Verification Report for Kruger Products LP New Westminster Biomass Gasification Project January 1, 2010 December 31, 2010 Reporting Period

Transcription

1 Verification Report for Kruger Products LP New Westminster Biomass Gasification Project January 1, 2010 December 31, 2010 Reporting Period Prepared for: Kruger Products LP May 13, 2011 Ruby Canyon Engineering 743 Horizon Ct. Suite 385 Grand Junction, Colorado (970)

2 Table of Contents 1.0 Introduction Project Background & Site Description Responsible Parties Verification Team Objectives Scope Verification Criteria Verification Activities Summary Assessment of the GHG Reduction Project Operations GHG Project Boundary (sources, sinks and/or reservoirs) Project Eligibility Criteria Assessment of GHG Emissions Reductions Calculations Verification Results Findings Overview Verification Assurance Statement... 6 Kruger Products LP New Westminster Biomass Gasification Project Final Version May 13, 2011 i

3 1.0 Introduction Ruby Canyon Engineering (RCE) was contracted by Kruger Products LP ( Kruger ) to perform the third-party greenhouse gas (GHG) verification of the Kruger Corporation New Westminster Biogas Gasification Project ( Project ). RCE subcontracted Keystone Environmental (Keystone) to be a team member on this verification and provide technical expertise related to pulp and paper operations and the British Columbia (BC) Emission Offset Regulation. The project was verified to the validated Project Plan using Pacific Carbon Trust (PCT) guidelines for the reporting period January 1, 2008 through December 31, The Project involves GHG emission reductions resulting from substituting fossil fuel (natural gas) as a primary energy source to generate steam to using a less GHG-intensive or renewable fuel - waste biomass. 1.1 Project Background & Site Description Kruger Products LP owns and operates a pulp mill in New Westminster, B.C. The large steam requirements at the mill are met through four boiler systems, three natural gas boilers and one hog fuel boiler. In March 2007, the No. 2 (hog fuel) boiler at Kruger s New Westminster Mill was shut down and decommissioned. As an interim measure, Kruger leased a natural gas-fired boiler in January 2008 to ensure the continued supply of sufficient steam volumes to the Mill. At the time, Kruger s choices for steam generation were 1) a complete overhaul of the existing 63 year old boiler, 2) installing a new natural gas boiler, or 3) installing a new hog boiler. After seeing the results of the trail tests performed at the Nexterra's Product Development Centre in Kamloops, B.C. in 2008, Kruger decided to replace the No. 2 boiler with Nexterra s biomass gasification system. The Project Activity consists of the installation and operation of a Nexterra gasification system, which replaced natural gas combustion (most likely baseline alternative), used for steam generation with the combustion of gasified wood waste materials. The project was fully operational in December The Project technology is not common practice in the industry and is the first application to employ direct steam generation (syngas flame sent directly to the boiler versus an indirect approach where syngas combustion flue gas is sent to a heat exchanger to generate steam). 1.2 Responsible Parties Kruger Products, LP 1900 Minnesota Court, Suite 200 Mississauga, Ontario, L5N 5R5 1.3 Verification Team The RCE verification team consisted of the following individuals who were selected based upon verification experience and knowledge of the pulp and paper industry. Lead Verifier: Michael Coté - RCE Team Member: Judy Tai - Keystone Team Member: Sally Phipps - RCE Senior Reviewer: Greg Palmer - RCE 1.4 Objectives The objective of verification activities was to ensure that the claimed GHG emission reductions by Kruger were within scope, real, quantifiable, additional, verifiable, counted once, under clear ownership, and that the Project was in compliance with PCT project additionality, monitoring and reporting requirements. Furthermore, the verification activities ensure that the data provided to RCE is well documented and free of any material errors or omissions. Kruger Products LP New Westminster Biomass Gasification Project 1

4 1.5 Scope The scope of the verification consisted of the following independent and objective activities: Review the reporting period s Project Plan Review the reporting period s Project Monitoring Plan Conduct a site visit Review the Project boundaries Review Project Eligibility Review the Project Data Acquisition & Quality Control Procedures Review the Project s baseline emission reductions Review the Project s emission reduction calculations Review of the Project documents and data against the Verification Criteria listed in Table 1. Issue requests for additional data, clarifications and corrective actions as necessary Issue a verification report, statement, and list of findings to Kruger 1.6 Verification Criteria Table 1 Verification Criteria BC Emission Offsets Regulation (December 9, 2008) GHG Quantification Protocol: Fuel Switching from Fossil Fuel-Fired Energy Generation to Less GHG Intensive Fossil Fuel or Renewable Energy Sources, V1.1 (Fuel Switching Standards and Protocols for Protocol V1.1), January 2011 Verification PCT s Guidance Document 2.0 to the Emission Offsets Regulation ISO Specification with guidance for the validation and verification of greenhouse gas assertions Reporting Period January 1, 2010 December 31, 2010 Level of Assurance Reasonable assurance (95% materially correct) Materiality A +/ 5 percent materiality threshold 2.0 Verification Activities Summary Prior to starting the verification activities, RCE developed a verification plan to follow throughout the verification. The verification plan included the following activities: Completion of a Project Conflict of Interest (COI) form by RCE s Internal Auditor to identify any potential conflict with the Project or Project developer. A verification kick off meeting was held via conference call on April 1, During the kick off meeting RCE reviewed the verification objectives and process, the verification schedule, and requested the verification background documents. RCE performed a strategic review and risk assessment of the received data and support documents in order to understand the scope and areas of potential risk in the GHG emissions reductions. RCE developed a risk based site visit sampling plan and desktop sampling plan based upon the strategic review and risk assessment. The sampling plans revolved around assessing the GHG management system in place, information control systems, appropriate application of emissions factors, the adequacy and placement of the flow metering, identifying project boundaries, the high heating value of the natural gas, biomass energy contents, the cross checking of GHG calculations and the QA/QC procedures used to assure data quality. The verification plan, site visit sampling plan and desktop sampling plan were used throughout the verification and revised as necessary based upon additional perceived risks. Kruger Products LP New Westminster Biomass Gasification Project 2

5 RCE conducted a site visit on April 20, During the site visit RCE performed key personnel interviews, inspected the Nexterra gasification system, observed the onsite GHG management systems, and data gathering, monitoring and handling practices. RCE has visited the natural gas meters on site, hog fuel delivery system and process metering devices. RCE also reviewed and sampled meter calibration records and fossil fuel consumption records. RCE performed a risk based desktop review of the submitted verification documents. The desktop review included an assessment of the GHG calculation methods and inputs, completeness of source documentation, evidence of ownership, GHG management and monitoring systems, project qualification relative to start date, evidence of the project activity following the project plan, evidence of regulatory compliance, and company record retention practices. RCE submitted a List of Findings document that included requests for additional data, clarifications & corrective actions. RCE s internal reviewer conducted a review of the verification sampling, report and opinion. RCE developed a final Verification Report, Verification Assurance Statement and List of Findings. RCE held an exit meeting with the client on May 13, Verification Findings 3.1 Assessment of the GHG Reduction Project Operations The project reduces GHG emissions by substituting waste biomass for natural gas as a primary energy source to generate steam. RCE physically inspected the Project equipment at the New Westminster facility while it was in operation to ensure all SSRs were being accounted for. RCE verified that the biomass handling system did not require additional energy to accommodate the new biomass feedstock. RCE verified how the truck loads of delivered biomass are documented and how the material is stored and sent to the Nexterra boiler. RCE looked over all associated monitoring and metering equipment with the boiler. RCE verified that this Project is real and reduces emissions of carbon dioxide (CO 2 ), methane (CH 4 ) and nitrous oxide (N 2 O) within the project boundary by combusting waste biomass as a substitute for natural gas as an energy source. During the site visit RCE performed interviews with the project key personnel and confirmed that the personnel are experienced, knowledgeable and competent to operate and maintain the project, collect and aggregate the project data and perform the GHG reduction calculations. RCE also interviewed personnel with the Instrument Maintenance department about the Kruger Products procedures for maintaining and calibrating their meters and for maintaining the project equipment. RCE determined that the personnel are competent and certified to perform the on-site meter calibrations and the calibration procedures are adequate to ensure the accuracy of the project meters. The primary inputs into the project GHG calculations are the total metered quantities of generated steam and natural gas used to operate the backup burner and backup starter. While onsite RCE physically looked at the natural gas meters and various process related metering devices. To verify the accuracy of the project steam generation and natural gas usage RCE examined the meter recording records during the site visit and requested the calibration records for the associated monitoring and metering equipment. RCE reviewed the 2010 calibration records during the desktop sampling and verified the meters were accurate within +/- 5%. RCE also reviewed documentation of Kruger Products environmental regulatory compliance that included an air permit and liquid waste discharge and verified that the operation is in compliance with the regulations. Kruger Products LP New Westminster Biomass Gasification Project 3

6 3.2 GHG Project Boundary (sources, sinks and/or reservoirs) Table 2 lists the sources of GHG emissions reviewed during the verification of the Project. Table 2 Project GHG Sources, Sinks and Reservoirs Activity GHG Sources, Sinks & Reservoirs Baseline Project B13 Fuel Combustion for Heat Generation P19 Operation of Facility P21 - Fuel Combustion for Heat Generation 3.3 Project Eligibility Criteria The Project meets all eligibility criteria: The project is located in British Columbia. The project is not a regulated activity within British Columbia. Kruger has demonstrated clear ownership of the emission reductions through evidence of gas ownership records. The project has not generated emission reduction offsets for longer than 10 years. The project start date is December, 2010 (meeting the requirement of post-november 29, 2007). The project plan has been validated by an ANSI-accredited validation/verification body. The project report has been submitted for the reporting period. 3.4 Assessment of GHG Emissions Reductions Calculations The emission reduction calculations assessment included a review of the Baseline, and Project assumptions, data inputs, data management, and accuracy of calculations. RCE first evaluated the completeness and validity of the original data and how the data is transferred from Kruger s data management system to the GHG Assertion Spreadsheet. RCE verified the accuracy of the natural gas heat content by cross checking the value to the B.C. Lower Mainland heat contents available on the Fortis B.C. website. RCE also verified the accuracy of the saturated steam temperature, heat of vaporization and heat capacity of the water assumptions by cross checking the values to published chemical engineering handbooks. During the site visit RCE had verified the pressure of the saturated stream and the boiler feed water temperature. RCE also conducted cross checks of the spreadsheet functionality, GHG emission factors, global warming factors and equations. The equation methodologies were compared to the methods described in the Project Plan and RCE found that the GHG calculations used were consistent with the Project Plan. RCE re-calculated the baseline emissions and the project emissions and verified that the final GHG assertion is materially correct. During the verification RCE had identified corrective actions that were addressed by Kruger Products and no material misstatements were identified during the final review of the assertion. Kruger Products LP New Westminster Biomass Gasification Project 4

7 4.0 Verification Results Table 3 Emission Reductions Verified for 2010 Emissions Verified CO 2 e (metric tons) Baseline Emissions 16,793 Project Emissions 766 Total Emission Reductions 16, Findings Overview Kruger provided high-quality documentation of their emission estimates, data collection procedures, monitoring and quality control procedures. The verification process focused on verifying the annual emissions estimates and the source data used by Kruger to quantify the emission reductions in accordance with the validated Project Plan and approved Fuel Switch Protocol V1.1. During the verification process, RCE made requests for clarifications, corrective actions and supplemental documentation to complete the verification activities. All corrective actions were addressed by Kruger by May 11, The details of these requests and how they were addressed are documented in the RCE Final List of Findings. Kruger Products LP New Westminster Biomass Gasification Project 5

8 5.0 Verification Assurance Statement RCE conducted a risk based analysis of the project GHG assertion and a strategic review of the Project data and evidence. Based upon the processes and procedures and the evidence collected, RCE concludes with a reasonable level of assurance that the Project emission reductions resulting from the reductions of CO 2 and CH 4 during the reporting period January 1, 2010 through December 31, 2010 can be considered: In conformance with the BC Emissions Offset Regulations, PCT Guidance Document 2.0 to the EOR, Fuel Switching from Fossil Fuel-Fired Energy Generation to Less GHG Intensive Fossil Fuel or Renewable Energy Sources, V1.1 and ISO standards, Without material discrepancy or material changes in how the project was carried out compared to the validated project plan, and Verified to the reasonable level of assurance of 95 percent. The verification was conducted in conformance with the principles and requirements of ISO The verified Emission Reductions are listed in the Table 4. Table 4 Emission Reductions Verified for January 1, 2010 through December 31, 2010 Emissions Verified CO2e (metric tons) Emission Reductions 16,027 Lead Verifier Signature Senior Reviewer Signature Michael M. Coté Greg Palmer Kruger Products LP New Westminster Biomass Gasification Project 6