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VALIDATION REPORT

REDUCTION IN STEAM CONSUMPTION THROUGH REVAMPING OF AMMONIA PLANT OF INDIAN FARMERS FERTILIZER COOPERATIVE LTD (IFFCO) PLANTS

REPORT NO. 2006-9023


REVISION NO. 01

DET NORSKE VERITAS

DET NORSKE VERITAS

VALIDATION REPORT
Date of first issue: Project No.:

2006-12-18
Approved by:

46069023.
Organisational unit:

DET NORSKE VERITAS CERTIFICATION LTD


Palace House 3 Cathedral Street London SE19DE United Kingdom http://www.dnv.com

Einar Telnes Director


Client:

DNV Certification, International Climate Change Services


Client ref.:

IFFCO
Summary:

Mr. Subhash Chandra

Det Norske Veritas Certification Ltd. (DNV) has performed a validation of the Reduction in Steam Consumption through Revamping of Ammonia Plant of Indian Farmers Fertilizer Cooperative Ltd (IFFCO) plants project in India on the basis of UNFCCC criteria for the CDM, as well as criteria given to provide for consistent project operations, monitoring and reporting. UNFCCC criteria refer to Article 12 of the Kyoto Protocol, the CDM modalities and procedures and the subsequent decisions by the CDM Executive Board. This validation report summarizes the findings of the validation. The validation consisted of the following three phases: i) a desk review of the project design and the baseline and monitoring plan, ii) follow-up interviews with project stakeholders and iii) the resolution of outstanding issues and the issuance of the final validation report and opinion. In summary, it is DNVs opinion that the project as described in the project design document of 6 November 2006, version 02, meets all relevant UNFCCC requirements for the CDM and correctly applies the approved baseline and monitoring methodology AM0018, version 01. Hence DNV requests the registration of the Reduction in Steam Consumption through Revamping of Ammonia Plant of Indian Farmers fertilizer Cooperative Ltd (IFFCO) plants as a CDM project activity.

Report No.:

Subject Group:

2006-9023
Report title:

Environment

Indexing terms
Key words Service Area

Reduction in Steam Consumption through Revamping of Ammonia Plant of Indian Farmers fertilizer Cooperative Ltd (IFFCO) plants
Work carried out by:

Climate Change Kyoto Protocol Validation Clean Development Mechanism

Verification
Market Sector

Fertilizer Industry

Amit Thusu, Ramachandran Ramesh, Michael Lehmann


Work verified by:

No distribution without permission from the client or responsible organisational unit free distribution within DNV after 3 years Strictly confidential

Chandrashekara Kumaraswamy
Date of this revision: Rev. No.: Number of pages:

2007-01-07

01

5-14

Unrestricted distribution

2002 Det Norske Veritas AS All rights reserved. This publication or parts thereof may not be reproduced or transmitted in any form or by any means, including photocopying or recording, without the prior written consent of Det Norske Veritas AS.

Head Office: Veritasvn. 1, N-1322 HVIK, Norway

DET NORSKE VERITAS Report No: 2006-9023, rev. 01 VALIDATION REPORT

Table of Content
1 1.1 1.2 1.3 2 2.1 2.2 2.3 2.4 3 3.1 3.2 3.3 3.4 3.5 3.6 3.7 3.8 4 5

Page

INTRODUCTION .................................................................................................5-1 Validation Objective 5-1 Scope 5-1 Description of Proposed CDM Project 5-1 METHODOLOGY ................................................................................................5-2 Review of Documents 5-4 Follow-up Interviews 5-4 Resolution of Clarification and Corrective Action Requests 5-4 Internal Quality Control 5-4 VALIDATION FINDINGS ...................................................................................5-5 Participation Requirements 5-5 Project Design 5-5 Baseline Determination 5-7 Additionality 5-8 Monitoring Plan 5-10 Calculation of GHG Emissions 5-11 Environmental Impacts 5-11 Comments by Local Stakeholders 5-11 COMMENTS BY PARTIES, STAKEHOLDERS AND NGOS...........................5-12 VALIDATION OPINION ...................................................................................5-12

REFERENCES..................................................................................................................5-13 Appendix A Validation Protocol Appendix B Certificates of Competence

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Abbreviations
CAR CDM CEF CER CL CO2 CO2e DNV DNA FAI GHG GPCB GWP GOI HTAS HP HT IPCC IFFCO LSHS LP LT MDEA MP MVP NGO ODA PDD PDIL SSCR UPPCB UNFCCC Corrective Action Request Clean Development Mechanism Carbon Emission Factor Certified Emission Reduction Clarification request Carbon dioxide Carbon dioxide equivalent Det Norske Veritas Designated National Authority Fertilizer Association of India Greenhouse gas(es) Gujarat Pollution Control Board Global Warming Potential Government of India M/s Haldor Topsoe High Pressure High Temperature Intergovernmental Panel on Climate Change Indian Farmers Fertilizer Cooperative Limited Low Sulphur Heavy Stock Low Pressure Low Temperature Methyl Diethanol Amine Monitoring Plan Monitoring and Verification Plan Non-governmental Organisation Official Development Assistance Project Design Document M/s Projects and Development India Limited Specific Steam Consumption Ratio Uttar Pradesh Pollution Control Board United Nations Framework Convention on Climate Change

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DET NORSKE VERITAS Report No: 2006-9023, rev. 01 VALIDATION REPORT

1 INTRODUCTION
The IFFCO has commissioned Det Norske Veritas Certification Ltd. (DNV) to validate the Reduction in Steam Consumption through Revamping of Ammonia Plant of Indian Farmers Fertilizer Cooperative Ltd. (IFFCO) plants in India (hereafter called the project). This report summarises the findings of the validation of the project, performed on the basis of UNFCCC criteria for CDM projects, as well as criteria given to provide for consistent project operations, monitoring and reporting. The validation team consists of the following personnel: Ramachandran Ramesh DNV, Chennai Amit Thusu DNV, New Delhi Michael Lehmann DNV, Oslo Chandrashekara Kumaraswamy DNV, Bangalore Team Leader & CDM Validator GHG Auditor Energy sector expert Technical Reviewer

1.1 Validation Objective


The purpose of a validation is to have an independent third party assess the project design. In particular, the project's baseline, monitoring plan, and the projects compliance with relevant UNFCCC and host Party criteria are validated in order to confirm that the project design, as documented, is sound and reasonable and meets the identified criteria. Validation is a requirement for all CDM projects and is seen as necessary to provide assurance to stakeholders of the quality of the project and its intended generation of certified emission reductions (CERs).

1.2 Scope
The validation scope is defined as an independent and objective review of the project design document (PDD). The PDD is reviewed against the criteria stated in Article 12 of the Kyoto Protocol, the CDM modalities and procedures as agreed in the Marrakech Accords and the relevant decisions by the CDM Executive Board, including the approved consolidated baseline and monitoring methodology AM0018, Version 01 /9/. The validation team has, based on the recommendations in the Validation and Verification Manual /11/ employed a risk-based approach, focusing on the identification of significant risks for project implementation and the generation of CERs. The validation is not meant to provide any consulting towards the project participants. However, stated requests for clarifications and/or corrective actions may have provided input for improvement of the project design.

1.3 Description of Proposed CDM Project


The proposed project activity envisages upgradation of the existing plant technology with energy efficient technology, with the objective of reducing the specific steam consumption ratio (SSCR) in the ammonia plants of the urea fertilizer units. The project activity has been proposed at the following three units of IFFCO: Aonla (I &II) located at Bareilly in Uttar Pradesh, India. Phulpur (I & II) located at Allahabad, Uttar Pradesh, India, and Kalol located at Gandhinagar, Gujarat, India

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DET NORSKE VERITAS Report No: 2006-9023, rev. 01 VALIDATION REPORT Several energy efficiency improvement alternatives have been initiated in these plants, which are either representing new technology alternatives, retrofits, new design or waste heat recovery. Through adoption of energy efficient technologies, the project activity aims to reduce consumption of fossil fuels such as coal and LSHS in the Phulpur unit, natural gas in the Aonla unit and naphtha and natural gas in the Kalol plants, and thereby achieve GHG emission reductions. Over the chosen 10 years crediting period starting 1 April 2007, the projects expected annual emission reductions will be on average 295 308 tonnes of CO2 equivalents (tCO2e).

2 METHODOLOGY
The validation consists of the following three phases: i) ii) iii) a desk review of the project design document follow-up interviews with project stakeholders the resolution of outstanding issues and the issuance of the final validation report and opinion.

In order to ensure transparency, a validation protocol was customised for the project, according to the Validation and Verification Manual /11/. The protocol shows in transparent manner criteria (requirements), means of verification and the results from validating the identified criteria. The validation protocol serves the following purposes: It organises, details and clarifies the requirements a CDM project is expected to meet; It ensures a transparent validation process where the validator will document how a particular requirement has been validated and the result of the validation. The validation protocol consists of three tables. The different columns in these tables are described in Figure 1. The completed validation protocol for the Reduction in Steam Consumption through Revamping of Ammonia Plant of Indian Farmers Fertilizer Cooperative Ltd. (IFFCO) plants is enclosed in Appendix A to this report. Findings established during the validation can either be seen as a non-fulfilment of validation protocol criteria or where a risk to the fulfilment of project objectives is identified. Corrective action requests (CAR) are issued, where: i) mistakes have been made with a direct influence on project results; ii) validation protocol requirements have not been met; or iii) There is a risk that the project would not be accepted as a CDM project or that emission reductions will not be certified. The term Clarification may be used where additional information is needed to fully clarify an issue.

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DET NORSKE VERITAS Report No: 2006-9023, rev. 01 VALIDATION REPORT

Validation Protocol Table 1: Mandatory Requirements for CDM Project Activities Requirement The requirements the project must meet. Reference Gives reference to the legislation or agreement where the requirement is found. Conclusion This is either acceptable based on evidence provided (OK), a Corrective Action Request (CAR) of risk or noncompliance with stated requirements or a request for Clarification (CL) where further clarifications are needed. Cross reference Used to refer to the relevant checklist questions in Table 2 to show how the specific requirement is validated. This is to ensure a transparent Validation process.

Validation Protocol Table 2: Requirement Checklist Checklist Question The various requirements in Table 1 are linked to checklist questions the project should meet. The checklist is organised in seven different sections. Each section is then further sub-divided. The lowest level constitutes a checklist question. Reference Gives reference to documents where the answer to the checklist question or item is found. Means of verification (MoV) Explains how conformance with the checklist question is investigated. Examples of means of verification are document review (DR) or interview (I). N/A means not applicable. Comment The section is used to elaborate and discuss the checklist question and/or the conformance to the question. It is further used to explain the conclusions reached. Draft and/or Final Conclusion This is either acceptable based on evidence provided (OK), or a Corrective Action Request (CAR) due to noncompliance with the checklist question (See below).A request for Clarification (CL) is used when the validation team has identified a need for further clarification.

Validation Protocol Table 3: Resolution of Corrective Action Requests and Requests for Clarification Draft report corrective action requests and requests for clarifications If the conclusions from the draft Validation are either a Corrective Action Request or a Clarification Request, these should be listed in this section. Ref. to Table 2 Summary of project participants response The responses given by the project participants during the communications with the validation team should be summarised in this section. Final conclusion

Reference to the checklist question number in Table 2 where the Corrective Action Request or Clarification Request is explained.

This section should summarise the validation teams responses and final conclusions. The conclusions should also be included in Table 2, under Final Conclusion.

Figure 1 Validation protocol tables

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DET NORSKE VERITAS Report No: 2006-9023, rev. 01 VALIDATION REPORT

2.1 Review of Documents


The PDD /1/ submitted by IFFCO and additional background documents related to the project design and baseline were reviewed during the validation /4//5//6/ /7//8//19//20/..

2.2 Follow-up Interviews


On 17 and 18 August 2006, DNV performed interviews with project stakeholders to confirm selected information and to resolve issues identified in the document review. Representatives of IFFCO were interviewed .The main topics of the interviews are summarised in Table 1. Table 1 Interview topics Interviewed organisation IFFCO Interview topics Approval from Host country (India) and Japan. Projects additionality, fertilizer policy in India, commissioning and operating risks of project and details of the investment analysis. Verification of applicability of baseline and monitoring methodology. Data provided for calculation of emission reductions and emission factor of the Western region grid. Procedures for training, calibration of monitoring equipments, maintenance of these equipments, record handling, internal audit, performance review, implementing corrective actions, etc. Legal and environmental compliance and consents. Stakeholders consultation process and comments.

2.3 Resolution of Clarification and Corrective Action Requests


The objective of this phase of the validation was to resolve any outstanding issues which needed to be clarified for DNVs positive conclusion on the project design. The corrective action requests (CAR) and requests for clarifications (CL) raised by DNV were presented to the project participant in DNVs draft validation report and were resolved during communication between the client and DNV. To guarantee the transparency of the validation process, the concerns raised and responses given are documented in the validation protocol in Appendix A (Table 3). Since modification to the project design were necessary to resolve DNVs concerns, the client decided to revise the PDD and resubmitted the PDD (version 02) of 6 November 2006. After reviewing the revised PDD, DNV issued this final validation report and opinion.

2.4 Internal Quality Control


The draft validation report including the initial validation findings underwent a technical review before being submitted to the project participants. The final validation report underwent another technical review before requesting registration of the project activity. The technical review was performed by a technical reviewer qualified in accordance with DNVs qualification scheme for CDM validation and verification. Page 4

DET NORSKE VERITAS Report No: 2006-9023, rev. 01 VALIDATION REPORT

3 VALIDATION FINDINGS
In the following sections the findings of the validation are stated. The validation criteria (requirements), the means of verification and the results from validating the identified criteria are documented in more detail in the validation protocol in Appendix A.

3.1 Participation Requirements


The project participants are IFFCO from India and the Japan Carbon Finance Ltd from Japan. Both parties involved, India and Japan, meet all requirements to participate in the CDM. The DNA of India and the DNA of Japan have approved the project and confirmed their voluntary participation in the CDM project and the projects contribution to sustainable development /2/ /3/. The project contributes to sustainable development by reducing Indias reliance on fossil fuel.

3.2 Project Design


The process modification proposed by IFFCO, India, was developed by IFFCO together with Haldor Topse (HTAS) Denmark, the technology provider for ammonia plant and Projects and Development India Ltd. (PDIL), engineering consultants in the fertilizer sector. The project aims to retrofit existing ammonia plants in an integrated manner with unique energy efficient technology, in order to reduce the specific steam consumption ratio (SSCR) of ammonia plants. This results in reduction in steam consumptions and thereby consequent reduction in the fuel fired ) in the boilers (coal in Phulpur I, LSHS in Phulpur II, natural gas in Aonla I & II, naphtha and natural gas in the Kalol plants). The list of schemes identified for implementation at the three locations of IFFCO is: Sr. No 1 List of energy efficiency schemes to be implemented in the integrated manner in units New Low Temperature (LT) shift guard, Boiler Feed Water (BFW) preheater Will reduce the Carbon mono-Oxide (CO) slippage from the section without increasing the pressure drop across the section, ultimately leading to feed (naphtha, natural gas) reduction and subsequent reduction in steam consumption. The new BFW preheater will improve the heat gain in BFW for the production of high pressure steam and temperature control in the LT shift section Aonla I II Y Y Phulpur I II Y Y Kalol Y

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DET NORSKE VERITAS Report No: 2006-9023, rev. 01 VALIDATION REPORT 2 Installation of S-50 radial flow Synthesis Converter and High Pressure (HP) / Medium Pressure (MP) Boiler The new converter would increase the ammonia conversion per pass thereby reducing the amount of recycled gas entering the synthesis compressor and reducing the load on compressor. The reduced load on the synthesis compressor leads to lesser steam consumption for compressor operations The waste heat boilers would be installed at the downstream of existing converters for utilisation of reaction heat generated in the existing converter. Installation of Make-up Gas Chiller Proposed to install a make up gas chiller at the down stream of final gas cooler to cool the make up gas to 6-80C from 350C. This is expected to increase the volumetric efficiency due to lower inlet temperature of make-up gas leading to reduction in steam consumption in the synthesis gas compressor for the same work output. Synthesis Gas Compressor LP (Low Pressure) & HP case Internal Replacement The new internals of LP & HP case shall be designed to meet the new operating conditions with better compression efficiency based on modern 3-D design. Hence the combined efforts of matching of the system & operating conditions, improvement in efficiency leads to lesser steam consumption in the synthesis compressor. Drying of Make-up Gas and Synthesis Loop Re-piping Installation of ammonia wash unit between LP & HP case of synthesis compressor and synthesis loop re-piping would reduce the power consumption in synthesis and refrigeration compressor as the ammonia would be condensed at the synthesis converter outlet and make up gas would be fed directly to the synthesis converter. The reduction in power consumption of synthesis compressor leads to steam consumption reduction. Complete revamping of CO2 removal system to a modern two-stage GV process It is proposed to modify the single stage GV process to two-stage GV process for reduction of energy consumption, along with a new LP stripper that would regenerate the solution by flashing instead of re-boiling, thus reducing the steam consumption for regeneration of the solution in the stripper.

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DET NORSKE VERITAS Report No: 2006-9023, rev. 01 VALIDATION REPORT Complete revamping of CO2 removal system to a modern 2-stage GV process at Phulpur I The present CO2 removal system is based on low heat Y benfield system. The project activity proposes to modify the same to a 2-stage GV process for reduction of energy consumption, along with a new LP stripper (as in 6 above). 8 Revamping of CO2 removal system to 2-stage a-MDEA process at Kalol The project activity proposes to convert the present aMDEA based one stage CO2 removal system to the aMDEA based two stage system Y- Indicates, a particular new feature proposed at the particular unit of IFFCO. 7

The project design and technology adopted is considered to be innovative and unique and hence not common practice in the industry. This has been substantiated by acknowledgements received from the Fertilizer Association of India (FAI) and Haldor Topse HTAS /7/. These acknowledgements have been verified by DNV. The project design reflects current good practice. Sufficient training to operate and maintain the project equipment has been provided, as per the procedures provided in the CDM manual, developed by IFFCO. The start date of the project activity is 09 November 2004 and the expected operational lifetime of the project activity considered to be 15 years is reasonable. The project developer has chosen a fixed crediting period of 10 years starting from 1 April 2007. No public funding is involved in the project, and the validation did not reveal any information that indicates that the project can be seen as a diversion of ODA funding.

3.3 Baseline Determination


The project applies the approved baseline methodology AM0018 (Version 01), titled Baseline methodology for steam optimization systems /9/, which is applicable to steam optimization projects in production processes with homogeneous and relatively constant outputs with continuous monitoring of steam output. The application of the methodology baseline is justified as the production process of the project proponent is homogeneous and with relatively constant outputs and with continuous monitoring of steam output. Two alternatives to the project activity have been considered (a) the project activity not undertaken as a CDM project and (b) continuation of the current scenario. The selected baseline scenario of the operation of the plant with the current scenario without any modification and with higher steam and fuel consumption is also justified. In accordance with AM0018, the baseline for the project activity has been estimated by determining the Specific Steam Consumption Ratio (SSCR) (SSCR = ton of steam consumed / ton of ammonia produced) prior to the implementation of project activity. The IFFCO project activity has used one-month data prior to project activity implementation (separately for each Phulpur I, Phulpur II, Aonla I, Aonla II and Kalol plants) to determine the baseline for each unit Page 7

DET NORSKE VERITAS Report No: 2006-9023, rev. 01 VALIDATION REPORT and has established that the specific steam consumption ration (SSCR) as a parameter to calculate the emission reduction in the baseline scenario. DNV is able to verify that the baseline SSCR is as tabulated below: Sr No. IFFCO plant Verifiable name plate capacity of ammonia plant (TPD) 1 520 1 520 977 1 520 1 100 Baseline SSCR (ton of steam consumed /ton of ammonia produced) 4.39 4.1857 6.0272 4.2502 5.54

1 2 3 4 5

Aonla- I Aonla-II Phulpur-I Phulpur-II Kalol

In the absence of any seasonal demand variation, one-month baseline data (daily shift-wise average of output values and corresponding steam consumption values) are considered for the baseline scenario and are reasonable. The verifiable name plate capacity of IFFCO plants at all the five locations are correctly described in the PDD and are verified by DNV. The production (ammonia production) for the baseline scenario has been calculated as 5% above or below the verifiable nameplate capacity. Outputs beyond this normal production range have been excluded to derive a representative output level of the day. The values corresponding to the representative output values determined above were estimated from historical data for steam consumption. Steam consumption values corresponding to the excluded output values were excluded. The project boundaries are clearly defined and includes sections of ammonia plant as primary and secondary reformers section, LT and HT shift converter section, CO2 removal section, synthesis loop converter section and boilers (HRSG-1, HRSG-2 and HRU in the Aonla plant, LSHS and coal fired boilers in the Phulpur plant and an auxiliary boiler in the Kalol plant). The emission reductions are determined ex-post by multiplying the improvement of the baseline benchmark SSCR with the actual, monitored output of the project after implementation.

3.4 Additionality
The projects additionality has been demonstrated through the use of the latest Tools for the demonstration and assessment of additionality STEP 0: The starting date for the project activity is 9 November 2004, coinciding with the erection of the first equipment in Phulpur, unit 1, therefore, step 0 is not applicable.

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DET NORSKE VERITAS Report No: 2006-9023, rev. 01 VALIDATION REPORT Communications between IFFCO with CDM consultants regarding the project activity have been evidenced to demonstrate that incentive provided by CDM was critically considered before decision making by the project proponent to ahead with the activity STEP 1: STEP 1a: Two alternatives are identified: [1] Proposed project not undertaken as a CDM project [2] Continuation of the current situation. Alternative [2] has been considered as the baseline scenario as in the absence of project, current processes would be continued as they do not face any barriers. STEP 1b: Both the above listed alternatives comply with all existing statutory rules and regulations. STEP 2: The project proponent has opted for step 3. STEP 3: Investment and Policy Barrier: DNV was able to verify that in India, production and price of urea produced (retention price) is controlled by the Government and the notified sale price of the urea to farmers has been fixed by the Government of India. The cost difference between the notified sale price and retention price of urea is paid as a subsidy to the fertilizer plant by the Government. The subsidy is reimbursed to plant according to feed used, technology and vintage (as per group concession scheme (GCS)). The project activity requires large initial investment (of about INR 4050 Million) to retrofit the existing plant technology with energy efficient technology. In any thermal energy efficiency project, the financial returns of the project mainly would be represented by the cost benefits due to fuel saved. However, in the Indian fertiliser industry, this scenario is quite different. Under the present urea pricing policy, the cost benefit of energy efficiency project implemented in a fertilizer plant is not been reimbursed (subsidized) to the fertilizer plant based on actual cost of fuel saved, but rather on the basic cost (cost excluding tax and transportation) of the cheapest fuel used in the plant. In the baseline scenario, IFFCO does not face this investment barrier. DNV was able to verify that with the current fertilizer policy, IFFCO would be gaining minimal monetary returns from energy efficiency retrofit project and the investment incurred for retrofitting the ammonia plants cannot be fully realized due to the subsidy policy of GOI. This has been verified from the documents (audited by chartered accountant) /6/ provided as evidence to DNV. Barriers to technology: The process modification implemented in the project activity is not a normal process flow route adopted by fertilizer plants, involved in the production of ammonia and urea. The retrofit measure taken by IFFCO (considering the scale of the project) is a first of its kind in Indian fertiliser industry as is evidenced from the acknowledgement from Fertilizer Association of India (FAI) and from the technology supplier HTAS /7/. IFFCO has taken the initiative to go ahead with the project, despite the risk to plant operations and disruptions to production and consequent financial losses. IFFCO also lacked the experience of the new technologies. DNV has been able to verify that the project faces technological Page 9

DET NORSKE VERITAS Report No: 2006-9023, rev. 01 VALIDATION REPORT barriers, as the project has suffered from many commissioning and installation problems, carried out in the running plant, such as heat exchanger leaking, vibration problems and foaming problems. Such occurrence of events has either led to the production losses or plant stoppages. The evidence /8/ for this occurrence has been provided to DNV in order to demonstrate the existence of the technical barrier for the project STEP 4: Implementation of such a capital intensive energy efficiency project is not a common practice in the fertilizer industry because of the prevailing fertiliser policy. DNV is able to verify that IFFCO is the first and the only fertiliser plant in India to implement such a capital intensive energy efficiency retrofit project. The same is evident from acknowledgements provided to DNV from the Fertilizer Association of India (FAI) and HTAS /7/. STEP 5: The impacts of CDM fund are identified from the point of view of removal of barriers discussed above. Thus CDM revenue would help the project proponent to cover the fixed and variable cost of retrofitting the ammonia plant. Also, since the retrofits are not based on common practice, the CDM fund is expected to provide additional coverage to the risk due to failure of projects, shut down of plant and loss of production. Through the use of the additionality tool it has been demonstrated, that the project itself is not a likely baseline scenario. In conclusion, it is deemed likely that the project activity would not have been implemented in the absence of the CDM.

3.5 Monitoring Plan


The project applies the approved monitoring methodology AM0018 (Version 01), titled Baseline methodology for steam optimization systems /9/, which is applicable to steam optimization projects in production processes with homogeneous and relatively constant outputs with continuous monitoring of steam output. The monitoring plan in the PDD adequately addresses all necessary parameters for monitoring and reporting of emission reductions due to the project activity and is confirmed to be in line with the approved methodology. All critical data are either measured or calculated. The main parameters monitored will be: The shift-wise monitoring of quantity of steam used in the ammonia plants using steam flow meter and quantity of ammonia produced. Monitoring the parameters related to boiler operations (HRSG, HRU, LSHS/coal fired boiler, auxiliary boiler) for efficiency calculation e.g. steam enthalpy parameters, fuel parameters, and heat balance parameters. Additional electricity consumption due to the project activity The fuel composition analysis and calorific value. The boiler efficiencies will be estimated.

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DET NORSKE VERITAS Report No: 2006-9023, rev. 01 VALIDATION REPORT Calibration, maintenance of process instrumentation including retrofits will be monitored and have been addressed by the companys established procedures contained in CDM manual developed by IFFCO. The detailed authority and responsibilities including procedures for training, record handling, internal audit, performance review, implementing corrective actions and management review are described and defined in the CDM Manual prepared by IFFCO. Moreover, IFFCO plants are ISO 140001 certified and as such necessary systems already exist. The monitoring practices are considered appropriate. All the data will be archived on paper and electronic form until two years after the crediting period.

3.6 Calculation of GHG Emissions


The calculation of the GHG emissions has been done as per AM0018, version 01. All the aspects related to the direct and indirect GHG emissions have been addressed and the calculations are presented in a transparent manner in separate excel files /4/ /5/. The leakages due to additional electrical load, resulting from the project activity have been addressed on the basis of name plate rating of the electrical equipments. While the Kalol plant relies on grid power supply (western region), Phulpur and Aonla plants are fed with power from their respective captive power plants. The efficiency for self generation is determined ex-post computed from the annual gross electricity generated and annual consumption of fuel. The western regional grid emission factor for the Kalol plant is calculated ex-ante by applying the approved methodology ACM0002. This has been estimated as a combined margin emission coefficient, consisting of the average of approximate operating margin (OM) emission coefficient and a build margin (BM) emission coefficient and verified to be 0.758 kg CO2/ kWh The project on implementation is expected to result in emission reduction to the extent of 2 95 308 tonnes of CO2e per year during the crediting period.

3.7 Environmental Impacts


The environmental regulations do not warrant an environment impact assessment (EIA) as the project does not fall under the purview of the Environmental Impact Assessment (EIA) notification of the Ministry of Environment and Forest, Government of India. No adverse environmental impacts are foreseen. The summary of findings has been addressed in the project design document. The necessary valid permits and consents as dictated by the Indian environmental regulations are verified to be in place /20/.

3.8 Comments by Local Stakeholders


While a formal stakeholder process is not required for this type of project under Indian environmental regulations, IFFCO has identified the elected body of representatives administering the local area, Ministry of Environment & Forest (MoEF), Government of India, project consultants and equipment suppliers as the key stakeholders. Meetings and direct consultation with the stakeholders did not reveal any negative comments.

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4 COMMENTS BY PARTIES, STAKEHOLDERS AND NGOS


The PDD of 17 January 2006 was made publicly available on DNVs climate change website (www.dnv.com/certification/climatechange) and Parties, stakeholders and NGOs were through the CDM website invited to provide comments during a 30 days period from 19 January 2006 to 17 February 2006. No comment was received.

VALIDATION OPINION

Det Norske Veritas Certification Ltd. (DNV) has performed a validation of the Reduction in Steam Consumption through Revamping of Ammonia Plant of Indian Farmers Fertilizer Cooperative Ltd. (IFFCO) plants project in India. The validation was performed on the basis of UNFCCC criteria for the Clean Development Mechanism and host country criteria, as well as criteria given to provide for consistent project operations, monitoring and reporting. The review of the project design documentation and the subsequent follow-up interviews have provided DNV with sufficient evidence to determine the fulfilment of stated criteria. The host country is India and Annex I country is Japan. Both India and Japan fulfil the participation criteria and approved the project and authorized the project participants. The DNA of India confirms that the project assists in achieving sustainable development. The project correctly applies AM0018 version 01 dated 6th December 2004 Baseline Methodology for steam optimisation systems . By implementing a retrofit and process modification in the ammonia plants of the urea fertilizer units the project reduces the specific steam consumption and thereby reduces the fuel consumption for steam generation in the ammonia plant. Hence the project results in reductions of CO2 emissions that are real, measurable and give long-term benefits to the mitigation of climate change. It is demonstrated that the project is not a likely baseline scenario. Emission reductions attributable to the project are hence additional to any that would occur in the absence of the project activity. The total emission reductions from the project are estimated to be on the average 295 308 tCO2e per year over the selected 10 year crediting period. The emission reduction forecast has been checked and it is deemed likely that the state amount is achieved given that the underlying assumptions do not change. Adequate training and monitoring procedures have been implemented. In summary, it is DNVs opinion that the Reduction in Steam Consumption through Revamping of Ammonia Plant of Indian Farmers Fertilizer Cooperative Ltd. (IFFCO) plants project in India, as described in the PDD, version 02 of 06 November 2006, meets all relevant UNFCCC requirements for the CDM and all relevant host country criteria and correctly applies the baseline and monitoring methodology AM0018, version 01. DNV thus requests the registration Page 12

DET NORSKE VERITAS Report No: 2006-9023, rev. 01 VALIDATION REPORT of the Reduction in Steam Consumption through Revamping of Ammonia Plant of Indian Farmers Fertilizer Cooperative Ltd. (IFFCO) plants project as a CDM project activity.

REFERENCES
Documents provided by the project proponent that relate directly to the project: /1/ IFFCO: CDM PDD for the Reduction in Steam Consumption through Revamping of Ammonia Plant of Indian Farmers Fertilizer Cooperative Ltd. (IFFCO) plants in India. Version 01 (of 17 January 2006) and 02 (of 06 November 2006). Ministry of Environment and Forests (DNA of India): Letter of Approval, F.No.4/16/2005-CCC dated 28 October 2005. DNA of Japan: Letter of Approval dated 06 November 2006 and its English translation (IFFCO_English Translation_Annex I Country Approval (Japan).pdf). IFFCO: Spreadsheets documenting the Western Region Grid emission factor calculations (Annexure-13 Western grid emission factor.xls). IFFCO : Spreadsheets documenting the emission reduction calculations for five units Kalol, Phulpur unit I and II, Aonla Unit I and II (Enclosure 1 Emission reduction calculation- Kalol.xls, Enclosure 2 Emission reduction calculation- Phulpur.xls and Enclosure 3 Emission reduction calculation- Aonla.xls). IFFCO: Spreadsheets documenting the Investment (barrier) analysis calculations for demonstrating additionality (Annexure 4 Investment analysis.xls & Annexure 4A Pre set Energy norms. PDF). IFFCO: Letters from FAI and HTAS (showing project is first of its kind) for demonstrating additionality (Annexure 15_certificate_htas_fai.pdf). IFFCO: Documents showing existence of technical barriers for demonstrating additionality (Annexure 5(low suction press).pdf, Annexure 6(leaking heat exchanger).pdf, Annexure 7(vibration problems).pdf, Annexure 8(Foaming problems).pdf, Annexure-10 log sheet - Aonla.pdf).

/2/ /3/ /4/ /5/

/6/

/7/ /8/

Background documents related to the design and/or methodologies employed in the design or other reference documents: /9/ CDM Executive Board: AM0018, Version 01 - Baseline (and monitoring) methodology for steam optimization systems (Version 01 of 06 December 2004). /10/ CDM Executive Board: Tool for the demonstration and assessment of additionality. Version 02 of 28 November 2005. /11/ International Emission Trading Association (IETA) & the World Banks Prototype Carbon Fund (PCF): Validation and Verification Manual. http://www.vvmanual.info Persons interviewed during the validation, or persons who contributed with other information that are not included in the documents listed above: /12/ Mr. N.K. Verma, Sr. Manager- Process (IFFCO, New Delhi) Page 13

DET NORSKE VERITAS Report No: 2006-9023, rev. 01 VALIDATION REPORT /13/ /14/ /15/ /16/ /17/ /18/ Mr. Birinder Singh, Joint General Manager- Projects Services (IFFCO, New Delhi) Mr. A.K. Sinha, General Manager (IFFCO, Kalol) Mr. C.N. Shah, Chief Manager- Process (IFFCO, Kalol) Mr. O.P. Dayama, Sr. Manager- Process (IFFCO, Kalol) Mr. Harish Kumar, Sr. Manager- Process (IFFCO, Aonla) Mr. R. Maiti, Sr. Manager- PE (IFFCO, Phulpur)

Other Documents provided by the Project Participants that have been used as direct sources of evidence for the verification conclusions, and are usually further checked through interviews with key personnel. /19/ Other documents as below providing: Motor rating specifications Name plate capacities for five units - Kalol, Phulpur unit I and II, Aonla Unit I and II Spread sheets demonstrating NH3 production is independent of seasonal variations- for Kalol (Annexure-2 Seasonal variation_kalol.xls). CDM Manual (for detailed procedures for operation, monitoring, responsibility and authority, training, etc) for five units - Kalol, Phulpur unit I and II, Aonla Unit I and II Documents demonstrating CDM was considered at the time of decision making (Annexure-3 CDM Consideration_Validation.pdf) /20/ All environmental approvals/documents as below are from authorised authorities in India: 1) For Kalol (GPCB): Consolidated Consent and Authorisation (for Air, Water and Hazardous wastes): No. CCA/GNR-95/15724 dated 31-05-2005 valid till 30/11/2008 for (consents) and till 12/05/2008 (for Authorisation). 2) For Aonla (UPPCB): Air Consent (16/C-5 dated 29/03/06 valid till 31/12/2006, Water Consent (14/C-5/2006 dated 29/03/06 valid till 31/12/2006 3) For Phulpur (UPPCB): Air Consent (192 dated 06/04/05 valid till 31/12/2006, Water Consent (71 dated 06/04/05 valid till 31/12/2006.

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DET NORSKE VERITAS

APPENDIX A
CDM VALIDATION PROTOCOL

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Table 1

Mandatory Requirements for Clean Development Mechanism (CDM) Project Activities


Reference Kyoto Protocol Art.12.2 Kyoto Protocol Art. 12.2, CDM Modalities and Procedures 40a Kyoto Protocol Art.12.2. Kyoto Protocol Art. 12.5a, CDM Modalities and Procedures 40a Kyoto Protocol Art. 12.5b Kyoto Protocol Art. 12.5c, CDM Modalities and Procedures 43 Conclusion OK Cross Reference / Comment Table 2, Section E.4.1

Requirement 1. The project shall assist Parties included in Annex I in achieving compliance with part of their emission reduction commitment under Art. 3 2. The project shall assist non-Annex I Parties in achieving sustainable development and shall have obtained confirmation by the host country thereof 3. The project shall assist non-Annex I Parties in contributing to the ultimate objective of the UNFCCC 4. The project shall have the written approval of voluntary participation from the designated national authority of each party involved 5. The emission reductions shall be real, measurable and give long-term benefits related to the mitigation of climate change 6. Reduction in GHG emissions shall be additional to any that would occur in absence of the project activity, i.e. a CDM project activity is additional if anthropogenic emissions of greenhouse gases by sources are reduced below those that would have occurred in the absence of the registered CDM project activity 7. In case public funding from Parties included in Annex I is used for the project activity, these Parties shall provide an affirmation that such funding does not result in a diversion of official development assistance and is separate from and is not counted towards the financial obligations of these Parties. 8. Parties participating in the CDM shall designate a national authority for the CDM

OK

Table 2, Section A.3

OK CAR 1 OK

Table 2, Section E.4.1 Clarification of the status of approval by the DNA of India and Japan and letter of participation is required. Table 2, Section E Table 2, Section B.2

OK OK

Decision 17/CP.7, CDM Modalities and Procedures Appendix B, 2 CDM Modalities and Procedures 29

OK

No Public Funding is involved.

OK

Designated National Authority for host party India has been formed under the Ministry of

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Requirement

REDUCTION IN STEAM CONSUMPTION THROUGH REVAMPING OF AMMONIA PLANT OF INDIAN FARMERS FERTILIZER COOPERATIVE LTD (IFFCO) PLANTS

Reference

Conclusion

9. The host Party and the participating Annex I Party shall be a Party to the Kyoto Protocol

CDM Modalities 30/31a

OK

10. The participating Annex I Partys assigned amount shall have been calculated and recorded 11. The participating Annex I Party shall have in place a national system for estimating GHG emissions and a national registry in accordance with Kyoto Protocol Article 5 and 7 12. Comments by local stakeholders shall be invited, a summary of these provided and how due account was taken of any comments received 13. Documentation on the analysis of the environmental impacts of the project activity, including transboundary impacts, shall be submitted, and, if those impacts are considered significant by the project participants or the Host Party, an environmental impact assessment in accordance with procedures as required by the Host Party shall be carried out. 14. Baseline and monitoring methodology shall be previously approved by the CDM Executive Board 15. Provisions for monitoring, verification and reporting shall be in accordance with the modalities described in the Marrakech Accords and relevant decisions of the COP/MOP

CDM Modalities and Procedures 31b CDM Modalities and Procedures 31b

OK OK

Cross Reference / Comment environment and forest. (MoEF). DNA of Japan is The Liaison Committee for the Utilization of the Kyoto Mechanisms formed under, Ministry of Foreign Affairs. Host country India is Party to the Kyoto Protocol having ratified it on August 2002 and Japan ratified it on 4 June 2002. Japans assigned amount is 94% of the emissions in 1990. Japan has in place a national system for estimating GHG emissions and a national registry. Table 2, Section G

CDM Modalities and Procedures 37b CDM Modalities and Procedures 37c

OK

OK

Table 2, Section F

CDM Modalities and Procedures 37e CDM Modalities and Procedures 37f

OK OK

Table 2, Section B.1.1 and D.1.1 Table 2, Section D

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Requirement 16. Parties, stakeholders and UNFCCC accredited NGOs shall have been invited to comment on the validation requirements for minimum 30 days, and the project design document and comments have been made publicly available

Reference CDM Modalities and Procedures 40

Conclusion OK

17. A baseline shall be established on a project-specific basis, in a transparent manner and taking into account relevant national and/or sectoral policies and circumstances 18. The baseline methodology shall exclude to earn CERs for decreases in activity levels outside the project activity or due to force majeure 19. The project design document shall be in conformance with the UNFCCC CDM-PDD format

CDM Modalities and Procedures 45c,d CDM Modalities and Procedures 47 CDM Modalities and Procedures Appendix B, EB Decision

OK

Cross Reference / Comment The PDD was published on www.dnv.com/certification/Clim ateChange, and Parties, stakeholders and NGOs were invited through the UNFCCC CDM website to provide comments on the validation requirement during a period of 30 days, commencing 19 January 2006 to 17 February 2006 and no comment was received. Table 2, Section B.2

OK

Table 2, Section B.2

OK

PDD in conformance with version 02 of the CDM PDD of 1 July 2004.

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Table 2

Requirements Checklist
Checklist Question Ref. MoV* Comments Draft Concl Final Concl

A. General Description of Project Activity


The project design is assessed. A.1. Project Boundaries Project Boundaries are the limits and borders defining the GHG emission reduction project.
A.1.1. Are the projects spatial (geographical) boundaries clearly defined? /1/ DR The geographical boundaries of the project are defined clearly, and located in the IFFCO fertilizer complexes at Kalol, Phulpur and Aonla Yes. The project boundary includes sections of ammonia plant, such as primary and secondary reformers section, LT and HT shift converter section, CO2 removal section and synthesis loop converter section. The steam consumed in primary reformer, process heating and back pressure turbines in this section will be saved as a result of retrofit measures. The flow of steam will be monitored centrally and the project boundary also includes Boilers (HRSG-1, HRSG-2 and HRU in Aonla plant, LSHS and Coal Fired boilers in Phulpur plant and Auxiliary boiler in Kalol plant). OK

A.1.2. Are the projects system (components and facilities used to mitigate GHGs) boundaries clearly defined?

/1/

DR

OK

* MoV = Means of Verification, DR= Document Review, I= Interview


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Checklist Question

Ref.

MoV*

Comments

Draft Concl

Final Concl

A.2. Technology to be employed Validation of project technology focuses on the project engineering, choice of technology and competence/ maintenance needs. The validator should ensure that environmentally safe and sound technology and know-how is used.
A.2.1. Does the project design engineering reflect current good practices? /1/ DR Yes, the project design engineering reflects current good practices as the technology is provided by M/s Haldor Topsoe (HTAS), a leader Ammonia Plants and by M/s Projects and Development India Ltd. (PDIL), who are reputed engineering consultants in fertilizer sector. Yes, the project proposes to use latest technology as this is first of its kind of retrofit project taken up by IFFCO based on M/s Haldor Topse study in India. The technology recommended for energy saving in ammonia plant is unique and IFFCO plants are one of the first in India to implement such combination as is evidenced from the acknowledgement from Fertilizer Association of India (FAI). Not likely, at least not within the operational lifetime of the project. Yes. Since the project involves retrofit taken CL 1 up by IFFCO based on recommendations by M/s Haldor Topsoe, it appears that skills and expertise in developing and implementing the project is not available OK

A.2.2. Does the project use state of the art technology or would the technology result in a significantly better performance than any commonly used technologies in the host country?

/1/

DR/ I

OK

A.2.3. Is the project technology likely to be substituted by other or more efficient technologies within the project period? A.2.4. Does the project require extensive initial training and maintenance efforts in order to work as presumed during the project period?

/1/

DR

OK

/1/

DR/ I

OK

* MoV = Means of Verification, DR= Document Review, I= Interview


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Checklist Question

Ref.

MoV*

Comments

Draft Concl

Final Concl

A.2.5. Does the project make provisions for meeting training and maintenance needs?

/1/

DR

with IFFCO and the PDD does not specifically address requirement and provisions of initial training and maintenance efforts during the project period. Same as in A.2.4. CL 1

OK

A.3. Contribution to Sustainable Development The projects contribution to sustainable development is assessed.
A.3.1. Is the project in line with relevant legislation and plans in the host country? A.3.2. Is the project in line with host-country specific CDM requirements? A.3.3. Is the project in line with sustainable development policies of the host country? A.3.4. Will the project create other environmental or social benefits than GHG emission reductions? /1/ /1/ DR DR/ I DR/ I DR Yes. As per the Indian legislation an EIA is not needed for the project. The project has received approval by the DNA of India and the letter of participation is provided to DNV. The project has received approval by the DNA of India and project is in line with the sustainable development policies of India. Yes, the proposed project appears to reduce fossil fuel consumption, contributes to society by way of providing local employment. OK OK

/1/

OK

/1/

OK

* MoV = Means of Verification, DR= Document Review, I= Interview


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Checklist Question

Ref.

MoV*

Comments

Draft Concl

Final Concl

B. Project Baseline
The validation of the project baseline establishes whether the selected baseline methodology is appropriate and whether the selected baseline represents a likely baseline scenario. B.1. Baseline Methodology It is assessed whether the project applies an appropriate baseline methodology.
B.1.1. Is the baseline methodology previously approved by the CDM Executive Board? /1/ DR Yes, The project applies the approved baseline methodology AM0018 (Version 01, dated 6 December 2004) Baseline methodology for steam optimizing systems. AM0018 / Version 01 is the most suitable CAR 2 methodology for the project activity. However, the following needs to be ascertained with respect to of the methodology application: In respect to the duration of the period representing the historical data in the determination of the Specific Steam Consumption Ratio (SSCR) the PDD (version 01) identifies the historical data of one-month based upon shift-wise output rate as being representative of the baseline. However, it remains uncertain if the historical data is free from seasonal demand variation with respect to (representative) production, energy use and equipment performance, as required by approved methodology AM0018 (Version 01) to OK

B.1.2. Is the baseline methodology the one deemed most applicable for this project and is the appropriateness justified?

/1/

DR/I

OK

* MoV = Means of Verification, DR= Document Review, I= Interview


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Checklist Question

Ref.

MoV*

Comments choose the one-month baseline data.

Draft Concl

Final Concl

B.2.

Baseline Determination

The choice of baseline will be validated with focus on whether the baseline is a likely scenario, whether the project itself is not a likely baseline scenario, and whether the baseline is complete and transparent.
B.2.1. Is the application of the methodology and the discussion and determination of the chosen baseline transparent? /1/ DR Yes. The project fulfils all applicability requirements of the baseline methodology and it has been convincingly demonstrated that the baseline scenario is the Continuation of the current practice where IFFCO continues to emit higher quantity of carbon-dioxide by maintaining the earlier technology status and not carrying out energy efficiency measures. Upon evaluation of the above project data CL 2 the following is noted and requires appropriate clarifications along with evidences so as to demonstrate transparency and conservativeness: For Phulpur I : Power Consumption by additional motors = 417.2 KW For Kalol: Power Consumption by additional motors = 180 KW. As per the methodology AM0018, the effect on emission reductions due to power consumption (from grid) by additional motors needs to be calculated OK

B.2.2. Has the baseline been determined using conservative assumptions where possible?

/1/

DR/I

OK

* MoV = Means of Verification, DR= Document Review, I= Interview


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Checklist Question

Ref.

MoV*

Comments using carbon emission factor of the selected grid determined by combined margin Method. However, IFFCO uses direct value of carbon dioxide emission factor =0.93 Kg CO2/ KWH as per excel sheets for Kalol. It needs to be demonstrated that the carbon emission factor is calculated as per combined margin method for the western regional grid. Common (for All the units): Basis for verifiable name plate capacity (TPD of NH3 production) for Aonla I, Aonla II, Phulpur I, Phulpur II and Kalol = 1520, 1520, 977, 1520, 1100 respectively. Yes, baseline is project activity specific. Yes.

Draft Concl

Final Concl

B.2.3. Has the baseline been established on a projectspecific basis? B.2.4. Does the baseline scenario sufficiently take into account relevant national and/or sectoral policies, macro-economic trends and political aspirations? B.2.5. Is the baseline determination compatible with the available data? B.2.6. Does the selected baseline represent the most likely scenario among other possible and/or discussed scenarios? B.2.7. Is it demonstrated/justified that the project activity itself is not a likely baseline scenario?

/1/ /1/

DR DR/I

OK OK

/1/ /1/

DR DR

Same as B.2.2. Same as B.1.2.

CL 2 CAR 2

OK OK

/1/

DR/ I

Yes, it has been demonstrated through the CAR 3 use of the latest additionality tool that the project itself is not a likely baseline scenario. Step 0:

OK

* MoV = Means of Verification, DR= Document Review, I= Interview


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Checklist Question

Ref.

MoV*

Comments Evidence needs to be provided for demonstrating that incentive provided by CDM was critically considered before decision making by the project proponents. Step 1: Sub-step 1a: Two alternatives are identified : [1] Proposed project not undertaken as a CDM project [2] Continuation of the current situation. Alternative [2] has been considered as the baseline scenario as in the absence of project, current processes would be continued as they do not face any barriers. Moreover, the technology recommended for energy saving in ammonia plant is unique and IFFCO plants are one of the first in India to implement such combination (as is evidenced from the acknowledgement from Fertilizer Association of India (FAI) and from HTAS) and requires additional investments. Sub-step 1b: Both the above listed alternatives comply with all existing statutory rules and regulations. Step 2: Omitted. Step 3: Investment Barrier:

Draft Concl

Final Concl

* MoV = Means of Verification, DR= Document Review, I= Interview


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Checklist Question

Ref.

MoV*

Comments DNV is able to verify that in India, production and price of urea production is controlled by Government and the notified sale price of the urea to farmers has been fixed by Government of India. The cost difference between the notified sale price and retention price of urea is paid as subsidy to the fertilizer plant by government. The subsidy is reimbursed to plant according to feed used, technology and vintage (as per Group Concession Scheme (GCS)). The project activity requires huge initial investment of about INR 4050 Million to retrofit the existing plant technology with energy efficient technology. In any thermal energy efficiency project, the financial returns of the project mainly would be the cost benefits due to fuel saved. However ,in Indian fertiliser industry, this scenario is quite different .Under the present urea pricing policy, the cost benefit of energy efficiency project implemented in a fertilizer plant is not been reimbursed (subsidized) to the fertilizer plant based on actual cost of fuel saved. Whereas the reimbursement is based on the basic cost (cost excluding tax and transportation) of the cheapest fuel used in the plant. In the baseline scenario, IFFCO does not face such investment barrier. However, it remains to be demonstrated quantitatively that with the current fertilizer

Draft Concl

Final Concl

* MoV = Means of Verification, DR= Document Review, I= Interview


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Checklist Question

Ref.

MoV*

Comments policy, IFFCO would be gaining minimal monetary returns from energy efficiency retrofit project and the investment incurred for retrofitting the ammonia plant, cannot be fully realized because of subsidy policy of GOI. Barriers to technology : Fertiliser plants are based on complex and integrated processes for urea manufacturing so IFFCO has taken high risk of retrofitting energy efficient equipments in their present operating system. The retrofit may affect the process parameters and process equipments and lead to malfunctioning of equipments and disruption in operation. The technology for the energy saving retrofit project is provided by Haldor Topse. The energy efficiency retrofit implemented in five units of IFFCO - Kalol, Phulpur unit I and II, Aonla Unit I and II. It is argued that the project faces technological barriers as the retrofit may disrupt prevailing operational parameters and conditions. Since some of the energy saving schemes has been implemented, DNV requests to provide the list of events that have already occurred since implementation of the retrofit so as to demonstrate the technical barrier. The retrofit measure taken by IFFCO (considering the scale of the project) is first

Draft Concl

Final Concl

* MoV = Means of Verification, DR= Document Review, I= Interview


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Checklist Question

Ref.

MoV*

Comments of its kind in Indian fertiliser industry. Hence, IFFCO has lack of experience in such new technologies and unforeseen circumstances may appear which may put the project in risk. Step 4: Implementation of such a capital intensive energy efficiency project is not a common practice in the fertilizer industry because of prevailing fertiliser policy. DNV is able to verify that IFFCO is the first and the only fertiliser plant in India to implement such a capital intensive energy efficiency retrofit project (as is evidenced from the acknowledgement from Fertilizer Association of India (FAI) and from HTAS). Step 5: The impacts of CDM fund are identified from the point of view of removal of barriers discussed above. Thus CDM revenue would help the project proponent to cover the fixed and variable cost of retrofitting the ammonia plant. Also, since the retrofits are not based on common practice and the CDM fund will provide additional coverage to the risk due to failure of projects, shut down of plant and loss of production.

Draft Concl

Final Concl

B.2.8. Have the major risks to the baseline been identified? B.2.9. Is all literature and sources clearly referenced?

/1/ /1/

DR DR

No major risks are foreseen. Yes.

OK OK

* MoV = Means of Verification, DR= Document Review, I= Interview


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Checklist Question

Ref.

MoV*

Comments

Draft Concl

Final Concl

C. Duration of the Project/ Crediting Period


It is assessed whether the temporary boundaries of the project are clearly defined.
C.1.1. Are the projects starting date and operational lifetime clearly defined and reasonable? /1/ DR/ I Yes. The project starting date is 09 November 2004 and its operational lifetime is 15 years. Yes, the project applies for a fixed crediting period of 10 years with no renewals starting from 01 April 2007. OK

C.1.2. Is the assumed crediting time clearly defined (renewable crediting period of seven years with two possible renewals or fixed crediting period of 10 years with no renewal)?

/1/

DR

OK

D. Monitoring Plan
The monitoring plan review aims to establish whether all relevant project aspects deemed necessary to monitor and report reliable emission reductions are properly addressed ((Blue text contains requirements to be assessed for optional review of monitoring methodology prior to submission and approval by CDM EB). D.1.
Monitoring Methodology

It is assessed whether the project applies an appropriate baseline methodology.


D.1.1. Is the monitoring methodology previously approved by the CDM Executive Board? /1/ DR Yes, The project applies the approved monitoring methodology AM0018 (Version 01, dated 6 December 2004) Monitoring methodology for steam optimizing systems. AM0018 / Version 01 are the most suitable methodology for the project activity. OK

D.1.2. Is the monitoring methodology applicable for this project and is the appropriateness justified?
CDM Validation Protocol - Report No. 2006-9023, rev. 01

/1/

DR

OK

* MoV = Means of Verification, DR= Document Review, I= Interview

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Checklist Question D.1.3. Does the monitoring methodology reflect good monitoring and reporting practices? D.1.4. Is the discussion and selection of the monitoring methodology transparent?

Ref. /1/ /1/

MoV* DR/ I DR Yes.

Comments

Draft Concl

Final Concl OK OK

Yes discussion of monitoring methodology is transparent

D.2.

Monitoring of Project Emissions

It is established whether the monitoring plan provides for reliable and complete project emission data over time.
D.2.1. Does the monitoring plan provide for the collection and archiving of all relevant data necessary for estimation or measuring the greenhouse gas emissions within the project boundary during the crediting period? D.2.2. Are the choices of project GHG indicators reasonable? D.2.3. Will it be possible to monitor / measure the specified project GHG indicators? D.2.4. Will the indicators give opportunity for real measurements of project emissions? D.2.5. Will the indicators enable comparison of project data and performance over time? /1/ DR Yes, collection and archiving of data is in paper form. OK

/1/ /1/ /1/ /1/

DR DR DR DR

Yes. CO2 is the only indicator playing role in this project activity. Yes Yes Yes

OK OK OK OK

D.3.

Monitoring of Leakage

It is assessed whether the monitoring plan provides for reliable and complete leakage data over time.
D.3.1. Does the monitoring plan provide for the collection and archiving of all relevant data necessary for determining leakage? D.3.2. Are the choices of leakage indicators
CDM Validation Protocol - Report No. 2006-9023, rev. 01

/1/

DR

Yes.

OK

/1/

DR

Same as D.3.1.

OK

* MoV = Means of Verification, DR= Document Review, I= Interview

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Checklist Question reasonable? D.3.3. Will it be possible to monitor / measure the specified leakage indicators? D.3.4. Will the indicators give opportunity for real measurements of leakage effects?

Ref. /1/ /1/

MoV* DR DR Same as D.3.1. Same as D.3.1.

Comments

Draft Concl

Final Concl OK OK

D.4.

Monitoring of Baseline Emissions

It is established whether the monitoring plan provides for reliable and complete project emission data over time.
D.4.1. Does the monitoring plan provide for the collection and archiving of all relevant data necessary for determining baseline emissions during the crediting period? D.4.2. Is the choice of baseline indicators, in particular for baseline emissions, reasonable? D.4.3. Will it be possible to monitor / measure the specified baseline indicators? D.4.4. Will the indicators give opportunity for real measurements of baseline emissions? /1/ DR Yes, collection and archiving of data is in paper form. OK

/1/ /1/

DR DR

Yes. Yes, itll be possible to measure/monitor the data at regular intervals. Yes.

OK OK OK

D.5.

Monitoring of Sustainable Development Indicators/ Environmental Impacts

It is checked that choices of indicators are reasonable and complete to monitor sustainable performance over time.
D.5.1. Does the monitoring plan provide the collection and archiving of relevant data concerning environmental, social and economic impacts? D.5.2. Is the choice of indicators for sustainability development (social, environmental, economic) /1/ DR As in A.3.1. OK

/1/

DR

As in D.5.1

OK

* MoV = Means of Verification, DR= Document Review, I= Interview


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Checklist Question reasonable? D.5.3. Will it be possible to monitor the specified sustainable development indicators? D.5.4. Are the sustainable development indicators in line with stated national priorities in the Host Country?

Ref. /1/ /1/

MoV* DR DR As in D.5.2 As in D.5.2

Comments

Draft Concl

Final Concl OK OK

D.6.

Project Management Planning

It is checked that project implementation is properly prepared for and that critical arrangements are addressed.
D.6.1. Is the authority and responsibility of project management clearly described? /1/ DR/I While the project proponent is IFFCO, the authority and responsibility for project management lies with the Joint General Manager (Technical) and will be supported by Plant in charge. The detailed authority and responsibilities including procedures for training, calibration of monitoring equipments, maintenance of these equipments, record handling, internal audit, performance review, implementing corrective actions and management review are described and defined in the CDM Manual prepared by IFFCO. Moreover, IFFCO plants are ISO 140001 certified and as such necessary systems already exist. The authority and responsibility for registration, monitoring, measurement and reporting lies with the Joint General Manager (Technical) and will be supported by Plant In charge. Same as in D.6.1. OK

D.6.2. Is the authority and responsibility for registration, monitoring, measurement and reporting clearly described?

/1/

DR

OK

D.6.3. Are procedures identified for training of


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/1/

DR

OK

* MoV = Means of Verification, DR= Document Review, I= Interview

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Checklist Question monitoring personnel? D.6.4. Are procedures identified for emergency preparedness for cases where emergencies can cause unintended emissions? D.6.5. Are procedures identified for calibration of monitoring equipment? D.6.6. Are procedures identified for maintenance of monitoring equipment and installations? D.6.7. Are procedures identified for monitoring, measurements and reporting? D.6.8. Are procedures identified for day-to-day records handling (including what records to keep, storage area of records and how to process performance documentation) D.6.9. Are procedures identified for dealing with possible monitoring data adjustments and uncertainties? D.6.10. Are procedures identified for review of reported results/data? D.6.11. Are procedures identified for internal audits of GHG project compliance with operational requirements where applicable? D.6.12. Are procedures identified for project performance reviews before data is submitted for verification, internally or externally? D.6.13. Are procedures identified for corrective actions in order to provide for more accurate future monitoring and reporting?

Ref. /1/

MoV* DR

Comments Such emergencies are not envisaged considering the nature of the project. Same as in D.6.1. Same as in D.6.1. Same as in D.6.1. Same as in D.6.1.

Draft Concl

Final Concl OK

/1/ /1/ /1/ /1/

DR DR DR DR

OK OK OK OK

/1/

DR

Uncertainties are expected to be minimum, considering the nature of the project. Same as in D.6.1. Same as in D.6.1.

OK

/1/ /1/

DR DR

OK OK

/1/

DR

Same as in D.6.1.

OK

/1/

DR

Same as in D.6.1.

OK

* MoV = Means of Verification, DR= Document Review, I= Interview


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Checklist Question

Ref.

MoV*

Comments

Draft Concl

Final Concl

E.

Calculation of GHG Emissions by Source

It is assessed whether all material GHG emission sources are addressed and how sensitivities and data uncertainties have been addressed to arrive at conservative estimates of projected emission reductions. E.1.Project GHG Emissions The validation of ex-ante estimated project GHG emissions focuses on transparency and completeness of calculations.
E.1.1. Are all aspects related to direct and indirect GHG emissions captured in the project design? E.1.2. Are the GHG calculations documented in a complete and transparent manner? E.1.3. Have conservative assumptions been used to calculate project GHG emissions? E.1.4. Are uncertainties in the GHG emissions estimates properly addressed in the documentation? E.1.5. Have all relevant greenhouse gases and source categories listed in Kyoto Protocol Annex A been evaluated? /1/ DR Yes, all aspects related to direct and indirect GHG emissions are captured in the project design. Yes, the GHG calculations are documented in a complete and transparent manner. Same as in B.2.2. CL 2 No uncertainties are expected for this project. Yes. CO2 is the only gas considered in this project activity. OK

/1/ /1/ /1/

DR DR DR

OK OK OK

/1/

DR

OK

* MoV = Means of Verification, DR= Document Review, I= Interview


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Checklist Question

Ref.

MoV*

Comments

Draft Concl

Final Concl

E.2.Leakage It is assessed whether there leakage effects, i.e. change of emissions which occurs outside the project boundary and which are measurable and attributable to the project, have been properly assessed and estimated ex-ante.
E.2.1. Are potential leakage effects beyond the chosen project boundaries properly identified? /1/ DR Leakage is not required to be identified by the methodology. OK

E.3.Baseline Emissions The validation of ex-ante estimated baseline GHG emissions focuses on transparency and completeness of calculations.
E.3.1. Have the most relevant and likely operational characteristics and baseline indicators been chosen as reference for baseline emissions? E.3.2. Are the baseline boundaries clearly defined and do they sufficiently cover sources and sinks for baseline emissions? E.3.3. Are the GHG calculations documented in a complete and transparent manner? E.3.4. Have conservative assumptions been used when calculating baseline emissions? E.3.5. Are uncertainties in the GHG emission estimates properly addressed in the documentation? E.3.6. Have the project baseline(s) and the project emissions been determined using the same appropriate methodology and conservative assumptions? /1/ DR Yes OK

/1/

DR

Yes

OK

/1/ /1/ /1/

DR DR DR

GHG calculations are documented in a complete and transparent manner. Same as in B.2.2. CL 2 Yes

OK OK OK

/1/

DR/ I

The calculation of Emission reductions for CAR 4 Aonla I and II has not been carried out as per the methodology AM0018 (version 01) and is clearly deviating from the

OK

* MoV = Means of Verification, DR= Document Review, I= Interview


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Checklist Question

Ref.

MoV*

Comments methodology. From the excel sheet calculations for Aonla I &II (as provided to DNV) and PDD (section D.2.4. and E 1-6), it seems that the emission reduction calculations are not done as per the procedure and the formulas provided in the methodology AM0018 (version 1). As required by the methodology, the steam savings have to be converted to equivalent energy savings by taking equipment efficiencies into consideration and finally to CO2 emission reductions, which is not evident in case of Aonla I & II. Also, it is not clear, how the project emission reductions due to power consumption by additional motors are taken in to account for Aonla I & II. Hence, clarification is required to demonstrate that the emission reduction calculations are as per the methodology AM0018. Thus it remains to be demonstrated, that the project is expected to reduce 26 27 110 tCO2/yr over the 10 year crediting period.

Draft Concl

Final Concl

E.4.Emission Reductions Validation of ex-ante estimated emission reductions.


E.4.1. Will the project result in fewer GHG emissions than the baseline scenario? /1/ DR Same as in E.3.6. CAR 4 OK

* MoV = Means of Verification, DR= Document Review, I= Interview


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Checklist Question

Ref.

MoV*

Comments

Draft Concl

Final Concl

F.

Environmental Impacts

Documentation on the analysis of the environmental impacts will be assessed, and if deemed significant, an EIA should be provided to the validator.
F.1.1. Has an analysis of the environmental impacts of the project activity been sufficiently described? Are there any Host Party requirements for an Environmental Impact Assessment (EIA), and if yes, is an EIA approved? F.1.2. Will the project create any adverse environmental effects? F.1.3. Are transboundary environmental impacts considered in the analysis? F.1.4. Have identified environmental impacts been addressed in the project design? Does the project comply with environmental legislation in the host country? /1/ DR The project activity has a positive environmental impact due to reduction in fuel consumption for steam generation. Indian law does not require EIA for the current project activity. No, the project activity will not create any adverse environmental effects. No trans-boundary environmental impacts are expected from the project activity No adverse environmental impact have been identified in the project activity The compliance to environmental legislation of India for project activity was to demonstrated to DNV by providing Air and Water Consents as below: 1) For Kalol (GPCB): Consolidated Consent and Authorisation (for Air, Water and Hazardous wastes): No. CCA/GNR-95/15724 dated 31-052005 valid till 30/11/2008 for (consents) and till 12/05/2008 (for Authorisation). 2) For Aonla (UPPCB): Air Consent (16/C-5 dated 29/03/06 valid till 31/12/2006, OK

/1/

DR

OK

/1/ /1/ /1/ /1/

DR DR DR DR/ I

OK OK OK OK

* MoV = Means of Verification, DR= Document Review, I= Interview


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Checklist Question

Ref.

MoV*

Comments Water Consent (14/C-5/2006 29/03/06 valid till 31/12/2006 3) For Phulpur (UPPCB): Air Consent (192 dated 06/04/05 valid till 31/12/2006, Water Consent (71 dated 06/04/05 valid till 31/12/2006. dated

Draft Concl

Final Concl

G. Stakeholder Comments
The validator should ensure that a stakeholder comments have been invited and that due account has been taken of any comments received.
G.1.1. Have relevant stakeholders been consulted? /1/ DR/ I DR Yes, the stakeholders public consultation meeting had been organised to consult the relevant stakeholders. Invitation to local villagers and elected representatives was given by IFFCO through printed invitation letters. Copy of invitation letters was available to DNV. Since, the project activity is not required to have environmental clearance; the stake holders consultation process is not required as per host country legislations / laws. Yes. There were no negative stakeholder comments. Same as G.1.4. OK

G.1.2. Have appropriate media been used to invite comments by local stakeholders?

/1/

OK

G.1.3. If a stakeholder consultation process is required by regulations/laws in the host country, has the stakeholder consultation process been carried out in accordance with such regulations/laws? G.1.4. Is a summary of the stakeholder comments received provided? G.1.5. Has due account been taken of any stakeholder comments received?

/1/

DR

OK

/1/ /1/

DR DR

OK OK

* MoV = Means of Verification, DR= Document Review, I= Interview


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Table 3

Resolution of Corrective Action and Clarification Requests


Ref. to Table 2 Summary of project participants response Final conclusion

Draft report corrective action requests and requests for clarifications

CAR 1: Table Clarification of the status of approval by the S.No. 4 DNA of India and Japan and letter of participation is required.

1/ The approval from DNA of India OK. This has been provided. The CAR 1 (F.No.4/16/2005-CCC dated 28 is therefore closed. October 2005) and approval from the DNA of Japan (dated 6 November 2006) has been obtained and submitted to DNV. In India, fertiliser industry is under the essential commodity act. The production and distribution is being governed and monitored by Government through various government policies. As well as, Fertiliser plant (ammoniaurea plant) is continuous production plant and production rate of fertiliser plant remains almost constant and does not vary. The above criterias ensures the constant nature of production output (Urea, Ammonia etc.,) of the plant through out the year irrespective of seasonal demand and variation. To substantiate further, please find attached documents showing, Monthwise SCCR of Ammonia plant of Kalol unit for one year from 1March 2004- 30 April 2005 (before start of project activity). The analysis clearly purports that the SCCR does not vary OK. DNV is able to verify that there are no substantial seasonal variations in the specific steam consumption ratios. So, one month data is considered reasonable for determining baseline emissions. The CAR 2 is therefore closed.

CAR 2: B.1.2., AM0018, Version 01 is the most suitable B.2.6. methodology for the project activity. However, the following needs to be ascertained with respect to of the methodology application: In respect to the duration of the period representing the historical data in the determination of the Specific Steam Consumption Ratio (SSCR) the PDD identifies the historical data of one-month based upon shift-wise output rate as being representative of the baseline. However, it remains uncertain if the historical data is free from seasonal demand variation with respect to (representative) production, energy use and equipment performance, as required by approved methodology AM0018 (Version 01) to choose the one-month baseline data.

* MoV = Means of Verification, DR= Document Review, I= Interview


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Draft report corrective action requests and requests for clarifications

Ref. to Table 2

Summary of project participants response


substantially with seasonal variations during the year. Hence one month baseline data as per the methodology is chosen.

Final conclusion

CAR 3: B.2.7. The following clarifications are sought with respect to additionality and application of the additionality tools as they appear in the PDD: Evidence needs to be provided for demonstrating that incentive provided by CDM was critically considered before decision making by the project proponents. However, it remains to be demonstrated quantitatively that with the current fertilizer policy, IFFCO would be gaining minimal monetary returns from energy efficiency retrofit project and the investment incurred for retrofitting the ammonia plant, cannot be fully realized because of subsidy policy of GOI. It is argued that the project faces technological barriers as the retrofit may disrupt prevailing operational parameters and conditions. Since some of the energy saving schemes have been implemented, DNV requests to provide the list of events that have already occurred since implementation of the retrofit so as to demonstrate the technical barrier.

OK. The following response is provided: DNV is able to verify that CDM was The required document is enclosed considered at the time of decision as evidence proving that CDM was making. considered at the time of decision making. DNV is able to verify that the project The document (audited by faces risks due to the government policy and high project cost. chartered accountant) showing investment analysis (Annexure-4 & DNV is able to verify, that the project 4A. ) is enclosed as an evidence has faced many commissioning and to demonstrates that IFFCO would installation problems such as heat gain minimal monetary returns exchanger leaking, vibration from the project on account of problems, foaming problems. Such existing fertilizer policy of occurrence of events has either led government of India. to the production losses or After implementing couple of stoppages. The evidence for their energy savings measures, IFFCO occurrence has been provided has started facing following demonstrating the existence of operational/ technological technical barrier for the project. problems: The PDD now projects additionality based on barrier analysis (through investment, technological barriers), Retrofitting of LT Shift guard and etc. BFW preheater in existing ammonia plant: Implementation of the project activity by After implementation of this proposal, overcoming the above barriers IFFCO is not able to achieve optimum effectively demonstrates the additionality CO slip i.e project activity parameter of the project. In conclusion, it is not synchronizing with prevailing

* MoV = Means of Verification, DR= Document Review, I= Interview


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Draft report corrective action requests and requests for clarifications


Version 01 of the PDD argued additionality through Investment barrier, however version 02 is arguing by barrier analysis. So, clarification is required on why the argument for additionality was changed from financial to the barrier analysis in the PDD from version 01 to 02.

Ref. to Table 2

Summary of project participants response


production process / parameters. The CO slip has increased subsequently, thus increasing synthesis gas loop pressure and disrupting prevailing operating conditions. The LT shift guard contains Zinc/ Copper promoted catalyst of lower volume. Since the lower volume catalyst is used in the guard, IFFCO is facing many operational risks /problems like Low suction pressure in synthesis gas compressor which is limiting suction volume of LP synthesis gas compressor, any disruption in upstream operation may lead to exhaust of the catalyst and this scenario will affect operating condition/parameters of process gas and may even lead to plant shutdown. Evidence is provided (Annexure 5) to DNV. The reaction taking place in LTS guard is exothermic in nature therefore BFW preheater is installed after the LTS guard. In the BFW preheater, any failure/ leakage of tubes may lead to disruption of process gas flow and other operating parameters. This would subsequently lead to plant shutdown and production loss. Kalol plant of IFFCO has already experienced 2 or 3 times leakage in

Final conclusion
deemed likely that the project activity would not have been implemented in the absence of the CDM. The barriers of technology and its non-prevalence as identified above do not exist for the baseline scenario. The CAR 3 is

therefore closed.

* MoV = Means of Verification, DR= Document Review, I= Interview


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Draft report corrective action requests and requests for clarifications

Ref. to Table 2

Summary of project participants response


tubes of BFW preheater which has caused plant downtime and production loss. Evidence is provided (Annexure 6) to DNV. The moisture/water (because of leakage) carry over in process gas may damage LTS converter catalyst Revamping of existing CO2 removal system After revamping of existing CO2 removal system, Kalol plant faced severe vibration problem in FV-14 line and downstream line. This was due to mismatch between prevailing operating parameters/ conditions with the project activity parameters. Evidence is provided (Annexure 7) to DNV. IFFCO is facing has to face many problems like Higher LP flash temperature, difficulty in control the level in CO2 stripper etc, these problems may lead to stoppage of CO2 removal section. Moreover, a-MDEA system has higher foaming problem compared to existing system (Please refer Annexure 8 for details). Foaming problem leads to various malfunctioning like falls indication of level of solution in absorber and stripper, cavitations problem in process etc. under this

Final conclusion

* MoV = Means of Verification, DR= Document Review, I= Interview


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Draft report corrective action requests and requests for clarifications

Ref. to Table 2

Summary of project participants response


scenario CO2 removal rate may get affected leading to abrupt changes in urea production which leads to functional losses. Evidence is provided (Annexure 8) to DNV. After revamping of existing CO2 removal system in Phulpur plant. IFFCO is facing following problems. Evidence is provided (Annexure 9) to DNV. In earlier CO2 removal system, (based on Lo-Heat Benfield Process), four reboilers, two Process Gas Reboilers and two Steam Reboilers supplied heat to both the strippers running in parallel. After modifying to 2-stage GV system, one steam reboiler was removed and all other three reboilers were connected to HP stripper to supply total regeneration heat. In the new GV system, IFFCO has to face many operational problems during passivation of the system. The Steam Reboilers were used to maintain the desired K2CO3 solution temperature at about 80 -100 deg C. But after the modification, only one Steam Reboiler was available because heat from Process Gas Reboilers was not available at this stage of plant start-up.

Final conclusion

* MoV = Means of Verification, DR= Document Review, I= Interview


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Draft report corrective action requests and requests for clarifications

Ref. to Table 2

Summary of project participants response


The heat supplied by only Steam Boiler became insufficient to maintain the solution temperature. Solution temperature could only be maintained after the Process Gas Reboilers were taken in line, which caused 24 hours delay in production. During commissioning IFFCO faced ensuing barriers. In the modified system, diverting rich solution to both HP Stripper and LP Stripper controls level of CO2 Absorber. Feeding of semi lean and lean solution from HP Stripper to LP Stripper controls level of LP Stripper and level of HP Stripper gets controlled automatically. During commissioning, the level indication of HP Stripper was erratic. Indicated level was much less than the actually prevailed. After introduction of process gas in the Process Gas Reboilers, it was observed that lean and semi lean solution temperature in HP Strippers gradually increased and level of LP Strippers gradually decreased, which led to reduction in circulation rate and finally stoppage of circulation. The scheme is a revamping measure so their lies a huge operating risk of project activity not synchronizing with prevailing production process / parameters. IFFCO has faced many

Final conclusion

* MoV = Means of Verification, DR= Document Review, I= Interview


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Draft report corrective action requests and requests for clarifications

Ref. to Table 2

Summary of project participants response


problems due to mismatch of design and operating parameters. As per process design, before entering to Process Gas Reboilers, process gas is cooled down to a temperature of 1730C by generating steam in Condensate Reboiler (501-C). Steam generated in Condensate Reboiler is directly fed to HP Stripper as live steam. Process gas temperature at the inlet of Process Gas Reboilers is controlled via a side stream flow control valve, which bypasses a fraction of process gas. After stabilizing the total plant, optimization of parameters in modified system was started. But LP steam supplied to Steam Reboilers could not be reduced beyond 3.5 MT/hr against the guaranteed figure of 1.5 MT/hr. Further reducing steam to Steam Reboiler below 3.5 MT/hr, overall water balance with in the system got disturbed and level in Condensate Reboiler could not be maintained with out taking DM Water from outside. This was due to lesser amount of condensate formed in the Over Head Condensate system. After analyzing the problem, it was found that heat load of Condensate Reboiler was more than design value, which demanded more condensate for

Final conclusion

* MoV = Means of Verification, DR= Document Review, I= Interview


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Draft report corrective action requests and requests for clarifications

Ref. to Table 2

Summary of project participants response


maintaining the desired level. Temperature of process gas at the inlet of Process Gas Reboilers was 162 0C against the design value of 1730C though the by-pass flow control valve was full open. Theoretical estimations based on the design pressure drop of the control valve indicated that only half of the process gas would flow through the by-pass control valve even at full open condition. IFFCO has to take substantial efforts and also risks developing the project activity. Since the technology is new, the failure of the system may result in the stoppage of GV plant, which may stop the main plant incurring heavy financial losses. After revamping of existing CO2 removal system in Aonla plant. IFFCO is facing problem in GV lean solution cooler-The cooler is used for cooling lean GV solution (fed to the suction of pump P-2301) and pre-heating DM water which is used in downstream systems. The cooler is a plate type exchanger and the cooler is very critical equipment because any leakage in the cooler will lead to the stoppage of the plant due to nonavailability of the solution at the inlet of

Final conclusion

* MoV = Means of Verification, DR= Document Review, I= Interview


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Draft report corrective action requests and requests for clarifications

Ref. to Table 2

Summary of project participants response


the GV lean solution pump. Aonla plant has already experienced leakage in the cooler affecting functioning of CO2 removal section. Evidence is provided (Annexure 10) to DNV. After implementing only few energy savings measures, IFFCO has started facing above mentioned operational/technological problems and certain operational problems has lead to production losses also. IFFCO is anticipating more operational risks and technological problems after implementation of all energy savings measures of the project activity. Hence CDM revenue would cover up the operating risks of the project activity and also would help in covering up any production losses and subsequent financial losses. The energy efficiency project of IFFCO faces both technical and financial barriers. In version 01 of PDD, additionality was demonstrated through financial route only (IRR analysis). Since the project faces both technical and financial barrier, in version 02 of PDD, to further strengthen the additionality technical barriers

Final conclusion

* MoV = Means of Verification, DR= Document Review, I= Interview


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Draft report corrective action requests and requests for clarifications

Ref. to Table 2

Summary of project participants response


faced by the project is illustrated. The financial additionality is demonstrated through investment barrier approach by conducting financial analysis (Payback period analysis). As an industry practice, IFFCO Aonla uses Manufacturers table and charts (Gas Turbine and HRSG) to determine the input energy required for Gas turbine or HRSG for a particular power or steam production rate. This chart is revalidated once in year, by conducting efficiency test of Gas Turbine and HRSG system at different loads.

Final conclusion

CAR 4: E.3.6., The calculation of emission reductions for E.4.1. Aonla I and II has not been carried out as per the methodology AM0018 (version 01) and is clearly deviating from the methodology. From the Excel sheet calculations for Aonla I &II (as provided to DNV) and PDD (section D.2.4. and E 1-6), it seems that the emission reduction calculations are not done as per the procedure and the formulas provided in the methodology AM0018 (version 1). As required by the methodology, the steam savings have to be converted to equivalent energy savings by taking equipment efficiencies into consideration and finally to CO2 emission reductions, which is not evident in case of Aonla I & II. Also, it is not clear, how the project emission reductions due to power consumption by additional motors are taken in to account for Aonla I & II. Hence, clarification is required to demonstrate that the emission reduction calculations are as per the methodology AM0018. Thus it remains to be demonstrated, that the project is expected to reduce 26 27 110 tCO2/yr over the 10 year crediting period.

OK. DNV is able to verify that the PDD (version 02) correctly applies AM0018 and the emission reductions are correctly and conservatively calculated in line with the formulas given in AM0018.

DNV is able to verify that the project is expected to reduce 29 53 080 tCO2/yr The emission reduction calculation of over the 10 year crediting period. The Aonla plant was calculated according CAR 4 is therefore closed. to AM0018 methodology, in version 01 of the PDD, except for slight change in approach in step -9 of AM0018. Now, the emission reductions calculations are done in line with the formulas and approach as given in AM0018 and the PDD of version 02 reflects the same. Also, now the leakages due to additional electrical load are also addressed and the PDD (version 02) reflects the same. Because of the changes as above, the expected emission reductions from the

* MoV = Means of Verification, DR= Document Review, I= Interview


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Draft report corrective action requests and requests for clarifications

Ref. to Table 2

Summary of project participants response

Final conclusion

CL 1: A.2.4., Since the project involves retrofit taken up by A.2.5. IFFCO based on M/s Haldor Topsoe, It appears that skills and expertise in developing and implementing the project is not available with IFFCO and the PDD does not specifically address requirement and provisions of initial training and maintenance efforts during the project period. CL 2: B.2.2., Upon evaluation of the above project data the B.2.5., following is noted and requires appropriate E.1.3. clarifications along with evidences so as to demonstrate transparency and conservativeness: For Phulpur I : Power Consumption by additional motors = 417.2 KW For Kalol: Power Consumption by additional motors = 180 KW. As per the methodology AM0018, the effect on emission reductions due to Power Consumption (from Grid) by

project activity are reported to be 29 53 080 tCO2/yr over the 10 year crediting period in place of that indicated in version 01 of the PDD. IFFCO has developed CDM Manual OK. Now, the PDD addresses the (and is provided to DNV) that lays provisions and procedures for the down procedures for training, training. Therefore this CL 1 is closed. maintenance, etc. Moreover, IFFCO plants are ISO 14001 certified and the systems for training and maintenance already exist. Now, PDD addresses the provisions and procedures for the same. OK. DNV is able to verify that PDD has corrected and appropriate The following corrections are done in been the PDD and are supported with the clarifications supported by evidences are provided to DNV. Therefore this CL evidence which are provided to DNV: 2 is closed. For Phulpur I : Power Consumption by additional motors = 472.2 KW. Specification sheets are provided as evidence to DNV. For Kalol: Power Consumption by additional motors = 180 KW. Specification sheets are provided as evidence to DNV. Kalol unit is located in Gujarat state of India and western region grid

* MoV = Means of Verification, DR= Document Review, I= Interview


CDM Validation Protocol - Report No. 2006-9023, rev. 01

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DET NORSKE VERITAS

REDUCTION IN STEAM CONSUMPTION THROUGH REVAMPING OF AMMONIA PLANT OF INDIAN FARMERS FERTILIZER COOPERATIVE LTD (IFFCO) PLANTS

Draft report corrective action requests and requests for clarifications


additional motors needs to be calculated using carbon emission factor of the selected grid determined by Combined margin Method. However, IFFCO uses direct value of Carbon dioxide emission factor =0.93 Kg CO2/ KWH as per excel sheets for Kalol. It needs to be demonstrated that the carbon emission factor is calculated as per combined margin method for the western regional grid. Common (for All the units): Basis for verifiable name plate capacity (TPD of NH3 production) for Aonla I, Aonla II, Phulpur I, Phulpur II and Kalol = 1520, 1520, 977, 1520, 1100 respectively.

Ref. to Table 2

Summary of project participants response


emission factor is applicable. Now, the revised western region grid emission factor calculated according to ACM0002 (0.75861 Kg CO2/ KWH) has been used in the calculations. The excel sheet for calculation western grid emission factor is provided to DNV. Common (for All the units): Evidences to demonstrate verifiable name plate capacity (TPD of NH3 production) for Aonla I, Aonla II, Phulpur I, Phulpur II and Kalol = 1520, 1520, 977, 1520, 1100 respectively are provided to DNV.

Final conclusion

- o0o -

* MoV = Means of Verification, DR= Document Review, I= Interview


CDM Validation Protocol - Report No. 2006-9023, rev. 01

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DET NORSKE VERITAS

APPENDIX B
CERTIFICATES OF COMPETENCE

Report No. 2006-9023, rev. 01

CERTIFICATE OF COMPETENCE Kumaraswamy Chandrashekara


Qualification in accordance with DNVs Qualification scheme for CDM/JI (ICP-9-8-i1-CDMJI-i1
GHG Auditor: CDM Validator: CDM Verifier: Industry Sector Expert for Sectoral Scope(s): Technical Reviewer for (group of) methodologies: ACM0001, AM0002, AM0003, AM0010, AM0011, AM0012, AMS-III.G ACM002, AMS-I.A-D, AM0019, AM0026, AM0029 ACM003, ACM0005, AM0033, AM0040 ACM0004 ACM0006, AM0007, AM0015, AM0036, AM0042 ACM0007 ACM0008 ACM0009, AM0008, AMS-III.B AM0006, AM0016, AMS-III.D AM0009, AM0037 AM0013, AM0022, AM0025, AM00379, AMSIII.H, AMS-III.I AM0014 AM0017 AM0018 AM0020 Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes AM0021 AM0023 AM0024 AM0027 AM0028, AM0034 AM0030 AM0031 AM0032 AM0035 AM0038 AM0041 AM0034 AMS-II.A-F AMS-III.A AMS-III.E, AMS-III.F Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes JI Validator: JI Verifier: ---

Sectoral scope 4 & 5

Hvik, 6 November 2006

Einar Telnes Director, International Climate Change Services

Michael Lehmann Technical Director

Report No. 2006-9023, rev. 01

CERTIFICATE OF COMPETENCE Michael Lehmann


Qualification in accordance with DNVs Qualification scheme for CDM/JI (ICP-9-8-i1-CDMJI-i1
GHG Auditor: CDM Validator: CDM Verifier: Industry Sector Expert for Sectoral Scope(s): Technical Reviewer for (group of) methodologies: ACM0001, AM0002, AM0003, AM0010, AM0011, AM0012, AMS-III.G ACM002, AMS-I.A-D, AM0019, AM0026, AM0029 ACM003, ACM0005, AM0033, AM0040 ACM0004 ACM0006, AM0007, AM0015, AM0036, AM0042 ACM0007 ACM0008 ACM0009, AM0008, AMS-III.B AM0006, AM0016, AMS-III.D AM0009, AM0037 AM0013, AM0022, AM0025, AM00379, AMSIII.H, AMS-III.I AM0014 AM0017 AM0018 AM0020 Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes AM0021 AM0023 AM0024 AM0027 AM0028, AM0034 AM0030 AM0031 AM0032 AM0035 AM0038 AM0041 AM0034 AMS-II.A-F AMS-III.A AMS-III.E, AMS-III.F Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes JI Validator: JI Verifier: Yes Yes

Sectoral scope 1,2,3 & 9

Hvik, 6 November 2006

Einar Telnes Director, International Climate Change Services

Michael Lehmann Technical Director

Report No. 2006-9023, rev. 01

CERTIFICATE OF COMPETENCE

Ramesh Ramachandran
Qualification in accordance with DNVs Qualification scheme for CDM/JI (ICP-9-8-i1-CDMJI-i1
GHG Auditor: CDM Validator: CDM Verifier: Industry Sector Expert for Sectoral Scope(s): Yes Yes Yes JI Validator: JI Verifier: ---

Sectoral scope 13 (wastewater)

Hvik, 6 November 2006

Einar Telnes Director, International Climate Change Services

Michael Lehmann Technical Director

Amit Thusu
Qualification in accordance with DNVs Qualification scheme for CDM/JI (ICP-9-8-i1-CDMJI-i1
GHG Auditor: CDM Validator: CDM Verifier: Industry Sector Expert for Sectoral Scope(s): Yes ---JI Validator: JI Verifier: ---

Hvik, 6 November 2006

Einar Telnes Director, International Climate Change Services

Michael Lehmann Technical Director

Report No. 2006-9023, rev. 01

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