Determination Report

Transcription

1 Determination Report Determination of the KronoClimate Fuel Switch Project RUSSIAN FEDERATION Report No , revision TÜV Industrie Service GmbH TÜV SÜD Group Carbon Management Service Westendstr Munich - GERMANY

2 Page 2 of 21 Report No. Date of first issue Revision No. Date of this revision Certificate No nd March th April Subject: Executing Operational Unit: Client: Contract approved by: Report Title: Number of pages Determination of a JI Project TÜV Industrie Service GmbH TÜV SÜD Group Carbon Management Service Westendstr Munich - GERMANY C4C Ltd., concepts for carbon Altenbergstrasse Bern SWITZERLAND Michael Rumberg Determination of the JI-Project: KronoClimate Fuel Switch Project, Russian Federation 21 (excluding cover page and annexes) Summary: The Certification Body Climate and Energy of TÜV Industrie Service GmbH TÜV SÜD Group, has been ordered by the Swiss company C4C Ltd., concepts for carbon based in Bern and project correspondent for Krono Holding AG, based in Luzern, Switzerland, to determine the above mentioned project in the context of the ERUPT 5 programme. The determination of this project has been performed by document reviews, interviews by and on-site inspections, audits at the locations of the project and interviews at the offices of the client. As an outstanding issue, documents demonstrating the approval of the project from both countries (The Netherlands and Russian Federation) have not been presented to the audit team. Taking this outstanding issue into consideration, it can be confirmed that otherwise the submitted project documentation is in line with all requirements set by the Marrakech Accords and the Kyoto Protocol. This statement is correct under the prerequisite that the outstanding license to operate is obtained by the plant owner. Additionally the assessment team reviewed the estimation of the projected emission reductions. We can confirm that the indicated amounts of emission reductions of tco 2e in the first phase (years 2006 and 2007) of the intended over-all crediting period from and of tco 2e (to be issued as ERUs) in the second phase ( ) represent a conservative estimation using the assumptions given by the project documents. Work carried out by: Michael Rumberg (Project manager and GHG lead auditor) Ulrich Krause (GHG trainee, ISO 9001 and lead auditor, local expert) Internal Quality Control by: Werner Betzenbichler Thomas Kleiser

3 Page 3 of 21 Abbreviations CAR CR DOE DP EIA / EA ER ERU GHG JI KP MP PDD UNFCCC VVM Corrective action request Clarification request Designated Operational Entity Determination Protocol Environmental Impact Assessment / Environmental Assessment Emission reduction Emission Reduction Unit Greenhouse gas(es) Joint Implementation Kyoto Protocol Monitoring Plan Project Design Document United Nations Framework Convention on Climate Change Validation and Verification Manual

4 Page 4 of 21 Table of Contents Page 1 INTRODUCTION Objective Scope GHG Project Description 5 2 METHODOLOGY Review of Documents Follow-up Interviews Resolution of Clarification and Corrective Action Requests 9 3 DETERMINATION FINDINGS Project Design Findings Issued CARs/CRs Conclusion Baseline and Additionality Findings Issued CARs/CRs Conclusion Monitoring Plan Findings Issued CARs/CRs Conclusion Calculation of GHG Emissions Findings Issued CARs/CRs Conclusion Environmental Impacts Findings Issued CARs/CRs Conclusion Local stakeholder process Findings Issued CARs/CRs Conclusion 19 4 COMMENTS BY PARTIES, STAKEHOLDERS AND NGOS DRAFT DETERMINATION OPINION... 21

5 Page 5 of 21 1 INTRODUCTION 1.1 Objective The Swiss company C4C Ltd., concepts for carbon based in Bern and project correspondent for Krono Holding AG, based in Luzern, Switzerland has commissioned TÜV Industrie Service GmbH TÜV SÜD Group, Carbon Management Service, to conduct a determination of the KronoClimate Fuel Switch Project,Russian Federation, with regard to the relevant requirements for JI project activities. The determination serves as a conformity test of the project design and is a requirement for all JI projects. In particular, the project's baseline, the monitoring plan (MP), and the project s compliance with relevant UNFCCC and host country criteria are validated in order to confirm that the project design as documented is sound and reasonable and meets the stated requirements and identified criteria. Determination is seen as necessary to provide assurance to stakeholders of the quality of the project and its intended generation of emission reductions (in particular ERUs - in the first commitment period under the Kyoto Protocol). UNFCCC criteria refer to the Kyoto Protocol Article 6 criteria and the Guidelines for the implementation of Article 6 of the Kyoto Protocol as agreed in the Marrakech Accords. As the project is submitted under the Dutch ERUPT 5 programme the terms of reference and currently valid programme guidelines for JI project are moreover applicable to the project. 1.2 Scope The determination scope is defined as an independent and objective review of the project design document (PDD), the project s baseline study and monitoring plan and other relevant documents. The information in these documents is reviewed against Kyoto Protocol requirements, UNFCCC rules and associated interpretations. TÜV SÜD has, based on the recommendations in the Validation and Verification Manual, employed a risk-based approach in the determination, focusing on the identification of significant risks for project implementation and the generation of emission reductions 1.3 GHG Project Description The project foresees the installation of two biomass boilers for process heat supply to the Kronostar wood processing factility in Sharja, Russian Federation. The factory is located in the Kostroma province. The factory produces particle board and MDF board. The objective of the project is to replace fossil fuels (mostly peat and heavy fuel oil) by biomass for the energy supply in the factory. Therefore the baseline scenario foresees a financially more attractive solution by installation of a new process heat supply system based on these types of fossil fuels. Compared to this scenario the project avoids carbon dioxide emissions as biomass is considered to be a carbon neutral fuel type.

6 Page 6 of 21 The project installation of the two biomass boilers in Sharja has started in All measures will be implemented until end of The crediting period start January 1, 2006 and last till the end of The project documentation has been developed by C4C Ltd., concepts for carbon in Bern Switzerland in cooperation with NeoSys Ag, Gerlafingen, Switzerland. 2 METHODOLOGY In order to ensure transparency, a determination protocol was customised for the project, according to the Validation and Verification Manual (VVM). The protocol shows, in a transparent manner, criteria (requirements), means of verification and the results from validating the identified criteria. The determination protocol serves the following purposes: It organises, details and clarifies the requirements a JI project is expected to meet; It ensures a transparent determination process where TÜV SÜD has documented how a particular requirement has been validated and the result of the determination. The determination protocol consists for this project of three tables. The different columns in these tables are described in Figure 1. The completed determination protocol is enclosed in Annex 1 to this report.

7 Page 7 of 21 Determination Protocol Table 1: Mandatory Requirements Requirement Reference Conclusion Cross reference The requirements the project must meet. Gives reference to the legislation or agreement where the requirement is found. Determination Protocol Table 2: Requirement checklist This is either acceptable based on evidence provided (OK), or a Corrective Action Request (CAR) of risk or non-compliance with stated requirements. The corrective action requests are numbered and presented to the client in the determination report. O is used in case of an outstanding, currently not solvable issue, AI means Additional Information is required. 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 determination process. Checklist Question Reference Means of verification (MoV) The various requirements in Table 1 are linked to checklist questions the project should meet. The checklist is organised in six different sections. Each section is then further sub-divided. The lowest level constitutes a checklist question. Gives reference to documents where the answer to the checklist question or item is found. 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 non-compliance with the checklist question (See below). Clarification or Additional Information is used when the independent entity has identified a need for further clarification or more information. Determination Protocol Table 3: Resolution of Corrective Action and Clarification Requests Draft report clarifications and corrective action and additional Information requests Ref. to checklist question in table 2 Summary of project owner response Determination conclusion If the conclusions from the draft determination are either a Corrective Action Request or a Clarification or Additional Information Request, these should be listed in this section. Reference to the checklist question number in Table 2 where the Corrective Action Request or Clarification or Additional Information Request is explained. The responses given by the Client or other project participants during the communications with the independent entity should be summarised in this section. This section should summarise the independent entity s responses and final conclusions. The conclusions should also be included in Table 2, under Final Conclusion.

8 Page 8 of Review of Documents The project participants submitted a baseline study, a monitoring and verification plan, a stakeholder consultation document and an EIA study document as well as additional background documents related to the project design and baseline in February A review for all these documents has been performed in order to identify all issues for discussion during the follow-up interviews on-site and by phone or . Subsequently revised project documentation has been submitted in April 2005 which has undergone renewed document review. 2.2 Follow-up Interviews In the period between March 14, 2005 and March 15, 2005 TÜV SÜD performed on-site interviews with project stakeholders to confirm selected information and to resolve issues identified in the document review. Representatives of the Swiss company Kronotec, the Polish company Kronopol and the Russian company Kronostar (project owner) have been interviewed. The main topics of the interviews are summarised in Table 1. The complete and detailed list of all persons interviewed is enclosed in Annex 2 to this report. Table 1: Interview topics Interviewed organisation Kronotec, Kronostar and Kronopol Interview topics Project design, baseline, monitoring plan, environmental impacts, stakeholder comments, additionality, monitoring procedures, documentation, archiving of data, approval of the project, national and sectoral policy

9 Page 9 of Resolution of Clarification and Corrective Action Requests The objective of this phase of the determination is to resolve the requests for corrective actions and clarification and any other outstanding issues which need to be clarified in order to achieve a positive conclusion during the assessment process. Clarification Requests raised by TÜV SÜD have been resolved totally by the revision of the project documentation submitted April Furthermore additional documents have been submitted separately in order to provide the required evidences. To guarantee the transparency of the determination process, the concerns raised are and the responses given is summarised in chapter 3 below. The whole process is documented in more detail in the determination protocol in Annex 1. 3 DETERMINATION FINDINGS In the following sections the findings of the determination are stated. The determination findings for each determination subject are presented as follows: 1) The findings from the desk review of the original project design documents and the findings from interviews during the follow up visit are summarised. A more detailed record of these findings can be found in the Determination Protocol in Annex 1. 2) Where TÜV SÜD has identified issues that needed clarification or that represented a risk to the fulfilment of the project objectives, a Clarification or Corrective Action Request, respectively, has been issued. The Clarification and Corrective Action Requests are stated, where applicable, in the following sections and are further documented in the Determination Protocol in Annex 1. 3) Where Clarification and Corrective Action Requests have been issued, the response by the project participants to resolve these requests is summarized in the determination report. 4) The conclusions of the determination are presented consecutively. 3.1 Project Design Findings A project documentation consisting of a baseline study, a monitoring plan, an EIA study and a stakeholder report has been submitted in February 2005 to the audit team. The project s spatial boundaries of the project are herein clearly described in chapter 3 of the baseline study. The project boundaries include hereby one type of emission reductions: Carbon dioxide emission reduction through heat generation by renewable fuel sources. The employed technology does reflect current good practice concerning the installation and operation of biomass fuelled heat generation plants. It is moreover not likely that the project technology will be substituted by a more efficient technology as the technology applied is considered to be operational for at least 7 years.

10 Page 10 of 21 During the visit on site it was reported that staff received and receives on the job training by the equipment providers. The Russian Federation is a Party to the Kyoto Protocol since November But the audit team has not received a Letter of Approval/ Letter of No Objection regarding the project from the Parties involved yet. From the host Party a Letter of Endorsement has been issued and presented to the audit team. The project starting date is with the year 2002 clearly defined. But no operational lifetime of the project is announced. The crediting period is defined as being from in accordance with the first commitment period defined in the Kyoto Protocol. Furthermore the sales of emission reductions (not ERUs) prior to 2008 is announced. That could be due to a bilateral agreement between Russian Federation and The Netherlands beyond the rules laid down in the Marrakech Accords and therefore outside the assessment criteria used for this validation Issued CARs/CRs Outstanding Issue No. 1: Documents demonstrating the approval of the project from both countries (The Netherlands and Russian Federation) have to be presented to the audit team. The approval by the two governments is beyond the time schedule of this validation. It will be based on this validation/determination report. Outstanding Issue No. 2: National guidelines and procedures (G&P) are currently available for the Dutch tender but not for JI projects in the Russian Federation. It has been indicated that these will be published in June The guidelines are still not available. Clarification Request No. 1: Documents should be submitted to the audit team reflecting the already implemented and/or planned training activities. A detailed explanation of the already implemented and/or planned training activities has been submitted. Clarification Request No.11: An operational lifetime of the project has to be announced. This timeframe should be realistic given the implemented equipment. A statement giving clarification has been inserted in the revised baseline study.

11 Page 11 of 21 Clarification Request No. 26: The contract with the landfill site operator should be submitted in order to ensure the proper depositing of the waste material. The contract with the landfill site operator has been submitted Conclusion The two outstanding issues are beyond the time horizon of the determination and must be considered as being outstanding. Otherwise the project fulfils the belonging criteria set for the approval of JI-projects. 3.2 Baseline and Additionality Findings The ERUPT 5 tender foresees hat the project applies an approved baseline methodology for CDM projects in case such a methodology is available for the project type assessed herewith. At the time of the project design documentation has been developed (starting December 2004) no methodology has been approved by the CDM Executive Board covering the presented project type. The project developer has subsequently applied the generic baseline methodology defined in the ERUPT guidelines and aims towards the specific baseline methodology for fuel switch projects even if the project is not a typical fuel switch project as it is a greenfield project. The discussion and selection of the baseline methodology is considered to be transparent although the project developer does not refer to any specific project type defined in the guidelines mentioned above. All data used is specified and documented. The data level regarding installation specific parameters and operation modes is plant specific whereas the emissions factors are derived from IPCCC sources. All spatial levels are hence considered to be appropriate. Conservative assumptions have been used. The baseline does take into account the major national and/or sectoral policies, macroeconomic trends and political developments. Relevant key factors are described in a very clear and transparent manner and their impact on the baseline and the project risk is evaluated. The description includes economic, legal, political and technological factors. The calculations given in the project documentastion are plausible given the technical equipment to be installed. But no evidence has been given that the prognosis regarding the activity level and whether the efficiency complies with the actual operation mode later on (which determines also baseline emissions). The baseline does nevertheless represent a likely scenario in the non project case as it conforms to all legal requirements and the prevailing practice in the Russian energy and wood processing sector.

12 Page 12 of 21 The assessment team has found convincing evidence that demonstrates that the project is not a business as usual project. But in order to be fully in line with the requirements of the CDM assessment tool for demonstration of additionality further information needs to be given Issued CARs/CRs Clarification Request No. 2: The baseline study assumes that in the baseline case peat and HFO are used as fuels in an 80/20 ratio. This approach is according to the PDD in line with the historic situation but it has not been supported by any documentation. In order to justify this assumption relevant evidence should be submitted to the audit team. Documents which make reference to other projects which are run by peat have been submitted. In addition the local administration confirmed that the former heat supply has been based on peat as the main fuel. Clarification Request No. 3 : The data obtained since the beginning of the project should be submitted in order to confirm the assumptions underlying the definition of the activity level. In addition, the predictions made regarding the demand for process heat should be supported by respective documentation. Data for current production capacities (2004) have been submitted to the audit team. The data complies with the figures in the business plan and hence the planning figures given can be seen as being plausible. For the phase II of the project (MDF production) no actual data is available so far. The predictions made regarding the demand for process heat have been supported by respective documentation and explanation. Clarification Request No. 4: The business plan claims that the project development costs of 1 Mio. in the project scenario are also caused by CDM specific project development. In order to allow a proper comparison of the various scenarios the share of CDM specific project development cost should not be included in the calculation. To be clarified. The client has responded to the issue by giving proper clarification in the sensitivity analysis. Clarification Request No. 5 : The boiler efficiency for the baseline case should be supported by respective sources. No boiler specific information has been submitted. But the assumption that the baseline system will by maximum be as efficient as the project system is deemed plausible and conservative.

13 Page 13 of 21 Clarification Request No. 6 : The figures given for the investment comparison analysis should moreover be supported by figures from a. the attachment to the board decision from October 1, 2001 b. the business plan for the project as outlined in 2002 c. the business plan as submitted to SenterNovem in March/April 2005 The figures in these business plans again should be from traceable sources. Regarding the board decision from 2001 the legal department from Krono Holding confirmed in writing that the data basis for the decision in 2001 has been comparable to the data presented in the baseline study. The business plan form 2002 as well as the draft business plan 2005, to be submitted to SenterNovem, do not support the presented figures as no figures are given for the project assessed herewith but only figures for the whole plant are presented. In contrast the 2005 business plan even refers back to the baseline study. The sources presented for the fuel prices can: a. for peat not demonstrate that the source refers to local prices. But as this issue is covered in the sensitivity analysis the figures are deemed to be acceptable. b. for heavy fuel oil not considered to be conservative but rather in the middle of the price range. But as this issue is covered in the sensitivity analysis the figures are deemed to be acceptable. c. for biomass of limited plausibility as the prices refer to external supply of bark from a study in Finland which also does not demonstrate regional applicability. The audit team does nevertheless consider the results of the investment comparison in combination with the information of sensitivity analysis to be plausible given the frame conditions of the project. This statement is also based on the information from the legal department of the project proponent confirming the correctness of the data and its compliance with 2001 board decision. Clarification Request No. 7 : Evidence should be given regarding the consideration of JI during the phase the investment decision has been made (step 0 of the additionality test). A signed version of the minutes from the board meetings in 2001 should be submitted to the audit team. As a proof for the consideration of JI already in 2003 project planning documents have been submitted to the audit team. In addition the information of JI consideration has been confirmed orally by the Swiss administration to which the project has been presented. The documents form Krono Holding which give evidence that by the time the investment decision has been made JI was considered has also been submitted. Clarification Request No. 8: The alternative scenarios in step 1 of the additionality tool should also consider the implementation of the project without JI.

14 Page 14 of 21 The revised baseline study includes the option to implement the project without JI revenues taken into consideration. Clarification Request No. 9: The common practice test does not reflect the current situation of energy supply in comparable factories in similar frame conditions. The necessary data and information should be added in the project documentation. In response to the clarification request the project proponent has presented an expert opinion from Jaakko Pöyry Consulting confirming the fact that the use of bark for energy generating purposes is not a common practice in wood industry in Russia. Clarification Request No.10: The fifth step of the additionality tool Impact of JI registration includes the statement that the project was determined to be implemented independent from an final approval of the JI project. During conversation on site the project proponent clarified the background for this statement which could lead to the judgement that the project does not comply with the additionlity requirements outlined for JI/CDM projects. Therefore the statement should be clarified in the revision of the PDD. The revised baseline study clarifies that the impact of the JI project has been considered from the beginning but has been only one element in the decision making process. The project can hence be considered as being additional as this approach is not in contradiction to the JI rules Conclusion All responses given to the indicated CRs are resolving the belonging issues. The project fulfils the criteria on baselines as set for the approval of JI-projects. 3.3 Monitoring Plan Findings The ERUPT 5 tender foresees hat the project applies an approved monitoring methodology for CDM projects in case such a methodology is available for the project type assessed herewith. At the time of the project design documentation (PDD) has been developed (starting December 2004) no methodology has been approved by the CDM Executive Board covering the presented project type. The project developer has subsequently applied the generic monitoring methodology defined in the ERUPT guidelines.

15 Page 15 of 21 The proposed monitoring methodology is considered to be a comprehensive approach given the project type. The provisions are consistent with the project boundaries. As the project is designed to be based on a carbon neutral fuel (biomass) no major direct on site project emission occur. Hence also no monitoring has to take place. Also no indicators have been defined and no significant leakage emissions are monitored according to the monitoring plan as there are no emissions to be expected. This approach is deemed to be appropriate. There are several key factors which are required in order to determine the baseline emissions. All these factors will be monitored. But as the methodologies need to be changed (see comments below) also the monitoring plan has to be adjusted. Thus, during the visit on site it became clear that out of the three sub-approaches proposed by the project proponent only two approaches are feasible. The third option is not foreseen to be implemented. Furthermore regarding the methodology No. 1 during the visit at the project site it moreover turned out that more exact data could be obtained by doing measurements in the bunkers instead of measuring shovels. The monitoring methodology does hence not fully allow for conservative, transparent, accurate and complete calculation of the ex post GHG emissions. Moreover no reference to internationally accepted methods is made although part of the monitoring parameters is even obtained form laboratory testing. The current and future responsibilities and quality assurance procedures have been explained during the visit on site in a plausible manner but not specific written documentation has been submitted so far Issued CARs/CRs Clarification Request No.12: Regarding the overall monitoring apporaches the PDD should be adjusted in order to reflect the actual situation on site. The monitoring plan has been adjusted accordingly. Clarification Request No.13: The PDD should be adjusted in order to optimize the first monitoring methodology. The monitoring plan has been adjusted accordingly. Clarification Request No.14: To be in accordance with the ERUPT guidelines reference to internationally accepted methods should be given.

16 Page 16 of 21 The revised monitoring plan contains references to accepted national and international standards. Clarification Request No.15: In order to ensure conservativeness the lower of the two values obtained should be finally applied in the calculated emission reductions. The monitoring plan has been adjusted accordingly. Clarification Request No.16: The calculations of emission reductions in the project documentation includes a reduction of the total emission reduction according to uncertainties related to the data obtained. It should be made clear whether such a calculation will also be applied during the monitoring process or whether such an approach is only applied in the prognosis of the future emissions reductions in order to be conservative. The revised baseline study clearly indicates that the reduction of the total emission reduction according to uncertainties related to the data obtained will only be made in the prognosis but not later on in verification. This approach is deemed sufficient given the monitoring concept applied. Clarification Request No.17: The monitoring plan and the subsequent parameters need to be adjusted according to the corrections made regarding the monitoring methodology. The monitoring plan has been adjusted accordingly. Clarification Request No.18: The project management planning and operation should be documented in writing. The overall organisational structure for the operation of the biomass boilers as well as the already implemented and planned measures and processes have been explained and are considered acceptable. Clarification Request No. 25: The registration/accreditation of the respective laboratory should be submitted. The registration of the laboratory has been submitted to the audit team. Clarification Request No. 27:

17 Page 17 of 21 The monitoring method 2 should be explained given the fact that part of the heat could be produced out of the emergency system resulting in a miscalculation of the emission reductions. The monitoring plan has been adjusted accordingly and monitors separately the heat production of the emergency system Conclusion All responses given to the indicated CRs are resolving the belonging issues. The project fulfils the criteria on baselines as set for the approval of JI-projects. 3.4 Calculation of GHG Emissions Findings The PDD gives a complete and transparent calculation of the project GHG emissions. Emissions of CO 2, CH 4, N2O, HFC s, CF and SF 6 have been assessed and only CO2 has correctly been identified as being relevant for the project. Leakage calculations have been made and deemed being not significant and are hence not further requested. The calculation is based on a spreadsheet, which is described and used by the monitoring plan. All figures and links have been checked. No error has been detected. All data is based either on default values or on the activity level of the project. Both components have been verified during the validation process. But the underlying assumptions and parameters are not supported by clearly referenced sources as for example: Availability of plant Boiler efficiency Heat value of fuels Issued CARs/CRs Clarification Request No.19: According to the ERUPT guidelines project emissions need to be calculated from the start of construction and operation. The missing data should be added. The revised baseline study contains the respective information. Clarification Request No.20/21:

18 Page 18 of 21 The calculation contains baseline/project emissions which later on in the project documentation are in contrast are considered to be not significant. It should be made clear to whether these emissions are relevant for the project or not. The revised baseline study contains the respective information. Clarification Request No.22: The sources for the respective parameters should be clarified. Clarification and explanation has been given regarding the chosen figures. It has been demonstrated that conservative figures have been applied or the client did change the figure (heat value for peat) in order to be conservative Conclusion All responses given to the indicated CRs are resolving the belonging issues. The project fulfils the criteria on baselines as set for the approval of JI-projects. 3.5 Environmental Impacts Findings The description of the environmental impacts is sufficient. Due to the project type and legislative frame conditions, there are no requirements specifically asking for an EIA. The project complies with the environmental legislation in the Russian Federation. A license to operate has been approved by for the first biomass boiler. The licenses for construction have been issued for the second biomass boiler Issued CARs/CRs Clarification Request No.23: The receipt of the license to operate should be included as a monitoring parameter in order to ensure the legal approval of the project. The monitoring plan has been adjusted accordingly.

19 Page 19 of Conclusion All responses given to the indicated CRs are resolving the belonging issues. Under the prerequisite that the outstanding license to operate is obtained which is expected by the audit team, the project fulfils the criteria on baselines as set for the approval of JI-projects. 3.6 Local stakeholder process Findings There has been a lot of effort to conduct a stakeholder process. But the project documentation contains misstatements of activities which have not as planned been carried out so far. The project has been made public in the context of the overall project of plant installation via meetings, articles in newspapers, TV interviews and reports and personal discussion with authorities. There have been no comments, which would have required any further action directly related to the specific project assessed herewith Issued CARs/CRs Clarification Request No.24: The PDD should be corrected according to the actual situation and supporting documents should be submitted such as: Invitation Letter List of participants Summary of feedback of public consultation process (via public hearings/ ) The revised project doumentation has been submitted to the audit team including supporting documents Conclusion All responses given to the indicated CRs are resolving the belonging issues. The project fulfils the criteria on baselines as set for the approval of JI-projects.

20 Page 20 of 21 4 COMMENTS BY PARTIES, STAKEHOLDERS AND NGOS A stakeholder process has taken place on the website of the ERUPT 5 programme (for details see The stakeholder process started February 28, 2005 and lasted for 30 days. Comments could be submitted until March 30, No comments have been received.

21 Page 21 of 21 5 DETERMINATION OPINION TÜV SÜD has performed a determination of the KronoClimate Fuel Switch Project in the Russian Federation. The determination was performed on the basis of relevant JI criteria. The review of the project design documentation and the subsequent follow-up interviews have provided TÜV SÜD with sufficient evidence to determine the fulfilment of stated criteria. As an outstanding issue, documents demonstrating the approval of the project from both countries (The Netherlands and Russian Federation) have not been presented to the audit team. Otherwise, the project meets all relevant UNFCCC requirements for JI under the prerequisite that the outstanding license to operate is obtained. Additionally the assessment team reviewed the estimation of the projected emission reductions. We can confirm that the indicated amounts of emission reductions of tco 2e in the first phase (years 2006 and 2007) of the intended over-all crediting period from and of tco 2e (to be issued as ERUs) in the second phase represent a realistic estimation using the assumptions given by the project documents. As these figures will depend on the future performance of the project, this confirmation gives no guarantee on the realisation. The determination is based on the information made available to us and the engagement conditions detailed in this report. TÜV SÜD can not guarantee the accuracy or correctness of this information. Hence, TÜV SÜD can not be held liable by any party for decisions made or not made based on the determination opinion. Munich, Munich, Werner Betzenbichler Head of Certification Body Climate and Energy Michael Rumberg Responsible Project Manager

22 Annex 1 of 2 Determination Protocol

23 Annex 2 of 2 Determination Reference List