with the registered PDD .................................. 10

3.3 Compliance of the Monitoring Plan with the Monitoring Methodology ......................... 10

3.4 Compliance of the Monitoring with the Monitoring Plan ............................................... 10

3.5 Assessment of Data and Calculation of Greenhouse Gas Emission Reductions ........ 13

4 Summary of Findings .......................................................................................................... 15

5 Verification Statement ......................................................................................................... 19

Annex 1: Verification Protocol Annex 2: Information Reference List


1 INTRODUCTION

1.1 Objective Lanxess Indústria de Produtos Químicos e Plásticos Ltda (hereafter referred as Lanxess) has commissioned an independent VER+ verification by TÜV SÜD Industrie Service GmbH (TÜV SÜD) of its registered VER+ project:

“Lanxess Biomass Generation Project (hereafter referred to as LBG – Project): Retroactive Verified Emission Reductions.”

As the project has been validated under VER+ Version 1 standard, therefore the verification is also carried out applying the same version. The objective of the verification work is to comply with the requirements of paragraph 62 of the CDM Modalities and Procedures. According to this assessment TÜV SÜD shall: ensure that the project activity has been implemented and operated as per the registered

PDD (version 4, dated 31-10-2008), and that all physical features (technology, project equipment, monitoring and metering equipment) of the project are in place,

ensure that the published MR and other supporting documents provided are complete, verifiable and in accordance with applicable CDM requirements,

ensure that the actual monitoring systems and procedures comply with the monitoring systems and procedures described in the monitoring plan and the approved methodology,

evaluate the data recorded and stored as per the applied methodology AMS-I.C. / version 9.

1.2 Scope

The verification scope encompasses an independent and objective review and ex-post determination of the monitored reductions in GHG emissions by the Designated Operational Entity. The verification is based on the submitted monitoring report, the validated project design documents including its monitoring plan and validation report, the applied monitoring methodology, relevant decisions, and guidance from the CMP and the EB and any other information and references relevant to the project activity’s resulting emission reductions. These documents are reviewed against the requirements of the Kyoto Protocol, the CDM Modalities and Procedures and related rules and guidance. Based on the requirements in the VVM, TÜV SÜD has applied a rule-based approach for the verication of the project. The principles of accuracy, completeness, relevance, reliability and credibility were combined with a conservative approach to establish a traceable and transparent verification opinion. The verification considers both quantitative and qualitative information on emission reductions. The verification is not meant to provide any consultancy towards the client. However, stated requests for clarifications, corrective actions may provide input for improvement of the monitoring activities.

1.3 GHG Project Description

Project activity: “Lanxess Biomass Generation Project (hereafter referred to as LBG-Project): Retroactive Verified Emission Reductions”

VER+ registration number: 39-1 Project Participants: Lanxess Indústria de Produtos Químicos e Plásticos Ltda Location of the project: Latitude: S 23o12.6639’ and Longitude: W 47o34.5294’


Rod. Marechal Rondon, km 139,5 – Porto Feliz –SP. Zip Code: 18540-000. Brazil

Crediting period: 01-07-2002 to 31-12-2007 (Fixed) The LBG - Project involves the generation of heat and steam using biomass residues (pine wood chips), gradually displacing the use of fossil fuel. Lanxess possessed one boiler and one calciner which worked 100% of heavy fuel oil. Starting at June 2002, a new biomass boiler (20 TPH) was added to the plant process. Since then, the new boiler has been gradually replacing the thermal energy produced by the fossil fuel boiler (30 TPH heavy fuel oil boiler). The calciner started using biomass residues in 2003. The fossil fuel unit now acts on stand-by. The emission reductions are claimed only for the displaced fossil fuels in boiler and not for the heavy oil displaced in calciner.


2 METHODOLOGY

2.1 Verification Process

The verification process is based on the approach depicted in the Validation and Verification Manual. Standard auditing techniques have been adopted for the verification process. The verification team performs first a desk review, followed by an on-site visit, which results in the formation of a protocol that includes all the findings. The next step involves the evaluation of the findings through direct communication with the PPs and then finally the preparation of the verification report.

2.2 Verification Team

The appointment of the verification team takes into account the technical area(s), sectoral scope(s) and relevant host country experience required amongst team members for verifying the ER achieved by the project activity in the relevant monitoring period for this verification.

The team members and their respective roles for the verification of the project are as follows:

Name Qualification Coverage of sectoral scope

Coverage of technical area

Host country experience

Sandeep Kanda ATL Wellington Almeida GHG-T -- --

Praveen Tekchandani GHG-T --

Sandeep Kanda is an auditor for CDM projects and energy and environment field expert at TÜV SÜD Industrie Service GmbH. He holds a master degree in energy systems engineering and also industrial safety and environmental management. Before joining the TÜV SÜD Industrie Service GmbH he has worked extensively on projects in energy sector, manufacturing industries, chemical industries and metal production. He has carried out energy audits and worked on development of CDM projects and methodologies in the aforementioned sectors.

Wellington Cesar Almeida is auditor trainee of TÜV SÜD. He studied Environmental Chemistry and is making a MBA course in Sustainability Management. He worked already for nine years and his last job was as an environment technician and environment chemist in a Public Agency in Sao Paulo State, Brazil. He is familiar with local laws, regulations and the assessment of technical installations.

Praveen Tekchandani is a GHG auditor trainee for CDM projects. He holds a degree in Production and Industrial engineering and is based in TUV SUD PSB Singapore Pte Ltd. He has received extensive training in the CDM Validation and Verification processes and participated already in several CDM project assessments. He has also successfully qualified the IRCA registered Lead auditor course for Environmental Managements System (EMS - ISO 14001).

2.3 Review of Documents

The Monitoring Report version 02 submitted by the PP was made publicly available on the Netinform website before the verification activities started. The published MR was assessed based on all the relevant documents available at the project documentation link indicated above. The aim of the assessment in the desk review was to:

verify the completeness of the data and the information presented in the MR,


check the compliance of the MR with respect to the monitoring plan depicted in the registered PDD and verify that the applied methodology was carried out. Particular attention to the frequency of measurements, the quality of the metering equipment including calibration requirements, and the quality assurance and quality control procedures was paid,

evaluate the data management and the quality assurance and quality control system in the context of their influence on the generation and reporting of emission reductions.

A complete list of all documents reviewed is available in annex 2 of this report.

2.4 On-site Assessment and follow-up Interviews

During 15-09-2010 to 17-09-2010, TÜV SÜD performed a physical site inspection and on-site interviews with project stakeholders to:

confirm the implementation and operation of the project,

review the data flow for generating, aggregating and reporting the monitoring parameters,

confirm the correct implementation of procedures for operations and data collection,

cross-check the information provided in the MR documentation with other sources, check the monitoring equipment against the requirements of the PDD and the approved

methodology, including calibrations, maintenance, etc.,

review the calculations and assumptions used to obtain the GHG data and ER,

identify if the quality control and quality assurance procedures are in place to prevent or correct errors or omissions in the reported parameters.

A list of the persons interviewed during this verification activity is included in annex 2.

2.5 Quality of Evidence to Determine Emission Reductions

Among several evidence items submitted, the following relevant and reliable evidence material have been used by the audit team during the verification process:

Final Validation report [4]

Commissioning report of Biomass boiler [11]

License to install and operate the project activity [15,16]

Calibration certificate for the monitoring equipments [7,18,19,20,24,25,27,28,30]

Biomass boiler operating manual [44]

Records of woodchips registered by SAP [47]

Steam generation records [48]

Weigh bridge operating manual [49] Sufficient evidence covering the full verification period in the required frequency is available to validate the figures stated in the final MR. The source of the evidence will be discussed in chapter 3 of this report. Specific cross-checks have been done in cases that further sources were available. The monitoring report’s figures were checked by the audit team against the raw data. The data collection system meets the requirements of the monitoring plan as per the methodology.

2.6 Resolution of Clarification and Corrective and Forward Action Requests

The objective of this phase of the verification process is to resolve any outstanding issues which require clarification for TÜV SÜD’s positive conclusion of the achieved GHG emission reduction.


Concerns raised in the desk review, the on-site audit assessments and the follow up interviews and the responses provided for the raised concerns are documented in Annex 1 (verification protocol) to guarantee the transparency of the verification process. A Corrective Action Request (CAR) is raised where TÜV SÜD identifies:

non-conformities in monitoring and/or reporting with the monitoring plan and/or methodology;

that the evidence provided is not sufficient to prove conformity;

mistakes in assumptions, data or calculations that impair the ER;

FARs stated during validation that are not solved until the on-site visit. A Clarification Request (CR/CL) is raised where TÜV SÜD does not have enough information or the information is not clear in order to confirm a statement or data. A FAR is raised where TÜV SÜD identifies that monitoring and/or reporting require special attention or adjustments for the next verification period. Information or clarifications provided as a response to a CAR, CL or FAR could also lead to a new CAR.

2.7 Internal Quality Control

As a final step of verification, the final documentation including the verification report and annexes have to undergo an internal quality control by the Certification Body (CB) “climate and energy”, i.e. each report has to be finally approved either by the Head of the CB or the Deputy. In case one of these two persons is part of the assessment team, the approval can only be given by the person who is not a part of the assessment team. If the documents have been satisfactorily approved, the Request for Issuance is submitted to the CB along with the relevant documents.


3 VERIFICATION RESULTS

In the following sections, the results of the verification are stated. The verification results relate to the project performance as documented and described in the final PDD and Monitoring Report (15-12-2010, version 06). The verification findings for each verification subject are presented below:

3.1 FARs from Validation

No FAR has been presented in the validation report.

3.2 Project Implementation in accordance with the registered PDD

The project is fully implemented according to the description presented in the registered PDD. The verifier confirms, through the visual inspection that all physical features of the project activity including data collecting systems and storage have been implemented in accordance with the registered PDD. The project activity is completely operational and the installed biomass boiler has completely replaced the baseline fossil fuel based boiler, the same has been confirmed on-site (fossil fuel based boiler act as a stand-by unit now). By comparing the actual ER claimed (94,871 tCO2e) in this monitoring period with the estimate in the registered PDD (152,568 tCO2e), the actual result is lower than what is stated in the PDD. The difference from the PDD and the explanation of this is as follows:

Accounting of emission reductions is done for biomass usage in the boiler only and not the Calciner;

The operating license for the boiler from CETESB was obtained on 11th Feb’03 [16], hence ER for the crediting period before this date has been considered as zero; and

Efficiency of baseline fossil fuel boiler was not considered during the calculation of ER in the registered PDD. However the same has been considered in the MR (please refer to CAR-22).

None of the data affects the additionality, scale or applicability of the project, hence no notification has been submitted to the CB.

3.3 Compliance of the Monitoring Plan with the Monitoring Methodology

The monitoring plan is in accordance with the approved methodology, AMS-I.C, Version 09, applied by the proposed CDM project activity. Neither a revision nor a deviation to the monitoring plan has been requested to the CB.

3.4 Compliance of the Monitoring with the Monitoring Plan

The monitoring has been carried out in accordance with the monitoring plan contained in the registered PDD. All parameters were monitored and determined as per the Monitoring Plan. The verification of the parameters required by the monitoring plan is provided as follows: Data / Parameter: EGy Data unit: TJ Description: Net quantity of thermal energy supplied by the project activity during

year “y” (TJ). Source of data used: This parameter has been calculated based on the monitored steam

flow data, estimated pressure and temperature.


It was verified that steam flow values in kgs are recorded from the Biochamm boiler computer screen daily. Records for the crediting period have been verified onsite. Calibration records for the steam flow meter have been available from 12/01/2004. In the absence of the calibration records for the steam flow meter prior to 2004 and subsequent calibration results not showing any error in the measuring equipment, the correction has been carried out by applying the maximum permissible error of the instrument i.e., 0.2% to the measured values. This is in accordance with EB-52, Annex 60, hence acceptable. Temperature of the feed water and steam has been sourced from the “Manufacturer’s report of commissioning of the boiler” [11] and “Fundamentals of Thermo Dynamics” – Van Wylen; Sonntag. Pressure of the feed water and steam has been sourced from the “Manufacturer’s report of commissioning of the boiler” [11] and inspection report of the boiler [29, 31, 34].

Means of verification/Comments:

Calculation of enthalpy has been verified. PP has taken the conservative figure by considering the saturated steam pressure and temperature instead of superheated heat pressure, temperature (please refer CAR-6).

Cross-check - Data / Parameter: Steamy Data unit: Ton Description: Amount of steam generated during the year “y”. Source of data used: It was verified that steam flow values in kgs are recorded from the

Biochamm boiler computer screen daily. Records in facotory (worksheet – “Planilha Consumo de Cavaco – Anual”) for the crediting period have been verified onsite (IRL#48). Calibration of the steam flow meter has been done from 12/01/2004 [24,27,32,36,40], hence the measured steam flow values before this date has been conservatively adjusted by a factor of “-0.2%”.


It was verified that data is archived in the worksheet and the back-up is maintained in the servers. Few discrepancies were identified between the raw data onsite and the data presented in the MR, please refer to CAR-17 below.

Cross-check The steam generation data have been successfully cross-checked with the biomass purchased during the crediting period.

Data / Parameter: Qbiomass (pine wood chips) Data unit: Ton/yr Description: Quantity of biomass (pinewood chips) used annually for displacement

of heavy fuel oil Source of data used: Weighbridge at the plant entrance.

It was verified onsite that for each fuel type the quantity of fuel is measured using weighbridge at the entrance of the plant. The fuel being fed to the boiler and the calciner by the belt conveyor is further


estimated based on the steam generation and through hours of calciner operation respectively. Calibration certificate of the weighbridge was also verified [19, 20, 25, 28, 30, 33, 37, 38, 39, 41, 42]


PP has sourced the values from SAP database [47] which is updated for each and every fuel entered in the plant premises.

Cross-check -- Data / Parameter: Ny Data unit: trips/yr Description: Number of truck trips for biomass transportation during the year y Source of data used: 2002 to 2004: Individual receipts for all the trucks delivering fuel to

the plant. 2005 onwards: SAP system has been used to capture the number of trips onsite.


All the recorded data for the trips have been verified onsite. For values before 2004, random individual receipts were verified onsite.

Cross-check - Data / Parameter: AVDy Data unit: Km Description: Round trips distance (from and to) between each biomass residues

supplier and the site of the project activity (km). Source of data used: Receipts from all the biomass suppliers with their address were

verified. Further Google maps have been used to calculate the distance between the supplier and the facility. As a conservative measure, PP has considered the maximum distance of the known supplier in cases where the supplier address is not available. This approach has been found acceptable.


Individual receipt from the suppliers with address has been verified onsite.

Cross-check - Data / Parameter: VFy Data unit: m3/km Description: Volume of fuel consumed by diesel truck Source of data used: Registered PDD refers to a value of 3.5km/ltr from a journal verified

at the time of validation. As per PDD, the PP shall monitor the distance from odometer and diesel consumption data to update VFy during the crediting period. However the same has not been monitored and PP has conservatively assumed the IPCC 1996 default emission factor of 3.3 km/ltr (please refer to CAR-14).


Value of VFy has been conservatively updated from 3.5 km/ltr to 3.3 km/ltr using IPCC 1996 default value.

Cross-check Value mentioned in registered PDD is cross-checked with the IPCC default value and PP has chosen the more conservative value.

Data / Parameter: NCVbiomass Data unit: TJ/Gg Description: Net calorific value of biomass residues (TJ/Gg)


Source of data used: NCV report from ESALQ – USP laboratory has been used and average of all the inhouse analysis has been done for the crediting period.


This parameter has not been used in the calculation of ER because PP opted to use the more accurate method of ER computation using steam generation data and efficiency of baseline boiler (please refer to CAR 10 below). Hence this parameter is only used as a cross-check for ER computation.

Cross-check NCV values has been cross-checked with the IPCC default values and is verified to be in the range specified by IPCC for "solid biomass - wood waste" of 7.9 TJ / Gg to 31.0 TJ / Gg.

Data / Parameter: ηBL Data unit: % Description: Efficiency of the plant using fossil fuel that would have been used in

the absence of the project activity. Source of data used: Default values from the “Tool to determine the baseline efficiency of

thermal or electric energy generation systems – version 01” EB 48 Means of verification/Comments:

PP has conservatively assumed the default values from the “Tool to determine the baseline efficiency of thermal or electric energy generation systems”

Cross-check -

3.5 Assessment of Data and Calculation of Greenhouse Gas Emission Reductions

PP has calculated the emission reduction according to applied methodology AMS-I.C version 09. The baseline emissions from the project activity have been calculated using the following equation:

thBL

COFFythyCOth

EFEGBE

x

,

2.,,2,

Where: BEth,CO2,y = Baseline emissions from steam displaced by the project activity during the year “y”; (tCO2) EGth,y = Net quantity of steam/heat supplied by the project activity during the year “y”;(TJ) EFHeavyoil.CO2 = CO2 emission factor of the fossil fuel that would have been used in the baseline plant in the absence of the project activity; (tCO2/TJ) ηBL,th = Efficiency of the plant using fossil fuel that would have been used in the absence of the project activity. (%) This approach is verified to be more appropriate and conservative than the approach mentioned in B.6.3 of the registered PDD which used the biomass consumption data for ER computation (please refer to CAR-22 in annex-1). EGth,y : For computation of net heat supplied by the project activity, PP has used the difference in enthalpy of steam output and feed water multiplied by the steam generation during the crediting period. Daily steam generation data has been verified onsite [48]. Further, PP has conservatively used the enthalpy of the saturated steam (not the superheated steam) for computation of net energy supplied by the project activity (please refer to CAR-6 in annex-1).


ηBL,th: PP has conservatively assumed the default efficiency value from from the “Tool to determine the baseline efficiency of thermal or electric energy generation systems – version 01” EB 48. As per AMS-I.C version 09, it was verified that there are no project emissions from the project activity. PP has calculated the leakage emission from the transportation of biomass used by the project activity. Following equations has been used for the leakage computation: LEy = ETbiomass,y LEy = Leakage emissions due to the project activity (tCO2e)

2,, COkmyyyBiomass EFAVDNET

Where: ET Biomass, y= CO2 emissions due to biomass transportation in year “y” (tCO2/yr). Ny = Number of truck trips for biomass transportation in year “y” (trips/yr). AVDy = Average round trips distance (from and to) between the biomass residues supply and the site of the project plant, in year “y” (km). EFkm,CO2 = Average CO2 emission factor for the trucks in year “y”. (tCO2/km) PP has used IPCC default value of 3.3 km/ltr for the calculation of EFkm,CO2 (since PP couldn’t monitor the distance travelled and corresponding fuel consumption to compute EFkm,CO2 therefore a CAR-19 was raised and PP has then conservatively assumed IPCC default value for this parameter). Google maps have been used to calculate the distance between the supplier and the facility. As a conservative measure, PP has considered the maximum distance of the known supplier in cases where the supplier address is not available. This approach has been found acceptable. The actual number of truck trips during the crediting period has been used.

The reported data have been cross-checked against other sources available as explained above in chapter 3.4.

The verifier confirms that the methods and formulae used to obtained the baseline, project and leakage emissions are appropriate. The same has been done in accordance with the methods and formulae described in the applicable methodology.

The verifier confirms that the monitoring report includes all parameters and the monitored data at the intervals required by the methodology and PDD. The verifier confirms that all the assumptions, emission factors and default values have been correctly justified. All the emission factors and default values are explicitly mentioned in the monitoring report.


4 SUMMARY OF FINDINGS

The verifier can confirm that the published MR and related documents are complete and verifiable in accordance with the VER+ requirements. All the findings raised by the verification team, the responses by the PPs and the conclusion from the team are presented in Annex 1. The means of verification (MoV) and resulting changes in the MR or related documents are identified in the following table:

Corrective Action Request:

CAR 1: Please update the title of the MR as per the registered PDD. Also with every revision the date and version of the MR should be updated. MoV: Revised MR has been updated and verified. Changes: PP has updated the MR to revise the title as per registered PDD.

CAR 2: The registered PDD and the final validation report do not give any details of the calciner and also the additionality of the project does not reflect the calciner. In light of the same, it should be clearly indicated in the revised MR that emission reductions are being claimed for the displacement of fossil fuel by biomass for steam generation only. MoV: Revised MR and emission reduction calculation has been verified (the same has been updated by PP to remove ER from calciner). Changes: PP has updated the MR and ER sheet to remove the emission reduction occured from biomass used in the calciner.

CAR 3: Please correct the operation start date in accordance with the licence to operate for the biomass based boiler, as issued by CETESB. MoV: Revised MR has been verified to have the updated start date of operation. Changes: PP has updated the MR and ER calculation to claim the emission reduction after obtaining the valid operating license for the biomass boiler.

CAR 4: As per EB48 annex-68, please update the MR to include implementation status of the project during the monitoring period. Also please include the major planned/forced outage details during the monitoring period in the MR. MoV: Revised MR has been verified to have the implementation status of the project activity. Changes: PP has updated the MR to include the implementation status of the project activity.

CAR 5: Please include the procedure for data recording and archiving for all the monitored parameters in the MR. MoV: Revised MR has been verified to have the necessary procedures for data recording and archiving as observed during the on-site audit. Changes: PP has updated the MR to include the necessary procedures for data recording and archiving.

CAR 6: Please clarify the basis of taking fixed pressure and temperature condition for the feed-water and steam produced. It cannot be confirmed whether the steam and feed water had the same temperature and pressure throughout the crediting period. Please provide further evidences and justification to prove the same. MoV: Revised ER calculation has been verified to have more conservative temperature and


pressure (corresponding to saturated steam). As a conservative approach, the lower value of the steam pressure at which the flow valve closes has been taken. Boiler commissioning report has also been verified to check the value of temperature and pressure used by the PP. Changes: PP has updated the MR and ER calculation to assume a more conservative value.

CAR 7: Please update the MR to include information as to how EGy has been monitored. MoV: Revised ER calculation and MR based on the steam generation data has been verified. Changes: PP has updated the MR and ER to use steam generation data for computation of EGy

CAR 8: Please update the MR to clarify the basis of including the parameter ‘Quantity of biomass residues (wood chips) used annually by the calciner for displacement of heavy fuel oil’ in the MR. MoV: Revised MR has been verified and this parameter has been removed. Changes: PP has updated the MR to remove this parameter from the MR. No emission reduction has been claimed for the fuel displaced by the biomass used in the calciner.

CAR 9: Please update the MR to include information as to how Qbiomass,boiler has been monitored. MoV: The monitoring of biomass as verified during the on-site audit has been included in the revised MR. Changes: PP has updated the MR to include the monitoring information of this parameter

CAR 10: Please clarify why the NCV has been calculated from the quantity of thermal energy generated, enthalpy difference and efficiency parameters. As per registered PDD, it is stated that for NCV measurements shall be carried out monthly at reputed laboratories and according to relevant international standards. Please update the MR to include the details as to how the NCV values have been obtained from laboratories. MoV: Revised approach of ER calculation has been verified and NCV is now only used as a cross-check. The cross-check through NCV values supports the ER calculation. Changes: PP has updated the MR and ER to calculate emission reduction from the steam generation not from the biomass consumed. NCV now acts as a cross-check parameter.

CAR 11: It cannot be verified from the MR as to how this parameter (TLy) has been monitored or calculated. Please update the MR to include the required details. MoV: Revised MR has been updated and verified. Changes: PP has updated the MR to include the necessary details.

CAR 12: Please include the details of the monitoring parameter Ny in MR. MoV: Revised MR has been updated and verified. Changes: PP has updated the MR to to include the necessary details.

CAR 13: Please update the MR to include details on the monitoring of AVDy MoV: Revised MR has been updated and verified. Changes: PP has updated the MR to to include the necessary details.

CAR 14: As per the registered PDD, this parameter (VF) shall be calculated based on the


monitored odometer and diesel consumption data. However the MR has assumed default IPCC values for this parameter, please clarify. MoV: Revised MR has been updated and verified to consider a more conservative value from IPCC (compared to registered PDD). Changes: PP has used the more conservative value among for the computation of leakage emissions.

CAR 15: Please update the MR to include details on the calibrations carried out for the steam flow meter and the pressure transmitter. MoV: Revised MR has been verified to have the calibration details of the monitoring equipments. Corresponding calibration certificates were also verified. Changes: PP has updated the MR to include the details on calibration of the moniotirng equipments.

CAR 16: As the consent to operate for the biomass based boiler has been obtained in 2003, therefore the emission reductions would be claimed from 2003 onwards. Please submit the revised MR and ER calculation spreadsheets addressing the same. MoV: Revised MR and ER has been verified and the PP has claimed from March 2003 onwards in the revised MR. Changes: PP has updated the MR and ER sheet to exclude the emission reduction before March 2003.

CAR 17: There are discrepancies observed in the values of steam generation in the raw data worksheets and the values used in the MR for emission reduction calculation. Please revise the MR and the calculation to be consistent with the raw data. MoV: The discrepancy has been attributed to the reporting procedure. This was verified from the check of raw data and interviews held during the on-site visit. Changes: The MR has been revised is now consistent with the verified raw data.

CAR 18: Please revise the MR and the calculation sheet to clearly indicate the biomass procured. MoV: Revised MR has been verified to have the details on the biomass procured. Changes: PP has updated the MR to include the necessary details.

CAR 19: The data has been referred to IPCC guidelines 1996. Please justify the usage in terms of appropriateness and conservativeness of this value in context of the project activity MoV: Appropriate justification was received by the PP and the same has been verified and deemed to be acceptable. Changes: PP has provided the appropriate justification to use IPCC 1996 default value.

CAR 20: Please keep the MR consistent with the registered PDD in terms of monitoring parameter and description of the parameters (please check NCV parameter). Please revise the MR to maintain consistency. MoV: Revised MR has been verified to be consistent with registered PDD. Changes: PP has updated the MR to make it consistent with registered PDD.

CAR 21: Please clarify and update the MR to include the crosscheck done as per the registered PDD (with ‘relevant data sources e.g. values in the literature and default values by


the IPCC) for NCV. MoV: Revised MR has been verified to be contain an appropriate cross-check for NCV Changes: PP has updated the MR to include the necessary cross-check for NCV

CAR 22: In light of the earlier raised CARs, it is to be noted that ERs are only eligible for the displacement of fossil fuel by the biomass based boiler for steam generation. Please correct the emission reduction calculations based on the measured value of steam generation and properties of steam and appropriately taking the efficiency of the boiler into account. Please also correct the emissions due to transportation of biomass. MoV: Revised MR and ER sheet has been verified. Changes: PP has updated the MR and ER to account only for the fossil fuel displaced for steam generation.

CAR 23: Please correct the density of the diesel oil as indicated in the registered PDD. MoV: Revised MR has been verified to have the updated diesel oil density. Changes: PP has updated the MR to include the appropriate density of diesel oil.


5 VERIFICATION STATEMENT

TÜV SÜD Industrie Service GmbH has performed the first periodic verification of the CDM project: “Lanxess Biomass Generation Project (hereafter referred to as LBG – Project): Retroactive Verified Emission Reductions”. The verification is based on the currently valid documentation of the UN Framework Convention on Climate Change (UNFCCC) and VER+ version 01 criteria. The management of Lanxess Indústria de Produtos Químicos e Plásticos Ltda is responsible for the preparation of the GHG emissions data and the reported GHG emission reductions on the basis set out within the project’s Monitoring Plan indicated in the registered PDD version 04, dated 31-10-2008 and the applied methodology AMS-I.C, Version 09. The verifier can confirm the following:

The development and maintenance of records and reporting procedures are in accordance with the registered monitoring plan;

The project is implemented and operated as planned and described in the registered PDD;

The installed equipment being essential for generating emission reduction runs reliably and is calibrated appropriately;

The monitoring system is in place and generates GHG emission reductions data;

The GHG emission reductions are calculated without material misstatements;

The monitoring plan in Monitoring Report (Version 06 / 15-12-2010) is as per the registered PDD approved by the CB; and

The monitoring plan in the approved PDD is as per the applied methodology.

Our opinion is based on the project’s GHG emissions and resulting GHG emission reductions reported, which have been both determined through the valid and registered project’s baseline, its monitoring plan and its associated documents. Based on the information we have seen and evaluated, we confirm the following statement:

Reporting period: From 01-07-2002 to 31-12-2007

Verified emissions in the above reporting period:

Baseline emissions: 97,054 t CO2e Project emissions: 0 t CO2e Leakage emission: 2,183 t CO2e Emission reductions: 94,871 t CO2e Munich, 16-12-2010

___________________________________

Munich, 16-12-2010

___________________________________

Thomas Kleiser Certification Body “climate and energy”

TÜV SÜD Industrie Service GmbH

Sandeep Kanda Assessment Team Leader

PERIODIC VERIFICATION “Lanxess Biomass Generation Project (hereafter referred to as LBG – Project): Retroactive Verified Emission Reductions”

Annex 1: Verification Protocol

Verification Protocol Project Title: Lanxess Biomass Generation Project (hereafter referred to as LBG-Project): Retroactive Verified Emission Reductions. Date of Completion: 16-12-2010 Number of Pages: 43

Page A-1

Table of Contents1. Project Activity Implementation 1.1. Technology 1.2. Organization 1.3. Quality Management System

1.4. Remaining FARs from previous report 2. Monitoring Plan Implementation 2.1. Parameters 2.2. Parameters measured directly with instruments 2.3. Parameters measured through sampling

2.4. Parameters obtained through external sources and accounting data 2.5. Other parameters 3. Data Processing and ER calculation 4. Additional assessment 4.1. Internal Review

4.2. Peculiarities 4.3. Further additional requirements 4.4. Data Reporting 5. Compilation and Resolutions of CARs, CRs and FARs


Page A-2

1. Project Activity Implementation 1.1. Technology

Location (s)

PDD Description Verified Situation Conclusion and IRL

Description / Address: Description: The proposed project is a biomass based thermal generation unit to generate heat and steam for in-house consumption. The project uses pine wood chips supplied by pine sawmills located in the municipalities of Itapeva, Buri and Sorocaba. The pro-ject activity has gradually replaced the use of heavy fuel oil used in the boiler by installation of a new biomass based boiler (20 TPH) in 2002. Address: Lanxess Indústria de Produtos Químicos e Plásticos Ltda, Inorganic Pigments business unit, Marechal Rondon, Rd, Porto Feliz, São Paulo state, Brazil

The monitoring report (MR) gives the fol-lowing description of the project activity: The LBG- Project involves the generation of heat and steam using biomass residues (wood chips), gradually displacing the use of fossil fuel. Lanxess possessed one boi-ler and one calciner which worked 100% of heavy fuel oil. Starting at June 2002, a new biomass boiler was added to the plant process. Since then, the new boiler has been gradually replacing the thermal energy produced by the fossil fuel boiler. The calciner started using biomass resi-dues in 2003. During the on-site visit, it has been con-firmed that the project site is in com-pliance with the description of the regis-tered PDD and the MR. The facility meets it heat and steam requirement from the biomass based units. The fossil fuel fired unit acts as stand-by. The commissioning report of the boiler as provided by the boiler supplier is dated 17th June 2002. The monitoring report (MR) gives the fol-

CAR1, CAR2


Page A-3

lowing location of the project activity: Rod. Marechal Rondon, km 139,5 – Porto Feliz –SP. Zip Code: 18540-000. Brazil. The facility could be reached with the in-dicated address. The location of the facil-ity could also be confirmed from the li-cense of installation of the industrial facil-ity issued by the government agency - CETESB. Corrective Action Request No.1 Please update the title of the MR as per the registered PDD. Also with every revi-sion the date and version of the MR should be updated. Corrective Action Request No.2 The registered PDD and the final valida-tion report do not give any details of the calciner and also the additionality of the project does not reflect the calciner. In light of the same, it should be clearly indi-cated in the revised MR that emission reductions are being claimed for the dis-placement of fossil fuel by biomass for steam generation only.

GPS coordinates: Latitude: 7.430.889 N Longitude: 236.483 E Data according to the UTM (Universal Transverse Mercator) Coordinate System

The monitoring report (MR) gives the fol-lowing geographical coordinates of the project activity: 23º 12’ 39,65’’ S, 47º 34’ 26,48’’ W The GPS coordinates checked during the onsite audit at the plant were:

Ok 6


Page A-4

Latitude: S 23o12.6639’ Longitude: W 47o34.5294’ With an accuracy of 20.68 m

Technical Equipment – Main Components

PDD Description Verified Situation Conclusion and IRL

Description Project equipment: 1 biomass based boiler installed at 2002. Baseline equipment: 1 fossil fuel based boiler

It has been verified during the on-site au-dit that the biomass (pine wood chips) based boiler supplies steam to the proc-ess. The fossil fuel (residual oil) fired boiler acts as a back-up equipment. The biomass based boiler was commis-sioned on 17 June 2002 as verified from the commissioning certificate provided by the boiler manufacturer Biochamm.

Ok 6, 11

Component 1: Biomass based boiler Technical Features

Manufacturer: BIOCHAMM Fabrication : 2002 Calorific Capacity: 13 Gcal/hour Steam Production: 20,000 kg/h Pressure: 12 kgf/cm2 Fuel : Biomass

The specification nameplate as indicated in the final PDD has been checked during the on-site audit and found to be in con-formance to the PDD description. Also the information was confirmed from the com-missioning certificate provided by the boiler manufacturer Biochamm.

Ok 4, 6, 11

Operation Status during verification

Verified Situation Conclusion and IRL

Approvals / Licenses The following documents could be checked during the on-site audit: The public announcement in the local newspaper Sorocaba regarding the implementa-tion of the biomass based boiler, dated 16th July 2002; the application to the CETESB

Ok 10 - 14


Page A-5

for obtaining the licence to install the biomass based boiler, dated 12th August 2002; The licence to install granted by CETESB, dated 5th September 2002; The license to operate granted by CETESB, dated 11th February 2003. Also, the change of the company name from Bayer to Lanxess was evidenced from the license to install and operate, granted by CETESB , dated 26th August 2004.

Actual Operation Status Start date of operation (each site if applicable): July 2002 Under construction In operation Out of operation Reason and date (if out of operation):

Ok

Corrective Action Request No.3 Please correct the operation start date in accordance with the licence to operate for the biomass based boiler, as issued by CETESB.

CAR3

Remarks to Special Operational Status During the Verification Period

Phased implementation: NA Special cases: NA

Corrective Action Request No.4 As per EB48 annex-68, please update the MR to include implementation status of the project during the monitoring period. Also please include the major planned/forced out-age details during the monitoring period in the MR.

CAR4

1.2. Organization

Project Participant (s)


Entity / Responsible person: Entity: Lanxess Indústria de Produtos

All the indicated persons are regular employees of Lanxess. Mr. Robert Madersdorfer is the general manager of the industrial facility, Mr. Walter Machado is the controller of the factory and Mr. Francisco Cesar Tofanetto is responsible for the thermal and elec-


Page A-6

Químicos e Plásticos Ltda Responsible Person: Mr. Robert Madersdorfer Mr. Francisco César Tofanetto Mr. Walter Machado

trical energy utilities of the facility.

VER Project management: Lanxess Indústria management is responsible for the project manage-ment.

Responsible management was checked during the onsite visit and can be confirmed. Corrective Action Request No.5 Please include the procedure for data recording and archiving for all the monitored parameters in the MR.

CAR5

1.3. Quality Management System

General aspects of the Quality Management System


Quality Management Manual: Lanxess Indústria is responsible for all kinds of quality management manual.

The following documents have been provided and have been checked during the on-site audit:

Operating manual for the biomass based boiler and the fossil fuel fired boiler Procedure for monitoring the biomass based boiler data

Ok 44, 45

Responsibilities: The operation manuals have been prepared by Mr. Carlos Zampola and approved by Mr. Francisco Cesar Tofanetto. The procedure for monitoring the biomass based boiler data was prepared by Mr. Francisco Cesar Tofanetto and approved by Mr. Robert Madersdorfer. Further, Green Domus Desenvolvimento Sustentável Ltda., being the consultant to the company is responsible for preparation and submission of the Moni-toring Report.

Ok 6

Qualification and Training: The personnel indicated above are qualified electrical engineers with sufficient expe- Ok


Page A-7

rience for the operations.

Implementation of QM-system Description in PDD has found to be implemented on site Ok

1.4. Remaining FARs from previous report

Remaining Requests from Previous Verifications Summary of project owner response

Audit team Conclusion and IRL

No FAR has been indicated in the previous report - -

2. Monitoring Plan Implementation

2.1. Parameters Parameters

Meth/tool PDD MR Included in table

Compliance Conclusion and IRL

Metering the energy pro-duced by a sample of the systems

Net quantity of steam/heat supplied by the project activity (wood chips) during the year y

Net quantity of thermal energy sup-plied by the project activity during year “y” (TJ).

2.2 table-1 The net quantity of thermal energy is calculated from the enthalpy difference (of the steam pro-duced and the feed water) and the measured steam production. Corrective Action Request No.6 Please clarify the basis of taking fixed pressure and temperature condition for the feed-water and steam produced. It cannot be confirmed whether the steam and feed water had the same tempera-ture and pressure throughout the crediting period. Please provide further evidences and justification to prove the same.

CAR6, CAR7


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Parameters



Corrective Action Request No.7 Please update the MR to include information as to how EGy has been monitored.

Quantity of biomass (pinewood chips) used annually for displacement of heavy fuel oil

Quantity of biomass residues (wood chips) used annually by the calciner for displacement of heavy fuel oil (ton/yr).

2.2 table-2 Corrective Action Request No.8 Please update the MR to clarify the basis of in-cluding the parameter ‘Quantity of biomass resi-dues (wood chips) used annually by the calciner for displacement of heavy fuel oil’ in the MR.

CAR8

Quantity of biomass residues (wood chips) used annually by the boiler for dis-placement of heavy fuel oil (ton/yr).

2.2 table-2 Corrective Action Request No.9 Please update the MR to include information as to how Qbiomass,boiler has been monitored.

CAR9

Net calorific value for pine wood chips

Net calorific value for biomass residues (TJ/Gg).

2.5 Corrective Action Request No.10 Please clarify why the NCV has been calculated from the quantity of thermal energy generated, enthalpy difference and efficiency parameters. As per registered PDD, it is stated that for NCV measurements shall be carried out monthly at reputed laboratories and according to relevant international standards. Please update the MR to include the details as to how the NCV values have been obtained from laboratories.

CAR10


Page A-9

Parameters



Leakage - If the energy generating equipment is transferred from another activity or if the existing equipment is transferred to another ac-tivity, lea-kage is to be considered. Since there is no tech-nology trans-fer in the project activi-ty, the PP has taken transporta-tion emis-sions as the leakage.

Average truck load of the trucks used for fuel biomass trans-portation

Average truck load of the trucks used for biomass residues transportation in year “y” (ton).

Not included in any table

The emissions due to transportation of biomass have been calculated based on the distance of the biomass supplier and the quantity of trips made from each supplier. The average truck load is not used in the compu-tation of the leakage emission due to biomass transportation because the actual distance of the supplier and the number of trips from the supplier is taken into account to arrive at the total distance travelled by the truck. Further as a conservative approach, the total biomass has been used instead of discounting the biomass used in the calciner. Corrective Action Request No.11 It cannot be verified from the MR as to how this parameter (TLy) has been monitored or calcu-lated. Please update the MR to include the re-quired details.

CAR11

Number of truck trips for biomass transpor-tation during the year y

Number of truck trips for biomass residues transporta-tion in year “y” (trips/yr).

2.4 table-1 This data being a part of the accounting informa-tion is obtained from the same. Corrective Action Request No.12 Please include the details of the monitoring pa-rameter Ny in MR.

CAR12


Page A-10

Parameters



Average return trip distance between the biomass fuel suppli-ers and the site of the project -activity

Round trips distance (from and to) be-tween each biomass residues supplier and the site of the project activity (km).

2.4 table-2 This data being a part of the accounting informa-tion is obtained from the same. The SAP system has the name of the supplier. Based on the ad-dress of the supplier and through use of Google maps the distance has been found out. As a con-servative approach, the maximum distance has been taken into account. Further, as a conserva-tive approach, for entries wherein the supplier details were not available (NT), the maximum distance of the known supplier as 382 km was taken. For the return trip this has been multiplied by a factor of 2, to arrive at the value of return trip dis-tance between the biomass fuel supplier and the site of the project activity. Corrective Action Request No.13 Please update the MR to include details on the monitoring of AVDy

CAR13

Average CO2 emis-sion factor for the trucks used in fuel biomass transporta-tion

Average CO2 emis-sion factor for the trucks used in bio-mass residues transportation in year “y”. (tCO2/km)

This is a cal-culated value from other monitored parameters and hence not included in any table

This is a calculated value based on the ex ante fixed values of density, calorific value and emis-sion factor of diesel and the monitored value of distance travelled per litre of diesel consumption (Volume of fuel consumed by a diesel truck). Emission factors for the trucks have been calcu-lated as per the formula mentioned in the regis-tered PDD.

Ok


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Parameters



- Volume of fuel con-sumed by a diesel truck

Volume of fuel con-sumed by a diesel truck

2.4 table-3 This is based on external sources. Corrective Action Request No.14 As per the registered PDD, this parameter (VF) shall be calculated based on the monitored odometer and diesel consumption data. However the MR has assumed default IPCC values for this parameter, please clarify.

CAR14

- Quantity of heavy fuel oil consumed annual-ly

Quantity of heavy fuel oil consumed annually by the cal-ciner and the boiler respectively

Not included in any table

This parameter is not required to be monitored as per the methodology and also it has no impact on the emission reduction calculations. Therefore the compliance of this parameter is not been checked.

Ok

2.2. Parameters measured directly with instruments Table 1

Parameter and instrumentation Information

PDD Meth/Tool MR Verified Conclusion and IRL

Parameter title Net quantity of steam/heat supplied by the project activity (wood chips) during the year y

Metering the energy produced by a sam-ple of the systems where the simplified baseline is based on the energy produced

Net quantity of thermal energy supplied by the project activity during year “y” (TJ).

yes Ok


Page A-12

Parameter ID (if available)

EGy N.A. EGy yes Ok

Data Unit TJ N.A TJ yes Ok

Monitoring fre-quency (reading)

Not indicated NA Not indicated The integrated values from the Biochamm boiler computer screen are read every working day and inputted manually to the work-sheet.

Ok

Monitoring fre-quency (recording)

The flow in Kg of steam is read in the Biochamm boi-ler computer screen. Data is read from Flow Comput-er – PLC. Accounting is made in 1-second inter-vals. Steam pressure in the boi-ler exit is recorded in Kgf/cm2 in the Biochamm boiler computer screen, from Flow Computer – PLC. Sampling is made in 200 ms intervals.

NA Please refer to CAR earlier on the reporting of this parameter.

The compliance was verified dur-ing the on-site audit.

Ok

Calibration re-quirements

Annually NA Calibration de-tails are not indi-cated in the MR.

Corrective Action Request No.15Please update the MR to include details on the calibrations carried out for the steam flow meter and the pressure transmitter.

CAR15

Uncertainty level 25 mmCA for the flow me-ter and 0.2 bar for the

NA Not mentioned Please refer CAR above CAR15


Page A-13

pressure transmitter (1 kPa = 102.07 mmCA)

Measurement Principle (if appli-cable)

Differential pressure transmitter (DPT), com-bined with an orifice plate

NA Not mentioned - Ok

Technical aspects Conclusion and IRL

Instrument Type: DPT combined with an orifice plate Ok

Serial Number: U385558 Ok

Manufacturer Model Nr.:

LD 301 Ok

Specific Location: Exit of the biomass fired steam boiler, 41003F01 (DPT); 41003P06 (pressure transmitter) Ok

Measurement Range:

0 – 2500 mmCA for the DPT and 0 – 20 bar for the pressure transmitter Ok

Gaps in operating time of instrument :

Period: There are no gaps in the operating time of the instrument. The calibration of the DPT is done in-situ using a HART communicator.

Ok

Default value used: NA Ok

Justification: NA Ok

QA/QC aspects Conclusion and IRL

Source of data Type: PLC data Ok

Procedures: The flow in Kg of steam is read in the Biochamm boiler computer screen. Data is read from Flow Computer – PLC. Accounting is made in 1-second intervals. The integrated steam flow data recorded in the PLC is manually transferred to the woodchip consumption worksheet. The monthly consolidation of the daily values is also carried out. The steam flow data is used to estimate the biomass consumption.

Ok


Page A-14

Implementation of procedure: The procedure has been followed as indicated above. Ok

Responsibility: Electrical engineer of the department Energy and Electrical. This is overseen by the head of the energy and electrical department.

Ok

Archiving of raw data and protec-tion measures

The data is archived in the worksheets and the back-up is maintained in the Servers. The access level to the file is restricted.

Ok

Data transfer and protection of input data for calcula-tions

Since the integrated steam flow meter readings are transferred daily to the worksheets therefore the data transfer errors are expected to be minimum. The limited access to the worksheets ensures protection of the input data.

Ok

Quality of evidence Conclusion and IRL

Completeness of data

Corrective Action Request No.16 As the consent to operate for the biomass based boiler has been obtained in 2003, therefore the emission reductions would be claimed from 2003 onwards. Please submit the revised MR and ER calculation spreadsheets addressing the same.

CAR16

Data verification Consistency of raw data with calculation tool: The raw data from the worksheets do not conform to the values indicated in the MR and the calculation tool. Corrective Action Request No.17 There are discrepancies observed in the values of steam generation in the raw data worksheets and the values used in the MR for emission reduction calculation. Please revise the MR and the calculation to be consistent with the raw data.

CAR17

Consistency of calculation tool with monitoring report: Please refer to CAR above CAR17

Crosscheck (if available)

The steam generation has been cross-checked with the biomass purchased during the period. Ok


Page A-15

Table 2

Parameter and instrumentation Information


Parameter title Quantity of biomass (pine-wood chips) used annually for displacement of heavy fuel oil

Metering the energy produced by a sample of the sys-tems where the simplified baseline is based on the energy produced

1. Quantity of bio-mass residues (wood chips) used annually by the calciner for displacement of heavy fuel oil (ton/yr).

2. Quantity of biomass resi-dues (wood chips) used an-nually by the boiler for dis-placement of heavy fuel oil (ton/yr).

The monitoring practice, equipment and required cali-bration certificates have been checked during the on-site audit. It has been verified during the on-site audit that for each fuel type the quanti-ty of fuel is meas-ured at the weigh-bridge at the plant entrance during arrival. The fuel being fed to the boiler and the cal-ciner by the belt conveyor is esti-mated based on the steam generation and through hours of calciner operation respectively.

Ok

Parameter ID (if available) Qbiomass (pine wood chips) N.A. 1. Qbiomass,calciner Please refer to CAR CAR8,


Page A-16

2. Qbiomass, boiler above CAR9

Data Unit ton/yr N.A ton/yr Please refer to CAR above

CAR8, CAR9

Monitoring frequency (read-ing)

Continuous electronic moni-toring and measurement.

NA Not included Every entry into the plant premises is being measured and recorded

Ok

Monitoring frequency (re-cording)

Shall be recorded online in the SAP as and when truck enters with biomass.

NA Not included Every entry into the plant premises is being measured and recorded

Ok

Calibration requirements The scale for weight meas-urement shall be calibration periodically.

NA Please refer to CAR above

Please refer to CAR above

CAR5

Uncertainty level Not mentioned NA Not mentioned The resolution of the weighbridge is 10 kg

Ok

Measurement Principle (if applicable)

Weigh bridge NA Weigh bridge Load cell Ok


Instrument Type: Weigh-bridge Ok

Serial Number: 589 Ok

Manufacturer Model Nr.: CE 10000 Ok

Specific Location: Plant entrance Ok

Measurement Range: 10 to 60000 kg Ok


Page A-17

Gaps in operating time of instrument :

Period: NA Ok




Source of data Type: Accounting information, SAP data Ok

Procedures: The amount of biomass coming to the plant is weighed by weighbridge upon its arri-val in the plant premises. The weight is compared with the invoice value and if found to be con-sistent then the truck is allowed to come in plant and unload. The value is then incorporated in the SAP system.

Ok

Implementation of procedure: The procedure has been followed as indicated above. Ok

Responsibility: The responsibility of the accounting information is with Mr. Walter Machado Ok

Archiving of raw data and protection measures

The data is archived in the SAP Ok

Data transfer and protection of input data for calculations

The limited access to the SAP system ensures protection of the input data. Ok


Completeness of data The data of biomass and oil receipts from the year 2002 till 2007 has been provided. Ok

Data verification Consistency of raw data with calculation tool: The biomass quantity used annually has not been indicated. Corrective Action Request No.18 Please revise the MR and the calculation sheet to clearly indicate the biomass procured.

CAR18


Page A-18


Crosscheck (if available) - Ok

2.3. Parameters measured through sampling Not applicable

2.4. Parameters obtained through external sources and accounting data Table 1

External sources and accounting information


Parameter title Number of truck trips for biomass transportation dur-ing the year y

- Number of truck trips for biomass residues transporta-tion in year “y”

Consistent Ok

Parameter ID (if available) Ny - Ny Consistent Ok

Data Unit trips/year - trips/year Consistent Ok


Description of Data / Data Refers to: The number of truck loads received from a supplier is recorded in the SAP system from 2005 onwards. Prior to that the individual receipts have been considered for arriving at the number of trips during the period 2002 to 2004.

Ok

Date of Data: The data of biomass and oil receipts from the year 2002 till 2007 has been provided. Ok


Page A-19

Gaps in data Period: The number of truck loads received from a supplier is recorded in the SAP sys-tem from 2005 onwards. Prior to that the individual receipts have been considered for arriving at the number of trips during the period 2002 to 2004.

Ok




Source of data Type: Accounting records and SAP records Ok

Responsibility: The responsibility of the accounting information is with Mr. Walter Machado

Ok

Representativeness: Each record is maintained in the accounting information Ok

Reliability of Data Source: Based on third party invoices. Ok

Is the Data up-to-date? Yes Ok


Till 2004 the individual receipts form the basis of the data source and from 2005 on-wards the SAP system

Ok


The accounting information has limited access and thereby ensures protection. Ok


Completeness of data The data of biomass and oil receipts from the year 2002 till 2007 has been provided. Ok

Data verification Consistency of raw data with calculation tool: Please refer to CAR above Ok

Consistency of calculation tool with monitoring report: Please refer to CAR above Ok



Page A-20

Table 2



Parameter title Average return trip dis-tance between the bio-mass fuel suppliers and the site of the project -activity

- Round trips distance (from and to) be-tween each biomass residues supplier and the site of the project activity (km).

Consistent Ok

Parameter ID (if available) AVDy - AVDy Consistent Ok

Data Unit km - km Consistent Ok


Description of Data / Data Re-fers to:

The distance between the biomass fuel supplier and the facility. Ok

Date of Data: The data of biomass receipts from the year 2002 till 2007 from the various suppliers has been provided. Also the address of suppliers has been provided. Through the use of Google maps the distance has been found out between the supplier and the facility. As a conserva-tive approach, the maximum distance has been taken into account.

Ok

Gaps in data Period: The number of truck loads received from a supplier is recorded in the SAP system from 2005 onwards. Prior to that the individual receipts have been considered for arriving at the number of trips during the period 2002 to 2004. For suppliers wherein no detail is avail-able, the maximum distance of the known supplier is taken. This is deemed acceptable. Please also refer CAR above.

Ok



Page A-21



Source of data Type: Accounting records and SAP records Ok

Responsibility: The responsibility of the accounting information is with Mr. Walter Machado Ok

Representativeness: Each record is maintained in the accounting information Ok

Reliability of Data Source: Based on third party invoices. Ok

Is the Data up-to-date? Yes Ok

Archiving of raw data and pro-tection measures

Till 2004 the individual receipts form the basis of the data source and from 2005 onwards the SAP system

Ok


The accounting information has limited access and thereby ensures protection. Ok


Completeness of data The data of biomass receipts from the year 2002 till 2007 has been provided. Ok

Data verification Consistency of raw data with calculation tool: Please refer to CAR above CAR16, CAR17

Consistency of calculation tool with monitoring report: Please refer to CAR above CAR16, CAR17



Page A-22

Table 3



Parameter title Volume of fuel con-sumed by a diesel truck

- Volume of fuel con-sumed by a diesel truck

Consistent Ok

Parameter ID (if available) VFy - VFy Consistent Ok

Data Unit m3/km - m3/km Consistent Ok


Description of Data / Data Refers to: The amount of fuel required for a unit distance travelled. Ok

Date of Data: Corrective Action Request No.19 The data has been referred to IPCC guidelines 1996. Please justify the usage in terms of appropriateness and conservativeness of this value in context of the project activity.

CAR19

Gaps in data Period: Please also refer CAR above. CAR19

Default value used: Please also refer CAR above. CAR19

Justification: Please also refer CAR above. CAR19


Source of data Type: IPCC guidelines 1996 have been referred, nevertheless please refer CAR above CAR19

Responsibility: NA Ok

Representativeness: Please refer CAR above. CAR19


Page A-23

Reliability of Data Source: Please refer CAR above. CAR19

Is the Data up-to-date? Please refer CAR above. CAR19


NA Ok


NA Ok


Completeness of data The same data is used throughout the crediting period. Ok

Data verification Consistency of raw data with calculation tool: Please refer to CAR above CAR19



2.5. Other parameters Other information (not included in the methodology/tool but included in the PDD)

PDD MR Verified Conclusion and IRL

Parameter title Net calorific value for pine wood chips

Net calorific value of bio-mass residues (TJ/Gg)

Yes Ok

Parameter ID (if available) NCV pine chips NCV wood chips Corrective Action Request No.20 Please keep the MR consistent with the registered PDD in terms of moni-toring parameter and description of the parameters (please check NCV

CAR20


Page A-24

parameter). Please revise the MR to maintain consistency.

Data Unit TJ/103t TJ/Gg Please refer to CAR above. CAR20


Description of Data / Data Re-fers to:

Net calorific value of the pine wood chips used in the project activity. Ok

Date of Data: Please refer to CAR above CAR20

Gaps in data Period: Please refer to CAR above CAR20

Default value used: Please refer to CAR above CAR20

Justification: Please refer to CAR above CAR20


Source of data Type: Please refer to CAR above CAR20

Responsibility: Electrical engineer of the department Energy and Electrical. This is overseen by the head of the energy and electrical department.

Ok

Representativeness: Please refer to CAR above CAR20

Reliability of Data Source: Please refer to CAR above. CAR20

Archiving of raw data and pro-tection measures

Please refer to CAR above. CAR20


Please refer to CAR above. CAR20

Quality of evidence Conclusion


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and IRL

Completeness of data Please refer to CAR above. CAR20

Data verification Consistency of raw data with calculation tool: Please refer to CAR above. CAR20

Consistency of calculation tool with monitoring report: Please refer to CAR above. CAR20

Crosscheck (if available) Corrective Action Request No.21 Please clarify and update the MR to include the crosscheck done as per the registered PDD (with ‘relevant data sources e.g. values in the literature and default values by the IPCC) for NCV.

CAR21

3. Data Processing and ER calculation

Description of data processing from transferred data to final results in the calculation tool

Step Description Conclusion and IRL

Consistency Please refer to CARs above. CAR 16, CAR 17

Calculation Tool description

Corrective Action Request No.22 In light of the earlier raised CARs, it is to be noted that ERs are only eligible for the displacement of fossil fuel by the biomass based boiler for steam generation. Please correct the emission reduction calculations based on the measured value of steam generation and properties of steam and appropriately taking the efficiency of the boiler into account. Please also correct the emissions due to transportation of biomass.

CAR22

Elimination of not plausible data (if applicable)

Please refer to CARs above. CAR22

Transformation from Please refer to CARs above. CAR22


Page A-26

useable data to in-put data for further calculation (if appli-cable)

Ex-ante data The ex-ante data used by the project activity are Emission factor of heavy oil and diesel, NCV of diesel has been taken as the IPCC default values. These values have been taken correctly as per section B.6.2 of the registered PDD. Corrective Action Request No.23 Please correct the density of the diesel oil as indicated in the registered PDD.

CAR23

Default parameter NA Ok

Formulae check Please refer to CARs and CRs above. CAR 16, CAR 17

Rounding functions Please refer to CARs and CRs above. CAR 16, CAR 17

Calculation tool changes and pro-tection measures

Please refer to CARs and CRs above. CAR 16, CAR 17

Reported data Please refer to CARs and CRs above. CAR 16, CAR 17

4. Additional assessment

4.1. Internal Review Description and performance of internal review

Description Conclusion and IRL

Procedure There is no formal procedure existing for the review of the data, nevertheless the controller of the com- Ok


Page A-27

pany reviews the cost associated with the consumption of biomass.

Documentation NA Ok

Responsibilities Mr: Walter Machado being the controller is responsible for the review Ok

4.2. Peculiarities

Description of Peculiarities and unexpected Daily Events during the verification period

Description Conclusion and IRL

Performance Please refer to CAR above CAR 17

Documentation Please refer to CAR above CAR 17

Measures NA Ok

4.3. Further additional requirements

NA

4.4. Data Reporting Description of the Monitoring Report

Comments and Results Conclusion and IRL

Compliance with UNFCCC regulations

The first monitoring report for the registered VER+ project activity is dated 02/08/2010, version 2.0. The monitoring period for this verification is from 1st July 2002 to 31st December 2007.

Ok

Completeness and Transparency

Please refer to CARs and CRs above. CAR17

Correctness Please refer to CARs and CRs above. CAR17


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5. Compilation and Resolutions of CARs, CRs and FARs Corrective Action Requests by audit team

Comments and Results Ref Conclusion and IRL

Issue Corrective Action Request No.1 Please update the title of the MR as per the registered PDD. Also with every revision the date and version of the MR should be updated.

1.1 Ok 50

Response Updated in Monitoring Report version 03. Response 01/11/2010: Corrected in Monitoring Report page 1 and page 5.

Assessment The title of the MR has been corrected to ‘Lanxess Biomass Generation Project (hereafter referred to as LBG-Project): Retroactive Verified Emission Reductions.’. The version and date has also been updated. Please correct the crediting period. The crediting period has been corrected in the revised MR.

Issue Corrective Action Request No.2 The registered PDD and the final validation report do not give any details of the calciner and also the additionality of the project does not reflect the calciner. In light of the same, it should be clearly indicated in the revised MR that emission reductions are being claimed for the displacement of fos-sil fuel by biomass for steam generation only.

1.1 Ok 50

Response The Monitoring Report version 03 was updated excluding the emission reductions due to the cal-ciner.

Assessment It has been clarified in the revised MR that the credits from biomass usage in the Calciner are not claimed. This issue is thus closed.


Page A-29

Corrective Action Requests by audit team

Issue Corrective Action Request No.3 Please correct the operation start date in accordance with the licence to operate for the biomass based boiler, as issued by CETESB.

1.1 Ok 50

Response Updated in Monitoring Report version 03, sections C.2.1.1; C.2.1.2; D.1; Table.1 and Table.3. Response 01/11/2010: Corrected in Monitoring Report page 1 and page 5.

Assessment Please correct the crediting period start date and length in accordance with the registered PDD. Although the crediting period would start from the indicated date in the registered PDD but the credits can be claimed from the operation start date in accordance with the licence to operate for the biomass based boiler, as issued by CETESB. In other words the credits would be zero during the period of crediting start date and operation start date. Also to be noted is that the emissions due to transportation of biomass should be accounted from the crediting period start date. The crediting period start date and length has been corrected in the revised MR in accordance with the registered PDD.

Issue Corrective Action Request No.4 As per EB48 annex-68, please update the MR to include implementation status of the project dur-ing the monitoring period. Also please include the major planned/forced outage details during the monitoring period in the MR.

1.1 Ok 50

Response Included in Monitoring Report version 03 section D.1.

Assessment The implementation status of the project during the monitoring period has been included in the re-vised MR. This issue is thus closed.

Issue Corrective Action Request No.5 Please include the procedure for data recording and archiving for all the monitored parameters in the MR.

1.2 Ok 50


Page A-30


Response Updated on Monitoring Report version 03 in Section D.2 and Section D.3.1.

Assessment The procedures for data recording and archiving for all the monitored parameters has been in-cluded in the revised MR. This issue is thus closed.

Issue Corrective Action Request No.6 Please clarify the basis of taking fixed pressure and temperature condition for the feed-water and steam produced. It cannot be confirmed whether the steam and feed water had the same tempera-ture and pressure throughout the crediting period. Please provide further evidences and justification to prove the same.

2.1 Ok 11, 50

Response As per the commissioning document of the boiler (“Prontuário da Caldeira BGV20000): - Feed water temperature: Tin = 85º C. - Feed water pressure: Pin = 12 kgf/cm2 = 1.18 MPa

- Superheated steam temperature: Tout = 190ºC. Pout = max(*) = 11.4 kgf/cm2 = 1.12 MPa Min(*) = 10.2 kgf/cm2 = 1.00MPa (*) See Inspection Report of the boiler nº 121/2002 (sent to DOE). (Section “Valvulas principais – 1ª válvula”).

If the pressure is up of 11.4 kgf/cm2, the security valve opens. If the pressure is lower than 10.2 kgf/cm2 the flow valves closes. It means that the pressure must be necessarily between 11.4 kgf/cm2 and 10.2 kgf/cm2. If the temperature is lower than 180ºC, the steam loses its features of superheated steam.


Page A-31


Simulating enthalpies we have: Tout = 190ºC Pout = max = 1.12 MPa → Eth = 0.002796 TJ/ton. Min = 1.00 MPa → Eth = 0.002803 TJ/ton. (the differences is about 0,25%, therefore neglected). Response 01/11/2010: The Monitoring Report ver04 and spreadsheet “LBG-Project_VER+sheet ver04” were updated us-ing: Pout= 10.2 kgf/cm2 = 1.0 MPa Saturated Steam: P = 1.00 MPa T = 179,9 ºC Enthalpy: Ethout = 2778 kJ/Kg = 0.002778 TJ/ton (source: “Fundamentals of Thermo Dynamics” – Van Wylen; Sonntag; Borgnakke. (John Wiley and Sons, Inc. – 6th Edition). Response 25/11/2010: Sent the spreadsheet “LBG-Project_VER+ sheet ver05” duly updated.

Assessment As a conservative approach, the lower value of the steam pressure at which the flow valve closes should be taken. Also the process steam is expected to be saturated and not superheated. There-fore please provide the evidence for the presence of superheater and as a conservative approach the saturated steam temperature corresponding to the pressure should be taken. The MR has been revised taking the conservative approach, the lower value of the steam pressure at which the flow valve closes has been taken. Also the steam is considered to be saturated and not super-heated. Please submit the revised emission reduction calculation spreadsheet. The revised emission reduction calculation spreadsheet has been submitted. This issue is thus closed.


Page A-32


Issue Corrective Action Request No.7 Please update the MR to include information as to how EGy has been monitored.

2.1 Ok 50

Response Included in Monitoring Report version 03, Section D.3.1.

Assessment The MR has been revised indicating that EGy is calculated based on the steam production and the properties of steam.

Issue Corrective Action Request No.8 Please update the MR to clarify the basis of including the parameter ‘Quantity of biomass residues (wood chips) used annually by the calciner for displacement of heavy fuel oil’ in the MR.

2.1 Ok 50

Response Excluded for the Monitoring Report version 03 the parameter “Quantity of biomass residues used annually by the calciner”

Assessment The MR has been revised excluding the indicated parameter. This issue is thus closed.

Issue Corrective Action Request No.9 Please update the MR to include information as to how Qbiomass,boiler has been monitored.

2.1 Ok 6, 47, 48, 50

Response Included in Monitoring Report version 03 the parameter “Qbiomass,y” indicating the total amount of biomass residues burned in the project plant during the year “y”. The value includes the biomass residues used in the boiler and in the calciner. The quantity was obtained in the invoices of bio-mass purchase. As the amount of biomass burned in each equipment was not monitored, was used to calculation, the steam production, abandoning the biomass quantities that were estimated without any preci-sion. Response 01/11/2010: The values given in the PDD were obtained in the spreadsheets of the production sector "PLANILHA ENERGIAS Y".


Page A-33


The quantities of the spreadsheets were obtained by calculation, based on boiler efficiency and calorific value of biomass.

To give greater coherence to the Monitoring Report data, it was considered the amount of biomass that was purchased and transported to Lanxess, the same quantity was also used to calculate leakage.

Anyway, the amount of biomass was not used for calculations, which were based on steam produc-tion.

Assessment As this is retroactive data therefore please clarify the difference between the values indicated in the registered PDD and the monitoring report. The difference in the values has been attributed to the different source and approach used for pre-senting the data. As the quantity of biomass procured has been used for the leakage calculation this could be accepted. This issue is thus closed.

Issue Corrective Action Request No.10 Please clarify why the NCV has been calculated from the quantity of thermal energy generated, enthalpy difference and efficiency parameters. As per registered PDD, it is stated that for NCV measurements shall be carried out monthly at reputed laboratories and according to relevant inter-national standards. Please update the MR to include the details as to how the NCV values have been obtained from laboratories.

2.1 Ok 50

Response Included in Section D.3.1 of the MR version 03, the parameter NCVbiomass, whose applied value was 10.546 TJ/Gg that was average of all analysis made during the crediting period. However, the parameter was not used because the heat generated was calculated through the production of steam.

Assessment As the value of NCVbiomass is not used in the emission reduction calculation but just as a cross-check for the thermal energy generation from the biomass usage therefore adopted approach is accepted and this issue is thus closed.


Page A-34


Issue Corrective Action Request No.11 It cannot be verified from the MR as to how this parameter (TLy) has been monitored or calculated. Please update the MR to include the required details.

2.1 Ok 50

Response Included in MR v03 Section E.3. (see more details in spreadsheet “LBG – Project VER+ sheet”).

Assessment As the emissions due to transportation of biomass have been calculated based on the monitored total number of truck trips therefore the parameter TLy is not used in the calculation. The MR has been revised accordingly. This issue is thus closed.

Issue Corrective Action Request No.12 Please include the details of the monitoring parameter Ny in MR.

2.1 Ok 50


Assessment The number of truck trips for biomass transportation has been taken from the Accounting records and SAP records. The total number of truck trip is slightly higher than the values indicated in the registered PDD. The MR has been revised. This issue is thus closed.

Issue Corrective Action Request No.13 Please update the MR to include details on the monitoring of AVDy

2.1 Ok 50


Assessment The MR has been revised to include the details on the monitoring of AVDy. The round trip distance has been found from Google maps using the address of the supplier. In case of non-availability of the address the maximum distance of the known supplier has been taken, this is deemed conser-vative. This issue is thus closed.


Page A-35


Issue Corrective Action Request No.14 As per the registered PDD, this parameter (VF) shall be calculated based on the monitored odome-ter and diesel consumption data. However the MR has assumed default IPCC values for this pa-rameter, please clarify.

2.1 Ok 50

Response As the PDD that was concluded in 2008, refers to retroactive emission reductions, there is no way to monitor the odometers and diesel consumption, considering that the trucks are not property of Lanxess. The consumption of the trucks indicated in the PDD was 0,0002857 m3/km (3,5 km/l). In the absence of more precise data, and in a conservative manner, the IPCC Guidelines - 1996 value of 3.3 km/l was adopted.

Assessment Since the fuel consumed has not been monitored for the retroactive claimed credits therefore as a conservative approach the mileage of the trucks has been taken as 3.3 km/l. This is deemed ac-ceptable. This issue is thus closed.

Issue Corrective Action Request No.15 Please update the MR to include details on the calibrations carried out for the steam flow meter and the pressure transmitter.

2.2 Ok 7,18,24,27, 50

Response Included in M.R. v03 – Annex 01. Response 01/11/2010: There are no calibrations prior to 2004. Response 25/11/2010: The “Guidelines for assessing compliance with the calibration frequency requirements” was ap-plied. As per the manufacturer’s manual of the flow meter, an adjustment of “-0.2%” was made. The Monitoring report updated “Lanxess VER+ Monitoring Report ver05” and the spreadsheet “LBG-Project_VER+ sheet ver05” duly updated were sent to DOE.

Assessment The calibration details of the steam flow meter and pressure transmitter has been provided from 2004 onwards. Please provide the details of the previous calibrations as well.


Page A-36


In the absence of the calibration records please apply the guidance as provided in EB-52, Annex 60. In the absence of the calibration records for the steam flow meter prior to 2004 and subsequent calibration results not showing any error in the measuring equipment, the correction has been car-ried out by applying the maximum permissible error of the instrument to the measured values. This is in accordance with EB-52, Annex 60, hence acceptable. This issue is thus closed.

Issue Corrective Action Request No.16 As the consent to operate for the biomass based boiler has been obtained in 2003, therefore the emission reductions would be claimed from 2003 onwards. Please submit the revised MR and ER calculation spreadsheets addressing the same.

2.2 Ok 15, 16, 50

Response Updated in Monitoring Report version 03 and spreadsheet “LBG – Project VER+ sheet”. Response 01/11/2010: Updated in Monitoring Report ver04 (see CAR 18) As the emission reductions will not be considered in the period prior to the issuance of the License, as a matter of consistency, the leakage will also not taken into account.

Assessment Please correct the crediting period start date and length in accordance with the registered PDD. Although the crediting period would start from the indicated date in the registered PDD but the credits can be claimed from the operation start date in accordance with the licence to operate for the biomass based boiler, as issued by CETESB. In other words the credits would be zero during the period of crediting start date and operation start date. Also to be noted is that the emissions due to transportation of biomass should be accounted from the crediting period start date. The crediting period start date and length has been corrected in the revised MR in accordance with the registered PDD. Also as a matter of consistency leakage before the licence to operate has not been considered. This could be accepted and thus this issue is closed.


Page A-37


Issue Corrective Action Request No.17 There are discrepancies observed in the values of steam generation in the raw data worksheets and the values used in the MR for emission reduction calculation. Please revise the MR and the calculation to be consistent with the raw data.

2.2 Ok 47, 48, 50

Response Updated the Monitoring Report version 03 and the spreadsheet “LBG – Project VER+ sheet”. Response 01/11/2010:

1) Values from the spreadsheet “Planilha Consumo Cavaco – Anual”: Year rev. 0 rev. 01 2002 50,076.248 49,907.3742003 96,118.176 95,933.536 2004 92,181.428 91,801.886 2005 87,308.835 87,151.547 2006 97,254.198 97,020.1762007 84,229.087 84,126.185

507,167.972 505,940.704 Considerations adopted for the spreadsheet “PLANILHA CONSUMO DE CAVACO - ANUAL rev01.xls”: - Noting that the record of the amount of steam produced is conducted at 8:00 am, the steam vol-ume considered for the month was the sum of daily values from the 2nd day of the current month until the 1st day of next month. Considerations adopted for the spreadsheet “PLANILHA CONSUMO DE CAVACO – ANUAL.xls” - The amount of steam for the month was considered the sum of daily values from first to last day of the month. - Thus, the difference between the criteria should be equivalent to the amount produced in the first day of the year in each period.


Page A-38


However there were some mistakes in the spreadsheet “PLANILHA CONSUMO DE CAVACO – ANUAL.xls” , namely: in 2002: production in the month of June was mistakenly increased the value for the 2nd day of July/2002 (154.405) in 2003: production in the month of June/2003 was mistakenly increased the value for the 2nd day of July/2003 (223.708) in 2004: production in the month of June/2004 was mistakenly increased the value for the 2nd day of July/ 2004 (272.333) in 2005: production in the month of June/2005 was mistakenly increased the value for the 2nd day of the month of June/2005 (202.535) in 2006: production in the month of June/2006 was mistakenly increased the value for the 2nd day of July/2006 (300.187) in 2007: The criterion for the sum of the values was changed, considering the 2nd day of the current month to the 1st day of next month. However there were some mistakes in the "spreadsheet", namely: In the month from October 2007 was not added to the production of the day 31.10 (72.279) In the month of December 2007 was not added to the production of the day 31/12 (106.656).


Page A-39


The fitted values of the spreadsheet " PLANILHA CONSUMO DE CAVACO – ANUAL.ver01.xls" were transported to the worksheets "Energias ver01.xls" and "PRODVAPORBIOMASSAver01.xls". The values of the spreadsheet "PLANILHA CONSUMO DE CAVACO – ANUAL.xls" were transported to the worksheets "Energias.xls" and "PRODVAPORBIOMASSA.xls". Thats the reason why the spreadsheets have different values. Resume of the differences:

year: 2002 ver.00 ver.01 spreadsheet value 50,076.248 49,907.374 1st day period ‐253.035 * 1st day next year 238.566 * 2nd day july/2002 ‐154.405 * Total year 49,907.374 49,907.374

year: 2003 ver.00 ver.01

spreadsheet value 96,118.176 95,933.536 1st day of the year ‐238.566 * 1st day next year 277.634 * 2nd day july/2002 ‐223.708 * Total year 95,933.536 95.933.536

year: 2004 ver.00 ver.01 spreadsheet value 92,181.428 91,801.8861st day of the year ‐277.634 * 1st day next year 170.425 *


Page A-40


2nd day july/2002 ‐272.333 * Total year 91,801.886 91,801.886

year: 2005 ver.00 ver.01 spreadsheet value 87,308.835 87,151.5471st day of the year ‐170.425 * 1st day next year 215.672 * 2nd day july/2002 ‐202.535 * Total year 87,151.547 87,151.547

year: 2006 ver.00 ver.01 spreadsheet value 97,254.198 97,020.1761st day of the year ‐215.672 * 1st day next year 281.837 * 2nd day july/2002 ‐300.187 * Total year 97,020,176 97,020.176

year: 2007 ver.00 ver.01

spreadsheet value 84,229.087 84,126.1851st day of the year ‐281.837 * production 31/10/2007 72.279 * production 31/12/2007 106.656 * Total year 84,126.185 84,126.185

Assessment Please clarify the discrepancies observed in the values of the steam generation reported in the dif-ferent sheets (PLANILHA CAVACO sheets in the PLANILHA CONSUMO DE CAVACO - ANUAL rev01.xls file and PLANILHA ENERGIAS and PRODVAPORBIOMASSA files) submitted.


Page A-41


The difference in the values has been attributed to the recording procedure adopted and errors in some days. This issue is thus closed.

Issue Corrective Action Request No.18 Please revise the MR and the calculation sheet to clearly indicate the biomass procured.

2.2 Ok 47, 50

Response Updated in Monitoring Report version 03 Section D.3.1 and spreadsheet “LBG – Project VER+ sheet”. Response 01/11/2010: As the emission reductions will not be considered in the period prior to the issuance of the License, as a matter of consistency, the leakage will also not taken into account.

Assessment Please account the emissions due to transportation of biomass from the crediting period start date. As a matter of consistency leakage before the licence to operate has not been considered. This could be accepted and thus this issue is closed.

Issue Corrective Action Request No.19 The data has been referred to IPCC guidelines 1996. Please justify the usage in terms of appro-priateness and conservativeness of this value in context of the project activity.

2.4 Ok 50

Response The values of the diesel consumption per kilometre of trucks are not available in IPCC Guidelines 2006. The more recent published values are from the IPCC Guidelines 1996. It was used the consumption value of European trucks that has mechanical gearbox, as in Brazil. The trucks in USA has automatical gearbox, a feature lacking in Brazil. The IPCC Guidelines 1996 value (3.3 km/l) used, is more conservative than the value used in PDD (3.5 km/l).

Assessment Since the fuel consumed has not been monitored for the retroactive claimed credits therefore as a


Page A-42


conservative approach the mileage of the trucks has been taken as 3.3 km/l from IPCC guidelines 1996. This is deemed acceptable. This issue is thus closed.

Issue Corrective Action Request No.20 Please keep the MR consistent with the registered PDD in terms of monitoring parameter and de-scription of the parameters (please check NCV parameter). Please revise the MR to maintain con-sistency.

2.5 Ok 50

Response Updated in Monitoring Report version 03 Section D.3.1.

Assessment The MR has been revised to be consistent with the reported value of NCV in the registered PDD. This issue is thus closed.

Issue Corrective Action Request No.21 Please clarify and update the MR to include the crosscheck done as per the registered PDD (with ‘relevant data sources e.g. values in the literature and default values by the IPCC) for NCV.

2.5 Ok 50


Assessment The MR has been revised. This issue is thus closed.

Issue Corrective Action Request No.22 In light of the earlier raised CARs, it is to be noted that ERs are only eligible for the displacement of fossil fuel by the biomass based boiler for steam generation. Please correct the emission reduction calculations based on the measured value of steam generation and properties of steam and appro-priately taking the efficiency of the boiler into account. Please also correct the emissions due to transportation of biomass.

3.0 Ok 50

Response Updated in Monitoring Report version 03 and spreadsheet “LBG – Project VER+ sheet”. Response 01/11/2010:


Page A-43


Updated in Monitoring Report ver04 and spreadsheet “LBG-Project_VER+ ver04”. Response 25/11/2010: Sent the spreadsheet “LBG-Project_VER+ sheet ver05” duly updated.

Assessment Please refer to CAR3 and CAR6. Please submit the revised emission reduction spreadsheets. The revised emission reduction calculation spreadsheet has been submitted. This issue is thus closed.

Issue Corrective Action Request No.23 Please correct the density of the diesel oil as indicated in the registered PDD.

3.0 Ok 50


Assessment The density of the diesel oil has been revised as indicated in the registered PDD. This issue is thus closed.

PERIODIC VERIFICATION “Lanxess Biomass Generation Project (hereafter referred to as LBG – Project): Retroactive Verified Emission Reductions”

Annex 2: Information Reference List

Final

Report

16-12-2010

Verification of the VER+ Project Lanxess Biomass Generation Project (hereafter referred to as LBG-Project): Retroactive Verified Emission Reductions.

Information Reference List (IRL)

Page 1 of 5

TÜV SÜD INDUSTRIE SERVICE GMBH

IRL. No.

Issuance and/or submission

date(dd/mm/yyyy) Title/Type of Document Author/Editor/ Issuer Additional

Information

1. 06/11/2007 PDD “Lanxess Biomass Generation Project (hereafter referred to as LBG-Project): Retroactive Verified Emission Reductions.”, Version 04

Lanxess Indústria de Produtos Químicos e Plásticos Ltda

VER+ registration number 39-1

2. 23/12/2006 AMS-I.C version 09 “Thermal Energy for the User” UNFCCC Applied Methodology

3. 02/08/2010 Published monitoring report PP -

4. 25/02/2009 Final Validation report TUV SUD -

5. 06/11/2009 Participant list of on-site interviews TÜV SÜD List of Participants

6. 15/09/2010 to 17/09/2010

On-site interviews conducted by TÜV SÜD Verification Team: Mr. Sandeep Kanda

Mr. Wellington Almeida

Interviewed Persons: Mr. Francisco Cesar Tofanetto Chief Energy/Electrical Lanxess

Mr. Nino S. Bottini Consultant GreenDomus

Mr. Carlos E. Zampola Electric Engineer Lanxess

Mrs. Arlete M. Ulerik Chemistry Analyst Lanxess

Mrs: Keli C. D. de Souza Adm. Technician Lanxess

Mr. Walter L. P. Machado Controller Lanxess

Mr. Carlos Cesar - Lanxess

Mr. Joao - Lanxess

Mr. Luis Paulo Galdino Instr. Technician Lanxess

TÜV SÜD List of Participants

7. 1612/2009 “Certificado de Calibracao” – Flow-meter Calibration Certificate, no. LV 1114/10 Visomes -

8. 01/10/2001 Technical Responsibility Annotation (A.R.T) of Rubens Siegel, Mechanical Engineer of Biochamm, which was the biomass based boiler manufacturer, no. 1877768-0

Rubens Siegel (CREA-SC) Safety procedures attendance

Final

Report

16-12-2010



Page 2 of 5


IRL. No.



Information

9. 19/10/2001 “Certificado de Entrega Técnica de Montagem”, whereby Biochamm certified that the biomas based boiler assembly process was conclude without restriction to activities later

Biochamm Safety procedures attendance

10. 14/11/2001 “Certificado de Entrega Técnica de Start-Up”, whereby Biochamm certified that the biomass based boiler start-up process was concluded without restriction to activities later

Biochamm Safety procedures attendance

11. 17/06/2002 “Prontuario de Caldeira BGV 20000” – Commissioning Report of the biomass based boiler manufacturer

Biochamm Boiler installation document

12. 16/07/2002 “Atas e Comunicados” – Public announcement in a newspaper to inform that Bayer had requested the license to install the biomass based boiler system

Diário Sorocaba -

13. 31/07/2002 “Relatório de Inspecao de Caldeira” – Safety Inspection Report of the biomass based boiler, no. 121/2002

Bayer Safety periodic Inspection of the boiler

14. 12/08/2002 “Solicitacao De Licenca de Instalacao” – Applied formula to request the license to install

CETESB/Lanxess Environmental procedures attendance

15. 05/09/2002 “Licenca de Instalacao” – License to install, no. 06001728 CETESB Environmental procedures attendance

16. 11/02/2003 “Licenca de Operacao” – License to operate, no. 6001799 CETESB Environmental procedures attendance

17. 24/09/2003 “Relatório de Inspeção de Caldeira” - Safety Inspection Report of the biomass based boiler, RIC n° 3420/03

ATEST Safety periodic Inspection of the boiler

18. 12/01/2004 “Certificado de Calibracao” – Flow-meter Calibration Certificate, no. TLM 6507/04 TAM -

19. 11/02/2004 “Certificado de Calibração” – Weigh-bridge Calibration Certificate, no. 208/04 Confiantec -


21. 26/08/2004 “Licenca de Instalacao Anexo” – License to install Appendix, changing the name of the license from Bayer to Lanxess

CETESB -

22. 26/08/2004 “Licenca de Operacao Anexo” – License to operate Appendix, changing the name of the license from Bayer to Lanxess

CETESB -

Final

Report

16-12-2010



Page 3 of 5


IRL. No.



Information









29. 11/07/2006 “Relatório de Inspeção em Caldeira” - Safety Inspection Report of the biomass based boiler, RNR n° 779/06

CIA Safety periodic Inspection of the boiler








35. 05/10/2007 “Licenca de Operacao” – License to operate, no. 6004026 CETESB Environmental procedures attendance

36. 14/01/2008 “Certificado de Calibracao” – Flow-meter Calibration Certificate, no. LV 1172/08 Visomes -

37. 16/04/2008 “Laudo de Exame de Balanca” – Weigh-bridge Expert Report no. 219092, issued by a governmental institute

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44. 16/09/2010 “RM-028 Manual de Operação da Área de Caldeiras – Caldeira BIOCHAM”, Rev.2, dated from 04-09-2008.

Lanxess Biomass based boiler operating manual

45. 16/09/2010 “RM-021 - Manual de Operação da Caldeira ATA”, Rev.3, dated from 04-09-2008. Lanxess Oil based boiler operating manual

46. 16/09/2010 “RM-031 Monitoramento de Dados de Biomassa na Caldeira”, Ver.0, dated from 01-08-2007, re-validated on 23/03/2010.

Lanxess

Operating procedure to define the monitoring of biomass data at the biomass based boiler

47. 16/09/2010

Files with the acquisition of woodchips registered by SAP for the following years: 2005 - 20100916_WoodChipRecordsfromSAP_Year2005.xls 2006 - 20100916_WoodChipRecordsfromSAP_Year2006.xls 2007 - 20100916_WoodChipRecordsfromSAP_Year2007.xls

Lanxess -

48. 16/09/2010

20100916_PLANILHA CONSUMO DE CAVACO – ANUAL.xls – Excel file with the daily steam production data, from 2002 – 2010 20100916_PLANILHA ENERGIAS 2006.xls – Excel file with the monthly steam production data plus financial information – year 2006 20100916_PLANILHA ENERGIAS – 2007.xls – Excel file with the monthly steam production data plus financial information – year 2007 20100916_PRODVAPORBIOMASSA_2003.xls – Excel file with the monthly steam production data plus financial information – year 2003 20100916_PRODVAPORBIOMASSA_2004.xls – Excel file with the monthly steam

Lanxess Steam production data

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Information production data plus financial information – year 2004 20100916_PRODVAPORBIOMASSA_2005.xls – Excel file with the monthly steam production data plus financial information – year 2005

49. 16/09/2010 “CE 10.000 – A sua balanca Rodoviaria” Confianca Weigh-bridge operating manual

50. 15/12/2020 Final Monitoring Report, Version 06 Lanxess -

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