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ACTIVITIES IMPLEMENTED JOINTLY(AIJ)
The uniform reporting format contained below is to be used in reporting on activities implemented jointly under the pilot phase. It is noted that the reporting should be consistent with decision 5/CP.1 and 8/CP.2 (reproduced in annexes I and II to this reporting format). The SBSTA notes that the uniform reporting format could possibly require revision in the light of experience gained and methodological work conducted under the pilot phase.
A. Project Description.
A.1. General Description.
The global capacity of the cement works in the Czech Republic is sufficient to satisfy national consumption but they are becoming old and obsolete. A number of them have been bought by foreign companies for modernisation. These companies include the German Pragocement AG and KDC and the French Lafarge. Lafarge bought the cement works at Cizkovice in 1992 and it is this plant which forms the subject of the present project.
Both the productivity and the quality of the cement of this production unit need to be improved, with an increase in the efficiency and a reduction in electrical power consumption. These improvements will all help to reduce the CO2 emissions per tonne of cement produced.
At the same time, the plant will see an increase in production (from 1800 to 2700 t/day), and it will be brought into line with environmental standards introduced by the Czech administration.
A.2. Project Type.
Energy efficiency improvement.
A.4. Arrangements with other institutions.
As the operation is within the Lafarge Group, there are no particular arrangements.
The total investment amounts to DEM 54M of which DEM 10M are directly related to the reduction in the emission of greenhouse gases.
A.6. Technical Data.
All the modifications will bring about an improvement in terms of greenhouse gas emission. However, most of the improvement will come from the improvement in energy efficiency, the installation of a new heat exchanger and secondarily from an improvement in the quality of the cement (reduction in the amount of cement required by the final user).
A.7. Long-term Viability.
The emission of greenhouse gases is further improved by the fact that the main fuel used is pyrolysis residue oil. If this fuel became unavailable, the caracteristics of the project should have to be reassessed.
Cizkovice, Czech Republic.
A.9. Project Duration.
The useful life of the new installations is of the order of several decades. However, it is not realistic to develop a fixed baseline scenario over such a long period. For this reason, the duration of the joint activity will be initially limited to five years. After this period, the situation will be reviewed in the light of the overall CO2 emissions performance of the Czech cement industry, and the AIJ operation will be either be continued or terminated taking into account the new situation.
It is clear that if pyrolysis residue oil were no longer available, it would be replaced, for instance, by coal, and the whole project would have to be re-assessed.
A.10. Project Evaluation procedure.
The project has been evaluated by the French JI Secretariat taking into account the preliminary work carried out by the Scientific Committee of the Evaluation Committee for Activities Implemented Jointly.
B. Governmental acceptance, approval or endorsement
A letter from the Czech Ministry of the Environment, dated January 7 1997, acknowledges the project as being « a possible candidate for AIJ pilot projects between France as an investor country and the Czech Republic as a host country ».
C. Degree of compatibility of the Project with and supportiveness of national economic development and socio-economic and environment priorities and strategies
The project comes within the scope of the Czech industrial modernisation plan. As noted in A.1, a number of cement works have been, or are currently being, taken over by Western European firms. There are at least two reasons why the Czech Republic does not wish to increase its capacity to export cement. Firstly, the transport costs are prohibitively high compared with the value of the goods transported. Secondly, as cement production is relatively polluting, the Czech Republic is against producing more than it needs for its domestic use. The cement works thus satisfy a "local" demand. The increased production capacity is therefore a means of phasing out old plants which would be too expensive to modernise.
D. Benefits derived from the activities implemented jointly project
This project should bring about a reduction of between 13.200 t CO2/year if output were maintained at 600,000 t/year, and 20,400 t CO2/year for a maximum cement output of 900,000 t/year.
The new installation meets Czech environmental standards. Dust emission will be very low, far below the authorised limit of 50 mg/m3. The installation of new equipment will also reduce the emission of nitrous oxides NOX .
Measurements made confirm these predictions.
E. Calculation of the contribution of activities implemented jointly projects that bring about real, measurable and long-term environmental benefits related to the mitigation of climate change that would not have occurred in the absence of such activities.
E.1 Technical Data.
The Cizcovice plant produces about 600,000 t of cement per year. (production 561 kt in 1993). The modernisation of the plant will give it a capacity of 900,000 t/year.
The following fuels are used:
- heavy gas oil
- pyrolysis residue oil
- used tyres
Coal could also easily be delivered to the plant.
The modifications were made between 1993 and 1996 and the new configuration was inaugurated in September 1996.
The transformations made were the installation of two new sub-systems (a new cement crusher and a new heat exchanger), specific improvements leading to economies in fuel and electricity consumption, and improved management (the control system and staff training programmes have been entirely remodelled).
E.2. Basic CO2 Emission Data.
CO2 is the direct result of the combustion process used for manufacture. Moreover, the plant also uses electricity, the production of which also produces CO2.
Emissions from the Cizkovice plant in 1993 were as follows:
Total emission was thus at 327 kg CO2/t cement.
The average thermal energy consumption at the same date calculated on the five Czech cement works was 3758 Gj per t of clinker.
E.3. Baseline Scenario.
As has already been pointed out in A.1, Lafarge decided to increase the production capacity of the plant that it had just bought as part of its industrial development policy. This choice had nothing whatsoever to do with reducing greenhouse gas emissions.
The baseline scenario must therefore consider two configurations:
According to figures produced by Lafarge in 1996 when the plant was brought into service after total modernisation, the following basic data applies:
The forecasts for the Cizkovice plant when completely operational, that is from 1996 onwards:
Note that in 1996 the emission factor for electricity producing power stations was 707 g CO2/kWh. No projections of this figure are available for the coming years.
E.3.1. Baseline scenario for constant production level
If Lafarge had not intervened, this cement plant would have probably been bought by another international cement producer or eventually closed down. In this latter case, the nominal production of 600,000 t/year, would have been given to another plant, or divided between those that were left. The choice is thus between the best of these plants which gives 338 kg CO2/t, or the average of all cement works i.e. 354 kg CO2/t.
The assumption of continued operation of the plant is kept, leading to a figure of 327 kg CO2/t. This corresponds to an emission of 240 due to combustion and 87 for electrical consumption.
The efficiency of Czech power stations has improved between 1993 and 1996. Taking into account the improvement from 865 to 707 g CO2/kWh in electricity generation emissions, this gives a reduced total emission of 311 kg CO2/t.
During the period considered, moreover, the average calorific consumption of Czech cement works has moved from 3758 to 3582 GJ/t of clinker which represents an improvement of 4.7%. When applied to the Cizkovice plant, this improvement leads to 300 kg CO2/ t.
After the modifications made by Lafarge, the plant Lafarge exhibits a figure of 270 kg CO2/t. As shown in table 2 above, this corresponds to 207 for combustion and 63 for electricity.
However, the majority of greenhouse gas reductions corresponds to the renovation of the heat exchanger. Under these circumstances, it was decided not to take into account the gains associated with the reduction in electrical power consumption (71 - 63 = 8).
The total gain retained for the AIJ activity is thus:
300 - 270 + 8 = 22 kg CO2/t
which represents an annual gain of:
22 x 600 = 13.200 t CO2/an
Taking the duration the AIJ operation to be five years, this gives an expected economy of :
66.000 t of CO2
Table 3 summarises the calculation of this gain in kg CO2/t of cement produced.
E.3.2. Scenario for increased production.
The capacity of the plant has been increased to meet Lafarge's industrial policy. This does not mean that this additional production need be taken into account. If the operation had not been carried out, the additional 300,000 t of cement would have been produced by another cement works in the country.
Supposing that this additional production was divided between the other plant, this would have led to an emission of 354 kg CO2/t.
We have nevertheless made the hypothesis that the plant with the best CO2 emission figures would have had a sufficient excess capacity to pick up this additional load and that its distance to the corresponding markets enabled it to serve them economically. This would have given a baseline emission factor of 338 kg CO2/t cement.
Under these circumstances, the expected reduction is then
338 - 270 = 68 kg CO2/t.
Note that in this case we have taken into account all the electrical economies since they contribute to the increased capacity of the cement works.
This would lead to the following annual gain:
68 x 300 = 20,400 t CO2/year;
and for the duration of the AIJ operation, gives:
102,000 t of CO2.
E.4. Gain in CO2 emissions during the duration of the joint activity.
The total expected gain during the first five years of the project, on condition that the fuel type is not changed, would be:
66,000+ 102,000 = 168,000 t of CO2.
E.5. Emission monitoring.
The monitoring will be performed using the invoices for fuel and electricity consumption.
F. Additionality to financial obligations of the Parties included in Annex II of the Convention within the framework of the financial mechanism as well as to current official development assistance (ODA) flows.
The project is entirely funded by the private sector. The total investment is 54 MDM. If only the pre-heater should be taken into account, the sum comes to 10 MDM or about 5.9 M$. This figure compares with an economy of 168,000 t of CO2, representing an investment of 35 $ per tonne.
G. Contribution to capacity building, transfer of environmentally sound technology and ecological know-how to other Parties, particularly developing countries, to enable them to implement the provisions of the Convention. In this process, the developed country Parties shall support the development and enhancement of endogenous capacities and technologies in developing country Parties.
The project includes a staff training aspect. It also contributes to the economic and technological development of the country.
H. Additional comments.
H.1. Natural gas is available and the question of using this fuel thus arises. According to the same German study, the cost of natural gas is too high to allow the production of cement at a competitive price. Coal is therefore the only fuel which can be used at present with the exception of the recycled fuels as used here.
H.2. Lafarge's investment policy in French cement works is to reduce CO2 emissions. With a constant production of 8 Mt/year, the national CO2 production in the year 2000 will be 220,000 t/year less than it was in 1990. The 33,600 t/year improvement planned for Cizkovice therefore represents 15 % of the economies made in France.