PAYBACK: Ensuring delivery of CERs 4th February, British Embassy, Tokyo Dr Euan Low

2 Presentation outline 1. Mott MacDonald and services in carbon 2. Examples 3. Suggested cooperation to ensure payback

3 Mott MacDonald is an Independent Management, Engineering & Development Consultancy >12,000 staff working in > 130 countries, turnover >US$1 billion

re Government Local Department/ Public Corp./ Private Co. EPC Contractor DesignerOperator Lenders/ Investors Manufacturer Obtaining Permissions & Consents, Survey,Detailed Design Policy development; Support of Parliamentary Acts; Establishment of Service Level Agreements, Privatization Market Study & Analysis, Master Plans; Procurement Strategies; Demand Forecasting; Independent Review; Contract Preparation; Independent Checking Engineer; Independent Technical Auditor; Independent Validation & Verification; Cost Control; Off-take Agreements Market Conditions; Lenders Engineer; Technical Due Diligence; Social & Env. Due Diligence; Asset Valuation Safety cases; Reliability, Availability, Maintenance & Safety Review Consortia Design; Detailed Specification; Owners Engineer, Risk Management; Social & Environmental Impact Assessment; Contract Preparation; Contract Audit, PDD Asset Management Planning, Investment Planning, Cost Optimization, Monitoring, Auditing, Operational Maintenance Planning & Procurement Mott MacDonald Services in Structured Finance EPCM, Cost Control, Design & Construction Management Special Purpose Co. Customers Affordability Studies Carbon Offtakers PDD, ERPA, Compliance

Market studies Investigation of energy efficiency & emission reductions Conceptual Design Risk analysis, due diligence for lenders Plant Engineering and Specification Contract award (Bid Evaluation) Construction Monitoring Operation Monitoring ENGINEERING PROJECT DEVELOPMENT: Feasibility Studies Lenders Engineer Owners Engineer Conceptual & Feasibility Stage Project Development Construction Operation Project Development CARBON PROJECT DEVELOPMENT: Carbon advisory work Technical design/analysis for owners Project Development Services Analysis of the host country institutional CDM organisation Capacity building of national CDM authority (DNA) (Training & workshops) Identification of country-specific project potentials Project screening and preliminary selection Formulation of PIN Project registration probability Search for Investors Procurement of buyers sellers ERPA signature Development of New Methodology Development of PDD Support with verification & certification Construction monitoring for carbon funds

6 CO2 (GWP = 1) Emission SourcesMM Specific Skills Power generationExtensive experience in all aspects of power generation and low carbon technologies including feasibility studies, cost analysis, technical and commercial due diligences, EPC tendering, operation and construction monitoring for all conventional technologies, CHP and renewables. TransportExtensive experience in transport studies and all aspects of transport engineering including light rail, rail, road transport and airports. Studies include traffic management, emission reduction programmes and technology appraisal. Energy use in buildingsExtensive experience in all aspects of energy use in buildings. This includes the following key areas: - Passive Design (advice/studies on microclimate, building orientation, ventilation, etc.) - Facade Design (Sustainable facade detailed design, thermal, daylighting and comfort studies, insulation and condensation analysis), - Systems Design (Mixed mode systems, displacement ventilation, chilled beams/ceilings, high efficiency lighting and control system, building energy management systems), - Energy Supply (use of micro-renewables and microCHP) Reuse and Recycling. Energy use in industrial processes Analysis of energy efficiency and fuel switching. This includes carrying out energy audits, energy modelling, appraisal of technology and fuel options and process modifications such as low efficiency boilers, installation of heat exchangers, creative use of economisers and cogeneration equipment, and adoption of good energy management. Energy use in miningExcellent contacts and knowledge of the mining sector to undertake energy studies as above specifically for the mining sector. Technologies

7 CH 4 (GWP = 21) Emission SourcesMM Specific Skills Incomplete combustion of fossil fuels In depth knowledge and extensive track record in combustion systems for power generation, analysis of technology solutions/options, efficiency studies, fuel switching (biomass, gas, biofuels), track record in analysis of biofuel production plants (bioethanol and biodiesel) Decomposition of organic matter and animal waste Extensive track record in landfill gas and landfill gas to energy feasibility studies, construction and operation monitoring, knowledge of landfill gas separation technologies (methane separated and gas returned to the grid), extensive experience in waste to energy projects using conventional combustion, advanced combustion technologies (pyrolosys and gasification) and anaerobic digestion, extensive experience in waste to energy projects with different fuels; municipal solid waste, biomass waste and animal waste. Transport and storage of oil and gas In depth knowledge and extensive track record in the oil and gas industry and oil and gas transportation systems. transportation systems Analysis of technology options such as pipeline leak reductions, compressor station efficiency improvements, process efficiency studies

8 N 2 O (GWP = 310) Emission SourcesMM Specific Skills Fertiliser manufacture and use Experience in analysis of production process to improve efficiency. Knowledge of fertilisers production processes based on urea/ammonium fertilisers. Fossil fuel combustionIn depth knowledge and extensive track record in combustion systems for power generation such as pulverised fuel boilers and fluidised bed boilers, analysis of abatement technologies/solutions, efficiency studies, fuel switching (biomass, gas, biofuels) Adipic (nylon) manufactureExperience in analysis of chemical processes to improve efficiency. Knowledge of nylon production processes and releases of pollutants to atmosphere. Nitric acid productionExperience in analysis of chemical processes to improve efficiency. Knowledge of the production and unit operation as well as understanding of the key different nitrogen based oxide gases. Water treatmentIn depth knowledge and extensive track record in water treatment processes. Familiar wtih all types of water treatment processes including ones with high nitride composition. Waste combustionExtensive experience in waste to energy projects using conventional combustion technology, advanced combustion technologies (pyrolosys and gasification) and anaerobic digestion Extensive experience in waste to energy projects with different fuels; municipal solid waste, biomass waste and animal waste Biomass burningExtensive experience in biomass combustion for power generation including different combustion technologies and the mechanism of N2O production as opposed to Nox.

9 PFC's (GWP = 9,200-6,500) Emission SourcesMM Specific Skills Aluminum smelteringExperience in analysis of production processes to improve efficiency as well as anode production. Semi-conductor manufactureKnowledge of recovery followed by destruction HFC's (GWP = 11, ) Emission SourcesMM Specific Skills Manufacture and use of refrigerants Experience in analysis of production processes to improve efficiency, knowledge of capture and destruction processes using thermal oxidation technologies. Experience in using mass balance approach to derive baseline data, developing gas storage concepts and minimum functional specifications for thermal oxidation plant, EPC tendering and construction monitoring. SolventAnalysis of production processes to improve efficiency, knowledge of capture and destruction processes Foam productionExperience in foam production and usage (fire fighting). AerosolsExperience in the production of aerosols in paint and other processes. Investigation of contamination incidents. Semi-conductor manufactureKnowledge of recovery followed by destruction

10 SF 6 (GWP = 23,900) Emission SourcesMM Specific Skills Electricity transmission and distribution Extensive experience and track record in the design and analysis of power systems including SF6 reduction programmes. This involves identifying operation and maintenance practices and options for equipment replacement. Magnesium smelteringAnalysis of process and use of alternatives Semi-conductor manufactureKnowledge of recovery followed by destruction

11 What makes Mott MacDonald different? We provide you with technical leadership and enhance your capabilities in all relevant technologies and sectors We are experienced in ensuring delivery in both the carbon market and infrastructure project development We provide you with global coverage support and access to an extensive client network This combination provides direct value to your business and makes MM different from our competition and so a preferred choice for many clients

12 Presentation outline 1. Mott MacDonald and services in carbon 2. Examples 3. Suggested cooperation to ensure delivery

13 HFC23 Incineration, China Client: Carbon Investor Phase 1 Scope: Risk analysis and due diligence: – Technical review of existent chemical plant (analysis of process flow diagrams, maintenance, capital investment programmes, etc) – Functional specification for incinerator (capacity, environmental regulations, safety issues, site issues (space), storage) – Analysis of CDM methodology – Engagement of validator Problems: – Lack of information on markets and contractual issues – recommended a market study – Lack of monitoring data – calculation of HCF23 from first principles – Cultural issues – Chinese team

14 HFC23 Incineration, China Phase 2: Identification of technology supplier and EPC contractor – Development of all tender documentation – Identification of long list of technology suppliers and EPC contractors – Tender evaluation – Tender award – EPC contract negotiations Problems: – Division of risks between carbon investor, host and EPC contractor – close collaboration with all parties Phase 3: Construction monitoring – on-going – Local support team

15 Biomass plant, Eastern Europe Biomass cogeneration project fired on forestry waste, steam used for district heating – 200ktCO 2/yr Client: Carbon Investor Scope: Risk analysis and due diligence: – Technical review of existent plant - complex project with three sub- projects: power expansion, district heating and fuel conversion) analysis of process flow diagrams, maintenance, capital investment programmes, etc) – Contractual analysis: EPC contract, O&M contract, fuel contracts – Project participant capabilities – Analysis of financial model – Environmental review Problems: – Lack of capability of EPC contractor: suggested possible mitigation strategies: contingency, partnership, recruitment.

16 Waste water treatment – South-East Asia Waste water treatment through a biodigestor to generate electricity – a number of projects across the region varying in size (avg. 100kt/COP2) Client: Carbon Investors, and project owner (own origination) Scope: Risk analysis and due diligence: – Technical review of host plant (tapioca factory) – Technical review of proposed biodigestor – Electricity grid connections – Contractual analysis: EPC contract, O&M contract, fuel contracts – Project participant capabilities – Analysis of financial model – Environmental review – CER estimation CDM registration Problems: – Control over host process and aligning incentives between host and carbon off- taker

17 Examples of CDM/JI Bio-diesel production facility in Brazil – Carbon investor Portfolio of heat recovery plants from coke and steel manufacturing – China – Carbon investor Portfolio of heat recovery projects from cement plants in China: Advisor to carbon investors CDM registration of 4 wind projects in Cyprus - Lenders Windfarms in China : DD for investors and CER buyers Rice Husk Power Plant, Thailand : Advisor to investor on DD and CDM approval

18 Examples of CDM/JI Cassava Waste Anaerobic Biodigester, Thailand: Technical, commercial and CDM feasibility study Bagasse-fired CHP Plant, Belize : Technical, commercial and CDM feasibility study Bagasse and wood-chip and bamboo-fired CHP Plant, Ecuador : Technical, commercial and CDM feasibility study Design of a methodology for gas company in Ukrainian, collaborating with QT Several Waste to Energy projects in India as CDM advisors

19 Examples CDM/JI Pipeline of own originated project with potential for 1m t/CO2 per year spread across a number of countries and covering different sectors, including the development of new methodologies.

20 Presentation outline 1. Mott MacDonald and services in carbon 2. Examples 3. Suggested cooperation to ensure delivery

21 Suggested areas of cooperation Carbon Advisory Services Technical & Commercial Advisory Business Owners Engineering / Project Management Consultancy

Thank you Consultancy services with a technical edge