Tel: +353 (0) Fax: +353 (0) Website: ARRAN CHEMICAL COMPANY LTD

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1 ARRAN CHEMICAL COMPANY LTD Monksland Industrial Estate Athlone, Co Roscommon, Ireland Tel: +353 (0) Fax: +353 (0) Website: ARRAN CHEMICAL COMPANY LTD ANNUAL ENVIRONMENTAL REPORT 2008

2 Arran Chemical Company Ltd AER INTRODUCTION 1.1 Company Details Licence Register No.: P Name: Arran Chemical Company Limited Location: Monksland Industrial Estate, Athlone, Co. Roscommon 1.2 Arran Chemical Company Activities Arran Chemical Company commenced manufacturing on-site in Monksland in 1988, with the number of employees currently standing at 45. Arran operates a small batch-mode multi-purpose chemical synthesis plant for the manufacture of products for pharmaceutical and health care, personal care, and other specialised chemical and industrial applications. Arran's manufacturing range includes products for diverse industrial applications, and features a range of alkylamines, pharmaceutical intermediates, flavour & fragrance and other personal care products, organometallics and other specialties. A significant part of the company s business is in specialized intermediates for the pharmaceutical industry, based on proprietory reaction technology, especially chiral products, which enable the manufacture of drugs with higher efficacy and lower side effects, and it is anticipated that this pattern will continue, and provide a focus for future growth within a pattern of sustainable development. The company works to ISO 9001:2000 standards, including many features of GMP (Good Manufacturing Practice). Arran is in good compliance with health and safety regulations and Safety Management System (SMS) in place. The Responsible Care programme, of which Arran is a member, provides a useful framework to support conformance with environmental, health and safety standards. The ISO14001 environmental management system was upgraded to the 2004 standard and accreditation was received in September 2005, with recertification in August The company made application to the Environmental Protection Agency (EPA) for an Integrated Pollution Control (IPC) Licence on the 1 st March 1996, with a licence being granted on 13 th December This licence was reviewed against the Integrated Pollution Prevention & Control (IPPC) Directive and a new licence (P ) granted on 2 nd July Annual Environmental Report 2008 This is Arran s twelfth Annual Environmental Report (AER), in accordance with condition 11.8 of the company s IPPC licence. This report has been prepared with regard to the Guidance Note on the preparation and presentation of the Annual Environmental Report published by the Agency in October 2000 and the reporting requirements in Schedule D of the IPPC licence. Over the last twelve years, as projected in the first AER, Arran has continued to develop, and to upgrade its manufacturing plant and operating systems, including management systems for safety, health and environmental control, with a modest increase in output year on year, while remaining within the original permitted limits, actually reducing emissions in certain categories and improving solvent recovery. As

3 Arran Chemical Company Ltd AER 2008 well as responding in a positive way to regulatory obligations, the company continues to move substantially in introducing elements of GMP into its ISO 9001 systems, which has required some internal changes and additional controls. During 2003, the Quality Management System was upgraded to the ISO9001:2000 standard. This allowed for integration of the Quality and Environmental systems in certain areas where there was overlap, resulting in an overall improvement in general management of the systems. Many of the new revised IPPC licence requirements and programme targets have now been implemented, and we are continuing with the phase of consolidating and seeking further improvement. This twelfth AER, which includes an index of contents and a number of sections covering the various aspects of its environmental control programme, also contains an account of progress made in relation to objectives and targets included in the company s Environmental Management Programme. The completed AER Returns Worksheet is contained in Appendix A. This new format is designed to summarise all emissions from the site in conjunction with the reporting requirements of the new Pollutant Release and Transfer Register (PRTR) regulations and IPPC AER reporting requirements. However, for the purpose of year on year comparisons the same format for presenting tables of emissions has been retained from previous years. In certain sections of this AER, additional tables and graphs have been included to highlight the reductions in process emissions, resulting from improved environmental control. There have been some changes to licence limits during the licence revision and the new limits as per licence P have being included in this AER. 1.4 Organisation Chart Managing Director Administration Production Quality Control Technical Environmental Manager Manager Manager Manager Manager QC Administration Engineer Production Chemists R & D Pilot Plant Environmental Staff Supervisors Chemists Operators Chemists Chargehands & Process operators 1.5 Environmental Policy A copy of our signed Environmental Policy is included on the next page. A copy is contained in our Environmental Manual (part of EMS) in line with the ISO14001 standard.

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5 2. SUMMARY INFORMATION 2.1 Emissions to Sewer Table 1 below contains Summary Information for 2008 based on daily composite results. The daily composite samples, taken by the composite sampler every day we discharge to sewer, were used to complete the Summary Data Table. Table 1 Summary Data for SE1 Emission Point Reference Number: Emission to: SE1 Sanitary Authority Foul Sewer Parameter Unit Licensed emission Volume M 3 25,550 18,363 18,553 18,966 Suspended Solids Kg 10,950 3,081 3,612 2,843 BOD Kg 87,600 54,003 58,583 60,237 COD Kg 219, , , ,214 Total Dissolved Solids Kg 131,400 76,419 77, ,059 Sulphates Kg 65,700 12,870 9,552 12,726 Phenol Kg Detergent Kg ,490 Chloride Kg 82,175 31,879 32,188 39,069 Sulphite Kg 4, Total Phosphorus Kg Heavy Metals Kg % Compliance % Number of samples Summary of Exceedances There were no exceedances in emissions to effluent during 2008.

6 2.2 Emissions to Surface Waters All surface water emissions to the Cross River occur through SW1 at the site front gate. This is visually inspected daily and during the first noticeable flow of the week, the surface water is sampled for ph, conductivity and COD, noting weather conditions. The results are maintained on file at Arran with summary data for SW1 is shown below in Table 2. Surface water that falls within the unloading area in the front yard is collected in the Front Yard Sump (FYS). FYS surface water is analysed for ph, conductivity and COD. This is released to SW1 through a manual valve provided that COD value is <125mg/l and ph & conductivity results are similar to those obtained at SW1. COD values above 125mg/l are investigated to determine the potential source. In 2008 no values above 125mg/l were recorded. Table 2. Summary Data for SW1 Emission Point Reference Number: Emission to: SW1 Surface Water Drain Emissions to surface water 2008 Parameter (average) Unit Average Maximum Minimum ph Conductivity µs COD mg/l Number of samples 28

7 2.3 Emissions to Atmosphere All Vents A1, A2, BE1 & BE2 were monitored during 2008 as required by the licence P Vent A1 is the main stack connected to the main scrubber for normal production. Vent A2 is used for solvent recovery and to monitor emissions from specific processes as required. Vent BE1 is the steam boiler and BE2 is the heating boiler. Table 3, 4, 5 & 6 contain summary data for vents A1, A2, BE1 & BE2 respectively, and Table 7 contains the Emissions to Atmosphere Monitoring Results for Vent A1 for Table 3. Summary Data for A1 Emission Point Reference Number: Vent A1 Emissions to air Parameter Unit Licensed emission Volume m 3 6,701,400 2,088,576 2,184,000 2,788,800 TA Luft Class I Kg TA Luft Class II Kg 17,520 7,778 7,366 10,973 TA Luft Class III Kg 26,280 6,390 4,079 10,321 % Compliance % Number of samples Table 4. Summary Data for A2 Emission Point Reference Number: Vent A2 Emissions to air Parameter Unit Licensed emission Volume m 3 6,570, , , ,000 TA Luft Class II Kg 17,520 3,456 3,414 2,767 TA Luft Class III Kg 26, % Compliance % Number of samples Table 5. Summary Data for BE1. Emission Point Reference Number: Boiler Emissions to air Licensed 2008 Parameter Unit emission SOx mg/nm 3 1, NOx mg/nm CO mg/nm BE1

8 Arran Chemical Company Ltd AER 2008 Table 6. Summary Data for BE2. Emission Point Reference Number: Boiler Emissions to air Licensed 2008 Parameter Unit emission SOx mg/nm 3 1, NOx mg/nm CO mg/nm BE2 Summary of Exceedances There was no exceedance relating to air emissions during 2008 on vents A1, A2, BE1 & BE2.

9 Arran Chemical Company Ltd AER 2008 Table 7. Emissions to Atmosphere from A Solvent Acetone DCM Ethanol (IMS) Ethyl Acetate Heptane Hexane IPA MeOH MTBE ACN TEA THF Toluene Xylene TA Luft Class III I III III II III III III III II I II II II Date Emission kg/hr (i) Air Emissions Quarter /01/ /01/ /02/ /02/ /03/ /03/ Total Emissions kg Q ,239 1, (ii) Air Emissions - Quarter /04/ /04/ /04/ /04/ /05/ /05/ /06/ Total Emissions kg Q , ,260 1,227 0 (iii) Air Emissions - Quarter /08/ /08/ /08/ /09/ /09/ Total Emissions kg Q ,233 1, ,672 1,

10 Arran Chemical Company Ltd AER 2008 Table 7. Emissions to Atmosphere from A (con t) Solvent Acetone DCM Ethanol (IMS) Ethyl Acetate Heptane Hexane IPA MeOH MTBE ACN TEA THF Toluene Xylene TA Luft Class III I III III II III III III III II I II II II Date Emission kg/hr (iv) Air Emissions - Quarter /10/ /11/ /11/ /12/ /12/ /12/ Total Emissions kg Q , ,877 6 Total Emissions in 2008, kg ,250 3, , ,951 5,

11 Table 8. Summary of Total Emissions to Atmosphere 2008 (v) Air Emissions - Summary 2008 TA Luft Class Total Emissions in 2008 Ethanol III 60 Acetone III 0 Ethyl Acetate III 265 Hexane III 1,250 IPA III 3,088 MTBE III 5,069 MeOH III 10 Heptane III 578 Total Class III 10,321 Xylene II 198 THF II 4,952 Acetonitrile II 102 Toluene II 5,823 Total Class II 11,075 DCM I 0 TEA I 3 Total Class I 3

12 Arran Chemical Company Ltd AER 2008 Vent A2 In previous years the Solvent Recovery Column and reactor vessel, R110, (normally used for Methanol recovery) were the only vessels connected to A2. On occasions R110 vessel is used for mixed solvent recovery, e.g. to reduce the water content of a batch of mixed solvent waste. Since 2006, by agreement with the EPA, emissions from specific processes were monitored using the FID analyzer on A2, which accounts for the increase in the Total Emissions for A2. Actual air flows will depend on pressure drops in vent lines, which depend on scrubbing capacity. Table 9. Emissions to Atmosphere from A (i) A2 Air Emissions Quarter Date Emission, kg/hr MeOH THF DCM TA Luft Class III II I 08/01/2008 < < /01/2008 < < /02/2008 < < /02/2008 < < /03/2008 < < /03/2008 < < /03/2008 <0.01 <0.01 <0.01 Total Emissions kg Q1 < <1 (ii) A2 Air Emissions - Quarter /04/2008 < < /04/2008 <0.01 <0.01 < /05/2008 < < /06/2008 < < /06/2008 < <0.01 Total Emissions kg Q2: <1 (iii) A2 Air Emissions - Quarter /07/2008 < < /07/2008 <0.01 < /07/2008 <0.01 < /08/ <0.01 < /08/2008 < < /09/2008 < < /09/2008 < <0.01 Total Emissions kg Q <29 (iv) A2 Air Emissions - Quarter /10/2008 <0.01 <0.01 < /10/2008 <0.01 <0.01 < /11/2008 < < /11/2008 < < /11/2008 < < /12/2008 <0.01 < /12/2008 <0.01 <0.01 < /12/2008 <0.01 < /12/2008 <0.01 < Total Emissions kg Q4 < Total Emissions in 2008, kg

13 Arran Chemical Company Ltd AER 2008 Table 10. Total Emissions to Atmosphere from Vent A Total Emissions in 2008, kg MeOH 13 Total Class III 13 THF 2767 Total Class II 2767 DCM 56 Total Class I 56

14 2.4 Waste Management The total waste produced hazardous and non-hazardous, recycled and disposed at Arran during 2008 shows a decrease of 753 tonnes when compared with the previous year. Part of this reduction relates to a reduction in output and a different product mix, but solvent recycling / reuse is also significant. Table 11 illustrates that overall recovery of waste (on & off-site) still exceeds disposal tonnages. Non hazardous waste recovery increased by 5 tonnes but there this is offset by a 9 tonne increase of recovery figures, with 4 tonnes extra diverted from disposal routes. Hazardous waste figures are reduced by 761 tonnes compared to 2007 figures with half of this waste recovered. As discussed in previous AERs, we continue to improve and develop processes by reducing raw material consumption, reducing waste stream volumes, making waste streams more manageable through segregation and balancing and reusing or recovering solvents. Table 12 contains information on the various waste streams produced at Arran. Asterix (*) next to the EWC Code indicates that the waste is hazardous. As can be seen from Table 13, additional solvent streams were segregated and sent externally for recovery and reuse (for example, Tetrahydrofuran, THF). Arran operates a small multi-purpose plant, carrying out batch processes, some of which are run only occasionally, so that waste streams and solvent usage are not constant, and there will be periods in the year and even years with substantially less usage and even emissions of particular solvents. Thus, waste streams are continuously changing, and the various balancing options need to be reviewed at regular intervals.

15 Table 11. Summary of Waste Produced Waste Total quantity of waste produced in calendar year(tonnes) 2212* Total quantity of waste disposed of on-site Total quantity of waste disposed of off-site Total quantity of waste recovered on-site Total quantity of waste recovered off-site Quantity of non-hazardous waste produced in calendar year Quantity of non-hazardous waste disposed of on-site Quantity of non-hazardous waste disposed of off-site Quantity of non-hazardous waste recovered on-site Quantity of non-hazardous waste recovered off-site Quantity of hazardous waste produced in calendar year (Tonnes) Quantity of hazardous waste disposed of on-site Quantity of hazardous waste disposed of off-site Quantity of hazardous waste recovered on-site Quantity of hazardous waste recovered off-site

16 Arran Chemical Company Ltd Table 12. CONTENTS Waste Streams Summary Data European Waste Catalogue Code Method of Disposal/ Recovery Location of Disposal/ recovery Name of Waste Disposal recovery Contractor Description of Waste Quantity (t/year) * Ethanol 17.8 R3 Ireland Soltec Ltd * Methanol 58.5 R3 Ireland Soltec Ltd * empty steel drums 53.8 R4 Ireland Rialta Ltd * empty plastic drums 4.5 R4 Ireland Rialta Ltd halogenated mixed * solvents 68.0 D10 Indaver Belgium Indaver Ireland halogenated mixed Kommunekemi * solvents D10 a/s, Denmark Indaver Ireland halogenated mixed * solvents 23.0 D10 AVG, Germany Indaver Ireland clean empty drums 23.4 R4 Ireland AES/Hammond Lane * aqueous wash & rinse liquids D9 Ireland ENVA * Inorganic chemicals 0.08 D9 Ireland ENVA * Mercury containing chemicals 0.08 D9 Ireland ENVA * non-halogenated mixed solvents D10 SAVA, Germany DEE Environmental * reaction residues 40.1 D10 SAVA, Germany DEE Environmental * absorbents & filters 11.0 D10 SAVA, Germany DEE Environmental * packaging 11.9 D10 SAVA, Germany DEE Environmental * Organic chemicals 1.3 D10 SAVA, Germany DEE Environmental * Inorganic chemicals 0.2 D10 SAVA, Germany DEE Environmental SRM Ltd, * THF R2 England DEE Environmental paper & cardboard 8.4 R3 Ireland CWR Ltd plastics 0.3 R3 Ireland CWR Ltd Tetrapak 0.4 R3 Ireland CWR Ltd timber pallets 45.2 R3 Ireland Connaught Timber Construction waste 8.3 R5 Ireland AES glass 0.2 R5 Ireland AES mixed municipal waste 25.8 D10 Ireland AES * Fluorescent tubes 0.03 R4 & R5 Ireland Irish Lamp Recycling * Waste oil 0.06 R2 Ireland SafetyKleen

17 Arran Chemical Company Ltd AER 2008 Table 13. Summary of all Waste Produced at Arran for Disposal and Recovery off-site All in Metric Tonnes Hazardous Disposed Water in mixed solvent Solvents in mixed solvent Aqueous waste Solid waste Total Hazardous Disposed Hazardous Recycled Empty Steel Drums Empty Plastic Drums IMS MeOH Ethyl Acetate IPA 4 Toluene THF Total Hazardous Recycled Total Hazardous Non-hazardous Disposal To Landfill Total Non-hazardous Disposed Non-hazardous Recycled Construction Waste 8.3 Timber Pallets Cardboard and Paper Plastic & Tetrapak Brown Glass Empty Drums Total Non-hazardous Recycled Total Non-Hazardous Total Tonnage Disposed Total Tonnage Recycled

18 Arran Chemical Company Ltd AER 2008 Breakdown of Total Waste Produced for Disposal & Recovery 2008 Methanol Empty Plastic Dr ums 5.9% 0.5% Solvent in Mixed Solvent Empty Steel Dr ums 23.0% 5.4% Br own Glass 0.0% Soli d Wast e 6.6% Plastic & Tetr apak 0.1% Ethanol / IMS 1.8% Landf ill 2.6% 2007 Timber Pallets 4.5% Aqueous waste 12.3% Empty Dr ums 2.4% Car dboar d & Paper 0.8% Constr uction waste 0.8% Water in Mixed Solvent 33.2%

19 Arran Chemical Company Ltd 2.5 Agency Monitoring & Enforcement During 2008, the EPA called unannounced twice to sample our effluent and surface water emissions and Roscommon County Council (RCC) took 6 samples of effluent emissions. 2.6 Energy Consumption Summary Table 14. Energy Consumption Energy Usage Unit Sulphur Content Light Fuel Oil m % Electricity MW The increase in energy usage depends on production output and product mix and can vary from year to year. 2.7 Resource Consumption Summary Table 15. Water Consumption Water Unit On-Site groundwater use m On-Site surface water use m Municipal water use m 3 18,475 15,566 12,899

20 Arran Chemical Company Ltd CONTENTS 2.8 Incidents & Complaints There were no incidents and no complaints to report to the Agency during In line with Condition 11.1 of our IPPC licence, there were 2 notifications to the Agency where monitoring equipment required repair during Date Notification Cause Corrective Action 27/05/08 Malfunction of FID on Stack A2 Gas Fuel nozzle malfunctioned Sent off-site for repair to supplier. 16/12/08 Malfunction of FID on Stack A2 Computer processing board malfunctioned Sent off-site for repair to supplier.

21 Arran Chemical Company Ltd 3 Management 3.1 Objectives & Targets In line with Section Schedule of Environmental Objectives and Targets and Environmental Management Programme (EMP), the schedule of environmental objectives and targets is changed somewhat from the format used in the AER 2006 report, to take into account additional requirements specified in the licence conditions listed. As set out in reports in previous years, it is the company s intention to continue to review and, where appropriate, upgrade its operations, particularly with respect to safety, environmental and product quality, as an integral part of the sustainable growth programme. The environmental objectives set out in the table below continuing in line with previous years, taking into account the requirements of the new licence conditions. Arran s Environmental Objectives are: Ref No. Area of Focus: Objective 1 Energy and Resource Efficiency: Review all operations and processes, for energy and resource efficiency. 2 Cleaner Technology and Cleaner Production: Review practicable options for use of cleaner technology and cleaner production with reference to the BAT guidelines, inlcuding possible options for replacement of list 1 substances and substances with the risk phrase R50, R51, R53, and R58. 3 Atmospheric and Fugitive Emissions: Review practicable options for reduction in fugitive emissions. 4 Waste Minimisation: Review practicable options for reduction and minimisation of waste. 5 To mimimise the consequence of any accidental discharges to the environment. 3.2 Summary of Work Completed During 2008 Section 3.2 contains a summary of targets completed during Energy & Resource Efficiency A new stock & inventory management system introduced in late 2007 was used during 2008 to process product batch sheets, quantify raw material status, plan production schedules and control stocks. This new tool has allowed us to plan production and scheduling more efficiently, helping to reduce raw material inputs (by improving recycling) and improve control of inventory. A review of electrical and fuel inputs was undertaken, leading to a focus on steam & boiler management. This led to a real reduction in boiler fuel consumption, even allowing for variation in production output and changed product mix over the years 2006, 2007 & The improvements in insulation on site were a factor in this saving.

22 Arran Chemical Company Ltd For electrical energy management during 2008 the wattless power panel was upgraded on site. Through the installation of a power correction capacitor it is possible to manage the power consumption of drive motors more effectively and hence save energy. The water consumption figures for 2008, taking the variation in production output and product mix into consideration show significant reduction. During 2008 recycled water was used on vacuum pump cooling systems, moving from the once through approach used previously. The larger reservoir for production cooling towers has improved cooling capacity and the replacement of the cooling water distribution system pipe work during shutdown 2008 has improved cooling supplies and eliminated leakages from distribution system Cleaner Technology and Cleaner Production The master chemical list on site was audited to identify all list 1 substances and the risk phrase R50, R51, R53 & R58 substances. The vast majority were small laboratory scale quantities used in the R&D and QC laboratory, which are suitably contained. In relation to substances used on production scale, process solvents and raw materials are determined by a balance of safety, economic and environmental factors, and are often fixed thereafter by various regulatory requirements. However, all new processes are subject to a screening programme which includes among its objectives the use of alternative substances where this is possible. A review of layout and design in the Pilot plant was undertaken in 2008 which included the upgrading of condensers and vacuum pump capacity with the intention of providing greater abatement options for pilot plant emissions. The A2 continuous emissions monitoring system has had an audible alarm installed that is set using SCADA according to solvent being monitored. Alarm limit is set at 80% of ELV to provide production Supervisors with time to react to the rising levels. It has proven very beneficial in maintaining ongoing compliance on A2 for DCM and THF monitoring Atmospheric and Fugitive Emissions An interim report on the efficiency of the charcoal abatement units for chlorinated solvents was submitted to the Agency in September The use of charcoal abatement was developed with the introduction of a larger unit for a new process (RPS2000) which was successfully introduced in The use of the A2 system for particular solvents like DCM or THF has resulted in further optimization of abatement efficiency for these solvents and improved understanding of scrubber changes required during processing. A project to identify a new continuous emission monitor for A1 air emissions by quantifying the combined solvent emission against TA Luft standards has being on-going during Trials with a portable GC were conducted on site and have resulted in further development research being undertaken by the company and the instrument supplier. A proposal was submitted to the EPA in relation to this project for review. New condensers and pipe work were installed onto the production area for improved solvent abatement during the annual shutdown.

23 Arran Chemical Company Ltd Waste Minimisation A review of the raw materials process from ordering to product or waste was conducted using the HAZOP model, with a team of people that had daily inputs to this process. This has highlighted a number of improvements to the process of planning, purchasing and storage of raw materials on site. Actions arising from this will be implemented in Three processes were run using only mother liquors from storage to generate respective end products without additional raw material inputs. Waste solvent purchasing was reduced and recycled solvent used in-house to reduce fresh solvent inputs. Three stock takes have being completed using Alliance and the manual check of stocks, each with better reconciliation & accuracy achieved. Stock levels have being reduced by better use of in-process material from storage and / or sending material for either off site disposal or recovery To Minimise the Consequence of any Accidental Discharges to the Environment The diesel fuel tank for main boiler was taken out of service during the 2008 shutdown, following the installation and commissioning of a new self bunded tank. A single skinned tank (1000litres) at Unit 4 was replaced with self bunded tank removed from Unit 5 which was not needed. The firewater retention pond was emptied and cleaned during the 2008 shutdown removing any accumulated silt and debris. It also provided a good opportunity to examine the condition of the liner and it was determined that the liner integrity is intact. The rainwater diversion system was tested to check for operation during emergency situations when diversion to the firewater retention pond may be required.

24 Arran Chemical Company Ltd 3.3 Environmental Management Programme: EMP 2009 Section 3.3 contains the details of the EMP Each of the five Objectives has associated targets for 2008, and these are summarised in the following sections, with a short progress note and comment as appropriate. For 2009, some targets include a continuation or modification of projects carried over from Energy & Resource Efficiency Objective: To review all operations and processes for energy and resource efficiency. Target 1/09/1: Arran has had a successful programme in place over the years to maximise resource efficiency in processes and operations. In continuation of this work and management and objectives, it is proposed to develop in-house metrics using the information from the new stock control programme to track and monitor resource efficiency. Timescale: Quarter 2, 2009 Target 1/09/2 Investigate production & process related electrical demand on site using supplier online metrics on usage. Examine potential for altering peak usage & requirements to nighttime periods to reduce environment impact caused by generation plants. Timescale: Quarter 3, 2009 Target 1/09/3 Investigate the potential & financial feasibility of harvesting rain water for use in non process related activities on site. Continue to monitor water usage to minimise wastage on site and further reduce annual usage. Timescale: Quarter 4, Cleaner Technology and Cleaner Production Objective: Review practicable options for use of cleaner production options for use of cleaner technology and cleaner production with reference to the BAT guidelines, including possible options for replacement of list 1 substances and substances with the risk phrase R50, R51, R53, and R58. Target 2/09/1: A continuous improvement programme for quality & environmental management of operations means that additional environmental instruction is to be included on production batch sheets and procedures. The aim of this objective is to improve technical communications at operator and supervisor levels through the batch sheet instructions, thus increasing the environmental aspects of the process. All new process notifications will include

25 Arran Chemical Company Ltd Timescale: Quarter 2, 2009 reference to this objective, and, where appropriate, the new REACH regulation. Target 2/09/2: Modify the purchasing procedures to create greater clarity of roles & responsibilities in relation to procurement of materials especially list 1 and risk phrase R50, R51, R53, and R58 substances. Timescale: Quarter 3, 2009 Target 2/09/3: Development work will continue to investigate potential for replacement of DCM from another process during Meanwhile charcoal abatement will continue to be used to ensure licence compliance. Timescale: Quarter 4, Atmospheric and Fugitive Emissions: Objective: Review practicable options for reduction in emissions. Target 3/09/1: The on-going project to identify and install a continuous emissions monitor on the A1 stack, that will quantify emission against the TA Luft standards, will continue during During Quarter 1, in cooperation with the company, the instrument supplier is undertaking further development work with new GC columns to accommodate the range of solvents used at Arran, and improve the resolution and retention time issues highlighted in 2008 trials. Field monitoring trials will then be undertaken to evaluate the performance of the portable GC instrument. Timescale: Quarter 4, 2009 Equipment to provide a composite 1 hour air emission sample for the GC is being sourced for suitability and workability. In addition work is on-going to determine and undertake modifications to the existing SCADA to accommodate the analytical device and to handle data generated. Quarterly updates will be provided to the EPA on the project in 2009.

26 Arran Chemical Company Ltd 4. Waste Minimisation: Objective: Review practicable options for reduction and minimization of waste. Target 4/09/1: Investigate the potential for reducing the water content in the solvent waste that is sent off site for disposal. It must be borne in mind that in this context, the average water content of aqueous substances is classified as hazardous waste. Timescale: Quarter 4, 2009 Target 4/08/2: Focus on the potentials for reduction of process inputs to minimise waste produced and further develop process metrics to monitor this goal. Timescale: Quarter 4, To Minimize the Consequences of any Accidental Discharges to the Environment. Objective: Review practicable options for improved containment on site. Target 5/09/1: Re-surface the Unit 6 warehouse floor to repair and reinstate the impervious sealant layer following recent construction and re-roofing work during the summer shutdown. Timescale: Quarter 2, 2009

27 Arran Chemical Company Ltd 3.4 Pollution Release and Transfer Register (PRTR) The E-PRTR is provided for by EC Regulation 133/2006 and was transposed into Irish law by S.I. 123/2007. The aim of PRTR is to enhance environmental data collection for the public and policy makers in Europe. All member states are required to contribute to PRTR on an annual basis and to meet this requirement the EPA has required all licensed activities in Ireland to combine the PRTR reporting with the requirements for the AER reporting. The PRTR reporting requirement to Europe will then be assessed by the EPA for each facility, and the facility will be informed prior to any PRTR reporting. It is also worth noting that the exceedance of PRTR thresholds does not imply noncompliance with licensed emission limit values. Reporting is required for; Emission to air and water (controlled & accidental) Offsite transfer of pollutants in waste water destined for wastewater treatment Waste transfers of hazardous & non-hazardous waste Reporting is completed in number of categories, Sector specific PRTR pollutants, licenced pollutants and remaining PRTR pollutants. The reporting as licence pollutants meets the requirements for AER reporting electronically and the remainder is for PRTR requirements. This means that some few pollutants fall into several categories and shall be reported for each of these categories. In these instances it will mean that the same pollutant is reported in duplicate under different categories. The AER Returns Worksheet in Appendix A contains the AER Electronic and the PRTR reporting requirements for This has being submitted electronically to the EPA for validation before inclusion in the AER Report. 4. Licence Specific Reports 4.1 Toxicity Testing Toxicity testing was undertaken in June 2008 by Enterprise Environmental on Arran s composite effluent sample, using ISO8192 (method B) as the test method. The results showed that the effluent toxicity of the effluent sample was less than 2 Toxic Units (TU), similar to previous results and against a licence limit of 10TU. A copy of the Enterprise Environmental report is maintained on file. 4.2 Ambient Groundwater Monitoring Bi-annual groundwater monitoring has continued since 2001 with one monitoring event completed for July The overall conclusion from the report is that the levels of organics at all boreholes have decreased substantially and confirms the efficacy of the Monitored Natural Attenuation programme (MNA). At the July 08 monitoring event, some changes were observed in one borehole, but further additional monitoring at this borehole carried out in December 08, showed a return to normal levels & trends. This indicates that fluctuations can be expected due to sampling, groundwater levels and movements.

28 Arran Chemical Company Ltd indicates that fluctuations can be expected due to sampling, groundwater levels and movements. 4.3 New Products and Processes In line with Section 1.4 of our IPPC licence, notifications were submitted to the Agency detailing new products being introduced into our manufacturing range. Data on the products, designated SMCQ and RPS2000, was submitted in the agreed format in September and November Noise Monitoring Report Summary This was completed in accordance with the methodology outlined in the EPA Noise Survey Guidance Document. The report is available on file for inspection. Noise sources at the Monksland Industrial Estate in the 2008 survey were related to construction and other traffic, with noise levels at the nearest private dwelling compliant with licence night-time limits. 4.5 Tank and Pipeline Testing Inspection Report In relation to the requirement of the IPPC licence P , Condition 6.9, Arran has a programme of testing of bunds with a schedule for re-testing and recording any repairs. There are no underground pipes on the site apart from surface water drainage. All pipe work is over ground and can be inspected visually. CCTV surveying of the surface water drains and process drains was undertaken in 2008 during the August shutdown. All test reports and survey reports are maintained on file at Arran for inspection. 4.6 Report on the assessment of the efficiency of use of raw materials in processes and the reduction in waste generated. This is a new requirement of the revised IPPC licence P As Arran operates a multi-purpose plant, carrying out batch processes for a range of products, the nature of the product mix and overall output can vary very considerably annually, and this will relate to consumption of raw materials, solvent and energy. We propose in our on-going assessment of the efficiency of the use of raw materials to focus on particular processes, as has been done in the past with some success. The Pollution Emissions Register (PER) has been used to track solvent usage on site on an annual basis. This model will be developed to monitor raw material usage in a process, and a usable index to illustrate the ratio of raw material inputs to product output developed. The inventory management system provides a useful tool for tracking raw materials and product outputs, and this will be developed further in Bearing in mind the above issues and noting the requirement for validated cleaning procedures with various solvents, seasonal fluctuations etc., it will be clear that waste streams from the plant may vary considerably, and recovery efficiencies will vary depending on actual streams. While it will be clear that not every process or solvent lends itself to efficient recovery, and account has to be taken of process change and new product introduction, we believe continued long term gains, even with individual fluctuations in one or other solvent from year to year, will best come from continued focus on individual process streams. We will continue to support

29 Arran Chemical Company Ltd this work of solvent recovery with optimization of individual processes, and these will be included in the ongoing EMP. During 2008 the raw material usage of one of the main processes was tracked. This process requires the use of one solvent, one chemical and gas raw material input. The process generates mother liquor that can be reused to replace the solvent input and when this is exhausted, the solvent is recovered from the spent mother liquor and re-used it the process again. For 2008, for one large volume product, reused & recovered solvent (in-house) accounted for >90% of the solvent inputs. 4.7 Report on progress made and proposals being developed to minimise water demand and the volume of trade effluent discharge This is a new requirement of the revised IPPC licence P A new metering system was to be installed on site for water consumption monitoring by the water supplier, Veolia Water. This meter was not installed due to administrative difficulties on behalf of the supplier and has proven unhelpful. However the existing company water meter is still used to track and monitor water usage. Water usage has reduced in 2008 and was the lowest usage recorded since 2000, and 27% lower then the average water usage figures. This is due to projects such as the upgrading the cooling water distribution pipework and recirculation of cooling water on vacuum pumps. 4.8 Review of Residual Management Plan This is a new requirement of the IPPC licence P , Condition 10. In line with these requirements a Residuals Management Plan was submitted to the EPA for review in January Following Agency review and a query for additional information, the plan was approved in January This plan will be reviewed annually and amendments agreed with the EPA will be reported in the AER s hereafter. No updates to the RMP have been identified at this time. 4.9 Statement of measures in relation to prevention of environmental damage and remedial actions (Environmental Liabilities). The measures outlined in the Environmental Management Plan (EMP) and the ISO14001 procedures address the potential risks of environmental incidents. These procedures & practices include; Air emission monitoring programme Surface water monitoring Emissions to sewer monitoring and control Daily odour patrols Groundwater monitoring programme Waste management procedures to ensure that only permitted licensed and competent waste brokers and facilities are used for waste disposal or recovery. Waste segregation to maximize potential for recovery or re-use of waste on or off-site of hazardous or non hazardous waste streams. Site infrastructure that provides bunding for chemical & solvent tanks and containment within storage facilities. The research & development expertise on site to incorporate waste minimization in all stages of the production process development and

30 Arran Chemical Company Ltd from the experience gained when processing existing processes. This provides opportunities for the efficient consumption of raw materials and even the elimination of some hazardous chemicals or solvents. The Abnormality procedures for the investigation of incidents and near misses to determine corrective and preventive actions to prevent potential re-occurrence. Training & awareness programme among employees of environmental procedures and practices. Auditing and checking procedures Under Condition 12.3 of the revised IPPC licence (P ), Arran Chemical Company submitted an Environmental Liabilities Risk Assessment to the EPA for review & approval. This was completed in July 2008 and final approval received in January This will be reviewed every three years or to reflect any significant change on site required by the licence. This review will be updated in the 2010 AER. The Company has to date undertaken work to put in place the additional mitigation actions suggested to reduce potential environmental risk and will continue to progress these in To date the following changes have being made; Steel cable railing was installed in 2008 on backyard racks to prevent potential for containers falling off the racks. Additional spill kits and signage were installed to create greater visibility for visiting drivers & hauliers of the location of spill response materials for potential spillage in the front yard loading/unloading bund. Firewater retention pond was cleaned and inspected in Fuel deliveries of diesel oil are bunded at the delivery truck tank interconnector flange to catch spillages/leaks during deliveries. A nonreturn valve is fitted and operates to prevent overfilling of the diesel tank. Appendix A: AER Returns Worksheet

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