CLEAN DEVELOPMENT MECHANISM PROJECT DESIGN DOCUMENT FORM (CDM-SSC-PDD) Version 03 - in effect as of: 22 December 2006 CONTENTS

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1 CLEAN DEVELOPMENT MECHANISM PROJECT DESIGN DOCUMENT FORM (CDM-SSC-PDD) Version 03 - in effect as of: 22 December 2006 CONTENTS A. General description of the small scale project activity B. Application of a baseline and monitoring methodology C. Duration of the project activity / crediting period D. Environmental impacts E. Stakeholders comments Annexes Annex 1: Contact information on participants in the proposed small scale project activity Annex 2: Information regarding public funding Annex 3: Baseline information Annex 4: Monitoring Information 1

2 Revision history of this document Version Date Description and reason of revision Number September 2007 Initial adoption 2

3 SECTION A. General description of small-scale project activity A.1 Title of the small-scale project activity: Project title: MARFRIG Bagasse Cogeneration Project in Promissão. Number of PDD version: 1 Date: September 20, 2007 A.2. Description of the small-scale project activity: The Marfrig Group is composed of nine large cow slaughter and meat processing centers which are located in the main cattle-growing areas in Brazil, plus four units in South America and one central storage and distribution centre. The cow slaughter and meat processing units are located in Bataguassu and Porto Murtinho in Mato Grosso do Sul, Tangará da Serra and Paranatinga in Mato Grosso, two units in Promissão in São Paulo (one of them for special products), Chupinguaia in Rondônia, Sao Gabriel in the Rio Grande do Sul and Mineiros in Goiás. The South American units are located in Chile (Quinto Cuarto), Uruguay (Tacuarembó and Best Beef) and Argentina (AB&P) slaughtering a total up to 10,000 head off cattle per day. Marfrig Group has also an efficient distribution and storage facility strategically positioned in Santo André, which is near the coast and the large Brazilian markets. The main objective of the project activity is electricity generation for internal use using biomass at the unit of Promissão, thus minimizing consumption of electricity from the grid. The Project consists of electricity generation by a high-efficiency steam turbine that utilizes steam from a biomass-fueled boiler. Biomass consists of sugar cane residue (Bagasse) produced by the sugar cane mills located near the town of Promissão, São Paulo state, Brazil. The project reduces emissions of green-house gases (total of 49,734 tones of CO 2 in the first crediting period) generating renewable and sustainable electricity, while displacing the same amount of energy produced by fossil-fueled thermal plants. This local source of electricity contributes to environmental sustainability by reducing emissions of carbon dioxide that would occur in the absence of the project activity and provides an adequate disposal of the biomass residues from the local sugar cane mills. 3

4 A.3. Project participants: Name of Party involved (*) ((host) indicates a host Party) Brazil Private and/or public entity(ies) project participants (*) (as applicable) Marfrig Frigoríficos e Comércio de Alimentos S.A. - Private entity Kindly indicate if the Party involved wishes to be considered as project participant (Yes/No) Brazil KEYASSOCIADOS - Private entity No (*) In accordance with the CDM Modalities and Procedures, at the time of making the CDM-PDD public at the stage of validation, a Party involved may or may not have provided its approval. At the time of requesting registration, the approval by the party (ies) involved is required. Credit owner and project operator, Marfrig Frigorigicos e Comercio de Alimentos S.A.., is responsible for all activities related to project management, registration, monitoring, measurement and reporting. No A.4. Technical description of the small-scale project activity: A.4.1. Location of the small-scale project activity: Brazil São Paulo A A Host Party(ies): Region / State /Province etc.: Promissão A City/Town/Community etc: A Details of physical location, including information allowing the unique identification of this small-scale project activity : Marfrig Frigoríficos e Comércio de Alimentos S.A. address Marfrig Headquarters Rua Acarapé, 559 Sto André SP Brasil Tel.: +55 (11) Homepage: Promissão I Facility Promissão - SP Via de Acesso Dr. Shuhei Uetsuka, km 2 P.O.Box 03 Zip Code

5 Tel.: (14)

6 Characteristics of Promissão Founded : 1923 Elevation : 426 m Population : 31,373 habitants Total Area : km² Density : 40 hab/km² Distance to the capital of São Paulo : 449 km FIGURE 1. Political division of Brazil. State of São Paulo and Promissão municipality (# 07) (Source: A.4.2. Type and category(ies) and technology/measure of the small-scale project activity: Type (i): Renewable energy projects. Category C: Thermal energy for the user. The project is a small scale project activity and falls under the category I.C according to the Annex II of the Simplified Modalities and Procedures for Small-Scale CDM project activities Thermal energy for the user. This methodology applies to renewable energy technologies that supply user with thermal energy that displaces fossil fuels, stating that thermal generation capacity shall be less than 45 MW. As specified by the manufacturer, the biomass boiler activity has a thermal capacity of 39.8 MW and a generator a gross output capacity of 4 MW. The steam supplied by the high-pressure boiler is used for heating and disinfection purposes at the meat processing lines. Electricity is generated by a multiple stage steam turbine connected to a generator. For the project activity only the amount of electricity generated from biomass will be considered as described in section B.3, project boundary, of this document. The categorization is justified by the following parameters: 1. Combined Thermal and Electricity generation capacity is lower than 45 MW as calculated below: 2. Fuel type is biomass: sugarcane bagasse (a renewable fuel source, residue from sugarcane processing). The project activity consists of a biomass-fired boiler with a steam generation capacity of 45 tons of steam/hour. An estimated 18 tons or bagasse per hour is consumed by the boiler. Bagasse is transported to site from a surrounding sugarcane mill. 6

7 By utilizing renewable biomass for generating electricity, emissions reductions from displacing grid electricity would total 47,734 tco 2 /year, as emissions from the sugarcane bagasse are considered zero. During its growth period, the sugarcane reabsorbs all the carbon emitted during the sugarcane bagasse combustion The CDM project was an important part of the decision making process, proof that Marfrig s intentions were in fact to prioritize emission reductions. Both, the generation capacity and the emissions avoided by utilizing renewable biomass as fuels, comply with the applicability conditions of this methodology. Thus, it can be concluded that regarding technology, this methodology can be applied. A flow diagrams explaining the steam generation and the steam flow to the electric generation unit is included below; 7

8 CDM Executive Board Process Flow Diagram Steam 30 kgf/cm 2 Steam 30 kgf/cm 2 High Pressure Steam 30 kgf/cm 2 Steam Steam 30 kgf/cm 2 Vaccum line Biomass Feed Boiler Condensate Turbine Steam from turbine 12 kgf/cm 2 Low pressure steam 8,7 kgf/cm 2 Steam for process 8,7 kgf/cm 2 Condensation Water Condensate trap Generator Condensate from process De-aerator Water line Energy /Industry 8

9 A.4.3 Estimated amount of emission reductions over the chosen crediting period: Year Estimated annual CO 2 emission reductions 1 st year : ,654 2 nd year : ,654 3rd year : ,654 4 th year : ,654 5 th year : ,654 6 th year : ,654 7 th year : ,654 Total estimated emission reductions (tones of CO 2 e) 46,576 Crediting period of the first commitment period (years) 7 Average annual reductions estimated for the first crediting period (tones of CO 2 e) 6,654 A.4.4. Public funding of the small-scale project activity: The project does not and will not involve any public funding. A.4.5. Confirmation that the small-scale project activity is not a debundled component of a large scale project activity: The described project activity consists of one single power plant with an installed capacity of 4 MW and is not a component of a larger project. Current steam production at Marfrig is based solely on steam supplied by the above mentioned boiler but thermal energy other than that necessary for electric generation will not be considered. There is no other electric generation from renewable fuels of which this project activity could be part of. The project activity will supply a electricity for internal consumption only, thus displacing grid electricity at the Marfrig facility in Promissão, São Paulo, Brazil. SECTION B. Application of a baseline and monitoring methodology B.1. Title and reference of the approved baseline and monitoring methodology applied to the small-scale project activity: Energy generation: methodology AMS, type I Renewable energy projects, category C Thermal energy for the user, version 12. B.2 Justification of the choice of the project category: 9

10 CDM Executive Board This methodology applies to renewable energy technologies that supply users with thermal energy that displaces fossil fuels, stating that thermal generation capacity shall be less than 45 MW. As specified by the manufacturer, the biomass boiler part of the project activity has a thermal capacity of 39.8 MW and the generator only 4 MW. The project baseline is the emissions associated to the electricity that would have been consumed from the grid. In other words, the amount of electricity that is being generated by utilizing steam generated in the biomass boiler. Part of the steam supplied by the high-pressure boiler is used for heating and disinfection purposes at the meat processing lines. Electricity is generated by a multiple stage steam turbine connected to a generator with a gross output capacity of 4 MW. The categorization is justified by calculating the maximum combined energy generation capacity (thermal plus electric) of the boiler and the turbine. Thermal Generation Capacity: Boiler Capacity = 45 Tonnes of Steam/hour Steam Enthalpy = 760 kcal/kg Operating Pressure = 32 kg/cm 2 Steam Temperature = 380 ºCelsius Based on data provided by the manufacturer, the installed thermal capacity for the biomass boiler is calculated as follows: Boiler Thermal Capacity = (Boiler Capacity ton/h)*( Enthalpy kcal/kg)*(1000 kg/ton)/(10^6 Gcal/kcal) Boiler Thermal Capacity = 34.2 Gcal/h Gcal to MWh = Boiler Thermal Capacity = 39.8 MW Based on data provided by the manufacturer, the installed capacity for the electric generator is calculated as follows: Electric Generator Capacity = 4 MW Combined Capacity = Electric Generator Capacity + Boiler Thermal Capacity = 43.8 MW Hence, the combined installed capacity is lower than 45 MW. B.3. Description of the project boundary: Definition of the project boundary examined in the methodology is applied to this Project activity in the following way: For the proposed project activity, the project boundary is from the point of fuel storage to the point where the electric energy is utilized by the user. This boundary is limited to the amount of steam necessary for 10

11 generating electricity at the rated capacity of the above mentioned equipment. Steam utilized in the process will not be considered a component for this project or a large scale project activity. For the baseline emissions, the Brazilian electric grid was considered as the system defined in the ex-ante calculations of the emission factor for displaced grid electricity. B.4. Description of baseline and its development: The emission factor for CO 2 emissions from generation of verified electric energy in the National Interconnected System (SIN) of Brazil are calculated based on the generation records of all powerplants dispatching energy to the National Operator of the Electric System (ONS). This emission factor is particularly affected by thermal powerplants burning fossil fuels. Since the project activity was first conceived in 2006, the selected ex-ante calculation of emission factor from the grid makes reference to the years of 2003, 2004 and In 2006, the calculation of emission factors of CO 2 emission from the interconnected system were developed by the Ministry of Science and Technology (MCT) in cooperation with the Ministry of Mines and Energy (MME), based on the calculations from CDM approved methodology ACM0002. These definitions are used for determining the construction margin and the operating margin emission factors. A project electricity system is defined by the geographical coverage of the electrical output of a powerplant that can be dispatched without significant transmission constraints. Similarly an interconnected electricity system is defined as one that is connected by transmission lines to the project and in which the output from several powerplants can be dispatched without significant transmission constraints. For the Marfrig project, the baseline emission factor was calculated as a combined margin, consisting of the operation margin and the construction margin. The construction margin involves the electrical contribution to the grid of the powerplants that would have been constructed in the absence of the project activity. The operating margin involves the electric energy that would have been dispatched by the existing powerplants connected to the grid in the absence of the project activity. Calculations for this combined margin must be based on official data, in this case the ONS. Increments in generation capacity as well as electricity from CDM projects are not considered when calculating this margin. Thus, the baseline emission factor is the average of the estimated operating margin and construction margin, where: 11

12 (i) The estimated operating margin emission factor (EFOM,y) is the weighted average emissions (in tco 2 e/mwh) of all generating sources serving the system, excluding hydro, geothermal, wind, low-cost biomass, nuclear and solar generation. Where: Σj Fi, j, is the amount of fuel i (in mass or volume unit) consumed by relevant power sources j in year(s) y, i j COEF, is the CO 2 e coefficient of fuel i (tco 2 e/mass or volume unit of the fuel), taking into account the carbon dioxide equivalent emission potential of the fuels used by relevant power sources j and the percent oxidation of the fuel in year(s) y and, Σjj y GEN, is the electricity (MWh) delivered to the grid by source j, The CO 2 e coefficient COEFi is obtained as, Where: NCVi is the net calorific value (energy content) per mass or volume unit of fuel i, OXIDi is the oxidation factor of the fuel i, EFCO2,i is CO 2 e emission factor per unit of energy of the fuel i, (ii) Chord The construction margin emission factor (EFBM,y) is the weighted average emissions (in kg CO 2 e/mwh) of recent capacity additions to the system, where capacity increments are defined as the greater (in MWh) of most recent 20% of existing powerplants or the 5 most recent powerplants, Where: Fi,m,y, COEFi,m and GENm,y are analogous to the variables described above for the operating margin for powerplants m (sample group m defined in (ii)), based on the most recent information available on plants already built. The baseline emission factor EFy is the average of the operating margin factor (EFOM,y) and the build margin factor (EFBM,y), 12

13 13

14 Ex-ante calculation of the baseline emission factor EFy Baseline (including EF OM [tco2/mwh] Load [MWh] LCMR [MWh] Imports [MWh] imports) ,933, ,670, , ,906, ,748,295 1,468, ,533, ,690,687 3,535,252 Total ( ) = 906,373, ,109,626 5,463,113 EF OM, simple-adjusted [tco2/mwh] EF BM,2005 Lambda λ 2003 Alternative weights Default weights w OM = 0.75 w OM = 0.5 λ 2004 w BM = 0.25 w BM = Alternative EF y [tco2/mwh] Default EF y [tco2/mwh] λ Thus, the emission factor for CO 2 emissions from generation of verified electric energy in the National Interconnected System (SIN) of Brazil is tco 2 /MWh. B.5. Description of how the anthropogenic emissions of GHG by sources are reduced below those that would have occurred in the absence of the registered small-scale CDM project activity: The identification of the baseline scenario follows the Tool for the demonstration and assessment of additionality (version 3) published by the Executive Board. Step 1. Identification of alternative scenarios Step 1.a Scenery identification: Possible scenarios for the proposed project activity are: 1) Electricity consumption from the grid. No additional biomass is purchased for generating steam for the turbine. 2) Electricity generation, utilizing steam generated by an on-site biomass-fired boiler, without the incentive of CDM Step 1.b - Consistency with mandatory applicable laws and regulations: 1) Business as usual there are no restrictions or applicable laws against consuming electricity from the grid. 2) A license for generating electricity unit is required for all systems connected to the grid. Although the Marfrig generation unit will not supply electricity to the grid, a permit was requested from the National Agency of Electric Energy (ANEEL). This permit has already been granted. Hence, both alternatives are in accordance with mandatory applicable laws and regulations. 14

15 Step 3. Barrier analysis Sub-Step 3a. Identify barriers that would prevent the implementation of the project activity For the proposed project activity, the following barriers were identified: Technological Barrier Investment Barrier Institutional Barrier Barriers due to prevailing practice Technological Barrier Several technical and technological barriers have been identified for this project 1. Bagasse supplied by third-parties 2. Steam generation capacity and internal utilization 3. Electricity Supply for Refrigeration purposes 4. Technical requirements for electricity Generation Bagasse supplied by third-parties The project activity aims at utilizing biomass that is not generated at the slaughter house. To keep the project operating, Marfrig needed to create specific logistics to transport and store sugarcane bagasse from sugar cane mills. The project faces risks concerning the supply of the plant with biomass. Sugarcane harvest, or safra, is carried-out only 8 months out of the year, making the bagasse harder to obtain during the non-harvest season. Because of the project activity, Marfrig s bagasse consumption grew 19%, when compared to the amount already used for thermal energy generation. In addition, availability of the sugarcane bagasse also relates to the sugarcane mills internal consumption. As many sugarcane mills are investing in bagasse co-generation projects, it is very difficult negotiate long term contracts that could guarantee that supply, so risks related the performance of the project and the investment needed to be carefully addressed by the company. Steam generation capacity and internal utilization Steam is indispensable for Marfrig s operations, since it is utilized for heating and disinfection within the meat processing areas. Marfrig is already consuming 35 ton/h of steam, almost 80% of the steam generation capacity of the boiler The Project activity utilizes 15% of the installed capacity for steam generation, thus by generating electricity from steam Marfrig compromises the steam supply for future process expansions or additional uses. Regarding energy generation, the generator output is not enough to cover the consumption, so Marfrig is still dependant on imports from the grid. Electricity Supply for Refrigeration purposes 15

16 For Marfrig s cow slaughtering and meat processing center in Promissão it is very important to guarantee a steady and safe supply of electricity, since process is dependant on illumination, conveyor belts, electric cutting tools, and refrigeration. Unlike many other slaughterhouses, the entire meat processing area in Promissão is climate controlled for improving the product and the work environment. Cold rooms are one of the main elements in a meat processing center, having critical temperature parameters to be maintained for sanitary purposes, Any unscheduled stop of the internal electricity production could potentially affect meat production and quality. Technical requirements for electricity Generation Steam production, biomass managing and electricity generation demand procedures and technical requirements that are not related to meat processing, which increases the demand for qualified personnel as well as specialized training. Marfrig s intentions of producing electricity for internal use required a series of technical improvements of both, equipment and the operating staff. Investment Barrier The Investment barrier consists of the factors relating to potential certified emission reductions (CERs) and the incentives derived from them in the project investment decision taking process, compared to the risk factors of generating electricity for internal consumption. When making the decision to carry-out the project activity, the risks associated to investing in the considered the potential monetization of CO2 credits that the project would produce. Given that an energy project is a riskier investment than a government bond, specially when facing risks of supply of biomass during his lifetime, it is necessary to have a much higher financial return, compared to the SELIC reference rate. Given the circumstances, rationale and distortions of the Brazilian economy, it is not straightforward to define the meaning of this difference of rates, and a developer might feel more comfortable than others, depending on the situation. The CDM incentive allows Marfrig to hedge its debt cash flow against risks of project performance ion terms of biomass supply and other risks associated to this project Institutional Barrier Since 1995 government electricity market policies have been continuously changing in Brazil. Too many laws and regulations were created to try to organize and to provide incentives for new investments in the energy sector. The results of such regulatory instability were the contrary to what was trying to be achieved. During the rationing period, electricity prices surpassed R$ 600/MWh (around USD 200/MWh) and the forecasted marginal price of the new energy reached levels of R$ /MWh (around USD 40). In the middle of 2004, the average price was bellow R$ 50/MWh (less than USD 20/MWh). This relatively high volatility of the electricity price in Brazil, although in the short term, contributes to difficult the analysis of the market by the developers. Although Marfrig does not have the capacity or the intention to export energy to the grid, the evolution of governmental policies regarding the energy sector can affect the project activity. Barriers due to prevailing practice 16

17 Generation of electricity is something relatively new to slaughterhouses and meat processing centers. Since Marfrig s main operation is meat processing and distribution, it is strategically safer to buy grid electricity than to produce it. By carrying-out the project activity Marfrig is facing the above mentioned technical and technological barriers, thus positioning itself in a potentially adverse situation in regard to other meat processing companies. Sub-step 3b. Show that the identified barriers would not prevent the implementation of at least one of the alternatives: As described above, the main alternative to the project activity is to continue the status quo, the slaughter houses only concentrating their investments meat and sub products. Therefore the barriers above would not affect the supply of energy from the grid, which is the baseline scenario. However, numerous risks and barriers are present during the execution of the proposed project activity. That can be in part overcome with support from the Clean Development Mechanism. Step 4. Common Practice Analysis Sub-step 4a. Analyze other activities similar to the proposed project: Sub-step 4b. Discuss any similar options that are occurring: It was not possible to identified similar cases in Brazil of meat processing centers that are currently generating electric energy from renewable biomass. To the best of Marfrig s knowledge it is more common for meat processing units to consume electricity from the grid, thus keeping the added capacity of steam generation for process needs. As a conclusion, importing energy from the grid is the baseline scenario and generate electric energy using biomass is an additional. Step 5. Impact of CDM registration The barriers identified in Sub-Step 3a can be partially overcome with support from the Clean Development Mechanism. For example, on account of successfully registration the project activity under the CDM, the additional revenue from the emissions reductions would help ease the economic burden of purchasing additional biomass for electricity generation. This adequately demonstrates that the project is additional and that the CDM incentive is necessary for its execution. B.6. Emission reductions: B.6.1. Explanation of methodological choices: The reasons for choosing the methodology AMS I.C are: The project activity comprises biomass-based co-generating systems that produce heat and electricity. 17

18 Thermal generation capacity is specified by the manufacturer, will be less than 45 MW. The project activity is not a co-fired system. Electricity generation is performed by a physically distinct unit than the biomass boiler. The added capacity of both units is less than 45 MW. The project activity considers the cogeneration of electric energy using steam prdiced with biomass (sugar cane bagasse). The electricity generated will substitute electric energy from the grid. As per the selected methodology, baseline emissions for electricity supplied from the grid shall be calculated as the amount of electricity produced with the renewable technology multiplied by the CO 2 emission factor of that grid. The emission factor for grid electricity shall be calculated as per the producedures detailed in AMS I.D. Following the methodolgy, the emission calculation is described below: BEy = TEy EFy Where: BEy = TEy = EFy = Baseline emissions in year y Energy produced by the project activity in year y Emission factor for grid electricity, defined ex-ante Baseline emission factor calculations are explained in section B.4 of this document. For estimating the baseline emissions, the energy produced by the project is calculated based on the capacity, efficiency and internal electricity consumption of the generator. ( WTEy EFF ) ECp y TEy =, Where: WTEy = EFF = ECp,y = Energy by project activity generation capacity Generator efficiency Internal energy consumption of the generator There are no project emissions (PEy). Leakage is considered only when the energy generating equipment is transferred from another activity or if the existing equipment is transferred to another activity. Since this is not the case, leakage will not be considered. Thus, emission reductions (ERy) are calculated as follows: ERy = BEy PEy Leakage 18

19 B.6.2. Data and parameters that are available at validation: Data / Parameter: EFy Data unit: Tonnes of CO 2 e / MWh. Description: Emission factor for energy generation at the grid. Source of data used: Host country data (MCT Ministério da Ciência e Tecnologia). Value applied: Justification of the Calculated from years 2003, 2004 and 2005 as per small scale methodology choice of data or AMS I.D. Defined ex-ante for the duration of the crediting period. description of measurement methods and procedures actually applied : Any comment: --- Data / Parameter: WTEy Data unit: MWh Description: Energy by project activity generation capacity Source of data used: Manufacturer specification Value applied: 4 Justification of the Data as specified by the manufacturer choice of data or description of measurement methods and procedures actually applied : Any comment: --- Data / Parameter: ECp,y Data unit: MWh Description: Internal energy consumption of the generator Source of data used: Manufactures specification Value applied: Justification of the Data as specified by the manufacturer choice of data or description of measurement methods and procedures actually applied : Any comment: --- Data / Parameter: EFF Data unit: % Description: Efficiency factor Source of data used: Estimated efficiency from the output load of the generator Value applied: 90% 19

20 Justification of the choice of data or description of measurement methods and procedures actually applied : Any comment: --- Calculated from the steam consumption of the generating unit and the output electricity. 20

21 B.6.3 Ex-ante calculation of emission reductions: Baseline emissions in the year y are calculated as follows: BEy = TEy EFy (1) Where: EFy = And: ( WTEy EFF ) ECp y TEy, = (2) TEy = [(4 MWh * 90%) 0.650] * 24 * 360 TEy = 25,488 MWh From equation (1) BEy = 25,488 MWh* tco 2 /MWh BEy = 6,654 tco 2 Emission reductions are calculated based on the following equation: ERy = BEy PEy Leakage ERy = 6,654 tco ERy = 6,654 tco 2 B.6.4 Summary of the ex-ante estimation of emission reductions: Year Project scenario GHG emissions estimative (tco 2 e) Baseline scenario GHG emissions estimative (tco 2 e) Leakage estimative (tco 2 e) Total GHG emission reduction (tco 2 e) Year 1 0 6, ,654 Year 2 0 6, ,654 Year 3 0 6, ,654 Year 4 0 6, ,654 Year 5 0 6, ,654 Year 6 0 6, ,654 Year 7 0 6, ,654 Total (tco 2 e) 0 46, ,576 21

22 B.7 Application of a monitoring methodology and description of the monitoring plan: B.7.1 Data and parameters monitored: Data / Parameter: TEy Data unit: MWh Description: Energy generated by project activity. Source of data to be Meter at generation unit used: Value of data applied Continuous monitoring at the control room of the generation unit for the purpose of calculating expected emission reductions in section B.5 Description of Electricity meter with digital output measurement methods and procedures to be applied: QA/QC procedures to --- be applied: Any comment: --- Data / Parameter: BIOy Data unit: tonnes of bagasse Description: Specific consumption of biomass Source of data to be Purchase information from the biomass suppliers, in this case the sugarcane used: mills. Value of data applied Monthly consumption of bagasse from sugarcane mill for the purpose of calculating expected emission reductions in section B.5 Description of Amount of biomass (bagasse) delivered to the plant, as per purchase invoices measurement methods and procedures to be applied: QA/QC procedures to Yes, invoices are kept in files for 7 years be applied: Any comment: -- B.7.2 Description of the monitoring plan: According to the applied small scale methodology type I, category C., the monitoring plan for the Marfrig project includes monitoring the amount of electric energy produced (TEy) where the simplified 22

23 baseline is based and the amount of biomass fuel input (BIOy). Baseline emission factor is calculated exante for the duration of the crediting period as per small scale methodology AMS I.D. The amount of electricity produced is obtained in megawatts per hour (MWh). Electricity is measured by an electric meter counting the net output in megawatts of the generator. This data is monitored continuously and archive electronically at the plant. The amount of sugarcane bagasse (BIOy) burned in the biomass boiler is measured in metric tons. Data for monitoring this item is obtained from the biomass purchase invoices. B.8 Date of completion of the application of the baseline and monitoring methodology and the name of the responsible person(s)/entity(ies) 18/ 09/ 2007 Ms Sheila Guebara de Souza Mr. Fernando Rangel Villasana Key Associados Av. Paulista, th floor Bela Vista São Paulo - SP Tel: +55 (11) key@keyassociados.com.br URL: SECTION C. Duration of the project activity / crediting period C.1 Duration of the project activity: C.1.1. Starting date of the project activity: 10 / 04 / 2007 C.1.2. Expected operational lifetime of the project activity: Professionals of ANEEL (Brazilian Electricity Regulatory Agency) suggest 25 years as an operational life of steam turbines, boilers, combined cycle and nuclear plants, according to Bosi, 2000, page 29. C.2 Choice of the crediting period and related information: C.2.1. Renewable crediting period C Starting date of the first crediting period: The crediting period will start on 10/02/2008, or on the date of registration of the CDM project activity, whichever is later 23

24 7 years C Length of the first crediting period: C.2.2. Fixed crediting period: Not applicable Not applicable Not applicable C C Starting date: Length: SECTION D. Environmental impacts D.1. If required by the host Party, documentation on the analysis of the environmental impacts of the project activity: The project activity does not generate environmental impacts that need to be monitored and an environmental impact assessment has not been requested by any local or regional environmental authorities. Marfrig s meat processing unit in Promissão complies with environmental and sanitary regulations and it has all pertaining licenses for meat processing, undertaking daily official inspections of its process and products. Aspects of potential environmental and safety implications are discussed as follows: Land Use No change in land use is expected, as the project activity occurs within the constructed area of the plant. Air Pollution Since the project activity consists of burning biomass, CO 2 emissions are considered zero, resulting in lesser GHG emissions. By burning biomass to produce electricity it is also expected to reduce SO x, NO x and hydrocarbons from burning fossil fuels in thermal powerplants. Water Pollution The project activity does not interfere with water reservoirs, underground water or waterways. Water used in by the boiler is recirculated, aiming at reducing water consumption for steam generation. Noise Pollution and Vibration The project activity does not generate noise impacts or vibration to area residents, as the boiler and the generator are located within a building that shelters the equipment and provides an acoustic barrier. Noise levels inside the building are clearly signaled and Marfrig s staff are required to use appropriate PPE when working inside it. Soil Quality There are no impacts on soils due to the implementation of this project activity. 24

25 Flora/Fauna There are no foreseeable effects on flora or fauna due to the project activity. The area of the project activity is surrounded by farms and sugarcane plantations. No records of endemic or endangered species exist for this specific site. D.2. If environmental impacts are considered significant by the project participants or the host Party, please provide conclusions and all references to support documentation of an environmental impact assessment undertaken in accordance with the procedures as required by the host Party: No environmental aspects are considered significant for the implementation and operation of the project activity. In conclusion, the project activity does not have any implications could adversely impact the environment. SECTION E. Stakeholders comments E.1. Brief description how comments by local stakeholders have been invited and compiled: Brazilian Designated National Authority requests, in addition to the UNFCCC global stakeholders process, that the project participants also contact NGOs for possible comments on the project activity. Letters to all the requested stakeholders were sent in September 2007 (copies of the letters with delivery confirmation are available upon request). The following institutions were contacted: Municipal City Hall of Promissão, Sao Paulo state; Municipal Assembly of Promissão, Sao Paulo state; Company of Environmental Sanitation Technology (CETESB); Secretary of Agriculture; Brazilian Forum of NGOs and Social Movements for Environment and Development ; Attorney General of Promissão The PDD of the Project in reference was publicized during the validation phase on the web-site of UNFCCC CDM web-site ( 25

26 E.2. Summary of the comments received: No comments were received from the contacted stakeholders. E.3. Report on how due account was taken of any comments received: Since no comments were received, the project activity remains without alterations. 26

27 Annex 1 CONTACT INFORMATION ON PARTICIPANTS IN THE PROJECT ACTIVITY Organization: KEYASSOCIADOS Street/P.O.Box: Av. Paulista, 37 Building: 10 th floor City: Sao Paulo State/Region: SP Postfix/ZIP: Country: Brazil Telephone: FAX: - key@keyassociados.com.br URL: Represented by: Sheila Guebara de Souza Title: Salutation: Ms. Last Name: Souza Middle Name: Guebara First Name: Sheila Department: Sustentabilitas Division Mobile: Direct FAX: - Direct tel: - Personal sguebara@keyassociados.com.br Organization: Marfrig Frigoríficos e Comércio de Alimentos S.A. Street/P.O.Box: Acarapé, 559 Building: City: Santo André State/Region: Sao Paulo Postfix/ZIP: Country: Brazil Telephone: (14) / (11) FAX: - URL: Represented by: Angelo Frighetto Title: Manager Salutation: Mr. Last Name: Frighetto Middle Name: First Name: Angelo Department: Mobile: Direct FAX: - Direct tel: - Personal angelo.frighetto@marfrig.com.br 27

28 Annex 2 INFORMATION REGARDING PUBLIC FUNDING No public funding was and will be used in the project activity 28

29 Annex 3 BASELINE INFORMATION Baseline information for calculating the emission factor for grid electricity was based on data from the Nacional Electric Energy Agency and the National Operator of the Electric System. References are provided below: [1] Agência Nacional de Energia Elétrica. Banco de Informações da Geração ( data collected in november 2004). [2] Bosi, M., A. Laurence, P. Maldonado, R. Schaeffer, A. F. Simoes, H. Winkler and J.-M. Lukamba. Road testing baselines for greenhouse gas mitigation projects in the electric power sector. OECD and IEA information paper, October / Planilha R. Shaeffer: COPPE IEA termo 1 [3] Intergovernamental Panel on Climate Change. Revised 1996 Guidelines for National Greenhouse Gas Inventories. [4] Operador Nacional do Sistema Elétrico. Centro Nacional de Operação do Sistema. Acompanhamento Diário da Operação do SIN (daily reports from Jan. 1, 2002 to Dec. 31, 2004). [5] Agência Nacional de Energia Elétrica. Superintendência de Fiscalização dos Serviços de Geração. Resumo Geral dos Novos Empreendimentos de Geração ( data collected in november 2004). [6] Centrais Elétricas Brasileiras S/A. Plano anual de combustíveis - Sistema interligado S/SE/CO 2005 (released December 2004)

30 CDM Executive Board Annex 4 MONITORING INFORMATION Data to be collected in order to monitor emissions reduction, and how this data will be archived: ID number (Please use numbers to ease cross-referencing to D.3) Data variable Source of data Data unit Measured (m), calculated (c) or estimated (e) 1. TEy Quantity of electricity produced in each year of the project activity 2. BIOy Amount of sugarcane bagasse that is consumed by the biomass boiler, for each year of the project activity. Monitored in the project activity from field instruments. Bagasse is measured by the supplier and delivered to the project site. This item is controlled through the purchasing receipts of biomass supplier. Recording frequency Proportion of data to be monitored How will the data be archived? (electronic/ paper) MWh M Continuous 100% Electronic - Metric tons M Monthly 100% Paper - Comment 30