Carbono Social Serviços Ambientais Ltda. GUARAÍ, ITABIRA AND SANTA IZABEL CERAMICS FUEL SWITCHING PROJECT Summary:

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1 Voluntary Carbon Standard Version Verification Report: /183 Name of Verification company: Date of the issue: TÜV NORD CERT GmbH August 03 rd, 2010 Report Title: Approved by: Final Verification Report Mr. Eric Krupp (FA) GUARAÍ, ITABIRA AND SANTA IZABEL CERAMIC Client: Project Title: Carbono Social Serviços Ambientais Ltda. GUARAÍ, ITABIRA AND SANTA IZABEL CERAMICS FUEL SWITCHING PROJECT Summary: Carbono Social Serviços Ambientais Ltda has commissioned the TÜV NORD JI/CDM Certification Program to carry out the 2 nd periodic verification of the project: Guaraí, Itabira and Santa IzabelCeramics Switching Fuel Project, with regard to the relevant requirements for CDM project activities. The project reduces GHG emissions due to switching non-renewable sources to renewable biomass fuel for end-user thermal energy generation. This verification covers the period from to In the course of the verification one (01) Corrective Action Request (CAR) and five (05) Clarification Requests (CR) were raised in total. Furthermore none FARs are raised to improve the monitoring system in the future. The verification is based on the draft monitoring report, revised monitoring report, the monitoring plan as set out in the VCS PD, the validation report, emission reduction calculation spreadsheet and supporting documents made available to the TÜV NORD JI/CDM CP by the project participant. As a result of this verification, the verifier confirms that: all operations of the project are implemented and installed as planned and described in the validated project design document. the monitoring plan is in accordance with the applied approved CDM methodology,ie, AMS-I.C.: Thermal energy for the user with or without electricity Version 13 from March 14th the installed equipment essential for measuring parameters required for calculating emission reductions are calibrated appropriately. the monitoring system is in place and functional. The project has generated GHG emission reductions. As the result of the 2 nd periodic verification, the verifier confirms that the GHG emission reductions are calculated without material misstatements in a conservative and appropriate manner. TÜV NORD JI/CDM CP herewith confirms that the project has achieved emission reductions in the above mentioned reporting period as follows: Emission reductions: Emission reductions: CO 2 [t CO 2] CH 4 [t CH 4] N 2O [t N 2O] HFCs [t HFC] PFCs [t PFC] SF 6 [t SF 6] Sum [t CO2e] , , ,465 29,465 TOTAL: 37,285 Work carried out by: Gilberto Andrade (TM) Gilberto Queiróz (TM) Raul Mitre (TM) Inga Nagel (TL) Alexandra Nebel (TR) Jochen Schubert (TR) Number of pages: 20 1

2 Table of Contents 1 Introduction Objective Scope and Criteria VCS project Description Level of assurance Methodology Verification Findings Remaining issues, including any material discrepancy, from previous validation Project Implementation Completeness of Monitoring Accuracy of Emission Reduction Calculations Quality of Evidence to Determine Emission Reductions Management and Operational System Verification conclusion References

3 1 Introduction 1.1 Objective The purpose of this verification, by independent checking of objective evidence, is as follows: to verify that the project is implemented as described in the project design document; to confirm that the monitoring system is implemented and fully functional to generate voluntary carbon units (VCUs) without any double counting, and to establish that the data reported are accurate, complete, consistent, transparent and free of material error or omission by checking the monitoring records and the emissions reduction calculation. 1.2 Scope and Criteria The verification of this VCS project is based on the VCS project description /VCS PD/, the monitoring report /MR/, the emission reduction calculation spreadsheet /XCS1/, supporting documents made available to the verifier and information collected through performing interviews and during the on-site assessment. Furthermore publicly available information was considered as far as available and required. The TÜV NORD JI/CDM CP has employed a risk-based approach in the verification, focusing on the identification of significant risks and reliability of project monitoring and generation of emission reductions. 1.3 VCS Project Description This project comprises three ceramics in the State of Rio de Janeiro: Guaraí, Itabira and Santa Izabel all of them located in the City of Itaboraí, which produce red ceramic devices. The project activity involves fuel switching from heavy oil to renewable biomass coming from wood residues and afforestation wood, thus GHG emission reduction is achieved. Other types of renewable sources of biomass can be applied during the project activity, as elephant grass coming from grassland in abandoned areas. Before the replacement of the biomass, Guaraí produced 19,200,000 devices per year and it consumed 3,516,000 litters per year in its one Hoffman kiln and five Round kilns, Itabira produced 12,000,000 and consumed 2,400,000 litters in its one Hoffman and Santa Izabel produced 14,400,000 devices and it consumed 2,880,000 litters of oil per year in its one Hoffman and three Round kilns. The total replacement occurred in April 2006, and now, Guaraí, Itabira and Santa Izabel are using their kilns to produce 2,800,000, 1,500,000, and 1,700,000 ceramic devices and consuming 1,170, 1,050 and 1,320 tonnes of renewable biomass per month, respectively. 3

4 The project contributes to the sustainable development as due to its activity it will: (1) diversify and improve sources of thermal energy generation; (2) become possible the use of new renewable biomass thermal energy generation technologies to be applied in the ceramic sector or other similar processes; (3) reuse biomass waste material and (4) utilize renewable sources of biomass for thermal energy generation. During that monitoring period, as it was verified at on-site visit, the Guaraí Ceramic has implemented more one Round kiln, the sixth one, in a changing process as planned at VCS PD., to adapt it to feed in only wood residues. That implementation was evidenced by reforming construction contract document. It is important to emphasize that modification has been previewed in the VCS PD and, as consequence, the GHG emission reduction calculation basis is still valid despite of that modification. The GHG emission reduction for the considered crediting period is 37,285 tco2e /XCS1/. 1.4 Level of assurance The verification report is based on Monitoring Report, supporting documents made available to the verifier and information collected through performing interviews and during the on-site assessment. The verification opinion is assured provided the credibility of all above. 2 Methodology The second verification of the project was carried out from March 1 st 2010 to July 05 th, Preparations: to On-site visit: (Guaraí), (Santa Izabel) and (Itabira) Draft Reporting: Final Reporting: The verification consisted of the following steps: A desk review of the VCS PD /VCS PD/ and supporting documents with the use of the relevant sections of a customised protocol according to the VCS A desk review of the Monitoring Report /MR/ and additional supporting documents which the client submitted. The relevant sections of the above-mentioned customised protocol according to the VCS were used. Verification audit planning, On-Site assessment, Background investigation and follow-up interviews with involved personnel of the project developer, Verification reporting (Final Validation and Verification Reports) to search for pending CR, CL and FAR, Additional Verification reporting (draft Verification and Final Verification Reports) The criteria of this verification include the relevant rules and steps as set out in the VCS. 4

5 3 Verification Findings 3.1 Remaining issues, including any material discrepancy, from previous validation There are no pending CARs, CLs or FAR issued during the course of the validation as well as the first verification processes. 3.2 Project Implementation The project consists of a fuel switch from non-renewable biomass to renewable biomass in the ceramic facility. The use of non-renewable native wood will be substituted by renewable biomass of different kinds as can be seen in the table below. Table 3-1: Type of biomass Renewable biomass applied Afforestation Wood Sawdust/Woodchips Wood residues from industries and civil construction Biomass that may be applied Elephant grass 5 Description of sustainability The afforestation wood used in the project activity is originated from the management of Eucalyptus and Pinus coming from sustainable forest management in the regions of Minas Gerais State and Rio de Janeiro State. Sustainability is evidenced by the environmental licenses of suppliers as well as by the cutting authorizations for assuring the quantities and legal origin of the afforestation wood and afforestation wood residues. Afforestation wood falls under Option I of the applied methodology. The wood chips or pieces and sawdust used in the project activity are originated from sawmills industries which utilizes wood coming from sustainable forest management. Sustainability will be provided by the assurance of the quantities and origin of the sawdust as well as of the woodchips or wood pieces used via the check of each individual invoice. Sawdust and woodchips fall under option V of the methodology. The wood residues used in the project activity are originated from industries and civil construction activities in the region. Sustainability will be provided by the assurance of the quantities and origin of the residues used via the check of each individual invoice. This biomass falls under option V of the applied methodology. Description of sustainability This is an alternative which is seen with potential for the future. If adopted by the project activity, the elephant grass cultivation should follow sustainable management methodologies. The elephant grass will be exclusively cultivated for the

6 purpose to supply fuel to the project activity. The ceramic owner will be responsible to maintain or to evidence the sustainability of the production. Until now the ceramic did not use elephant grass for their project. The evidence of sustainability will be provided by the evidences of the sustainable management origin of the elephant grass and by the control of the quantities involved. This kind of biomass falls also under option III of the methodology. Table 3-2: Wood chips supplier Guaraí Ceramic Name of supplier Evidence of sustainability and legacy of wood chips/eslwc/ The indications bellow are for wood chips and the intention here is just to prove the legal operation of the supplier in trading the supplied biomass type Environmental Regularity Ownership Industria e Comércio de Madeiras Fam s Certificate (CTFCR) nr , valid since Ltda. (FAM s) 18/08/2008, indicating the legal registration to the Environmental Ministry/IBAMA- The Environmental and Renewable Natural Resources Brazilian Institute Chaco-Vaco Transporte Comércio e Beneficiamento de Madeira Ltda. GB Cordeiro Reciclagens ME (GB Wilson) Nogueira Industria e Comércio de Urnas Ltda. (Sérgio Veroquia) Environmental Operational License nr. 171/2008 valid until 09/12/2013 Environmental Operational License nr. LO nr. FE-14050, valid until 04/04/2013 Installment and Operations License nr code 621 from Municipal City Hall of Bom Jardim at the State of Rio de Janeiro, indicating the legal registration of the referenced supplier, valid until 31/12/2010 Table 3-3: Afforestation wood supplier Itabira Ceramic Name of supplier Estância Dois Irmãos Reflorestamento e Pecuária Ltda. Serra Extração e Comércio de Madeiras Ltda. Manoel Chelson Kher Munhoz.(Sítio Nova Fonte) Sítio Boa Esperança Ltda. Luiz Vanderlei Heckert (Sítio Recreio) Evidence of sustainability of afforestation wood/esaw1/ Cutting authorization eucalyptus /CA1/ Cutting authorization eucalyptus /CA2/ Cutting authorization eucalyptus /CA3/ Cutting authorization eucalyptus /CA4/ Cutting authorization eucalyptus /CA5/ 6

7 Serraria Mury Ltda Jorge de Castro (Sítio Auto da Serra) Cutting authorization eucalyptus /CA6/ Cutting authorization eucalyptus /CA7/ Table 3-5: Afforestation wood supplier Sta Izabel Ceramic Name of supplier Estância Dois Irmãos Reflorestamento e Pecuária Ltda Semear Agropecuária de Teresópolis Ltda. REMAC Serviços Florestais Ltda. Evidence of sustainability of afforestation wood/esaw2/ Cutting authorization eucalyptus /CA1/ Cutting authorization eucalyptus /CA2/ Contract of Buying and Selling of Afforestation Wood Residues nr. 45VR0509 between Suzano Papéis e Celulose S/A e REMAC Serviços Florestais Ltda., related to the regular supply of afforestation wood residues/cbs/ For the project implementation the ceramic owner had to deal with different kind of barriers, such as: Table 3-6: Assessment of Barrier Analysis No barrier parameters are used for additionality justification Assessment of barriers see below Kind of Barrier (invest, tech, other) Description of Barrier Eviden ce used Approp riatene ss of informa tion source Assessment of validation team Explanation of final result 7

8 Technical Kilns adjustment to the new machineries. Use of the new mechanical burners and homogeneizer. Using the new fuel, changing of working process. Storage of the renewable biomass. Protection of electric network to avoid damage due to severe atmosphere conditions (rays). /OSV/ /IM01/ Technical adjustments and modifications in the kilns and in the overall ceramic production could be evidenced during on-site visit and were crosschecked by invoices for the new technical equipments /FAE/. The ceramists had to learn how to manage and control the logistics for the new machinery in order to get the most efficient production. Moreover, it was necessary to train the staff responsible for the kilns feeding as well as overall operation of the ceramic. The difficulties that occurred during the switch of the biomass, as described by the PP, could be evidenced during the interviews with workers and by checking the training plans, loss of biomass and loss of production during the experimental period. As the new process is different than the baseline a technical barrier was faced by this project. The damage that occurred on electric network that is used to collect data from thermopairs have impacted the temperature monitoring system built by ALUTAL Sensores Elétricos. This limitation due to that damage could be evidenced during the interviews with workers and on-site observation at Santa Izabel Ceramic. The technical barrier has been verified and found to be significant for the additionality of the small-scale project activity. Financial variable costs Renewable biomass purchase Electrical consumptions cost due to the new mechanical burners /ECR in VCS PD/ /FAE in VCS PD/ As it is clear indicated in the VCS PD and the financial spreadsheet, the variable cost of the renewable biomass is higher when compared with heavy oil. The new fuel implicates in higher costs due to its transportation and high biomass price. During the Validation phase the heavy oil price was evidenced according to receipts presented to the auditor. The transportation costs are higher when using the new fuel, as evidenced in the invoices. All values used for the calculations could be evidenced and properly assessed. Please refer to the financial spreadsheet of Validation phase. The financial barrier due to variable costs has been validated and found to be significant for the additionality of the small-scale project activity. Financial investm ent costs Kiln entrance adjustment Equipment acquisition New storage shed Maintenance costs /FAE in VCS PD/ All the sources of investment costs could be verified during on-site visit of the Validation phase. All invoices have been checked by the validation team. During this Verification phase the data reported was confirmed. The financial barrier due to investment cost has been validated and found not to be significant for the additionality of the small-scale project activity. Other Increasing price for biomass /OSV/ As the use of renewable biomasses in the ceramic sector is an innovation, the future demand of these fuels is difficult to foresee. Although there is currently a great amount of these biomasses available, there is the possibility that the prices of renewable biomasses will increase. During this Verification the biomass cost was assessed. This barrier has been validated to be true but found not to be significant for the additionality of the small-scale project activity. 8

9 During the new verification period a site visit was carried out. On the basis of this site visit and the reviewed project documentation it could be confirmed that the realized technology, the project equipments as well as the monitoring and monitoring equipment has been implemented and operated as described in the Monitoring Report and are in line with the VCS Standard. It was confirmed that the actual project activity was implemented in accordance with the validated VCS PD. 3.3 Completeness of Monitoring The monitoring has been carried out in accordance with the VCS standard. The responsibilities identified during the validation have been confirmed and all parameters to be monitored have been verified and crosschecked. During the Draft phase of the second Verification, 01 CAR and 05 CLs were recorded with reference to completeness of monitoring, as indicated bellow. General CL 1 Description of finding Describe the finding in unambiguous style; address the context (e.g. section) The records and data obtained through spot checking during the site visit to the Guaraí Ceramic related to biomass reported in this Second Verification Period are different from the data included in the VCS MR v1 in more than 10%. Please, clarify that observed difference between the evaluated amount of biomass and the value reported in the MR. Corrective Action #1 This section shall be filled by the PP. It shall address the corrective action taken in details. DOE Assessment #1 In case of non-closure, additional corrective action and DOE assessments (#2, #3, etc.) shall be added. Conclusion Tick the appropriate checkbox The internal control of the ceramic will be sent to the validation team. It was rechecked with the VCS MR v1. The records and data related to biomass for Guaraí Ceramic, as reported in this Second Verification Period, are considered corrected and so CL1 is closed To be checked during the next periodic verification Appropriate action was taken Project documentation was corrected correspondingly Additional action should be taken The project complies with the requirements 9

10 General CL 2 Description of finding Describe the finding in unambiguous style; address the context (e.g. section) The records and data obtained through spot checking during the site visit to the Santa Izabel Ceramic related to biomass reported in this Second Verification Period are different from the data included in the VCS MR v1 in more than 17% on average. Please, clarify that observed difference between the evaluated amount of biomass and the value reported in the MR. Corrective Action #1 This section shall be filled by the PP. It shall address the corrective action taken in details. DOE Assessment #1 In case of non-closure, additional corrective action and DOE assessments (#2, #3, etc.) shall be added. Conclusion Tick the appropriate checkbox The biomass consumption stated in the VCS MR v1 was corrected according to the invoices of biomass. All the invoices will be sent to the validation team. The records and data related to biomass for Santa Izabel Ceramic, as reported in this Second Verification Period, are considered corrected and so CL2 is closed To be checked during the next periodic verification Appropriate action was taken Project documentation was corrected correspondingly Additional action should be taken The project complies with the requirements General CL 3 Description of finding Describe the finding in unambiguous style; address the context (e.g. section) The records and data obtained through spot checking during the site visit to the Santa Izabel Ceramic related to the monthly production of tonnes of ceramic pieces reported in this Second Verification Period for all the monitoring period are quite different from the data included in the VCS MR v1 in more than 17% on average. Please, clarify that observed differences between the evaluated amount of production of ceramic pieces and the value reported in the MR for the whole monitoring period. Corrective Action #1 This section shall be filled by the PP. It shall address the corrective action taken in details. DOE Assessment #1 In case of non-closure, additional corrective action and DOE assessments (#2, #3, etc.) shall be added. Conclusion Tick the appropriate checkbox The monthly production stated in the VCS MR v1 was corrected according to the control of production. This control will be sent to the validation team. The records and data related to monthly production for Santa Izabel Ceramic, as reported in this Second Verification Period, are considered corrected and so CL3 is closed To be checked during the next periodic verification Appropriate action was taken Project documentation was corrected correspondingly Additional action should be taken The project complies with the requirements 10

11 General CL 4 Description of finding Describe the finding in unambiguous style; address the context (e.g. section) The records and data from month of July-2009 related to biomass reported in this Second Verification Period and obtained through spot checking during the site visit to the Itabira Ceramic is different from the data included in the VCS MR v1 in more than 13%. Please, clarify that observed difference between the evaluated amount of biomass and the value reported in the MR. Corrective Action #1 This section shall be filled by the PP. It shall address the corrective action taken in details. DOE Assessment #1 In case of non-closure, additional corrective action and DOE assessments (#2, #3, etc.) shall be added. Conclusion Tick the appropriate checkbox The biomass consumption stated in the VCS MR v1 was corrected according to the invoices of biomass. All the invoices will be sent to the validation team. The records and data from month of July-2009 as well as months of October-2008, November-2008 and June related to biomass reported in this Second Verification Period are considered corrected and so CL4 is closed To be checked during the next periodic verification Appropriate action was taken Project documentation was corrected correspondingly Additional action should be taken The project complies with the requirements General CAR 1 Description of finding Describe the finding in unambiguous style; address the context (e.g. section) The unit for calculated production of ceramic type for Itabira Ceramic as shown at VCS MR calculation spreadsheet is erroneous. The correct unit is tonnes of pieces instead of thousands of pieces (please see cell P5:Q5). Please correct. Corrective Action #1 This section shall be filled by the PP. It shall address the corrective action taken in details. DOE Assessment #1 In case of non-closure, additional corrective action and DOE assessments (#2, #3, etc.) shall be added. Conclusion Tick the appropriate checkbox The monthly production stated in the VCS MR v1 was corrected according to the invoices of selling. The invoices of some months will be sent to the validation team. The production unit was corrected in the VCS MR calculation. The unit for calculated production of ceramic type for Itabira Ceramic as shown at VCS MR calculation spreadsheet was corrected in accordance with the invoices of selling, and therefore the observed error was eliminated, and so CR1 is closed To be checked during the next periodic verification Appropriate action was taken Project documentation was corrected correspondingly Additional action should be taken The project complies with the requirements 11

12 Table 3-3: Responsibilities Responsibility for the Monitoring Mr. Jorge Luiz Bastos Junior from Guaraí Ceramic. Mr. Rafael Diniz from Santa Izabel Ceramic. Mr. Osvaldo Cardoso Filho from Itabira Ceramic Area registration monitoring measurement reporting Table 3-4: Parameter monitored Description of measurement and Name /REF/ monitoring methods. Unit Value MR Q renbiomass Amount of renewable biomass employed PR y Production ceramic devices Origin of renewable biomass of tonnes per month (pieces per month originally in the VCS PD) tonnes per month - From 01/10/2008 to 31/12/2008: 5,867 tons From 01/01/2009 to 31/12/2009: 25,019 tons TOTAL: 30,886 tons From 10/10/2008 to 31/12/2008: 28,240 tons From 01/01/2009 to 31/12/2009: 106,359 tons TOTAL:134,599 tons as verified in the /OSV/ /B.4/ /B.4/ /OSV/ Measured monthly by the project developer. The parameter is monitored through the weight indicated in the buying receipts of the renewable biomasses providers. These values are crosschecked with internal records on biomass received by the ceramics. The specific gravity of each renewable biomass can be used for unit conversion /WEB11/WEB12/ Controlled by the project developer, monthly The ceramic maintain an internal spreadsheet for the control of production that is fed daily. The QA/QC procedure consists of a rigorous register of the daily production for each format produced. The ceramics have an internal control of the production as part of their internal financial balance as required by law /IM01/. Controlled annually by the ceramic owner. The project participant will only buy renewable biomass from the list of its reliable supplier. Depending on the renewable biomass type different criteria must be applied as stated in Table 3.1 of this report. If the ceramic obtain their biomass from other suppliers than listed in the VCS PD they will check the origin of the biomass and provide evidence to the verification team. /REF/ for crosscheck /OSV/ /OSV/ /OSV/ Renewable biomass surplus tonnes or m³ as in /MR/ /PDD/ /B.4/ In order to estimate the leakage emission of the renewable biomass the project participant is monitoring yearly the renewable biomass surplus in the specific region of the project activity. The measurement will be based on national and internal /PDD/ /MR/ 12

13 Leakage of fossil fuel tco2e 0,0 Leakage of renewable biomass tco 2e as in /MR/ /PDD/ /B.4/ /B.4/ and /B.6/ sources. During validation and previous verifications leakage could not be identified so far. According to the general guidance on leakage EB 28 a possible source of leakage is the competing use of biomass. This is the case when the project uses more than 25% of the biomass available in the region. With proper references the PP could show, that there is more than 75% of each biomass available on the marked not used for the project activity /VCS PD/, /MR/. All equipments in use are new and no leakage for the use of fossil fuel is applicable. The verification of this item was included in the site visit. All sources of leakage predicted in the applied methodology are being monitored, annually. It provides information regarding the nonrenewable biomass availability in the specific project region by official statistic data and national surveys. /MR/ /OSV/ /FAE/ /OSV/ The monitoring equipments are controlled based on common industrial practice of the ceramic sector. An internal verification was performed to ensure that the monitoring plan is being followed accordingly with the proposed procedure stated in the VCS PD. The proper use of the internal procedures was checked during the Site Visit. 3.4 Accuracy of Emission Reduction Calculations The approved CDM baseline and monitoring methodology Category AMS-I.C.: Thermal energy for the user with or without electricity Version 13 from March 14th 2008, is applied to the project activity. GHG emission reduction is calculated as baseline emissions minus project emissions minus leakage emissions. As no project and leakage emissions are identified according to the applied methodology, baseline emissions are equal to the amount of emission reduction. Emission reduction is calculated through the estimate value of oil that would be consumed in the absence of the project activity in year y multiplied by the efficiency of the plant using fossil fuel in the absence of the project activity in year y multiplied by Net Calorific Value of oil multiplied by the EF of the projected fossil fuel adopted. The approach used for the emission reduction calculation was considered to be in accordance with the applied methodology. It was verified in the course of this verification that the above-mentioned methodology has been correctly and accurately applied in calculating the total emission reductions and the emission reduction calculation is accurate and conservative. During the Draft phase of the Verification 01 CL was recorded with reference to accuracy of emission reduction calculations, as indicated bellow. 13

14 General CL 5 Description of finding Describe the finding in unambiguous style; address the context (e.g. section) For Guaraí Ceramic, the Validation Report indicated the prevision of an average production of 2,800,000 pieces per month. The production listed in VCS MR Calculation Spreadsheet version 1 has an average of 1,592,104 pieces per month which is almost 43% below the validated value. Please clarify the reason for this reduction in production of pieces and the relation with the use of biomass as defined in the VCS PD. Corrective Action #1 This section shall be filled by the PP. It shall address the corrective action taken in details. DOE Assessment #1 In case of non-closure, additional corrective action and DOE assessments (#2, #3, etc.) shall be added. Conclusion Tick the appropriate checkbox Further the final emission reductions need to be rounded down. The cause of the reduction in the ceramic production was the storms and rain that occurred in the region. The results of this were: Two Abóbodas kilns were partially damaged, a shed was taken away, and a lot of difficulty was faced in the extrusion process due to the high humidity of the clay, thus, reducing even more the production of pieces. The main reason for the reduction in the ceramic production was explained and the fact has been documented for use in the future as needed, and so the CL1 is closed The emission reductions have been rounded down for conservativeness. To be checked during the next periodic verification Appropriate action was taken Project documentation was corrected correspondingly Additional action should be taken The project complies with the requirements 3.5 Quality of Evidence to Determine Emission Reductions The project proponent as evidence of the calculations required to determine the emission reductions submitted several documents in addition to those collected during the On-Site Visit. Refer to Table 5-1. The evidences were assessed and considered as of sufficient quantity and appropriate quality. 3.6 Management and Operational System The management and operational system of the project is suitable. An operational structure was established with responsibilities identified. Staff training plan was clear; training records were available. The quality management and the procedures to address errors and non-conformances were clearly defined /VCS PD/. 14

15 4 Verification Conclusion Carbono Social Serviços Ambientais Ltda has commissioned the TÜV NORD JI/CDM Certification Program to carry out the 2 nd periodic verification of the project: Guaraí, Itabira and Santa IzabelCeramics Switching Fuel Project, with regard to the relevant requirements for CDM project activities. The project reduces GHG emissions due to switching non-renewable sources to renewable biomass fuel for end-user thermal energy generation. This verification covers the period from to In the course of the verification one (01) Corrective Action Request (CAR) and five (05) Clarification Requests (CL) were raised in total. Furthermore none FARs are raised to improve the monitoring system in the future. The verification is based on the draft monitoring report, revised monitoring report, the monitoring plan as set out in the VCS PD, the validation report, emission reduction calculation spreadsheet and supporting documents made available to the TÜV NORD JI/CDM CP by the project participant. As a result of this verification, the verifier confirms that: all operations of the project are implemented and installed as planned and described in the validated project design document. the monitoring plan is in accordance with the applied approved CDM methodology,i.e, AMS-I.C.: Thermal energy for the user with or without electricity Version 13 from March 14th the installed equipment essential for measuring parameters required for calculating emission reductions are calibrated appropriately. the monitoring system is in place and functional. The project has generated GHG emission reductions. As the result of the 2 nd periodic verification, the verifier confirms that the GHG emission reductions are calculated without material misstatements in a conservative and appropriate manner. TÜV NORD JI/CDM CP herewith confirms that the project has achieved emission reductions in the above mentioned reporting period as follows: Emission reductions: Emission reductions: CO 2 [t CO 2] CH 4 [t CH 4] N 2 O [t N 2O] HFCs [t HFC] PFCs [t PFC] SF 6 [t SF 6] Sum [t CO2e] , , ,465 29,465 TOTAL: 37,285 Essen, Essen, Inga Nagel TÜV NORD JI/CDM CP Verification Team Leader Eric Krupp TÜV NORD JI/CDM CP Final approval 15

16 16 VCS Verification Report

17 5 References Table 5-1: Documents provided by the project proponent Reference /VCS PD/ /MR/ /OSV/ /PFT/ /ESLWC/ /ESAW1/ /ESAW2/ /ECR in VCS PD/ /ECT in VCS PD/ /FAE in VCS PD/ /PRO/ /WEB1/ Document Project Design Document Guaraí, Itabira and Santa Izabel switching fuel project Version 01 February 12th, 2009, Version 02-March 26th, 2009, Version 03-May 22th. Monitoring Report of the Second Period Guaraí, Itabira and Santa Izabel Switching Fuel project Version 04 Information/Observation during On-Site Visit including ceramic pieces production, renewable biomasses used, origin of the clay used in production and maintenance of legal requirements and licenses. Appropriate records were retained by the Verification Team as evidences of the On-Site Visit. Contract signed between Carbono Social Serviços Ambientais Ltda and Guaraí, Itabira and Santa Izabel ceramics stating their ownership of the project. Evidence of sustainability and legacy of wood chips for Guaraí Ceramic Evidence of sustainability of afforestation wood for Itabira Ceramic Evidence of sustainability of afforestation wood for Santa Izabel Ceramic Electric consumptions receipts checked during on-site visit. It could be evidenced that the electric consumption and costs are higher than before of the project activity. During Site Visit the data was confirmed. Employee s certificates for training realized regarding process for the project activity. During Site Visit the data was confirmed Financial assessment evidences. Please refer to invoice receipts for the assessment of the pertinent financial data used in the financial spreadsheet calculation. During Site Visit the data was confirmed. Signed BRTÜV Proposal issued for the project activity. It is clearly stated the date of contracting for the verification process. Date 22/12/2009 Website consult on 2010/01/25 ExcedenteAcucar.pps 17

18 Reference Document /WEB2/ /XCS1/ Website consult on 2010/01/25 VCS MR Emission Reduction Calculation Spreadsheet Guaraí, Itabira and Santa Izabel Switching Fuel Project Version 4 Table 5-2: Background investigation and assessment documents Reference /AMS-I.C./ /GHG Protocol/ /IPCC-GP/ /IPCC/ ISO :2006 ISO :2006 ISO :2006 ISO 14065:2007 Document AMS-I.C.: Thermal energy for the user with or without electricity Version 13 from March 14th GHG Protocol for Project Accounting IPCC Good Practice Guidance & Uncertainty Management in National Greenhouse Gas Inventories, IPCC Guidelines for National Greenhouse Gas Inventories: General Guidance and Reporting Greenhouse gases - Part 1: Specification with guidance at the organization level for quantification and reporting of greenhouse gas emissions and removals Greenhouse gases - Part 2: Specification with guidance at the project level for quantification, monitoring and reporting of greenhouse gas emission reductions or removal enhancements. Greenhouse gases - Part 3: Specification with guidance for the validation and verification of greenhouse gas assertions Greenhouse gases - Requirements for greenhouse gas validation and verification bodies for use in accreditation or other forms of recognition /KP/ Kyoto Protocol (1997) /CONAMA 279/ Resolution CONAMA 279 (2001) Environmental National Board /VCS/ Voluntary Carbon Standard Program Guideline

19 Table 5-3: Websites used Reference Link Organization /MCT/ Ministério da Ciência e Tecnologia Technology and Science Department /UNFCCC/ United Nations Framework Convention on Climate Change /VCS/ Voluntary Carbon Standard /DNPM/ National Department of Mineral Production Table 5-4: Interviewed persons and interview topics Interviewed Persons / Entities Mr. Jorge Luiz Bastos Junior from Guaraí Ceramic. Mr. Rafael Diniz from Santa Izabel Ceramic. Mr. Osvaldo Cardoso Filho from Itabira Ceramic Interview topics - Desk review findings - General aspects of the project - Project design, Commissioning and implementation - Technical equipment and operation of the project - Performance of the project - Involved personnel and responsibilities - Training and practice of the operational personnel - Implementation of the monitoring plan - Monitoring and measurement equipment - QA/QC Testing and calibration procedures - Monitored data management - Data quality, archiving and reporting procedures - Data uncertainty and residual risks - GHG calculation - Procedural aspects of the verification 19

20 Table 5-5: List of interviewed people Reference MoI 1 Name Organization / Function /IM01/ V Mr. Ms. Mr. Jorge Luiz Bastos Junior Guaraí Ceramic /IM01/ V Mr. Ms. Mr. Rafael Diniz Santa Izabel Ceramic /IM01/ V Mr. Ms. Mr. Osvaldo Cardoso Filho Itabira Ceramic /IM01/ E,V Mr. Ms. Mr. Rafael Kupper Oliva Carbono Social Serviços Ambientais Ltda Technical Analist /IM01/ E,V Mr. Ms. Mr. Antonio Cubano Carbono Social Serviços Ambientais Ltda - Consultant 1) Means of Interview: (Telephone, , Visit) 20