Verification Report for Orica Carseland Works
Transcription
Verification Report for Orica Carseland Works
Verification Report for Orica Carseland Works Nitric Acid Plant 2: Nitrous Oxide (N2O) Abatement From Nitric Acid Production Offset Project Prepared for: Capital Power Corporation 8th floor, 505 2 Street SW Calgary, Alberta T2P 1N8 & Orica Canada Inc. P.O. Box 250 Carseland, Alberta T0J 0M0 Prepared by: Stantec Consulting Ltd. 845 Prospect Street Fredericton, NB E3B 2T7 Project Number: 1232-10331 March 17, 2014 VERIFICATION REPORT FOR ORICA CARSELAND WORKS NITRIC ACID PLANT 2: NITROUS OXIDE (N2O) ABATEMENT FROM NITRIC ACID PRODUCTION OFFSET PROJECT TABLE OF CONTENTS EXECUTIVE SUMMARY .......................................................................................................................... 1 1.0 1.1 1.2 1.3 1.4 INTRODUCTION ......................................................................................................................... 1 PROJECT DESCRIPTION................................................................................................................. 1 1.1.1 Location ....................................................................................................................... 1 PROCESSES AND ACTIVITIES ......................................................................................................... 1 BASELINE AND PROJECT CONDITIONS ....................................................................................... 2 GHG ASSERTION ............................................................................................................................ 2 2.0 2.1 2.2 2.3 2.4 2.5 2.6 VERIFICATION METHODOLOGY ............................................................................................... 4 VERIFICATION OBJECTIVES........................................................................................................... 4 LEVEL OF ASSURANCE .................................................................................................................. 4 VERIFICATION CRITERIA ................................................................................................................ 4 VERIFICATION SCOPE ................................................................................................................... 4 MATERIALITY ................................................................................................................................... 5 VERIFICATION PLAN ...................................................................................................................... 5 3.0 3.1 VERIFICATION TEAM: QUALIFICATIONS, ROLES AND RESPONSIBILITIES ................................. 6 STATEMENT OF COMPLIANCE WITH THE SGER ........................................................................... 6 4.0 4.1 4.2 4.3 4.4 4.5 4.6 VERIFICATION ACTIVITIES ......................................................................................................... 7 INHERENT RISK ................................................................................................................................ 7 CONTROL RISK ............................................................................................................................... 7 DETECTION RISK ............................................................................................................................. 7 SITE VISIT .......................................................................................................................................... 9 VERIFICATION PROCEDURES........................................................................................................ 9 CONFIRMATIONS......................................................................................................................... 10 5.0 SUMMARY OF FINDINGS......................................................................................................... 11 6.0 6.1 6.2 CONCLUSION ......................................................................................................................... 16 OPINION ....................................................................................................................................... 16 SUBMISSION DOCUMENTS .......................................................................................................... 16 7.0 CLOSURE ................................................................................................................................. 17 March 17, 2014 i VERIFICATION REPORT FOR ORICA CARSELAND WORKS NITRIC ACID PLANT 2: NITROUS OXIDE (N2O) ABATEMENT FROM NITRIC ACID PRODUCTION OFFSET PROJECT LIST OF TABLES Table E.1 Table 1.1 Table 3.1 Table 4.1 Table 5.1 Table 5.2 Verification Summary ...............................................................................................E.1 GHG Assertion ............................................................................................................. 3 Verification Team ....................................................................................................... 6 Schedule of Verification Activities ........................................................................... 8 Verification and Sampling Plan .............................................................................. 11 Identified Misstatements and Resolutions ............................................................. 15 LIST OF APPENDICES Appendix A Appendix B ii Final Verification Plan Submission Documents March 17, 2014 VERIFICATION REPORT FOR ORICA CARSELAND WORKS NITRIC ACID PLANT 2: NITROUS OXIDE (N2O) ABATEMENT FROM NITRIC ACID PRODUCTION OFFSET PROJECT EXECUTIVE SUMMARY A summary of the verification of Orica Carseland Works Nitric Acid Plant 2: Nitrous Oxide (N2O) Abatement From Nitric Acid Production Offset Project (the Project) is provided in Table E.1. Table E.1 Verification Summary Project Name Orica Carseland Works Nitric Acid Plant 2: Nitrous Oxide (N2O) Abatement From Nitric Acid Production Offset Project Project Description Project Start Date The Project reduces greenhouse gas (GHG) emissions associated with nitric acid production by using a dedicated catalyst to abate the nitrous oxide formed during ammonia oxidation in the nitric acid plant. 264077 Township Road 221, Carseland, Alberta T0J 0M0 (50 km southeast of Calgary); latitude 20033E to 200730E, 23063N to 25296N. March 29, 2012 Credit Start Date March 29, 2012 Credit Duration Period March 29, 2012 to March 29, 2020 Expected Lifetime of the Project Project Contact 20 years Applicable Quantification Protocol Other Environmental Attributes Project Registration Quantification Protocol for Nitrous Oxide Abatement from Nitric Acid Production (version1.0, October 2009) No other environmental attributes / credits / benefits have been claimed by the Project as asserted by the Project Developer. The Project is registered under the Alberta Emissions Offset Registry (AEOR). Ownership Orica Canada Inc. GHG Assertion The fundamental assertion verified is the quantification of 116,860 t CO2e in GHG reductions for the period of January 1, 2013 to December 31, 2013 resulting from the direct GHG emission reductions from the NAP2 plant due to the abatement of N2O as a result of the presence of the secondary catalyst in the ammonia burner under the primary catalyst where the abatement of N2O takes place. The SGER and ESRD require the verifier to conduct sufficient procedures to deliver a reasonable level of assurance. The verification was planned and executed accordingly. Climate Change and Emissions Management Act (the Act), SA 2003, c C-16.7; Specified Gas Emitters Regulation (SGER) Alta Reg. 139/2007; Technical Guidance for Offset Project Developers (version 4.0, February 2013); and Quantification Protocol for Nitrous Oxide Abatement from Nitric Acid Production (October 2009, V1.0) The objective of the verification was to assess whether the Project Report and the GHG assertion satisfies the verification criteria above. The verification was conducted in accordance with ISO 14064:3, ISO 14065, and guidance contained within the Technical Guidance for Greenhouse Gas Verification at Reasonable Level Assurance, January 2013, version 1.0. Project Location Level of Assurance Verification Criteria Verification Objective Verification Standards March 17, 2014 Jeff Zubach, Health and Environment Specialist 264077 Township Road 221 Carseland, AB, T0J 0M0, Canada T: (403) – 936 - 2228 E: [email protected] www.orica.com E.1 VERIFICATION REPORT FOR ORICA CARSELAND WORKS NITRIC ACID PLANT 2: NITROUS OXIDE (N2O) ABATEMENT FROM NITRIC ACID PRODUCTION OFFSET PROJECT Table E.1 Verification Summary Project Activity Verification Summary The Project Activity is eligible under the SGER to generate offsets as it meets the following conditions. Result from actions taken on or after January 1, 2002 – the Project began operation after this date. Be real, demonstrable, quantifiable – the Project has been verified according to the Verification Criteria above. Not be required by law – the Project is not required by any current or proposed law. Have clearly established ownership – the Project Developer provided sufficient and appropriate evidence that Orica owns the offset credits generated by the Project. Be counted once for compliance purposes – the Project’s offset credits are serialized on the Alberta Emission Offset Registry (AEOR). Be verified by a qualified third party – Stantec is a qualified third party (see Section 1.0, 3.1, and Statement of Qualifications). Have occurred in Alberta – the Project is physically located in Alberta. No unresolved material misstatements were identified in the Project Report (including the Project Offset Plan) as submitted. The GHG assertion for the Project is deemed to be fairly presented and substantiated by sufficient and appropriate evidence. A reasonable level assurance verification statement is issued herein Verification Team Lead Verifier Designated Signing Authority Project Manager Christina Flogeras, P.Eng. Christina Flogeras, P.Eng. Independent Peer Reviewer Joe Harriman, Ph.D., P.Chem. Senior Reviewer Verification Timeframe Daniel Hegg, M.Sc., EMIT November 2013 to February 2014 Site Visit Dates November 18, 2013 Report Date March 17, 2014 E.2 Daniel Hegg, M.Sc., EMIT March 17, 2014 VERIFICATION REPORT FOR ORICA CARSELAND WORKS NITRIC ACID PLANT 2: NITROUS OXIDE (N2O) ABATEMENT FROM NITRIC ACID PRODUCTION OFFSET PROJECT 1.0 INTRODUCTION Stantec Consulting Ltd. (Stantec) was contracted by Capital Power Corporation (CPC) to conduct an independent third-party verification of the greenhouse gas (GHG) assertion provided in the Orica Carseland Works (Orica) Nitric Acid Plant 2: Nitrous Oxide Abatement From Nitric Acid Production Project Report (Project Report) dated March 12, 2014. The Orica plant site operates two Nitric Acid Plants referred to as NAP1 and NAP2. Orica produces low density prilled ammonium nitrate which is used for mining, construction and logging industries. The NAP2 plant began operation in 1998 to produce ammonia (NH3) using a GPN Mono Pressure Process which oxidizes ammonia on platinum-rhodium catalyst gauze and absorbs nitrogen oxide gases in water. The oxidation reaction of ammonia that takes place on the platinum-rhodium catalyst has a side reaction which produces N2O. The Project consists of the installation of a dedicated secondary catalyst, Johnson Matthey (Yara 58-Y1) abatement catalyst in Orica’s Nitric Acid Plant 2 (NAP 2) below the precious metal catalyst gauze to abate the nitrous oxide. The NAP1 Project is being verified as a separate Project. In this work, Orica was responsible for the collection of data used in the calculations and data management. Orica was responsible for the completion of the calculations, presentation of the information within the Project Report, and for the supporting technical documents. Stantec is a qualified third party verifier, as defined in Section 18 of the SGER. Stantec is accredited with the American National Standards Institute (ANSI), a member of the International Accreditation Forum (IAF), in accordance with ISO 14065 (Accreditation ID #0805 issued to Stantec Consulting Ltd. Atmospheric Environment Group for greenhouse gas (GHG) verification). Stantec was responsible for planning and executing the verification in order to deliver an opinion as to whether the Project Report is presented fairly and in accordance with the verification criteria. Stantec resubmitted this verification report after addressing comments from the Alberta Emissions Offset Registry. The revisions include clarifying text, adding increased detail to the Executive Summary, and adding one immaterial qualitative disclosure. 1.1 PROJECT DESCRIPTION 1.1.1 Location The Project is located 50 kilometers southeast of Calgary near Carseland, Alberta. The longitude and latitude is 20033E to 200730E and 23063N to 25296N respectively. 1.2 PROCESSES AND ACTIVITIES The Project, as defined in the Project Report, involves the creation of GHG emission offset credits due to the abatement of N2O as the result of the presence of the secondary catalyst in the ammonia burner under the primary catalyst, in NAP2, where the abatement of N2O takes place. The facility includes two nitric acid plants (NAP1 and NAP2) which have the ability to produce approximately 480,000 metric tonnes of low density prilled ammonium nitrate per year for use in mining, March 17, 2014 1 VERIFICATION REPORT FOR ORICA CARSELAND WORKS NITRIC ACID PLANT 2: NITROUS OXIDE (N2O) ABATEMENT FROM NITRIC ACID PRODUCTION OFFSET PROJECT construction and logging industries. Ammonium nitrate is obtained from the chemical reaction of nitric acid and ammonia. The plant also produces nitric acid which is used as a reactant in ammonium nitrate production. The Project consists of the installation of a dedicated secondary catalyst below the primary catalyst (precious metal catalyst gauze) to destroy N2O emissions. The NAP2 plant began operation in 1998 to produce nitric acid (HNO3) using a GPN Mono Pressure Process which oxidizes ammonia on platinum-rhodium catalyst gauze and absorbs nitrogen oxide gases in water. The plant has a production rate of 310 tonnes per day. In order to reduce the GHG emissions from the process, a dedicated catalyst was installed under the platinum rhodium catalyst gauze to reduce N2O production. Orica installed a N2O monitoring system (known as PROCAL P-200) at NAP2 in 2011 to measure the N2O emissions in order to establish the baseline and project N2O emissions. The PROCAL P-200 system consists of an ultrasonic flow monitor (measuring gas volumetric flows) and an infrared unit (measuring N2O concentration). This system is installed within the stack of NAP2. Upon completion of the baseline (1 catalyst campaign), Orica installed a Heraeus N 2O abatement catalyst (HR-SC) on March 29, 2012 which was only used until September 2013 as this catalyst did not perform as expected. On September 17, 2013 a Johnson Matthey catalyst, Yara 58-Y1 was installed in an attempt to boost abatement. Nitric acid is produced from the oxidation of liquid ammonia in both NAP1 and NAP2. During the production process, the oxidation reaction of ammonia takes place on a platinum rhodium catalyst (primary catalyst) where a side reaction produces N2O. This side reaction of ammonia oxidation is a source of N2O emissions which is the only GHG emission relevant to this Project. As such, the catalyst acts to reduce N2O that would otherwise be vented to the atmosphere through the stack. The Project boundary encompasses the physical and geographical site of the plant and the equipment for the entire production process. This includes all compressors, tail gas expander turbines and any nitrous oxide (N2O) abatement equipment installed. Emission reductions are calculated as the difference between the baseline emissions and the project emissions. 1.3 BASELINE AND PROJECT CONDITIONS The baseline condition for NAP2 is defined as the amount of N2O that would be released to the atmosphere through the stack in the absence of the secondary catalyst in the ammonia burner. The related Sources, Sinks and Reservoirs (SSR) included in the baseline are presented in B1 Nitric Acid Plant (Burner Inlet to Stack) of the Project Report. The Project condition is defined as the amount of N2O that would be released to the atmosphere through the stack with the presence of the secondary catalyst in the ammonia burner under the primary catalyst where the abatement of N2O takes place. The related SSRs included in the baseline are presented in P1 Nitric Acid Plant (Burner Inlet to Stack) of the Project Report. 1.4 GHG ASSERTION The fundamental assertion to be verified is that the Project Report dated March 12, 2014 meets the criteria of ESRD for the period of January 1, 2013 to December 31, 2013 (see Section 2.3). 2 March 17, 2014 VERIFICATION REPORT FOR ORICA CARSELAND WORKS NITRIC ACID PLANT 2: NITROUS OXIDE (N2O) ABATEMENT FROM NITRIC ACID PRODUCTION OFFSET PROJECT The claimed emissions reductions as part of the GHG assertion verified by Stantec are presented in Table 1.1 below. Table 1.1 GHG Assertion Year January 1 – December 31, 2013 Baseline Emissions (t CO2e) 249,906 Project Emissions (t CO2e) 133,042 Emission Reductions (t CO2e) 116,860 Notes: Emission Reductions are rounded down as per Guidance. March 17, 2014 3 VERIFICATION REPORT FOR ORICA CARSELAND WORKS NITRIC ACID PLANT 2: NITROUS OXIDE (N2O) ABATEMENT FROM NITRIC ACID PRODUCTION OFFSET PROJECT 2.0 VERIFICATION METHODOLOGY 2.1 VERIFICATION OBJECTIVES The objective of the verification was to assess whether the GHG assertion (as presented in Table 1.1) for the Project Report under the SGER satisfied the ESRD requirements in the verification criteria in accordance with the verification standards identified in Section 2.3. 2.2 LEVEL OF ASSURANCE The SGER and ESRD require the verifier to conduct sufficient procedures to deliver a reasonable level of assurance. The verification was planned and executed accordingly. 2.3 VERIFICATION CRITERIA Stantec has conducted sufficient and appropriate procedures in order to express a reasonable level of assurance opinion as to whether the Project (the GHG assertion) satisfies the requirements of the: Climate Change and Emissions Management Act (the Act), SA 2003, c C-16.7; Specified Gas Emitters Regulation (SGER) Alta Reg. 139/2007; Technical Guidance for Offset Project Developers (version 4.0, February 2013); and Quantification Protocol for Nitrous Oxide Abatement from Nitric Acid Production (version1.0, October 2009). The verification was conducted in accordance with ISO 14064:3, ISO 14065:2013, and the Technical Guidance for Greenhouse Gas Verification at Reasonable Level Assurance, January 2013, version 1.0 (Verification Guidance). 2.4 VERIFICATION SCOPE The verification is for the Project period of January 1, 2013 to December 31, 2013. The verification covers the specified gases under the Act and the SGER. These include carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), sulphur hexafluoride (SF6), hydrofluorocarbons (HFCs) and perfluorocarbons (PFCs). The total GHG emissions are reported as equivalent tonnes of carbon dioxide (t CO2e) emissions. Sources of project GHG emissions include: Nitric Acid Production (N2O): Abatement of nitric oxide during the production of nitric acid through the oxidization of ammonia using a secondary catalyst Sources of baseline GHG emissions at the Project are: 4 Nitric Acid Production (N2O): No abatement of nitric oxide during the production of nitric acid. March 17, 2014 VERIFICATION REPORT FOR ORICA CARSELAND WORKS NITRIC ACID PLANT 2: NITROUS OXIDE (N2O) ABATEMENT FROM NITRIC ACID PRODUCTION OFFSET PROJECT 2.5 MATERIALITY ESRD has set the quantitative materiality threshold at 5% of the total reported GHG emission reductions or removals asserted. Qualitative misstatements are at the discretion of the verification body. 2.6 VERIFICATION PLAN A copy of the final verification plan is provided in Appendix A. The activities described therein were executed during the course of the verification. The sampling plan, a subset of the verification plan, is outlined along with the final results in Section 5.0 of this report. March 17, 2014 5 VERIFICATION REPORT FOR ORICA CARSELAND WORKS NITRIC ACID PLANT 2: NITROUS OXIDE (N2O) ABATEMENT FROM NITRIC ACID PRODUCTION OFFSET PROJECT 3.0 VERIFICATION TEAM: QUALIFICATIONS, ROLES AND RESPONSIBILITIES The verification team is identified in Table 3.1. Table 3.1 Verification Team Name Role Responsibilities Christina Flogeras, P.Eng. Lead Verifier Lead and delegate verification duties. Designated Signing Authority on verification documents. Daniel Hegg, M.Sc., EMIT Senior Reviewer/Project Manager Independent Peer Reviewer Carry out project management duties. Review verification deliverables technical soundness and compliance with Stantec’s internal processes. Independent review of verification deliverables for consistency with Stantec templates, adherence to ISO 14064:3, ISO 14065, and ESRD compliance. Lead desktop review with supervision from Lead Verifier. Joe Harriman, Ph.D., P.Chem. Rengarajan Vaiyapuri, M.Eng. Junior Verifier Full details of the qualifications of the project team are included in the final verification plan located in Appendix A. 3.1 STATEMENT OF COMPLIANCE WITH THE SGER Mrs. Christina Flogeras is the signing authority for the report. She is a professional engineer registered by the Professional Engineers and Geoscientists of New Brunswick which satisfies Section 18(a)(ii)(A) of the SGER. With respect to the technical knowledge required under Section 18(b)(i-iii), each member of the team has the required technical knowledge of GHG emission quantification methodologies and all have experience in completing third party GHG verifications. Please refer to the team profiles included in the verification plan in Appendix A. 6 March 17, 2014 VERIFICATION REPORT FOR ORICA CARSELAND WORKS NITRIC ACID PLANT 2: NITROUS OXIDE (N2O) ABATEMENT FROM NITRIC ACID PRODUCTION OFFSET PROJECT 4.0 VERIFICATION ACTIVITIES Details of the verification activities undertaken are set out in the final verification plan included in Appendix A and summarized in Section 5.0 of this report. The verification and sampling plans for this facility were developed considering our assessment of the verification risk for the engagement. We assessed the initial verification risk as Medium1. The final verification risk is deemed to be Low based on the results of the verification procedures undertaken. This final risk assessment is shown based on the assessment of inherent, control and detection risk as follows. 4.1 INHERENT RISK Inherent risk is the risk of error that occurs as a result of the lack of capacity by staff; the size/complexity of the organization or GHG project; the industrial sector; and/or, the technologies or processes being applied in the organization or GHG project. We regard this risk as Low due to: This is the second verification completed by Stantec for NAP2. Stantec is familiar with Orica’s processes and processes and data collection procedures (low risk). Data used to calculate emission reductions are measured using analyzers meeting the Alberta CEMS code, which has prescribed quality assurance and control procedures (low risk). The analyzers are regularly maintained, inspected, and calibrated. Some analyzers undergo Relative Accuracy Test Audits or Compressed Gas Audits as required by ESRD (low risk). 4.2 CONTROL RISK Control risk is the risk that the proponent’s control system will not detect and rectify a misstatement. We regard this risk as Low due to: Quality assurance and control checks on the data from the site data historian are performed manually, but are checked by senior management and are used to report to ESRD (low risk). Based on the previous verification on these Projects by Stantec, the data for the emission reduction calculations are copied manually from the data historian spreadsheet and thus there is risk of transcription errors (low risk). On-site meters automatically sample and record data electronically on the site’s Distributed Control System (DCS) every 5 to 10 seconds (low risk). 4.3 DETECTION RISK Detection risk is the risk that Stantec will not identify a material misstatement. We regard this risk as Low due to: 1 Possible risk ratings are “high”, “medium” and “low”. These are based on inherent, control, and detection risks as evaluated by the project team prior to engaging in verification activities. March 17, 2014 7 VERIFICATION REPORT FOR ORICA CARSELAND WORKS NITRIC ACID PLANT 2: NITROUS OXIDE (N2O) ABATEMENT FROM NITRIC ACID PRODUCTION OFFSET PROJECT Our quality management procedures. We are committed to providing exceptional service to our clients in accordance with our ISO 9001 and ISO 14065 accreditations. We believe that quality is a basic principle and have made quality management an integral part of our work. We take a systematic approach to quality management in compliance with ISO requirements and strive to achieve continual improvement. The cornerstone of our quality management system is an entrenched process of technical and independent peer review where our deliverables are objectively vetted by senior and expert people in our firm. Level of assurance. The reasonable level of assurance applied in this verification (as required by the SGER) mandates that Stantec perform increased sampling to meet the assurance requirements, however, the level of assurance still increases the risk to Stantec as the risk-based verification approach means that not all information can be reviewed. Stantec has designed the sampling plan to target potentially material items in the GHG information to maintain low detection risk. This is the second verification completed by Stantec for NAP2. Stantec is familiar with Orica’s processes and processes and data collection procedures (low risk). The verification team assessed whether the Project resulted in emission reductions in a manner consistent with the Project Offset Plan. During the verification, the verification team considered the level of audit risk noted above and incorporated necessary tasks to mitigate the audit risk. These tasks included: assessing conformance with applicable verification criteria, including the principles and requirements of relevant standards or GHG programs within the scope of verification; evaluating the establishment, justification and documentation of the Project Report; assessing the GHG project's quality assurance and controls; and assessing the information for consistency with our knowledge of Orica’s operations. The schedule for the verification activities is presented in Table 4.1. Table 4.1 Schedule of Verification Activities Verification Activity Responsible Party Date of Completion Kick-off Call Stantec / Orica October 24, 2013 Receive Documentation Stantec October 16, 2013 Initial Desktop Review Stantec November 8, 2013 Internal Conference Call – Desktop Assessment Review Stantec November 12, 2013 Provide Verification Plan to CPC (including additional data requests) Site Visit Stantec November 13, 2013 Stantec / Orica November 18, 2013 Internal Site Visit Follow-up Conference Call Stantec November 19, 2013 Receive Additional Documentation Orica January 28 – February 23, 2014 Review additional information Stantec January 28 – February 23, 2014 Draft Verification Report Stantec February 26, 2014 8 March 17, 2014 VERIFICATION REPORT FOR ORICA CARSELAND WORKS NITRIC ACID PLANT 2: NITROUS OXIDE (N2O) ABATEMENT FROM NITRIC ACID PRODUCTION OFFSET PROJECT Verification Activity Responsible Party Date of Completion Address Follow-up Items Stantec / Orica February 27, 2014 Finalize Verification Report, SOV, SOQ, COI form Stantec February 27, 2014 Revise Verification Report, SOV, SOQ, COI form Stantec March 17, 2014 4.4 SITE VISIT Stantec Senior Reviewer, Daniel Hegg, conducted an office and site visit on November 18th, 2013. The following personnel were interviewed: • Aaron Li, Orica Canada Inc. – Production Engineer; • Chelsea Thomson, Capital Power Corporation - Environmental Markets Specialist; • David Hind, Orica Canada Inc. – Technical Manager – Nitrate Process; • Jeff Zubach, Orica Canada Inc. – Health and Environment Specialist; • Ken Nguyen, Orica Canada Inc. – Process Engineer; and • Tyler Pilgrim, Orica Canada Inc. – Instrumentation/Electrical. A tour of the facility was led by Orica representatives with in-depth knowledge of the facility and the project. During the tours, Stantec performed procedures to identify Project boundaries, confirmed GHG sources, looked for additional sources, visually confirmed the presence of meters and N2O abatement technologies, as well as inquired about Project operations and the GHG data management systems. 4.5 VERIFICATION PROCEDURES The process of developing the sampling plan included a review of Orica’s records and comparisons of raw data to calculation spreadsheets provided by Orica for the verification program. Interviews with the staff members listed above were conducted to assess various aspects of Project operations, data management, data storage, and transfer. Activities associated with operations, record keeping, meter data management, and emissions sources were reviewed to better understand the calculations, data treatment, and data management for the Project. The site boundaries were evaluated to confirm that no additional GHG sources, sinks, or reservoirs were present. During the site visit, Stantec observed the data collection and processing systems, and visually confirmed the presence of meters and N2O abatement technologies. Activities associated with ammonia production, measurements and emissions sources and reductions were reviewed to confirm consistency with the Project Report. Stantec’s final sampling plan included sampling raw data for stack flow rates, stack temperatures, operating hours, nitric acid production, andN2O concentration, as well as recalculating baseline and project emission factors and emissions and assessing consistency with the Protocol and ESRD guidance. The final verification procedures are provided in the final verification plan (Appendix A) and summarized in Table 5.1. Stantec’s detailed internal working papers can be provided to ESRD upon request and signing of a confidentiality agreement. March 17, 2014 9 VERIFICATION REPORT FOR ORICA CARSELAND WORKS NITRIC ACID PLANT 2: NITROUS OXIDE (N2O) ABATEMENT FROM NITRIC ACID PRODUCTION OFFSET PROJECT 4.6 CONFIRMATIONS For this Project, Stantec confirmed that: offset project information was consistent across the offset project documentation; offset project location is as indicated in the Project Offset Report; the Offset Project Plan contains the monitoring and quantification procedures applied to this Project; the Project contact, report date, emission reduction numbers and other related information is accurate; and the Project GHG Information System is consistent with the data flow diagram shown in the Offset Project Plan. Stantec detected that the emission reductions shown in the Project Report and the Assertion Statement (116,860 t CO2e) are not accurately presented. Using the baseline and project emissions asserted, the calculated emission reductions are 116,864 t CO2e. This occurred due to rounding of the baseline and project emissions in the Report and Assertion. The emission reductions of 116,863 t CO2e, which account for rounding down the emission reductions as per Guidance, are supported by the Project documentation. Stantec considers this to be an immaterial qualitative disclosure. 10 March 17, 2014 VERIFICATION REPORT FOR ORICA CARSELAND WORKS NITRIC ACID PLANT 2: NITROUS OXIDE (N2O) ABATEMENT FROM NITRIC ACID PRODUCTION OFFSET PROJECT 5.0 SUMMARY OF FINDINGS A summary of the key findings from this verification is provided in Table 5.1. Table 5.1 Parameter GHG Assertion Ownership Verification and Sampling Plan Procedures Sampling Plan Result Reviewed the Project Report for the following information: location of the Project; Project start date and period; registration of Offset Credits; Project Plan; Notice of Creation; Protocol followed; and eligibility of GHGs reduction. All required information. Satisfactory The Project takes place in Alberta. The Project took place after January 1, 2002 and the emission reductions are claimed within the allowable 8year crediting period. The credits have been registered on the Alberta registry. The Project Offset Plan is available on the Registry. Orica has appropriately completed the Notice of Creation. The Project is using an appropriate Protocol and the correct version of the Protocol. The GHGs reduced are eligible. Conducted a site tour to compare emissions inventory to on-site sources. All on-site GHG sources. Reviewed the Project Reports for a statement regarding credit ownership. Sufficient and appropriate evidence to support that Orica is authorized to serialize the offset credits. Satisfactory Stantec conducted a site visit and onsite interviews to assess procedures for various aspects of project operations, data management, production accounting, QA/QC and data storage and transfer. Activities measuring stack flow rates, stack temperatures, operating hours, nitric acid production, andN2O concentration, as well as recalculating baseline and project emission factors, measurements and emissions sources and reductions were reviewed to confirm consistency with the project report. The site boundaries were also evaluated by the verifiers to confirm that there have been no physical changes that would affect the boundary for the project plan. Stantec confirmed the emission reductions included in the report and looked for additional sources that were not included in the Project Plan. Satisfactory The Project Report indicates that Orica owns the Project. Catalyst suppliers give up ownership over the environmental attributes of the abated N2O. Reviewed ownership evidence. March 17, 2014 11 VERIFICATION REPORT FOR ORICA CARSELAND WORKS NITRIC ACID PLANT 2: NITROUS OXIDE (N2O) ABATEMENT FROM NITRIC ACID PRODUCTION OFFSET PROJECT Table 5.1 Parameter Project Additionality Consistency with Project Offset Plan Consistency with ISO 14064-2 12 Verification and Sampling Plan Procedures Sampling Plan Result Reviewed the Project Report and supporting documentation to assess whether the Project Developer is meeting the additionality criteria in the Protocol and the Project continues to be additional to regulations. Reviewed the Project Report against the Project Plan for the following criteria: deviation of the Project from the Project Plan; same baseline and project boundaries for the Project and the Project Plan; and similar emission reductions claimed. Not applicable. Satisfactory The Protocol does not have specific criteria related to Project additionality. The N2O emissions are considered industrial process emissions of which there is currently no regulated reduction target under the Specified Gas Emitters Reporting Regulation (SGER). Not applicable. Satisfactory The Project Report discloses that the secondary catalyst has changed from the Heraeus product to a Johnson Matthey product. The contact information for the Project was also updated. The monitoring and quantification of emission reductions remain identical to the Project Plan. The baseline and project boundaries are identical. The Project Report has similar emission reductions as the Project Plan. Assessed the Project Report for transparency. Not applicable. Satisfactory The Project Report is adequately transparent when presenting the GHG emissions, emission reductions, and related information Assessed the Project Report for accuracy. Not applicable. Assessed the Project Report for relevance and completeness. Not applicable. Assessed the Project Report for consistency. Not applicable. Satisfactory (Immaterial Misstatement, Resolved) The GHG assertion within the Project Report was found to agree with the emissions quantified by Orica. During the review of the Project Report, it was noted that the assertion contained text referring to the 2012 reporting period. Satisfactory (Immaterial Misstatement, Resolved) The information presented in the Project Report is relevant. The Project Report was found to contain all information required to be reported according to the Guidance. During the review, it was noted that the Project Report was missing two pieces of information as compared to the template (expected lifetime of the project and Orica website address). Satisfactory The Project Report is consistent with the Project Plan. Consistent formulas were used for emissions quantification. March 17, 2014 VERIFICATION REPORT FOR ORICA CARSELAND WORKS NITRIC ACID PLANT 2: NITROUS OXIDE (N2O) ABATEMENT FROM NITRIC ACID PRODUCTION OFFSET PROJECT Table 5.1 Parameter Quantification and Monitoring Verification and Sampling Plan Procedures Assessed the Project for inaccurate measurement of stack flow rate, stack temperature, operating hours, nitric acid production, and N2O concentration. Trace values to the quantification spreadsheet. Assessed the Project for Project data not removed if outside of permitted range. Inconsistent baseline emission factor. Anomaly in parameter trends. Assessed the Project for inconsistent quantification methodologies. Inspected calibration and verification records. March 17, 2014 Sampling Plan Result Sampled monthly daily averages and traced to reports and to GHG emission quantification spreadsheet. Satisfactory Orica provided monthly NAP2 records. The data provided covered the entire 2013 reporting period and no records were outside the 2013 reporting period. Entire crediting period (January through December 2013), NAP2 monthly reports and raw data Assess baseline campaign run as well the calculations that result in the generation of the baseline emission factor. Satisfactory The baseline campaign used in line with the requirements of the protocol. Trended each variable for entire crediting to identify anomalies and data outside of the reporting period. All methodologies (including baseline emissions, project emissions, and emission reductions). Sample the maintenance log book and also records showing weekly inspections are carried out on regular basis. Sample records showing the RATA test are done to verify the flow meter and temperature probe. Review Cylinder Gas Audits (CGA) and Fourier Transform Infrared (FTIR) audits completed during the reporting year to look for anomalies and match Satisfactory (Material and Immaterial Misstatements, Resolved) During the review, Stantec noted that the wrong period for the permitting operating condition was used. This item was resolved. Stantec noted that Orica rounded up their emission factor to 0.0052 tN2O / t Acid which results in an under-reporting of 717.38 tCO2e or 0.61%.This item was resolved. Satisfactory The sampled records agree with internal records and quantification spreadsheet. No discrepancies noted. Satisfactory Stantec found that the quantification methodologies used were consistent with the Offset Plan and the Protocol. Satisfactory Stantec reviewed the RATA tests, CGA logs, FTIR reports, and maintenance logs and determined they are valid for the reporting period. 13 VERIFICATION REPORT FOR ORICA CARSELAND WORKS NITRIC ACID PLANT 2: NITROUS OXIDE (N2O) ABATEMENT FROM NITRIC ACID PRODUCTION OFFSET PROJECT Table 5.1 Parameter Verification and Sampling Plan Procedures Sampling Plan to trend analysis. Recalculated baseline emissions. Not applicable. Recalculated project emissions. Not applicable. GHG Data Management and Quality Control Assessed whether Orica’s GHG data management system, including quality control, is adequate. Entire system for completeness, accuracy, validity, and restricted access, through interviews, Project documentation, and site visit. GHG Data Retention Assessed whether there is sufficient document storage and retention. Not applicable. 14 Result Satisfactory (Immaterial Misstatement, Resolved) Stantec successfully recalculated the baseline emissions. Stantec noted that Orica rounded up their baseline emission factor to 0.0052 tN2O / t Acid which results in an under-reporting of 717.38 tCO2e or 0.61%.This item was resolved. Satisfactory Stantec successfully recalculated the project emissions. Satisfactory Stantec reviewed Orica’s data management system through a review of on-site monitoring systems, personnel interviews, and inspecting the quantification spreadsheet, Offset Plan, Project Report, and supporting information. Stantec found that Orica’s data management system adequately collects and aggregates Project data and performs checks on the quantified emissions. Satisfactory (Immaterial Misstatement, Not Resolved) Retention period - Orica asserts that Project records are retained in a retrievable manner for a total of 10 years. Stantec finds that this is consistent with the Protocol’s requirements; however, this retention period is not consistent with the Technical Guidance for Offset Project Developers. The requirement is to retain documentation for at least 7 years past the end of the crediting period. Stantec considers the issue to be an immaterial discrepancy due to the following: Orica has previously submitted the Offset Plan with this retention period noted; Orica’s retention period is consistent with the Protocol; and Orica‘s retention period is consistent with the SGER Section 15(1). March 17, 2014 VERIFICATION REPORT FOR ORICA CARSELAND WORKS NITRIC ACID PLANT 2: NITROUS OXIDE (N2O) ABATEMENT FROM NITRIC ACID PRODUCTION OFFSET PROJECT Misstatements identified during the verification are provided in Table 5.2. The quantitative materiality threshold (5%) was not exceeded. One unresolved immaterial discrepancy remains. Table 5.2 Identified Misstatements and Resolutions Identified Misstatement Consistency with Guidance The Project Report rounds up the emission reductions. This item is considered material. Material/Immaterial Material and immaterial qualitative misstatement Resolution Resolved. Immaterial quantitative misstatement Resolved. Material quantitative misstatement Resolved. Immaterial qualitative misstatement Not Resolved. The assertion contained text referring to the 2012 reporting period. This item is considered material. The Project Report was missing two pieces of information as compared to the template (expected lifetime of the project and Orica website address). The missing pieces are not considered material. GHG Assertion - Accuracy Stantec noted that Orica rounded up their baseline emission factor to 0.0052 tN2O / t Acid which results in an under-reporting of 717.38 tCO2e or 0.61%. Baseline Permitted Operating Condition – Cut-off During the review, Stantec noted that the wrong period for the permitting operating condition was applied. The error consisted of using data that included the baseline campaign (June15, 2009 to March 27, 2012) instead of the period prior to the baseline campaign (i.e. June 15, 2009 to Oct 11, 2011). This item was resolved. Data Retention The Project’s retention period is consistent with the Protocol but not the guidance. This is immaterial because Orica’s offset plan has been accepted by the Registry with this misstatement present. March 17, 2014 15 VERIFICATION REPORT FOR ORICA CARSELAND WORKS NITRIC ACID PLANT 2: NITROUS OXIDE (N2O) ABATEMENT FROM NITRIC ACID PRODUCTION OFFSET PROJECT 6.0 CONCLUSION 6.1 OPINION Based on the procedures undertaken and described in this report, the Project Report for the Orica Carseland Works Nitric Acid Plant 2: Nitrous Oxide (N2O) Abatement From Nitric Acid Production Offset Project satisfies the requirements of the: Climate Change and Emissions Management Act, SA 2003, c C-16.7; Specified Gas Emitters Regulation; Alta Reg. 139/2007; Technical Guidance for Offset Project Developers (version 4.0, February 2013); and Quantification Protocol for Nitrous Oxide Abatement from Nitric Acid Production (version1.0, October 2009). 6.2 SUBMISSION DOCUMENTS The verification documents for submission are in Appendix B and include: Statement of Qualifications, a Statement of Verification, and a Conflict of Interest Checklist. 16 March 17, 2014 VERIFICATION REPORT FOR ORICA CARSELAND WORKS NITRIC ACID PLANT 2: NITROUS OXIDE (N2O) ABATEMENT FROM NITRIC ACID PRODUCTION OFFSET PROJECT 7.0 CLOSURE Stantec Consulting Ltd. (Stantec) was contracted by Capital Power Corporation (CPC) to conduct an independent third-party verification of the greenhouse gas (GHG) assertion provided in the Orica Carseland Works (Orica) Nitric Acid Plant 2: Nitrous Oxide Abatement From Nitric Acid Production Project Report (Project Report) dated March 12, 2014. In this work, Orica was responsible for the collection of data used in the calculations and data management. Orica was responsible for the completion of the calculations, presentation of the information within the Project Report, and for the supporting technical documents. Stantec has undertaken all assignments in its role as an environmental engineering consulting firm using professional effort consistent with the Technical Guidance for Offset Project Developers, February 2013, version 4.0, and the Technical Guidance for Greenhouse Gas Verification at Reasonable Level Assurance, January 2013, version 1.0. Stantec has assessed the Project Report submitted by Orica for the Orica Carseland Works Nitric Acid Plant 2: Nitrous Oxide (N2O) Abatement From Nitric Acid Production Offset Project using reasonably ascertainable information, as defined by ISO 14064-3, obtained from a review of operational records and available literature and documents. The assessment represents the conditions in the subject area at the time of the assessment. Stantec did not conduct direct GHG emissions monitoring or other environmental sampling and analysis in conjunction with this verification report. Stantec disclaims liability for use by any other party and for any other purpose. A copy of our internal working papers can be confidentially provided to ESRD on request. Stantec will retain all project documents for a minimum of seven (7) years. A copy of our internal working papers can be confidentially provided to ESRD on request. This report entitled, “Verification Report for the Orica Carseland Works Nitric Acid Plant 2: Nitrous Oxide (N2O) Abatement From Nitric Acid Production Offset Project” was produced by Christina Flogeras, P.Eng. This report was peer reviewed by Joe Harriman, Ph.D., P.Chem. and senior reviewed by Daniel Hegg, M.Sc, EMIT. Respectfully Submitted, STANTEC CONSULTING LTD. Christina Flogeras, P.Eng. Lead Verifier Environmental Services Tel: (506) 452-7000 Joe Harriman, Ph.D., P.Chem., Independent Peer Reviewer Environmental Services Tel: (506) 634-2185 \\cd1208-f04\shared_projects\1232\active\123210331\GHG Folder\3_val_ver_statement (report)\rpt_final\post_submission March 17, 2014 17 VERIFICATION REPORT FOR ORICA CARSELAND WORKS NITRIC ACID PLANT 2: NITROUS OXIDE (N2O) ABATEMENT FROM NITRIC ACID PRODUCTION OFFSET PROJECT Appendix A Final Verification Plan VERIFICATION REPORT FOR ORICA CARSELAND WORKS NITRIC ACID PLANT 2: NITROUS OXIDE (N2O) ABATEMENT FROM NITRIC ACID PRODUCTION OFFSET PROJECT Stantec Consulting Ltd. 845 Prospect Street Fredericton NB E3B 2T7 Tel: (506) 452-7000 Fax: (506) 452-0112 VIA EMAIL <[email protected]> March 17, 2014 File: 123210331 Attention: Jeff Zubach Health and Environment Specialist Orica Canada Inc. PO Box 250 Carseland, AB T0J 0M0 Dear Mr. Zubach, RE: FINAL VERIFICATION PLAN - SPECIFIED GAS EMITTERS REGULATION PROJECT REPORT FOR ORICA NITRIC ACID PLANT 1 AND 2 NITROUS OXIDE ABATEMENT FROM NITRIC ACID PRODUCTION INTRODUCTION Stantec Consulting Ltd. (Stantec) has completed the initial verification desktop review for the Orica Canada Inc. (Orica) Nitric Acid Plant 1 and Nitric Acid Plant 2 Nitrous Oxide Abatement from Nitric Acid Production Projects (referred to as the Projects) under the Alberta Environment and Sustainable Resource Development (ESRD) Specified Gas Emitters Regulation (SGER). This verification plan is provided to outline the terms of the engagement and the planned verification procedures. The verification plan also provides a list of data and documentation required to complete the planned procedures. Although each Plant has its own Project Report, this verification plan covers both Projects. Furthermore, Stantec will assess each plant individually and will issue separate verification reports for each Project. For simplicity, the Nitric Acid Plant 1 and Nitric Acid Plant 2 will be referred to as NAP1 and NAP2 in this verification plan. VERIFICATION OBJECTIVES The objective of the verification is to ensure that the NAP1 and NAP2 Project Reports: Satisfies in material aspects the following ESRD requirements: ● Climate Change and Emissions Management Act (the Act), SA 2003, c C-16.7; ● Specified Gas Emitters Regulation (SGER) Alta Reg. 139/2007; ● Quantification Protocol for Nitrous Oxide Abatement from Nitric Acid Production (October 2009, version 1); and ● Technical Guidance for Offset Project Developers (February 2013, version 4.0). Template version 1.0 November 2013 March 17, 2014 Orica Canada Inc. Page 2 of 16 RE: FINAL VERIFICATION PLAN - SPECIFIED GAS EMITTERS REGULATION PROJECT REPORT FOR ORICA NITRIC ACID PLANT 1 AND 2 NITROUS OXIDE ABATEMENT FROM NITRIC ACID PRODUCTION VERIFICATION CRITERIA The verification was conducted with the following criteria: Climate Change and Emissions Management Act; Specified Gas Emitters Regulation; Quantification Protocol for Nitrous (October 2009, version 1.0); and Technical Guidance for Offset Project Developers (February 2013, version 4.0). Oxide Abatement from Nitric Acid Production VERIFICATION STANDARD The verification was conducted in accordance with: ISO 14064 Part 3 – Greenhouse Gases: Specification with guidance for the validation and verification of greenhouse gas assertions; ISO 14065 – Greenhouse Gases: Requirements for greenhouse gas validation and verification bodies for use in accreditation and other forms of recognition; and Technical Guidance for Greenhouse Gas Verification at Reasonable Level Assurance (January 2013, version 1.0). VERIFICATION SCOPE The verification is for the period of January 1, 2013 to December 31, 2013 for both Projects. Stantec understands the Projects to be defined in the manner described The reasonableness of these project descriptions will be subject to verification by Stantec. below. The Orica plant site operates two Nitric Acid Plants referred to as NAP1 and NAP2. Orica produces low density prilled ammonium nitrate which is used for mining, construction and logging industries. For both Projects, the Project and process can be described as follows: NAP1: In 1978, the NAP1 plant was designed to produce nitric acid (HNO 3) by using an Uhde Dual Pressure Process. Initially, the plant had a production rate of 545 tonnes per day and later it was increased to 890 tonnes per day by adding three air compressors. In order to reduce the GHG emissions from the process, a dedicated catalyst was installed under the platinum rhodium catalyst gauze to reduce N2O production. Orica installed a N2O monitoring system (known as PROCAL P-200) at NAP1 in 2007 to measure the N2O emissions in order to establish the baseline and project N2O emissions. The PROCAL P-200 system consists of an ultrasonic flow monitor (measuring gas volumetric flows) and an infrared unit (measuring N 2O concentration). Upon Template version 1.0 November 2013 March 17, 2014 Orica Canada Inc. Page 3 of 16 RE: FINAL VERIFICATION PLAN - SPECIFIED GAS EMITTERS REGULATION PROJECT REPORT FOR ORICA NITRIC ACID PLANT 1 AND 2 NITROUS OXIDE ABATEMENT FROM NITRIC ACID PRODUCTION completion of the baseline (1 catalyst campaign), Orica installed a Heraeus N 2O abatement catalyst (HR-SC) in the stack of NAP1 on May 12, 2008. NAP2: The NAP2 plant began operation in 1998 to produce nitric acid (HNO3) using a GPN Mono Pressure Process which oxidizes ammonia on platinum-rhodium catalyst gauze and absorbs nitrogen oxide gases in water. The plant has a production rate of 310 tonnes per day. In order to reduce the GHG emissions from the process, a dedicated catalyst was installed under the platinum rhodium catalyst gauze to reduce N2O production. Orica installed a N2O monitoring system (known as PROCAL P-200) at NAP2 in 2011 to measure the N2O emissions in order to establish the baseline and project N2O emissions. The PROCAL P-200 system consists of an ultrasonic flow monitor (measuring gas volumetric flows) and an infrared unit (measuring N 2O concentration). This system is installed within the stack of NAP2. Upon completion of the baseline (1 catalyst campaign), Orica installed a Heraeus N2O abatement catalyst (HR-SC) on March 29, 2012 which was only used until September 2013 as this catalyst did not perform as expected. On September 17, 2013 a Johnson Matthey catalyst, Yara 58-Y1 was installed in an attempt to boost abatement. The GHG emission reductions are achieved as follows. Nitric acid is produced from the oxidation of liquid ammonia in both NAP1 and NAP2. During the production process, the oxidation reaction of ammonia takes place on a platinum rhodium catalyst (primary catalyst) where a side reaction produces N2O. This side reaction of ammonia oxidation is a source of N2O emissions which is the only GHG emission relevant to this Project. The greenhouse gas (GHG) Project boundary encompasses the physical and geographical site of the plant and the equipment for the entire production process. This includes all compressors, tail gas expander turbines and any nitrous oxide (N2O) abatement equipment installed. The baseline scenario is the continued operation of the NAP1 and NAP2 without the secondary catalyst. The baseline emission factor and operating conditions were established over the course of one catalyst campaign (i.e., from installation to catalyst change out). The following GHGs are included within the scope of the verification as required by SGER: carbon dioxide (CO2); methane (CH4); nitrous oxide (N2O); hydrofluorocarbons (HFCs); perfluorocarbons (PFCs); and sulphur hexafluoride (SF6). The total equivalent GHG emissions are reported as tonnes carbon dioxide equivalent (t CO2e). Template version 1.0 November 2013 March 17, 2014 Orica Canada Inc. Page 4 of 16 RE: FINAL VERIFICATION PLAN - SPECIFIED GAS EMITTERS REGULATION PROJECT REPORT FOR ORICA NITRIC ACID PLANT 1 AND 2 NITROUS OXIDE ABATEMENT FROM NITRIC ACID PRODUCTION Sources of Project GHG emissions for both Projects include: Nitric Acid Production (N2O): Abatement of nitric oxide during the production of nitric acid through the oxidization of ammonia using a secondary catalyst Sources of baseline GHG emissions for both Projects are: Nitric Acid Production (N2O): No abatement of nitric oxide during the production of nitric acid. ASSERTION The fundamental assertion to be verified for the Orica NAP1 Nitrous Oxide Abatement from Nitric Acid Production Project is that it meets the criteria above for the period of January 1, 2013 to December 31, 2013. The claimed emissions reductions for NAP1 as part of the GHG assertion verified by Stantec are presented in Table 1.1 below. Table1.1 GHG Assertion Year January 1 – December 31, 2013 Baseline Emissions (t CO2e) 438,324 Project Emissions (t CO2e) 82,329 Emission Reductions (t CO2e) 355,991 Notes: Emission Reductions are rounded down as per Guidance. The fundamental assertion to be verified for the Orica NAP2 Nitrous Oxide Abatement from Nitric Acid Production Project is that it meets the criteria above for the period of January 1, 2013 to December 31, 2013. The claimed emissions reductions for NAP2 as part of the GHG assertion verified by Stantec are presented in Table 1.2 below. Table 1.2 GHG Assertion Year January 1 – December 31, 2013 Baseline Emissions (t CO2e) 249,906 Project Emissions (t CO2e) 133,042 Emission Reductions (t CO2e) 116,860 Notes: Emission Reductions are rounded down as per Guidance. LEVEL OF ASSURANCE Sufficient procedures were conducted in order to express a reasonable level of assurance opinion as required by ESRD. MATERIALITY ESRD has set the quantitative materiality threshold to 5% of the asserted emission reductions and removals for offset projects. The materiality is assessed on the net and absolute values of discrepancies. The identification of material qualitative discrepancies was at the discretion of the verification body. Template version 1.0 November 2013 March 17, 2014 Orica Canada Inc. Page 5 of 16 RE: FINAL VERIFICATION PLAN - SPECIFIED GAS EMITTERS REGULATION PROJECT REPORT FOR ORICA NITRIC ACID PLANT 1 AND 2 NITROUS OXIDE ABATEMENT FROM NITRIC ACID PRODUCTION The historical GHG assertions and verification outcomes for calendar years 2010, 2011, and 2012 are presented in Table 2 for informational purposes only. Table 2 Historical Assertions and Outcomes Parameter Units 2012 2011 2010 Project Start Date 388,637 459,782 374,222 May 15, 2008 Claimed Emission Reductions NAP1 t CO2e NAP2 Verification Outcome - 101,078 -- -- March 29, 2012 Positive Positive Positive NA VERIFICATION SCHEDULE Table 3 presents the verification schedule. Table 3 Planned Verification Schedule Verification Activity Responsible Party Date of Completion Kick-off Call Stantec / Orica October 24, 2013 Receive Documentation Stantec October 16, 2013 Initial Desktop Review Stantec November 8, 2013 Internal Conference Call – Desktop Assessment Review Stantec November 12, 2013 Provide Verification Plan to CPC (including additional data requests) Stantec November 13, 2013 Site Visit Stantec / Orica November 18, 2013 Internal Site Visit Follow-up Conference Call Stantec November 19, 2013 Receive Additional Documentation Orica January 28 – February 23, 2014 Review additional information Stantec January 28 – February 23, 2014 Draft Verification Report Stantec February 26, 2014 Address Follow-up Items Stantec / Orica February 27, 2014 Finalize Verification Report, SOQ, SOV, COI form Stantec February 27, 2014 Revise Verification Report, SOQ, SOV, COI form Stantec March 17, 2014 VERIFICATION TEAM: QUALIFICATIONS, ROLES AND RESPONSIBILITIES Table 4 presents the verification team. Table 4 Verification Team Name Role Christina Varner, P.Eng. Lead Verifier Daniel Hegg, M.Sc., EMIT Senior Reviewer/Project Manager Independent Peer Joe Harriman, Ph.D., Responsibilities Lead and delegate verification duties. Designated Signing Authority on verification documents. Carry out project management duties. Review verification deliverables technical soundness and compliance with Stantec’s internal processes. Independent review of verification deliverables for Template version 1.0 November 2013 March 17, 2014 Orica Canada Inc. Page 6 of 16 RE: FINAL VERIFICATION PLAN - SPECIFIED GAS EMITTERS REGULATION PROJECT REPORT FOR ORICA NITRIC ACID PLANT 1 AND 2 NITROUS OXIDE ABATEMENT FROM NITRIC ACID PRODUCTION Table 4 Verification Team Name P.Chem. Role Reviewer Rengarajan Vaiyapuri, M.Eng. Junior Verifier Responsibilities consistency with Stantec templates, adherence to ISO 14064:3, ISO 14065, and ESRD compliance. Lead desktop review with supervision from Lead Verifier. TEAM PROFILE Lead Verifier – Christina Flogeras, P.Eng. Ms. Flogeras obtained a Bachelor of Science in Engineering (Chemical) from the University of New Brunswick. She has recently been identified as a lead verifier at Stantec. Ms. Flogeras has completed desktop reviews, reporting, and conducted site visits for facility and project GHG inventories under Alberta Specified Gas Emitters Regulation (SGER), the British Columbia Emissions Offset Regulation and Reporting Regulation, The Climate Registry, Verified Carbon Standard (VCS), the Ontario Environmental Protection Act 452/09, and the Massachusetts Mandatory Greenhouse Gas Reporting Regulation. Ms. Flogeras has completed the ISO 14064-3 GHG verification training course. She has also been involved in air quality studies including dispersion modelling, noise monitoring, source emissions testing, and ambient air quality monitoring. These projects have been across a number of industrial sectors, including pulp and paper, petroleum refinement, electricity generation, and asphalt production. Ms. Flogeras has created various emissions inventories to address regulatory requirements and permitting including National Pollutant Release Inventory (NPRI) and Environment Canada Greenhouse Gas (GHG) reporting. Christina oversaw the completion of the site visit, Verification and Sampling Plans, draft and final Verification Report and Statement of Verification. She was the designated signing authority on all verification deliverables. Senior Review / Project Manager – Daniel Hegg, M.Sc., EMIT, ENV-SP Daniel Hegg is a Senior Sustainability Specialist and Western Canada/US Discipline Lead for Stantec Consulting Ltd. Climate Change Service Line. To assist public and private sector clients successfully address their toughest sustainability challenges, Daniel has invested over decade of time and effort in developing a knowledge base that offers unique perspectives and insights on integrated carbon, energy and water management and strategy, triple bottom line business case development and climate change risk assessment and planning. Daniel‘s approach is multi-faceted and dynamic; it is predicated on an ownership transition model in which the sense of responsibility and understanding evolves from his team to the client. This allows for the development of strategic sustainability plans that are focused, workable, and address all aspects of sustainability associated with business operations as well as product portfolios. Daniel has developed and verified over 50 organizational and facility GHG inventories and offset projects for clients in a wide range of sectors. Daniel has also consulted across a wide variety of Template version 1.0 November 2013 March 17, 2014 Orica Canada Inc. Page 7 of 16 RE: FINAL VERIFICATION PLAN - SPECIFIED GAS EMITTERS REGULATION PROJECT REPORT FOR ORICA NITRIC ACID PLANT 1 AND 2 NITROUS OXIDE ABATEMENT FROM NITRIC ACID PRODUCTION sectors directing pioneering projects in community and corporate visioning, policy and strategic planning for sustainability. He has provided strategy, policy advice, and has prepared a number of strategic guidance documents and plans on a number of climate change related topics to public and private sector organizations including the Federation of Canadian Municipalities (FCM), the Union of BC Municipalities (UBCM), the British Columbia Climate Action Secretariat, the Pacific Carbon Trust (PCT), Bell Alliant, TransAlta, Capital Power Corporation, Total E&P Canada, Teck, Connacher Oil and Gas, BC Transit, Phillips 66, amongst others. As an internal quality management practice, all Stantec deliverables are reviewed by a Senior Expert in the firm. Daniel provided the senior review for this project. Independent Peer Reviewer – Joe Harriman, Ph.D., P.Chem. Dr. Harriman is the Team Leader of Stantec’s Atmospheric Environment team based in Saint John, NB. He is responsible for managing air quality, acoustics and climate components environmental baseline assessments, environmental assessments and environmental planning and permitting. In addition, Dr. Harriman is a Project Manager with substantial experience and background knowledge in the energy sector with respect to air quality and GHG emissions. He has been the project manager and technical lead on the development of numerous greenhouse gas (GHG) emission inventories for industrial, corporate, municipal and government clients. Dr. Harriman is experienced in working under the Alberta, British Columbia, Ontario, Quebec and Massachusetts mandatory reporting regulations, as well as voluntary programs such as The Climate Registry, having participated in over 80 verifications since the inception of the these regulations and/or programs. Dr. Harriman, on behalf of Stantec, is an instructor for the CSA to deliver the ISO 14064 GHG series of courses including Inventories (ISO 14064-1), Projects (ISO 14064-2) and Validations/Verifications (14064-3). Dr. Harriman is a registered Professional Chemist in the Province of Alberta and has the responsibility at Stantec for ensuring the quality of the verification and acting as peer reviewer in accordance with ISO14065. This designation is reserved for select individuals with the appropriate experience in GHG inventories and projects. Dr. Harriman is currently the Regional Discipline Leader for Climate Services at Stantec in Canada East (Ontario to Atlantic regions). He has substantial knowledge in developing technologies for renewable energy production and has been involved in considerable green energy assessments including wind, solar and tidal projects. In addition, Dr. Harriman has a strong background in the chemical, mining, oil and gas and energy sectors. Joe had responsibility for ensuring the quality of the verification and acting as the independent peer reviewer in accordance with ISO14065. Junior Verifier – Rengarajan Vaiyapuri, M.Eng. Rengarajan Vaiyapuri is currently working with Stantec Environmental Service team in Edmonton as an Environmental Scientist. He has completed his Masters of Engineering from University of Alberta in Environmental Engineering and has a Bachelor of Technology degree in Biotechnology Template version 1.0 November 2013 March 17, 2014 Orica Canada Inc. Page 8 of 16 RE: FINAL VERIFICATION PLAN - SPECIFIED GAS EMITTERS REGULATION PROJECT REPORT FOR ORICA NITRIC ACID PLANT 1 AND 2 NITROUS OXIDE ABATEMENT FROM NITRIC ACID PRODUCTION from SRM University, India. Rengarajan worked at Stantec during summer as an intern and assisted the Air Quality team with various projects. The experience at Stantec includes odour monitoring, preparing odour monthly report, setting up air dispersion model, preparing concentration contour, and setting up air and noise monitoring station. Rengarajan led the desktop review activities, including development of the Verification Plan and Sampling Plan, under the Lead Verifier’s supervision. RISK ASSESSMENT Stantec performed a preliminary assessment of the potential risk associated with this verification assignment and presented the results in the draft verification plan. The risk assessment is an internal procedure used to assess inherent, control, and detection risk. Based on the risk assessment in each of these categories, the Stantec team assigns an overall risk to the verification. The final overall risk for this verification has been assessed as Low. A summary of the risk assessment is provided in Table 5. Table 5 Risk Summary Risk Area Inherent Risk Preliminary Assessment Low Final Assessment Low Control Risk Medium Low Low Low Medium Low Detection Risk Overall Risk We consider the final inherent risk to be Low based on the following: Data used to calculate emission reductions are measured using analyzers meeting the Alberta CEMS code, which has prescribed quality assurance and control procedures (low risk). The analyzers are regularly maintained, inspected, and calibrated. Some analyzers undergo Relative Accuracy Test Audits or Compressed Gas Audits as required by ESRD (low risk). We consider the final control risk to be Low based on the following: Quality assurance and control checks on the data from the site data historian are performed manually, but are checked by senior management and are used to report to ESRD (low risk). Based on the previous verification on these Projects by Stantec, the data for the emission reduction calculations are copied manually from the data historian spreadsheet and thus there is risk of transcription errors (low risk). On-site meters automatically sample and record data electronically on the site’s Distributed Control System (DCS) every 5 to 10 seconds (low risk). Template version 1.0 November 2013 March 17, 2014 Orica Canada Inc. Page 9 of 16 RE: FINAL VERIFICATION PLAN - SPECIFIED GAS EMITTERS REGULATION PROJECT REPORT FOR ORICA NITRIC ACID PLANT 1 AND 2 NITROUS OXIDE ABATEMENT FROM NITRIC ACID PRODUCTION Detection risk is the risk that Stantec will not identify a material discrepancy. We regard this risk as Low due to: Our Quality Management Procedures. We are committed to providing exceptional service to our clients in accordance with our ISO 9001 and ISO 14065 accreditations. We believe that quality is a basic principle and that quality management is an integral part of all our work. We take systematic approach to quality management to ensure compliance with requirements and to achieve continual improvement. The cornerstone of our quality management system is an entrenched process of Senior Review which ensures all our deliverables have been vetted by senior and expert people in our firm (low risk). Level of Assurance. The reasonable level of assurance applied in this verification (as required by the SGER) mandates that Stantec perform increased sampling to meet the assurance requirements, however, the level of assurance still increases the risk to Stantec as the risk-based verification approach means that not all information can be reviewed. Stantec has designed the sampling plan to target potentially material items in the GHG information to maintain low detection risk. This is the second verification completed by Stantec for NAP2. Stantec is familiar with Orica’s processes and processes and data collection procedures (low risk). Stantec has verified NAP1 project from a partial year in 2008 to 2012, thereby totaling 4.5 verification years. The 2013 verification would result in 5.5 verification years and as such, CPC and Orica have received approval from ESRD allowing Stantec to complete the 2013 verification as there is no deemed conflict of interest (COI). Stantec is familiar with Orica’s processes and processes and data collection procedures (low risk). VERIFICATION PLAN The objective of the verification plan is to facilitate the assessment of the completeness, conservativeness, consistency, accuracy, and transparency of the Project’s GHG information and GHG Assertion. With regards to the magnitude of potential errors, omissions and misrepresentations, there are five parameters that directly affect the emission reductions. These include: stack flow rate, operating hours, stack temperature, nitric acid production, and N2O concentration. Template version 1.0 November 2013 March 17, 2014 Orica Canada Inc. Page 10 of 16 RE: FINAL VERIFICATION PLAN - SPECIFIED GAS EMITTERS REGULATION PROJECT REPORT FOR ORICA NITRIC ACID PLANT 1 AND 2 NITROUS OXIDE ABATEMENT FROM NITRIC ACID PRODUCTION The greatest risk of material error relates to errors in these data. Stantec will perform procedures to check the accuracy, completeness, and validity of these data as well as the calculations. Table 6 shows the final verification procedures. NAP1 and NAP2 were assessed separately. Template version 1.0 November 2013 March 17, 2014 Orica Canada Inc. Page 11 of 16 RE: FINAL VERIFICATION PLAN - SPECIFIED GAS EMITTERS REGULATION PROJECT REPORT FOR ORICA NITRIC ACID PLANT 1 AND 2 NITROUS OXIDE ABATEMENT FROM NITRIC ACID PRODUCTION Table 6 Final Verification Procedures Line Item Verification Objective Risk Identified Type of Procedure Description of Procedure Greenhouse Gas Assertion Completeness Incompleteness of inventory. Test of detail – inspection. Conduct a site tour to determine sources and compare with inventory. Greenhouse Gas Assertion Accuracy Information not appropriately disclosed. Test of detail – inspection. Inspect Project Report for correct reporting of emissions and related information. Greenhouse Gas Assertion Completeness Incompleteness of Project Report. Test of detail – inspection. Inspect Project Report for missing information. Greenhouse Gas Assertion Occurrence Document storage and retention practices may not be sufficient. Test of detail – inquiry. Inquire of operators the location and retention period of data used for GHG Assertion. Project emission factor Completeness Missing records for stack flowrate, stack temperature, operating hours, nitric acid production, and N2O concentration. Test of detail – tracing Trace records for each parameter from the site data historian to the calculation of the emission factor. Project emission factor Consistency Inconsistent quantification methodology. Test of detail – inspection. Assess whether the quantification methodology is consistent with previous periods and with the protocol. Project emission factor Accuracy Anomaly in parameter trends. Test of detail – inquiry. Inquire of operators as to any production anomalies or changes to the monitoring equipment. Analytical test – profile. Run profile tests for hourly and/or monthly data. Template version 1.0 November 2013 March 17, 2014 Orica Canada Inc. Page 12 of 16 RE: VERIFICATION PLAN - SPECIFIED GAS EMITTERS REGULATION PROJECT REPORT FOR ORICA NITRIC ACID PLANT 1 AND 2 NITROUS OXIDE ABATEMENT FROM NITRIC ACID PRODUCTION Table 6 Final Verification Procedures Line Item Verification Objective Project emission factor Project emission factor Accuracy Accuracy Risk Identified Type of Procedure Description of Procedure Inaccurate measurement of stack flowrate, stack temperature, operating hours, nitric acid production, and N2O concentration. Test of control – Inspect all calibration records for the monitoring inspection, inquiry. equipment. Inaccurate calculation of emissions. Test of detail – recalculation, inspection. Recalculate annual project emission factor. Inquire on data aggregation and quality assurance and control procedures. Inspect any data backfilling events and assess consistency with the protocol. Project emission factor Cut-off Improper dates of recording stack flowrate, stack temperature, operating hours, nitric acid production, and N2O concentration. Test of detail – inspection. Inspect the dates of parameter records. Project emission factor Accuracy Project data not removed if outside of permitted range. Test of detail – inspection. Inspect demonstration of compliance with permitted operating conditions. Vouch project parameters from demonstration of compliance to data historian. Recalculate the project permitted operating conditions. Baseline emissions Consistency Inconsistent baseline emission factor. Test of detail – inspection. Inspect and compare the baseline emission factor from the previous reporting period to the factor used to estimate emission reductions. Baseline emissions Accuracy Anomaly in parameter trends. Analytical test – profile. Run profile tests for hourly and/or monthly data. Test of detail – Inspect baseline data where any anomalies are detected. Template version 1.0 November 2013 March 17, 2014 Orica Canada Inc. Page 13 of 16 RE: VERIFICATION PLAN - SPECIFIED GAS EMITTERS REGULATION PROJECT REPORT FOR ORICA NITRIC ACID PLANT 1 AND 2 NITROUS OXIDE ABATEMENT FROM NITRIC ACID PRODUCTION Table 6 Final Verification Procedures Line Item Verification Objective Risk Identified Type of Procedure Description of Procedure inspection. Calculated emission reductions Accuracy Errors in the calculation of the emission reduction. Test of detail – inspection. Inspect the calculation spreadsheet for accurate calculation of emission reductions. Template version 1.0 November 2013 March 17, 2014 Orica Canada Inc. Page 14 of 16 RE: FINAL VERIFICATION PLAN - SPECIFIED GAS EMITTERS REGULATION PROJECT REPORT FOR ORICA NITRIC ACID PLANT 1 AND 2 NITROUS OXIDE ABATEMENT FROM NITRIC ACID PRODUCTION SITE VERIFICATION PROCEDURES Stantec Senior Reviewer, Daniel Hegg, conducted an office and site visit on November 18, 2013. The following personnel were interviewed: • Aaron Li, Orica Canada Inc. – Production Engineer; • Chelsea Thomson, Capital Power Corporation - Environmental Markets Specialist; • David Hind, Orica Canada Inc. – Technical Manager – Nitrate Process; • Jeff Zubach, Orica Canada Inc. – Health and Environment Specialist; • Ken Nguyen, Orica Canada Inc. – Process Engineer; and • Tyler Pilgrim, Orica Canada Inc. – Instrumentation/Electrical. A tour of the facility was led by Orica representatives with in-depth knowledge of the facility and the project. During the tours, Stantec performed procedures to identify Project boundaries, confirmed GHG sources, looked for additional sources, visually confirmed the presence of meters and N2O abatement technologies, as well as inquired about Project operations and the GHG data management systems. INFORMATION REQUEST Table 7 contains a preliminary list of documentation and data required by Stantec to complete the proposed procedures and the outcome of the requests. This table was updated as needed throughout the verification process to track requests. If we need to request additional information, Stantec will update Table 8 and will provide Orica with a copy via email. Request Date Obtained On November 13, 2013 February 24, 2014 November 13, 2013 February 27, 2014 Offset Calculations spreadsheet with final assertion. November 13, 2013 February 24, 2014 Calibration and/or maintenance records for: HNO3 production meter; stack flow meter; stack temperature meter; N2O concentration meter; oxidation pressure meter; ammonia gas flow rate; oxidation temperature meter; cylinder gas audit and third party audit reports; November 13, 2013 November 18, 2013 Information Requested Completed Project Report with final assertion, signed by Orica. Completed Statutory Declaration form, with final GHG assertion, signed by Orica. Template version 1.0 November 2013 March 17, 2014 Orica Canada Inc. Page 15 of 16 RE: VERIFICATION PLAN - SPECIFIED GAS EMITTERS REGULATION PROJECT REPORT FOR ORICA NITRIC ACID PLANT 1 AND 2 NITROUS OXIDE ABATEMENT FROM NITRIC ACID PRODUCTION Information Requested Request Date Obtained On November 13, 2013 November 18, 2013 November 13, 2013 January 22, 2014 November 13, 2013 January 22, 2014 November 13, 2013 January 22, 2014 November 13, 2013 January 22, 2014 November 13, 2013 January 22, 2014 November 13, 2013 January 22, 2014 November 13, 2013 January 22, 2014 November 13, 2013 January 22, 2014 February 21, 2014 February 24, 2014 and maintenance log book and weekly inspection records. Details of the quality management systems or processes for the projects (e.g., quality assurance and control procedures, frequency of checks, documentation of checks). Spreadsheets that contain the data used to calculate the baseline and project emissions. 2013 secondary catalyst installation report or maintenance records for each project Evidence that Orica has full legal ownership of 2013 emission reductions for each project Provide stack flow rate from the data historian for the months of February, May, and June. Provide operating hours for January through December. Provide January, June, July and September raw production data from historian. Provide January, June, July and September raw N2O concentration data from historian. Provide oxidation temperature, oxidation pressure, ammonia gas flow rate, and ammonia to air ratio from the data historian for the months of February, May, and June. The Project Reports for NAP1 and NAP2 were missing two pieces of information as compared to the template (expected lifetime of the project and Orica website address). Template version 1.0 November 2013 March 17, 2014 Orica Canada Inc. Page 16 of 16 RE: VERIFICATION PLAN - SPECIFIED GAS EMITTERS REGULATION PROJECT REPORT FOR ORICA NITRIC ACID PLANT 1 AND 2 NITROUS OXIDE ABATEMENT FROM NITRIC ACID PRODUCTION Should you have any questions or require additional information, please contact me directly. Sincerely, STANTEC CONSULTING LTD. Christina Flogeras, P.Eng. Lead Verifier Environmental Services Tel: (506) 452-7000 Fax: (506) 452-0112 [email protected] This report was reviewed and approved for transmittal by: Joe Harriman, Ph.D. Independent Peer Reviewer Environmental Management Tel: (506) 634-2185 Fax: (506) 634-8104 [email protected] \\cd1208-f04\shared_projects\1232\active\123210331\ghg folder\3_val_ver_statement (report)\rpt_final\post_submission\appendices\ltr_cmf_20140317_fnl_vplan_orica_nap1_2.docx Template version 1.0 November 2013 VERIFICATION REPORT FOR ORICA CARSELAND WORKS NITRIC ACID PLANT 2: NITROUS OXIDE (N2O) ABATEMENT FROM NITRIC ACID PRODUCTION OFFSET PROJECT Appendix B Submission Documents VERIFICATION REPORT FOR ORICA CARSELAND WORKS NITRIC ACID PLANT 2: NITROUS OXIDE (N2O) ABATEMENT FROM NITRIC ACID PRODUCTION OFFSET PROJECT CONFLICT OF INTEREST CHECKLIST Question 1. Can the verifying organization or the verification team members directly benefit from a financial interest in the Project Developer or the Project Developer’s Project? For example: • owning shares of the Project Developer; • having a close business relationship with the Project Developer; • contingent fees relating to the results of the engagement; • potential employment with the Project Developer; or • undue concern about the possibility of losing the verification or other fees from the Project Developer. 2. Can the verifying organization or verification team members be in a position of assessing their own work? For example: • provided greenhouse gas consultation services to the project; • provided validation for the project; • if providing non-greenhouse gas work for the company, consideration needs to be given as to how potential and perceived conflict of interests can be managed; or • a member of the verification team was previously employed with the company. 3. Does the verifying organization or a member of the verification team, or a person in the chain of command for the verification, promote or be perceived to promote, a project developer's position or opinion to the point that objectivity may, or may be perceived to be, compromised? For example: • dealing in, or being a promoter of, greenhouse gas credits on behalf of a project developer; or • acting as an advocate on behalf of the project developer in litigation or in resolving disputes with third parties. 4. Is one or more of the verification team too sympathetic to the project developer's interests by virtue of a close relationship with a project developer, its directors, officer or employees? For example: • a person on the verification team has a close personal relationship with a person who is in a senior greenhouse gas compilation role at the project developer; or • the verification team or a person of influence on the verification team has accepted significant gifts or hospitality from the project developer. 5. Is a member of the verification team or a person in the chain of command is deterred from acting objectively and exercising professional skepticism by threats, actual or perceived, from the directors, officers or employees of the Project Developer. For example: • the threat of being replaced as a third party verifier due to a disagreement with the application of an greenhouse gas quantification protocol; • fees from the project developer represent a large percentage of the overall revenues of the verifying organization; • the application of pressure to inappropriately reduce the extent of work performed in order to reduce or limit fees; or • threats of litigation from the project developer. STANTEC CONSULTING LTD. Christina Flogeras, P. Eng. Lead Verifier Phone: (506) 452-7000 Cell: (506) 440-4086 [email protected] March 17, 2014 Issued in Fredericton, New Brunswick Yes No STATEMENT OF QUALIFICATIONS Christina Flogeras is a professional engineer registered by the Association of Professional Engineers and Geoscientists of New Brunswick. Christina Flogeras is the Designated Signing Authority for the report and this satisfies Section 18(1)(ii)(A) of the SGER. With respect to the technical knowledge required under Section 18(b)(i-iii), each member of the team has the required technical knowledge of GHG emission quantification methodologies and all have experience in completing third party GHG verifications. Please refer to the team cameos below for details. TEAM QUALIFICATIONS AND EXPERIENCE Lead Verifier – Christina Flogeras, P.Eng. Ms. Flogeras obtained a Bachelor of Science in Engineering (Chemical) from the University of New Brunswick. She has recently been identified as a lead verifier at Stantec. Ms. Flogeras has completed desktop reviews, reporting, and conducted site visits for facility and project GHG inventories under Alberta Specified Gas Emitters Regulation (SGER), the British Columbia Emissions Offset Regulation and Reporting Regulation, The Climate Registry, Verified Carbon Standard (VCS), the Ontario Environmental Protection Act 452/09, and the Massachusetts Mandatory Greenhouse Gas Reporting Regulation. Ms. Flogeras has completed the ISO 14064-3 GHG verification training course. She has also been involved in air quality studies including dispersion modelling, noise monitoring, source emissions testing, and ambient air quality monitoring. These projects have been across a number of industrial sectors, including pulp and paper, petroleum refinement, electricity generation, and asphalt production. Ms. Flogeras has created various emissions inventories to address regulatory requirements and permitting including National Pollutant Release Inventory (NPRI) and Environment Canada Greenhouse Gas (GHG) reporting. Senior Review – Daniel Hegg, M.Sc., EMIT Daniel Hegg is a Senior Sustainability Specialist and Western Canada/US Discipline Lead for Stantec Consulting Ltd. Climate Change Service Line. To assist public and private sector clients successfully address their toughest sustainability challenges, Daniel has invested over decade of time and effort in developing a knowledge base that offers unique perspectives and insights on integrated carbon, energy and water management and strategy, triple bottom line business case development and climate change risk assessment and planning. Daniel‘s approach is multi-faceted and dynamic; it is predicated on an ownership transition model in which the sense of responsibility and understanding evolves from his team to the client. This allows for the development of strategic sustainability plans that are focused, workable, and address all aspects of sustainability associated with business operations as well as product portfolios. Daniel has developed and verified over 50 organizational and facility GHG inventories and offset projects for clients in a wide range of sectors. Daniel has also consulted across a wide variety of sectors directing pioneering projects in community and corporate visioning, policy and strategic planning for sustainability. He has provided strategy, policy advice, and has prepared a number of strategic guidance documents and plans on a number of climate change related topics to public and private sector organizations including the Federation of Canadian Municipalities (FCM), the Union of BC Municipalities (UBCM), the British Columbia Climate Action Secretariat, the Pacific Carbon Trust (PCT), Bell Alliant, TransAlta, Capital Power Corporation, Total E&P Canada, Teck, Connacher Oil and Gas, BC Transit, Phillips 66, amongst others. Independent Peer Reviewer – Joe Harriman, Ph.D., P.Chem. Joe is responsible for managing air quality, acoustics, climate components environmental baseline assessments, environmental assessments and environmental planning and permitting. In addition, Dr. Harriman is a Project Manager with substantial experience and background knowledge in the energy sector with respect to air quality and GHG emissions. He has been the project manager and technical lead on the development of numerous greenhouse gas (GHG) emission inventories for industrial, corporate, municipal and government clients. Dr. Harriman is experienced in working under the Alberta, British Columbia, Ontario, Quebec and Massachusetts mandatory reporting regulations, as well as voluntary programs such as The Climate Registry, having participated in over 80 verifications since the inception of the these regulations and/or programs. Dr. Harriman, on behalf of Stantec, is an instructor for the CSA to deliver the ISO 14064 GHG series of courses including Inventories (ISO 14064-1), Projects (ISO 14064-2) and Validations/Verifications (ISO 14064-3). Dr. Harriman is a registered Professional Chemist in the Province of Alberta and has the responsibility at Stantec for ensuring the quality of the verification and acting as peer reviewer in accordance with ISO 14065. This designation is reserved for select individuals with the appropriate experience in GHG inventories and projects. Dr. Harriman is currently the Regional Discipline Leader for Climate Services at Stantec in Canada East (Ontario to Atlantic regions). He has substantial knowledge in developing technologies for renewable energy production and has been involved in considerable green energy assessments including wind, solar and tidal projects. In addition, Dr. Harriman has a strong background in the chemical, mining, oil and gas and energy sectors. Junior Verifier – Rengarajan Vaiyapuri, M.Eng. Rengarajan Vaiyapuri is currently working with Stantec Environmental Service team in Edmonton as an Environmental Scientist. He has completed his Masters of Engineering from University of Alberta in Environmental Engineering and has a Bachelor of Technology degree in Biotechnology from SRM University, India. Rengarajan worked at Stantec during summer as an intern and assisted the Air Quality team with various projects. The experience at Stantec includes odour monitoring, preparing odour monthly report, setting up air dispersion model, preparing concentration contour, and setting up air and noise monitoring station. STANTEC CONSULTING LTD. Christina Flogeras, P.Eng. Lead Verifier, Environmental Services Tel: (506) 452-7000 March 17, 2014 Issued in Fredericton, New Brunswick 1.0 STATEMENT OF VERIFICATION Stantec Consulting Ltd. (Stantec) was contracted by Capital Power Corporation (CPC) to conduct an independent third-party verification of the greenhouse gas (GHG) assertion provided in the Orica Carseland Works (Orica) Nitric Acid Plant 2: Nitrous Oxide Abatement From Nitric Acid Production Project Report (Project Report) dated March 12, 2014. In this work, Orica was responsible for the collection of data used in the calculations and data management. Orica was responsible for the completion of the calculations, presentation of the information within the Project Report, and for the supporting technical documents. Stantec is a qualified third party verifier, as defined in Section 18 of the SGER. Stantec is accredited with the American National Standards Institute (ANSI), a member of the International Accreditation Forum (IAF), in accordance with ISO 14065 (Accreditation ID #0805 issued to Stantec Consulting Ltd. Atmospheric Environment Group for greenhouse gas (GHG) verification). Stantec was responsible for planning and executing the verification in order to deliver an opinion as to whether the Project Report is presented fairly and in accordance with the verification criteria. 1.1 INTENDED USER This report has been prepared for Alberta Environment and Sustainable Resource Development (ESRD) for the express purpose of facilitating the creation of Emission Reduction Credits (ERCs) under the Climate Change and Emissions Management Act and the Specified Gas Emitters Regulation (SGER). 1.2 VERIFICATION OBJECTIVE The objective of the verification was to assess whether the GHG assertion (as presented in Table 1.1) for the Project Report under the SGER satisfied the ESRD requirements in the verification criteria in accordance with the verification standards identified in Section 1.5. 1.3 PROJECT DETAILS 1.3.1 Location The Project is located 50 kilometers southeast of Calgary near Carseland, Alberta. The longitude and latitude is 20033E to 200730E and 23063N to 25296N respectively. 1.3.2 Description The Project, as defined in the Project Report, involves the creation of offset credits due to the abatement of N2O as the result of the presence of the secondary catalyst in the ammonia burner under the primary catalyst, in NAP2, where the abatement of N2O takes place. The facility includes two nitric acid plants (NAP1 and NAP2) which have the ability to produce approximately 480,000 metric tonnes of low density prilled ammonium nitrate per year for use in mining, construction and logging industries. Ammonium nitrate is obtained from the chemical reaction of nitric acid and ammonia. The plant also produces nitric acid which is used as a reactant in ammonium nitrate production. The Project consists of the installation of a dedicated secondary catalyst below the primary catalyst (precious metal catalyst gauze) to destroy N2O emissions. The NAP2 plant began operation in 1998 to produce nitric acid (HNO3) using a GPN Mono Pressure Process which oxidizes ammonia on platinum-rhodium catalyst gauze and absorbs nitrogen oxide gases in water. The plant has a production rate of 310 tonnes per day. In order to reduce the GHG emissions from the process, a dedicated catalyst was installed under the platinum rhodium catalyst gauze to reduce N2O production. Orica installed a N2O monitoring system (known as PROCAL P-200) at NAP2 in 2011 to measure the N2O emissions in order to establish the baseline and project N2O emissions. The PROCAL P-200 system consists of an ultrasonic flow monitor (measuring gas volumetric flows) and an infrared unit (measuring N2O concentration). This system is installed within the stack of NAP2. Upon completion of the baseline (1 catalyst campaign), Orica installed a Heraeus N2O abatement catalyst (HR-SC) on March 29, 2012 which was only used until September 2013 as this catalyst did not perform as expected. On September 17, 2013 a Johnson Matthey catalyst, Yara 58-Y1 was installed in an attempt to boost abatement. The GHG emission reductions are achieved as follows. Nitric acid is produced from the oxidation of liquid ammonia in both NAP1 and NAP2. During the production process, the oxidation reaction of ammonia takes place on a platinum rhodium catalyst (primary catalyst) where a side reaction produces N2O. This side reaction of ammonia oxidation is a source of N2O emissions which is the only GHG emission relevant to this Project. The Project boundary encompasses the physical and geographical site of the plant and the equipment for the entire production process. This includes all compressors, tail gas expander turbines and any nitrous oxide (N2O) abatement equipment installed. Emission reductions are calculated as the difference between the baseline emissions and project emissions. 1.3.3 Baseline and Project Conditions The baseline condition for NAP2 is defined as the amount of N2O that would be released to the atmosphere through the stack in the absence of the secondary catalyst in the ammonia burner. The related Sources, Sinks and Reservoirs (SSR) included in the baseline are presented in B1 Nitric Acid Plant (Burner Inlet to Stack) of the Project Report. The Project condition is defined as the amount of N2O that would be released to the atmosphere through the stack with the presence of the secondary catalyst in the ammonia burner under the primary catalyst where the abatement of N2O takes place. The related SSRs included in the baseline are presented in P1 Nitric Acid Plant (Burner Inlet to Stack) of the Project Report. 1.3.4 Emission Reduction Credit Period Emission reductions have been calculated and verified for the period of January 1, 2013 to December 31, 2013. 1.4 GHG ASSERTION The fundamental assertion to be verified is that the Project Report dated March 12, 2014 meets the criteria of Alberta Environment and Sustainable Resource Development (ESRD) for the period of January 1, 2013 to December 31, 2013. The essential information contained within the GHG assertion verified by Stantec is presented in Table 1.1 below. Table 1.1 GHG Assertion Year Baseline Emissions (t CO2e) Project Emissions (t CO2e) Emission Reductions (t CO2e) 249,906 133,042 116,860 January 1 – December 31, 2013 Notes: Emission Reductions are rounded down as per Guidance. 1.5 VERIFICATION CRITERIA Stantec has conducted sufficient and appropriate procedures in order to express a reasonable level of assurance opinion as to whether the Project (the GHG assertion) satisfies the requirements of the: 1.6 Climate Change and Emissions Management Act (the Act), SA 2003, c C-16.7; Specified Gas Emitters Regulation (SGER) Alta Reg. 139/2007; Technical Guidance for Offset Project Developers (version 4.0, February 2013); and Quantification Protocol for Nitrous Oxide Abatement from Nitric Acid Production (version1.0, October 2009). VERIFICATION STANDARDS The verification was conducted in accordance with ISO14064:3, ISO 14065, and the verification guidance contained within the Technical Guidance for Greenhouse Gas Verification at Reasonable Level Assurance, January 2013, version 1.0 (the Verification Guidance). 1.7 UNRESOLVED MISTATEMENTS The ESRD has set the materiality threshold for offset projects to 5% of the total reported GHG emission reductions or removals asserted. Qualitative misstatements are at the discretion of the verification body. The following is a high level summary of the unresolved discrepancies. For more information, see the verification report. Orica asserts that Project records are retained in a retrievable manner for a minimum of 10 years. The Projects’ retention period is consistent with the Protocol’s requirements; however, this retention period is not consistent with the Technical Guidance for Offset Project Developers. The requirement is to retain documentation for at least 7 years past the end of the crediting period. Stantec detected that the emission reductions shown in the Project Report and the Assertion Statement (116,860 t CO2e) are not accurately presented. Using the baseline and project emissions asserted, the calculated emission reductions are 116,864 t CO2e. This occurred due to rounding of the baseline and project emissions in the Report and Assertion. The emission reductions of 116,863 t CO2e, which account for rounding down the emission reductions as per Guidance, are supported by the Project documentation. Stantec considers this to be an immaterial qualitative disclosure. 1.8 OPINION Based on the procedures undertaken and described in this report, the Project Report for the Orica Carseland Works Nitric Acid Plant 2: Nitrous Oxide (N2O) Abatement From Nitric Acid Production Offset Project satisfies the requirements of the: 1.9 Climate Change and Emissions Management Act, SA 2003, c C-16.7; Specified Gas Emitters Regulation; Alta Reg. 139/2007; Technical Guidance for Offset Project Developers (version 4.0, February 2013); and Quantification Protocol for Nitrous Oxide Abatement from Nitric Acid Production (version1.0, October 2009). VERIFICATION CLOSURE The findings presented herein were used to make a reasonable level of assurance opinion as required by ESRD. Stantec did not conduct direct GHG emissions monitoring or other environmental sampling and analysis in conjunction with this verification. Because of the inherent limitations in any internal control structure it is possible that fraud, error or non-compliance with other laws and regulations may occur and not be detected. Further, the verification was not designed to detect all weaknesses or errors in internal controls as the verification has not been performed continuously throughout the period and the procedures performed on the relevant internal controls were on a test basis. Any projection of the evaluation of control procedures to future periods is subject to the risk that the procedures may become inadequate because of changes in conditions, or that the degree of compliance with them may deteriorate. STANTEC CONSULTING LTD. Christina Flogeras, P.Eng. Lead Verifier, Environmental Services Tel: (506) 452-7000 Issued in Fredericton, New Brunswick March 17, 2014 Joe Harriman, Ph.D., P.Chem., Peer Reviewer, Environmental Services Tel: (506) 634-2185