SOCIALCARBON REPORT CONTENT

Transcription

1 SOCIALCARBON REPORT CONTENT 1. Identifying the project 2. General description of the reduction of GHG emissions Project activity 3. Method of applying SOCIALCARBON Methodology 4. Results 5. Analysis of Results TABLE OF RESULTS 2009 ATTACHMENTS 1

2 1. Identifying the Project Basic Information Indicators Indicators used for elaboration of the SOCIALCARBON Report: Indicators for the Ceramist Sector Version October, 2008 Project s Name Argibem, São Sebastião and Vulcão Ceramics Fuel Switching Project - This report reffers to Argibem Ceramic Fuel Switching Project Diagnostic Enterprise Year-Point of Project One Date of diagnostic January 21 st 2010 (Diagnostic related to the period of May May 2009) Date of completion of January 29 th 2010 report Date for carrying out December, 2010 next diagnostic Location Argibem Ceramic, Três Rios, Rio de Janeiro State, Brasil Identifying the Researcher Name Silvia Cruz & Jonathan De Jesus (Application of the diagnostic) Jonathan De Jesus (Completion of the report) Address Rua Borges Lagoa, Cjto th Floor São Paulo SP, Brazil Phone +55 (011) jonathan@socialcarbon.com; heloisa@socialcarbon.com Identifying the Project Developer Name Cerâmica Argibem Ltda. Address Rua Matheus Salzano, 16 Bemposta Três Rios, RJ CEP: Phone +55 (024) argibem@argibem.com.br 2

3 2. General description of the reduction of GHG emissions Project activity 2.1. Context and history of the reduction of GHG emissions project The Brazilian Ceramic Industry One of the main sectors in the Brazilian civil construction industry are ceramic facilities that produce red ceramic; for the most part, is mainly constituted by small companies. This sector represents a great economic importance for other industry so that they can generate and consumer goods and services. Furthermore, the red ceramic sector employs a large number of people with relatively low education 1. The production of Brazilian red ceramic is in technological and organizational retrocession, when compared to others industries in the Brazilian economy, or even compared to ceramics located in Europe and others regions. A large number of Brazilian ceramic facilities have family organizational structures. Most of these work with low-efficiency machines and equipments that are manual, with difficulty obtaining skilled workers 2. The issues mentioned about greatly influences the working conditions in most Brazilian ceramics, with the low-efficiency of the production responsible for exposing workers to the arduous working conditions, especially related to manual labor. Below are some examples of such working conditions: Feeding of the kilns with firewood or others fuels; Employees exposed to high levels of noise due to the use out-dated equipments; Manually carrying products around the production floor; Stacking the ceramic products inside the kilns, after the drying process; Removing the ceramic products from the kilns after the kiln firing process and; Employee exposure to high temperatures of the kilns, especially when the ceramic does not effectively monitor the temperature of the temperature burning curve of the kiln. Below is a generic flowchart of the ceramic production cycle: 1 Adapted from the dissertation: Modelo para introdução de Novas Tecnologias em Agrupamentos de Micro e Pequenas Empresas: Estudo de caso das indústrias da cerâmica vermelha do Vale dos Tijucas. 2 Adapted from the study Diagnóstico Empresarial do Setor Cerâmico da Região Central do Estado do Tocantins, realized by the Brazilian Service of Support for Micro and Small Enterprises of the Tocantins State. 3

4 Clay and Water Alimentation of machineries Disintegrating and Blending Flaking Extrusion Cutting Wastes: Material which wasn t burned Fuel Devices Drying Burning (in the Kilns) Gases Emissions Ashes Wastes of the productive process: After Burning Potsherds (after burning) Figure 1: Simplified flowchart of the productive process of the ceramic industry 3 Characteristics of Argibem Ceramic Fuel Switching Project The Argibem Ceramic is a facility that manufactures red ceramic, to be used in the construction sector. In general, the red ceramic sector produces these building materials made from clay, which after burning, acquire a red-like color, ready to by used in the civil construction market in Brazil. Argibem Ceramic produces approximately 2,000,000 ceramic products per month. With 71 employees, the ceramic is a medium-sized company, based on the definition by SEBRAE Brazilian Service of Support for Micro and Small Enterprises of São Paulo 4. To better understanding of the production process of the ceramic, the above flowchart (Figure 1) presents a simplified process of the structural manufacturing stages of the ceramic products, from the extraction of the clay and water, to the end stage that produces the finished ceramic product. The ceramic is located in Três Rios, a city in Rio de Janeiro state, which has a population of approximately73,000 inhabitants. Três Rios ranks 10 th in Rio de Janeiro state as attaining a good quality of life to it s inhabitants. 3 Adapted from study Diagnóstico Empresarial do Setor Cerâmico da Região Central do Estado do Tocantins, carried out by the Brazilian Support Service for Micro and Small Companies from Tocantins. 4 Source: SEBRAE-Brazilian Service of Support for Micro and Small Enterprises. 4

5 The municipal district is important to the state as it has great tourist potential. In the past, the city s economy developed greatly mainly due to the railway industry and food sector. Currently, the economy is experiencing significant growth due to investments in new industries within the city, due to its strategic geographical position with easy access to major consumer centers of Rio de Janeiro, Belo Horizonte and São Paulo 5. In regard to the environmental characteristics, Três Rios is unique as it is the meeting point of three important rivers; the Paraiba do Sul, Piabanha and Paraibuna Rivers. The climate is mesothermic with hot and rainy summers. The predominant vegetation in thhe region is the Atlantic Forest and creeping vegetation 6. Figure 2: Aerial view of the Três Rios downtown Figure 1: View of the rivers meeting Previously, the fuel used by Argibem Ceramic during the production of its ceramic products in the kilns was heavy oil, also known as BPF oil. The replacement of this non-renewable fossil fuel to renewable biomass fuel, mainly sawdust, began in September 2004 with the crediting period beginning in April The ceramic operates with a Tunnel kiln, which was responsible for the consumption of approximately1,877,000 liters of BPF oil per year. It was imperative that the ceramic ceased the use of oil and adjustments made in the production process so that the ceramic can effectively convert to the new biomass fuel. In order to implement the project, the ceramic had some barriers, such as the definition of the burning point of the biomass, reforms in kilns, acquisition of new equipment and changes to the factory s layout. The project has been validated by a Designated Operating Entity (DOE) and the vintages from 2007 and 2008 have already been commercialized and sold to a buyer. 5 Informations available at website of the Três Rios town hall: 6 Informations available at website of the Três Rios town hall: 5

6 The stages for the project implementation are presented below: 2.2. Activities and methodology used for reduction/capture of GHGs The main activity of this project is to cease the use of GMP oil, replacing it with a renewable biomass to generate thermal energy for the ceramic kilns. The burning of the new biomass is derived from areas from reforestation, in the form of a closed cycle of emission and carbon capture, while the fossil fuels previously used would take millions of years to be renewed again. The calculations of the emissions reduction were made based on the following methodologies, approved by the UNFCCC 7 : Category AMS-I.C.: Thermal energy for the user with or without electricity Version 13 of March 14 th The activity will be responsible for the reduction of approximately 208,1 tons of CO2 during the period of ten years. This accounts for the emissions reduction related to three ceramic facilities, which form a group for this Fuel Switching Project: Argibem, São Sebastião and Vulcão. 7 United Nations Framework Convention on Climate Change. Available at: 6

7 3. Method of applying SOCIALCARBON Methodology 3.1. Elements considered in the application of the SOCIALCARBON Method for the sector Initially designed to evaluate conditions of the communities involved in forest projects, the SOCIALCARBON Methodology was adopted by projects which encompassed many different types of enterprises, maintaining its essential characteristics. The application of the SOCIALCARBON Methodology (SCM) requires the diagnosis of social-environment conditions of the project based on the SCM Indicators, which are specific for the ceramist sector. In the Brazilian scenario, this sector is constituted in its majority by small-scale enterprises. Although they have extensive experience in the production of red ceramic s devices, these enterprises still present low technological performance in regard with the efficiency of projects, production quality control, and environmental impacts. In addition to this, the workers profile is characterized by social and economical privation, as well as a lack of professional training and financial difficulties. Work carried out by the SOCIALCARBON Team within industries of the sector demonstrated that, in order to reach sustainable development, first of all, it is necessary to adopt internal actions of social-environment responsibility. These actions concern improvements of the working conditions, investments in human and technological resources, as well as reduction of environmental impacts through efficient and rational use of available resources. Considering this priority, the influence of the project on local communities has not been evaluated by the SCM. In the evaluation of the enterprise, the limits used for the project analysis are characterized by the operation cycle of the ceramist activity: Figure 3: Boundary Indicators Thus, the boundary limits may be extensive, mainly due to the distance between the transportation of fuels and raw material. Therefore, the SOCIALCARBON Methodology establishes that during evaluation, the organization shall only respond to activities and impacts that meet one or more of the following criteria: a) Be partially or completely controlled by the organization responsible for the project; b) Be related to the project on a proven or evident way; c) Be affected by the project on a proven or evident way; d) Be directly or indirectly attributable to the project on a proven or evident way. 7

8 The method of applying the SOCIALCARBON Methodology can be summarized as the diagram below: Identification of the Project Activity Methodology Objectives Identification of the social, economic and environmental impacts Final Result Construction of Specific Sustainability Indicators Visits to the enterprise : Interviews and Data Analysis Application of SCM Indicators Delineating Possible Perspectives for each Resource Elaboration of the Social Carbon Report Construction of the SC Hexagon Portrait of the Enterprise Sustainability Situation Feedback Figure 4: Scheme of the application of the SOCIALCARBON Methodology 8

9 3.2. Social, economic and environmental impacts of the emission reductions project The following table presents a listing of the main social-economic and environmental impacts of the red ceramic industry. The environment impacts specifically related to the emissions reduction project are described in the section of Environmental Impacts of the Project Design Document. IDENTIFICATION OF SOCIAL-ECONOMIC AND ENVIRONMENTAL ASPECTS AND IMPACTS Item Activity Aspect Impact 01 Acquisition of Raw Material Clay extraction 02 Dosage of clay (preparation of mass) Water consumption Silting Erosion Changes in Landscapes Depletion of Natural Resources Effect Benefits Adverse X X Ceramic: Version: 1 Responsbile: Argibem Social Carbon Company Effect Monitored through the SOCIALCARBON Indicators Monitored through the SOCIALCARBON Indicators Illumination and alimentation of electrical devices Renewable Storage 05 Kilns Feed Biomass Electrical comsuption energy Renewable Biomass disposal inside the factory Renewable Biomass consumption Depletion of Natural Resources Local air contamination due to the Better disposal and use of agroforestry residues 06 Firing of Kilns Smoke emission Air Pollution X X X - X - Monitored through the SOCIALCARBON Indicators Monitored through the SOCIALCARBON Indicators 9

10 07 Baths/ Sanitariums Lavatories/ Sanitary effluent, baths and lavatories Water Contamination 08 Firing of Kilns Ashes residues Soil Contamination X X - Monitored through the SOCIALCARBON Indicators 09 Productive Process Potsherds Landfill Occupation X Monitored through the SOCIALCARBON Indicators 10 Operation of Machines Oil and grease consumption 11 Operation of Machines Oil and grease disposal Operation of machines, transport of materials and products Administration and activities management 14 Productive Process 15 Firing of Kilns Depletion of Natural Resources Soil and Water Contamination X - X Monitored through the SOCIALCARBON Indicators Necessity of manpower Jobs Generation X In general, for low skilled manpower Necessity of manpower Jobs Generation X In general, with some professional skills Particulate emission Heat emission material Respiratory Problems Risks to the health of the employees 16 Operation of Machines Equipments in Operation Noise X X X

11 3.3. Method used for obtaining information The application of the SOCIALCARBON Methodology was realized using the following process: Stage 01: The elaboration of the questionnaire by a representative from the technical team, in preperation for the application of the SOCIALCARBON Methodology. Stage 02: A visit in locco to the ceramic. Stage 03: During the visit in locco, the questionnaire was completed by the representative, applying the SOCIALCARBON Methodology through semi-structure interviews, with the participants listed below. The objective was to obtain, in an indirect manner, information about the six resources in the SOCIALCARBON Methodology (social, human, financial, natural, technologic and carbon). Stage 04: Gather evidence during the ceramic visit (including, but not limited to, photography and relevant documents) Actors involved The following key-representatives of the organization were identified to participate in the diagnosis: Table 2: Participants List Relation of Participants Name Function/Job Cedenir Fernando Barbosa Lima Owner of the enterprise Marcelo de Oliveira do Vale Administrative Manager 11

12 4. Results 4.1. Social Resources 1. Turnover: The Turnover is obtained by the fraction among the average of dismissal and admissions and the number of employees in the period. IR = (dismissed workers + hired workers)/total number of workers in the period. Total number of employees: 91 Number of hired employees: 21 Number of dismissed employees: 20 TR: (20+21) / 91 = 45% The ceramic turnover rate is considered average for the ceramic sector. According to the owner, the majority of the employees have been worked in the company for many years. 3 (three) 2. Syndical Relations: Evaluates the involvement of the entrepreneur and workers with the syndicate. There were no employee strikes during the period. The ceramic owner was not involved with the workers union. There is a workers union, however the workers are not organized, with no worker committee present in the ceramic. The ceramic owner does not have meetings with union workers 2 (two) 3. Benefits: Evaluates the additional benefits offered by the entrepreneur to the employees, besides the obligatory ones. Note: Additional benefits will be considered as: meal-voucher; basic alimentation provision; programs for the education and training in own education establishments or by third parties, paid by the company (values concerning registration, tuition fee, annual fee, books and educational material, etc.); medical, hospital and dental assistance or by health insurance, life insurance and personal accidents; private pension plans; among others, with the exception of transportation ticket. Argibem ceramic provides a Health Insurance for all employees. 4 (four) 4. Social Inclusion: Evaluates the existence of effective programs prioritizing the local manpower, and the inclusion of gender, young people, disabled people or minority, among other initiatives for social inclusion. Due to the installation of the new machinery and equipments, the production process has become less hazadous and safer for workers. Therefore, the employment of an additional woman in the production process was observed in the period. Currently, there are 8 women working in the enterprise. 12

13 There is no record of disabled people working in the ceramic. 3 (three) 5. Satisfaction: Aims to identify the employee satisfaction level, as well as demands related to the improvement of the working conditions. Mechanisms which evaluate the workers perception regarding the workplace, in order to assess the degree of satisfaction and motivation in the activities developed is of extreme importance, as it enables the organization to perform continuous improvement of its services and be able to strengthen the relationship with the individual and his profession as well as with the employment organization. Despite the good relationship among the ceramic owner and the collaborators, Argibem does not have a formal procedure which evaluates the level of satisfaction of the workers. 1 (one) There are no improvements forecasts in the moment. 6. Relationship with the community: Evaluates the relationship among the entrepreneur and the community, as well as his contribution on events and social activities. The ceramic engages with the community via donations to the local governments (the city hall) and also to the church. The amount of donations increased in relation to the previous period. The ceramic provides evidence in regards to their donations. There is no formal plan to continue the donations to the community, nor are there plans to raise community problems with relevant parties. 3 (three) Continue to engage with the community by donating to the community. 7. Social Return of the project: Evaluates the benefits reverted to both parties when benefits are measurable or evidenced. Note: The definition about the scope of benefits (limited, satisfactory or unsatisfactory) should consider the scale of the project and organization(s) involved. There are no formal plans with the commercialization of credits to reinvest them into the community Also there are no plans to hire new employees to improve the social return of the project. 4 (four) The ceramic owner intends to invest more in social benefits, especially engage more with the community in which the ceramic is present in Human Resource 8. Scholarship Levels: Evaluates the scholarship degree level (formal education) of the employees and how the entrepreneur contributes for the promotion of the 13

14 education among the workers. Note: The illiteracy rate of people aged or over 15 years old in Brazil is 13%. There is no record of employees scholarship level. However, according to the information obtained with the directors and the workers, it is common that employees in the ceramic are illiterate with limited to no education 8. 1 (one) 9. Professional Training: Evaluates the level of Professional training among the workers. Note: Professional training will be considered as any course concluded in educational institutions, which give specific abilities for the employees, promoting the earnings generation and their inclusion in the job market. As observed in the previous indicator; few workers have high levels of professional qualification. Furthermore, there are no records in regard to the courses realized by the employees to improve their professional qualification. 2 (two) 10. Training Plan: Evaluates the initiatives of the enterprise in regard with capacitating plans and programs, including, if they exist, their approach, strategies, frequency and the satisfaction of the employees. There are no plans to develop a formal training program. However, there are links with educational institutions in regards to the promotion of courses and training to employees. The National Service for Industrial Acknowledge (SENAI) offers such course, however there are no records of employees taking up the opportunity to participate. 1 (one) The new equipment in the ceramic is highly advanced and therefore requires higher skilled workers. Therefore, the ceramic owner intends to improve the professional qualification of employees by providing training courses to better inform them of new production processes in the ceramic. 11. Working Conditions: Evaluates the improvements made regarding the working environment conditions of the employees, considering salubrious and sanitary conditions. There has been a great improvement in the working conditions for workers since the last evaluation period. Four new mechanical burners have been installed in the tunnel kiln, an advanced machine that automatically feeds the kilns with the biomass. This new process helps greatly reduce the exposure to the heat from the kilns to workers. Furthermore, the ceramic recently constructed new pavements around the ceramic to help improve working conditions for workers, making the workplace less slippery when wet and reduce workplace accidents. Nevertheless, there were no improvements in the sanitary conditions for workers. 4 (four) 8 People who have studied for less than 4 years. 14

15 Currently constructing two automated ceramic product lifting system, munks, to help reduce the physical labor of lifting the finished ceramic goods onto pallets for distribution. It is expected that the new munk system will be in operation in March/April The ceramic owner intends to focus on the sanitary conditions of workers once the construction of the new equipments is complete. Such activities include building leisure areas for workers. 12. Use of PPEs: Evaluates the procedures adopted by the entrepreneur and the workers behavior towards the use of equipment and safety procedures. The ceramic owner realizes the following actions in regard to safety equipment: - Personal protective equipments necessary for the workers are available: boots, gloves, masks and hearing protectors; - There are internal control in the management of these personal protective equipments; - There are monitoring on the proper use of safety equipments such as warnings to workers who do not use the equipments correctly; - There are plans for the establishment of the Prevention of Environmental Risks - PPRA 5 (five) 13. Health & Safety Practices: Evaluates the existence and the performance of campaigns, lectures, plans and target related to the health and safety. The ceramic has plans and goals in regards to health & safety, as the ceramic has relations with many agencies including ASO, PCMSO, PPRA and they are implementing CIPA, with SESI support. Nevertheless, this can still be improved greatly, especially in regards to the proper use of personal protective equipment as there are no formal procedures on its proper use. 2 (two) 4.3. Financial Resource 14. Financing: Evaluates the ability of the enterprise to obtain credit in financial institutes and the fulfillment of commitment/deadlines assumed. There have been loans made to the ceramic in the period in order to acquire the new machinery and equipments in the ceramic production process. However, there has been no difficulty by the ceramic owner in meeting its financial obligations in regards to the loan. 4 (four) 15. Production: Evaluates the development of the production in the last year and the relation of this increase with the diversification of products or significant events that may have affected the production. Production remained stable in the period, remaining relatively the same. 15

16 3 (three) 16. : Evaluates the entrepreneur expectations on the business in the next years. There are expectations that there will be an expansion of the business in the next few years, due to the new machinery and equipments that allow for increased production, therefore better meeting market demand. Furthermore, it is expected that the new machinery and equipments will reduce production costs due to increased efficiency in the process. However, there are no formal documents outlining the expansion plans and goals of the ceramic. 4 (four) 17. Renewable Biomass Supply: Evaluates the availability and diversification of the biomass and suppliers considering the guarantee of fuel supply. The ceramic currently uses sawdust as the renewable biomass to feed its kilns. However, similar to ceramics in Rio de Janeiro state, the supply of this biomass is unpredictable, with prices varying. The ceramic faces difficulty in acquiring a good supplier of the sawdust and is possibly looking at neighbouring states, such as São Paulo and Minas Gerais, as potential future suppliers. 5 (five) 18. Carbon Market: Evaluates the eligibility of the credits in the CDM market or other voluntary emissions markets, as well as its attractiveness to potential buyers. The project has been validated by a Designated Operating Entity (DOE) and the vintages from 2007 and 2008 have already been commercialized and sold to a buyer. 5 (five) 19. Financial Planning for the emissions reduction project: Evaluates the existence of financial controls during the implementation and operation of the project activity.. There are adequate control of expenses incured for implementing the project, with invoice records of all expenses related to the new equipment. 5 (five) 4.4. Natural Resource 20. Sustainability Principles: Evaluates the existence of specific policies and programs towards the sustainability of the enterprise and the applicability of the principles, values and objectives regarding sustainability. For most of Brazilian industries, the technological innovations which aim only the productive process optimization do not consider the bad impacts on the environment. This is clear when the environmental costs are higher than 16

17 the environmental capacity to embody these impacts. The ceramic will begin using the SOCIALCARBON logo on their vehicles to better promote the environmental aspects of the project to employees and external parties. 2 (two) 21. Environmental Management: Evaluates environmental management procedures adopted by the entrepreneur, including the organization and coordination of actions and documentation, such as identification of impacts, monitoring, periodic emissions reports, as well as the existence of independent audits or certifications. The ceramic owner is aware of an Environmental Management Plan, however believes that it is difficult to implement in the ceramic industry. 1 (one) 22. Environmental Legality: Evaluates the accordance of the enterprise with the legal requirements/ or other standards, such as environmental licenses and permits required for the installation and operations of the enterprise. The ceramic has an operational license so that it complies with legal requirements. The ceramic aims to comply with all the environmental legislation that pertains to the license. Though complying with environmental legislation is a common difficulty among all ceramics in Rio de Janeiro state. 4 (four) 23. Lawsuit procedures: Evaluates if the entrepreneur was involved with any lawsuit or administrative actions executed by public organs, person or people, aiming the protection or repair of the environment and human health. There were no legal proceedings against the ceramic during the period. 6 (six) 24. Energy (firing and drying): Evaluates the fuel used in the kilns of the ceramic industry, for the firing and drying of devices, as well as the origin and control of the fuel. The biomass fuel used in the ceramic is renewable sawdust, the sole fuel used in both the drying of the ceramic product, as well as being used in the kilns. There are no records of the origin or control of this fuel. 4 (four) 25. Clay: Evaluates the compliance with the environmental regulations to the extraction of clay, and the existence and effectiveness of Environmental Control Plans for plowings. 17

18 The ceramic has trouble receiving the clay extraction license from the environmental agency and the ceramic owner believes that they are delaying the process. The ceramic owner have a plan developing a nursery to replant the vegetation where the ceramic extracted clay; however this was delayed due to a geological problem that occurred in the area, leading to a water retention and making the reforestation impossible until the present time. 2 (two) The ceramic owner intends to develop a nursery where they can grow plants to restore the degraded areas from clay extraction. 26. Water: Evaluates the water consumed in the industrial process, as well as the legal and sustainable aspects of the consumption of this resource. There is control over the water used in the ceramic. The main water supply is from small artisan wells and has a water license to do so. The ceramic does not reuse/recycle of water. 3 (three) 27. Atmospheric Emissions: Evaluate the procedures adopted for the control and reduction of atmospheric pollution, related to gases and particles emitted during the productive process, not including gases that cause the greenhouse effect. There is limited control of emission in the ceramic. They control emissions in the ceramic by visually monitoring the emissions generated. Currently, there is no formal or automated system of effectively monitoring, calculating or controlling the emissions generated from the ceramic. 2 (two) The ceramic owner intends to install filters in the chimneys of the kilns to effectively monitor and control the emissions. 28. Residues from the Productive Process: Evaluates the treatment and destination dispended to the industrial residues generated in the productive process, just as the existence of a residues management plan. The ceramic does reuse the ceramic product residues from production. They donate the residues to be used in the grounding of land and roads. However, there is no effective waste management plan to control the waste produced in the ceramic. 3 (three) 29. Ashes: Evaluates the procedures adopted by the entrepreneur in order to control the ashes and promote its adequate destination. The ceramic does not produce any ash during the production process. 6 (six) 18

19 4.5. Technology Resource 30. Kilns Burning Efficiency: Evaluates the efficiency level and types of kilns used for firing of the devices during the productive process of the ceramic. The ceramic has an energy efficient tunnel kiln to heat the ceramic products. This type of kiln is one of the most energy efficient kilns in the ceramic industry. The temperature in the kilns is also automatically monitored, and adjusts the amount of biomass inserted in the kilns. 6 (six) 31. Drying of ceramic units (pre-firing): Evaluates the efficiency of the method used for the drying of devices between the stages of extrusion and firing, and the existence of artificial dryers (to avoid fissures on the devices) and the use of controlled forms of drying through the transfer of heat from the kilns to the dryers. The drying of all ceramic products is made in a continuous automated dryer that reuses the heat from the kiln or operates through its own kiln, it also has an analog monitoring of temperature and humidity. The entries of the ceramic products in the dryer are automated and are then transported to the cutting area, then to an automatic forklift. However, the removal device from the dryer is still manual. There is control of the humidity and temperature in the dryer. 6 (six) 32. Firing Control: Evaluates the existence and the automation of the procedures used for the construction of the fire curve. There are temperature controls of furnaces for burning. There are 18 points in their systems to control the temperature. There is a manual system in recording the temperature. 4 (four) 33. Kilns Supplying: Evaluates the existence and automation of the procedures for the alimentation of kilns. The kiln feeding mechanism is totally automated with four mechanical burners (imported from Germany) that feed the kilns with biomass that ensures that the temperature is the most energy efficient. Furthermore, there is a system of delivering the biomass (sawdust) from the storage area to the mechanical burners (such as a conveyer belt connecting the biomass storage area to the mechanical burners/kilns), which provides a safer working environment for workers. 19

20 6 (six) 34. Machinery: Evaluates the existence and conservation of machineries which help workers in order to decrease risks and improve the productive process. Factors of poor state of conservation: leaks, excessive noise, loose or missing components, etc. The criteria of types of machinery is established in order to determine the quantity: with up to 3 types low, up to 6 types medium, 7 and above wealth. - The machinery found in the factory are listed below: - Forklifts - Fans - Exhaustors - Cutter - Excavator - Stoker - Screener - Electromagnet - Disintegrator - Homogeneity - Rolling (metalworking) - Extrusion - Automatic Carrier - Semi-continuous Dryer All the machinery in the ceramic facility is new. The ceramic currently has forklifts to help with the transportation of the ceramic products within the production process. The ceramic owner intends to switch the fuel to natural gas, which reduces the ceramics emissions. 6 (six) 35. Diversification of Products: Evaluates the production diversity, types of products, as well as the existence of personalized or high value market products. Currently, the ceramic produces approximately 60 types of ceramic products. 5 (five) 36. Quality Control: Evaluates the procedures adopted by the entrepreneur during the productive process, in order to ensure the quality of products. Also verifies the existence of any kind of quality certificate. The ceramic has good quality control with certification from a third 20

21 party, PSQ, which assures that the ceramic products are of high quality standards. All the steps in the production process are quality inspected by the PSQ certification, from the raw material to the final end product. 6 (six) 4.6. Carbon Resource 37. Additionality: Consists of the greenhouse gases emissions reduction or of the adittional increase of the CO2. This item evaluates the tools used for the evaluation of the additionality and its accordance to the national and international standards. The additionality of the project is established according to the 2.1 section from VCS Voluntary Carbon Standard with contains specifications for the quantification, monitoring and project report, as well as the validation and verification of the greenhouse gases emission. In order to demonstrate that this project is additional, the test 1 of the VCS document was used: test for the project. 5 (five) There are no improvements forecasts in the moment. 38. Emission Calculations & Monitoring: Evaluates the methodologies used to calculate the emission and monitoring, and its accordance to the national and international standards. The calculations of emissions reduction and monitoring plan of the project are based on approved methodologies by the CDM Executive Board, applied on small-scale projects: Category I.C: Thermal energy for the user with or without electricity Version 13 from March 14th The monitoring will be of responsibility of the entrepreneur, being annually performed a complete verification of the data by the DOE (Designated Operational Entity), accredited by the CDM Executive Committee. More information regarding the calculations of the emissions reductions of the project activity is specified at the PDD (Project Design Document). 6 (six) There are no improvements forecasts in the moment. 39. Validation & Verification: Evaluates the existence of total or partial validation/verification of the project by a third part, accredited by UNFCCC, and the accordance of the procedures for the validation/verification with national and international standards. 21

22 The validation and verification procedures, based on VCS an SOCIALCARBON Standards, were made and then the respective reports. For accessing the Final Validation and Verification reports, please visit: 6 (six) There are no improvements forecasts in the moment. 40. Project s Performance: Evaluates the project performance in comparison to the emission reductions estimated in the PDD- Project Design Document. Considering the first period of the project, described in the Project Design Document PDD, between April 2006 to September 2008, the performance was acceptable with 95% of the planned carbon credits being issued. 6 (six) 41. Employees in the Project: Evaluates the process of the entrepreneur s internal communication regarding the emissions reduction project. There were no actions by the ceramic to inform employees of the carbon project in the ceramic. 1 (one) The ceramic owner intends to inform employees of the carbon project by holding a meeting, outlining the main points and to answer any concerns or questions. 42. Stakeholders Involvement: Evaluates the communication and acceptance of the project by the communities, environmental agencies and public authorities, among other social actors, as well as analyzing if the project was elaborated in isolation, or had the involvement of other institutions and stakeholders. Stakeholders are the people and the organizations which are involved in a project or may be influenced by this project s activities or outcomes. The stakeholders become aware of the project because the entrepreneur sent suppliers, clients, and partners, letters explaining all the project activities. The Company webpage is engaged to the project, and all the stakeholders can easily become aware not only about the fuel switching project, but also, about the SOCIALCARBON application. 3 (three) There are no improvements forecasts in the moment. 9 Voluntary Carbon Stardard 22

23 5. Analysis of results To analyze the situation of the project, it is important to consider what is represented by the score obtained for each of the resources. The indicators are established to express the following relationship between the scores obtained and the situation of the project: Scores 1 and 2: Situation: Critical. Characteristics: existence of irregularities; high socio-environmental risk; significant levels of social and environmental degradation; or situation of extreme hardship, which significantly compromises the quality of life of the population. Scores 3 and 4: Situation: Satisfactory. Characteristics: meets all the legal requirements relating to its activities; surpass them through the adoption of good practices and voluntary actions in some cases; or a quality of life that reaches the minimum acceptable standard, but which requires improvement. Scores 5 and 6: Situation: Sustainable. Characteristics: exceeds its legal obligations and/or common practice in the market, in many cases adopting the best-possible practices for the sector; or communities have reached a sustainable livelihood, with adequate access to material and social goods, are capable of recovering independently from situations of stress, and are not causing the deterioration of basic environmental resources through their activities. In order to obtain an analysis of the Resources average, an equal distribution is adopted between the decimal intervals from 1 to 6, expressing the following relationship amongst the indexes obtained and the project performance. Average index obtained for the Resource Decimal interval Situation Interval from 1 to 2,6 1,7 Critical Interval from 2,7 to 4,3 1,7 Satisfactory Interval from 4,4 to 6 1,7 Sustainable 23

24 5.1. General performance The general performance of Argibem ceramic is considered satisfactory, with a general score of 3.8 based on the resource indicators above (refer to Annex I for statistical results). As highlighted by Table 2 (below) 40% of the indicators achieved the sustainable interval, showing that some of the practices in the ceramic set the industry standard in regards to their practices. Most notably, the Technological resource indicates an industry leading performance in regards to the efficiency, safety and production of its ceramic products that utilize renewable biomasses, such as sawdust, in their production process. Moreover, over half of the indicators in the Financial and Carbon resources are within the sustainable interval. In the case of the Financial resource, this is primarily due to the sound financial planning of the ceramic owner, and the plan to effectively utilize the carbon credit revenue into the ceramic. Furthermore, the commercialization and sale of the carbon credits indicate that the project is attractive to credit buyers. In regards to the Carbon resource, the project has been verified and validated by an accredited DOE, with sound calculations and monitoring that is consistent and conservative, improving this resource indicator. The Natural resource indicator shows a satisfactory rating. Indicators in this resource that relate to legal environmental issues performed well, with no legal proceeding and the ceramic complying to environmental laws, however indicators in this resource that relate to the use of natural resources underperformed; the ceramic is in the process of renewing its clay extraction license, there are ineffective environmental management plans to monitor and control the use of natural resources such as water, clay and there is limited focus on the treatment of waste. The two critical resources at the ceramic are Social and Human, primarily due to the ceramic owners focus on improving the technological aspects of the business in order for effective carbon project implementation. In regards to the Social resource, the relation between the employer and employees are satisfactory, with relatively good benefits and a satisfactory turnover rate. However, the relation between the ceramic and the community is minimal, with some social return of the project to the community and no plans to utilize the credits to improve this relation. The Human resource indicator reveals that the ceramic does provide a safe working environment for its employees, with the construction of new pavements, the new machinery and equipments providing a safer working environment, and the provision of personal protective equipment to employees. However, the ceramic underperforms in regards to the betterment of employees, with the ceramic not registering their education or professional qualifications and performing minimal capacity building courses. 24

25 Table 1: Sustainable Performance of the Project Point One Performance by resource Social Resource: The turnover rate in the ceramic is considered relatively satisfactory, in relation to the ceramic sector. There are workers unions present, however they are not organized and the ceramic owner does not engage with them. Employees receive good employment benefits at the ceramic with bonuses related to production and uniforms are supplied. There are currently five women working in the ceramic, with two working in the production process, due to the new, safer equipments installed in the ceramic in the period. Nevertheless, there are still no handicapped workers. The ceramic owner does engage with the community via donations to the local government and church groups, however there no plans to engage further with the community with the credit revenue. Human Resource: There are adequate working conditions throughout the production process, as the new equipment and machinery provides safer working conditions for employees. For example, the new mechanical burners that feed the kilns, greatly reduces employee exposure to heat generated from the kilns. Furthermore, personal protective equipment is provided to all employees. Consequently there were no accidents recorded in the period. Nevertheless, the ceramic does not record the educational and professional qualification of its employees and performs minimal capacity building courses. However, the ceramic does engage with SENAI, a third party organization that provides training and courses to workers in the ceramic industry. Financial Resource: The ceramic owner acquired loans in the period to acquire new equipment and machinery such as the mechanical burners that automatically feed the kilns, and will soon install a new clay grinding and mixing machine in the next months. However, the ceramic has no difficulty in meeting its financial obligations. Production remained stable in the period; however the ceramic owner expects the business to expand in the next few years due to the installation of the new equipment and machines. The project has been verified and validated by a DOE and the vintages from 2007 and 2008 have been commercialized. There is adequate control of expenses incurred for implementing the project. Natural Resource: The ceramic complies with environmental legislation of the state, and holds an operational license. However, it is in the process of renewing its clay extraction license from the environmental agency. The ceramic understands the importance of an Environmental Management Plan, however the ceramic owner finds it difficult to implement. Furthermore, the ceramic does not have a formal waste management plan; however the ceramic product residues are donated to fill land and roads. The ceramic owner intends to improve this resource by investing filters in the chimneys, to effectively monitor and control the emissions. Technological Resource: The ceramic owns a highly energy efficient tunnel kiln to heat and produce its ceramic products. The temperature in the kilns is effectively monitored by an automated system that adjusts the temperature in the kiln by inserting more or less biomass, therefore efficiently using fuel. The ceramic also owns an automatic dryer that reuses the heat from the kilns, as well as forklifts to help move ceramic products around the production 25

26 floor. In the next few months, it is expected that new clay mixer and a new machine to pack and deliver the finished ceramic products, will be constructed to help create a more efficient production process. The ceramic produces 60 different types of ceramic products, and has a quality management system in place, certified by a third party, the Sectorial Quality Program (PSQ). Carbon Resource: The project presents consistent and internationally recognized methodologies for the additionality assessment and for the calculations of the emission reductions. The project is now verified and validated by a DOE, accredited by the UNFCCC. However, there is still a lack of disclosure of the carbon project to stakeholders and employees Historic performance and comparative analysis There has been a slight improvement from Point Zero to Point 01 in this ceramic project. The improvements were slight primarily due to the ceramic owner s priority to improve the technology within the ceramic and verification, validation and commercialization of credits. This is clearly demonstrated by the Technological resource achieving sustainable performance, similar to Point Zero. The Carbon resource indicator improved substantially due to the verification and validation of the project and the commercialization of the credits. The Natural and Financial resources remained relatively stable at satisfactory, Human resource still at a critical performance, while the Social resource decreased. The Technological resource remained relatively stable from Point Zero to Point 01. During the period, the ceramic had replaced the feeding mechanism in the kilns, to 4 more efficient machines that self regulate the amount of biomass inserted into the kilns, based on the temperature required in the different stages within the Tunnel kiln (in this long kiln, different sections require different temperatures based on production stage). Not only does this improve the energy efficiency of the kiln, it reduces the costs to the ceramic, while improving the safety working conditions to employees, as they are less exposed to the heat from the kilns. It was also observed that there were construction within the ceramic, with new machines to be included in the production process in the coming months, in particular, new machines and equipment for clay mixing and final product distribution. The Carbon resource experienced a relatively good increase, especially due to the project being validated and verified by a DOE during the period and the ceramic owners intention to include stakeholders in the carbon project. The Natural resource remained the same as the previous period, suggesting that the ceramic had not prioritized in improving this indicator, considering the ceramic has no formal environmental and waste management plan, no clay extraction license and no formal measurement, monitoring and control of emissions. In regards to the Financial resource, the ceramic had no financial plan on the cashflow of the project in Point Zero, however in this period the ceramic owner is in control of the cash flow and has plans for credit commercialization. Furthermore, production remained stable from the last period to this period, with expectations that the ceramic will expand in the near future due to the technological changes in the ceramic. The Human resource is still at a critical performance; however this indicator did improve slightly from the previous period. The ceramic still lacks capacity building courses for its employees, who have not received formal training on the new equipment and machinery. Furthermore, the ceramic still does not record educational and professional qualifications nor has the ceramic implemented an employee satisfaction survey to gage workers concerns. 26