INDONESIA CHILLER ENERGY EFFICIENCY PROJECT DRAFT ENVIRONMENTAL MANAGEMENT FRAMEWORK

Transcription

1 Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized INDONESIA CHILLER ENERGY EFFICIENCY PROJECT DRAFT ENVIRONMENTAL MANAGEMENT FRAMEWORK 2 May 2012 MINISTRY OF ENVIRONMENT REPUBLIC OF INDONESIA E3024 1

2 A. Objective The Government of Indonesia has requested the World Bank to assist Indonesia with the Indonesia Chillers Energy Efficiency Project (ICEEP). The project involves the removal of existing chillers and the collection of their CFC or HCFC refrigerants in compliance with applicable laws, policies and environmental best practice as described in the Environmental Management Framework (EMF). The EMF contains a series of mitigating and enhancement measures designed to ensure that the project minimizes any possible negative impacts and brings about positive results. The objectives of this EMF are to: (a) Provide information on environmental requirements and capacities needed for the removal of old chillers and their refrigerants and for the installation of new chillers by chiller owners that participate in ICEEP (subprojects). (b) Adopt procedures and methodologies for proper handling of chiller replacements that meet international standards for good practice to be followed by all ICEEP subprojects. (c) Provide a framework for the preparation of an Environmental Management Plan (EMP) for chiller replacement activities. (d) Specify roles and responsibilities, and outline the necessary reporting and approval procedures, for managing and monitoring environmental concerns related to the subprojects. (e) Establish the funding responsibility for implement the EMF requirements. A. Project description A chiller is the primary component in refrigeration or air-conditioning systems, typically in large buildings (hotels, malls, office buildings) or industrial facility. Chillers use significant amounts of electricity to power a compressor and typically contain CFCs, HCFCs, HFCs and other substances as primary refrigerant medium. Chlorofluorocarbons (CFCs) and hydrochlorofluorocarbons (HCFCs) are ozone depleting substances controlled by the Montreal Protocol. The consumption of new CFCs was phased out under the Montreal Protocol by December 31, 2009, but there is still a residual CFC demand from CFC-based chillers that remain in service. HCFCs were used as transition chemicals to replace CFCs in chillers; they are required to be phased out by 2030 under the second phase of the Montreal Protocol. CFC/HCFC-free chillers manufactured today are more energy efficient than older models. However, these energy efficiency gains have not been recognized by chiller owners as a sufficiently strong incentive to replace their old chillers. The project thus corresponds with the central features of the Government s strategy for energy efficiency and the phase-out of ozone depleting substances. The objective of ICEEP is to accelerate the replacement of inefficient CFC and HCFC-based chillers with energy efficient CFC/HCFC-free chillers and to contribute to a reduction of ODS consumption, GHG emissions and demand for electricity. ICEEP pursues this objective by supporting the replacement of old inefficient chillers with an incentive payment (grant) to participating chiller owners and by a variety of 2

3 promotional activities that are designed to transform the chiller market in Indonesia. ICEEP is designed to overcome the barriers of investment in energy efficient chillers through demonstration, awareness raising and capacity building and expend the project s impact through a partnership with similar and related energy efficiency programs. B. Legal framework Indonesia ratified the Montreal Protocol for the phase-out of Ozone Depleting Substances in 1992 through Presidential Decree No. 23 Year Indonesia has banned the imports of virgin CFCs since January 1, 2010, and has begun to implement the HCFC Phase-out Management Plan (HPMP) as part of phase two of the Montreal Protocol. Indonesia has ratified the United Nations Framework Convention on Climate Change (UNFCCC), which came into force in 1994, with an objective to stabilize atmospheric concentrations of greenhouse gases. The National Action Plan for Reduction of Greenhouse Gas Emissions (RAN-GRK) issued in 2011, outlines the government s plans for achieving a 26% reductions below business-as-usual by The Government of Indonesia introduced the implementation of energy conservation measures in offices, including air-conditioning, through Presidential Instruction no. 10, Decree No. 0031, 2005 of the Ministry of Energy and Mineral Resources (MEMR) introduced guidelines for energy conservation measures and reporting of all energy consuming sectors in Indonesia. 1 Government Regulation No. 74 Year 2001 on Management of Hazardous Substances (PP 74/2001) regulates handling and disposal of hazardous substance. Procedures on handling of hazardous wastes, including temporary storage of wastes, are covered by MoE Regulation No. 18 Year C. Word Bank safeguard policies The World Bank s operational policy OP 4.01 provides guidance on objectives and principles regarding environmental and social safeguards for Bank operations. ICEEP is a category B project, which requires only an Environmental Assessment and Management Framework. An excerpt of the applicable policy is below. Word Bank Safeguard Environmental Assessment (EA) (OP 4.01) Abstract EA is a process whose breadth, depth, and type of analysis depend on the nature, scale, and potential environmental impact of the proposed project. EA evaluates a project's potential environmental risks and impacts in its area of influence; examines project alternatives; identifies ways of improving project selection, siting, planning, design, and implementation by preventing, minimizing, mitigating, or compensating for adverse environmental impacts and enhancing positive impacts; and includes the 1 Energy Efficiency Policies of Indonesia, Ministry of Energy and Mineral Resources, 4 August

4 Environmental, Health and Safety (EHS) Guidelines process of mitigating and managing adverse environmental impacts throughout project implementation. The Bank favors preventive measures over mitigatory or compensatory measures, whenever feasible. The EHS Guidelines are technical reference. When one or more members of the World Bank Group are involved in a project, these EHS Guidelines are applied as required by their respective policies and standards. D. Environmental impacts Chillers impact the global environment when (part of) their refrigerant load is emitted to the environment due to leakages from chillers or in the process of servicing, decommissioning and maintenance of chillers, or from storage containers. a) Ozone depletion: CFCs and HCFCs are ozone depleting substance (ODS). CFCs were used as refrigerant in older chillers; virgin CFCs are now banned. HCFCs were permitted as alternative refrigerant in newer chillers due to their lower ODP. HCFCs are being phased out now. HFCs have no ODP. b) Global climate change: CFCs, HCFCs and HFCs are greenhouse gases with different global warming potentials (GWP). HFCs have no ODP and are recommended as a substitute for newer chillers, but they do have a high GWP, although their lifecycle emission from modern chillers is low due to improved design and more robust structure. Chillers consume considerable amounts of electricity, which contributes to climate change to the extent that fossil fuels are used to generate grid power. Modern, well maintained chillers use much less electricity than their older counterparts. Chillers and their replacement can have local environmental and health impacts: a) Noise: Movement and operation of large equipment can generate local dust and noise pollution. Elevated noise levels from construction, in particular from cutting equipment, can lead to temporary or permanent hearing impairment. b) Liquids: Lubricating oils and greases are contained in and will be removed from old chillers together with the refrigerant. A contamination of the site is therefore not expected. c) Solid waste: The removal of the old chillers can result in hazardous waste, in particular asbestos from insulation materials or buildings. While asbestos is usually not used as insulation material for chillers and attached pipes, it may be present in walls and other building parts, part of which may have to be removed to make space for the movement of the old and new chillers. Asbestos is a sever health and occupational hazard. No other hazardous waste materials are associated with chillers or their removal. d) Destruction of ODS: The destruction of ODS, usually by incineration, can produce and release harmful substances, such as dioxins and furans, if destruction is not executed in appropriate facilities and is carefully controlled. ICEEP does not include any ODS destruction activities, but the World Bank will assist the Government of Indonesia to explore funding opportunities for the disposal of unwanted ODS. 4

5 e) Power generation: Chillers consume large quantities of electric power that is often produced by power that emit polluting substance to the environment. The project will reduce electricity consumptions and ensure that old inefficient chillers cannot be reused. E. Mitigation measures The mitigation activities included in this EMF are reflected in the project design and must be included in the EMP for each chiller replacement activity, as follows: a) Recovery of refrigerants: Proper capture of all ODS from decommissioned chillers is essential to avoid atmospheric release. The refrigerants in old chillers can be volatile and can easily be released intentionally or unintentionally during the removal of the old chiller. The recovery of refrigerants from decommissioned chillers must be undertaken by a qualified technician using a recovery and recycling machine. The recovery process must be witnessed and documented independently and certified by the project management unit. b) Refrigerant storage: Recovered refrigerant must be stored in suitable containers within suitable storage premises. Containers may be pressurized and require appropriate safety and health precautions and procedures. Refrigerant Storage is the responsibility of chiller owners, who have the options to recycle and reuse recovered refrigerants to service existing chillers. c) Refrigerant inventory: The quantity of refrigerants recovered from old chillers and stored must be recorded in an inventory to ensure that these stockpiles and their movement and utilization can be monitored and tracked and that they are not vented into the atmosphere. This inventory should be kept updated and made available for inspection by independent auditors. d) Asbestos: A site assessment for the presence of asbestos should be carried out in the area impacted by the removal and movement of old and new chillers. If asbestos is found and need to be removed, a management plan for removal, transport and disposal should be followed. It is important to isolate the area during the asbestos removal process. Particle masks and containment rooms are standard precautionary measures. e) Occupational and safety measures: Standard precautions, such as the use of personal protective equipment and noise protection, during the decommissioning, demolition and removal processes of old chillers and during the movement and installation of new chillers must be followed. The replacement process must abide by all applicable national regulations and standards. The new chillers and their installation must comply with ASHRAE (Safety Standard for Refrigeration Systems) and with ANSI/ASHRAE (Designation and Safety Classification of Refrigerants), which specify safe design, construction, installation, and operation of refrigeration systems. f) Disposal of old chillers: The compressor of the decommissioned chillers must be physically destroyed and rendered unusable to prevent the reuse of the old chiller. The destruction of the compressor must be witnessed, documented and certified. All other parts may be stored and used as spare parts or must be recycled or disposed of in an environmentally sound manner. 5

6 g) Maintenance: The completion of the installation, the testing and proper operations of the new chillers must be documented. Chiller owners that participate in ICEEP must agree to undertake proper and routine maintenance for new chillers to ensure optimal performance, energy efficiency and containment of refrigerants. F. Responsibilities Chiller owners bear the responsibility for all chiller replacement activities and any related environmental management obligations. They must submit a chiller replacement implementation plan (CRIP) prior to any replacement activities, which will include the EMP. The CRIP must be approved and will become part of the legally binding agreement between the chiller owner and MoE. The chiller owner must make compliance with the EMP a binding condition in any contract with a chiller supplier and/or installation company who provide services that are covered by the agreement with MoE. A template for the EMP to be submitted is contained in Annex A. The PMU will include relevant environmental management guidelines in the project s Operations Manual. To assist the chiller owner, the PMU may develop information material for contractors, setting forth the environmental rules and procedures to be followed during the removal/destruction of Chiller equipment. The information material may include good practice guidelines on environmental management and supervision, environmental requirements for contractors, environmental planning rules for construction and oversight of works, and activities to minimize and mitigate impacts from removal or movement of large equipment. However, the assistance that the PMU may provide shall in no way limit the responsibility of the chiller owner for the preparation of the EMP and its proper execution and supervision. Chiller suppliers and contractors are responsible to undertake all work related to the agreed chiller replacement in a safe and environmentally sound manner, whether directed by specific rules or not. Suppliers and contractors are expected to recognize and promptly address any environmentally adverse impact of their work whether included or not in the EMP or other documents. Supplier/contractors shall prepare and sign a report on the replacement process (or their part of the process), which shall confirm successful completion of the work and mention any irregularities that occurred during the process. G. Institutional arrangements The Ministry of Environment (MoE) has been empowered by the Government of Indonesia with overall responsibility for the implementation of the Montreal Protocol. The National Ozone Unit (NOU), established within MoE, is responsible for day-to-day operations of the Montreal Protocol Program under the guidance of a National Steering Committee representing by concerned ministries. A PMU will be established within the NOU for the day-to-day management of ICEEP. A sub-grant agreement will be signed between MoE and chiller owners that participate in ICEEP. This legally binding agreement will include the CRIP and the EMP, which are to be prepared by the chiller 6

7 owner and must be submitted to the PMU for approval. The PMU will monitor compliance with the subgrant agreement and the EMP, which is a prerequisite for the release of the ICEEP incentive payment to the chiller owner. The chiller owners will report on the replacement work and compliance with the EMP and will furnish required documents. Critical parts of the replacement activities will be witnessed and certified by the PMU and reported to the World Bank as part of routine reporting requirements. The PMU will monitor a representative sample of new chillers as part of ICEEP implementation. The PMU will record and maintain all information related to the chiller replacement program in a secure database. The World Bank task team will supervise the implementation of the project including its environmental provisions. Supervision will include discussion with selected chiller owners and visits of the sites where chillers will be or have been replaced. H. Supporting documents The following documents will support the implementation of this EMF: a) EMP template in Annex A b) World Bank Guidance Note on Asbestos. June 2007 in Annex B c) ICEEP Operations Manual to be prepared by PMU d) Information material for chiller owners, suppliers and contractors to be prepared by PMU I. Capacity requirements It is the chiller owner s responsibility to select a supplier and/or contractor for the chiller replacement work who are trained and capable of following the EMP and to supervise their work. As part of the implementation of ICEEP, the PMU will organize technical workshops for chiller owners, suppliers and other stakeholders. These workshops will include a section on the decommissioning of old chillers and the installation of new chillers, the proper handling of refrigerants, and other environmental requirements. They will also cover the required documentation to be provided by the chiller owners, in particular the CRIP and the EMP. The technical consultant hired for ICEEP will be required to be fully familiar with the chiller replacement process and the handling of refrigerants and, if necessary, he can advise chiller owners and contracts on the proper process. J. Budget The chiller owner bears the financial responsibility for the replacement of his old chillers including for any environmental mitigation activities required by the EMF/EMP. ICEEP will make a lump sum payment to chiller owners for the successful installation of a new chiller of about 15% of the cost of a new chiller. The payment will only be made after chiller owners have complied with all EMF/EMP requirements. 7

8 ANNEX A Environmental Monitoring Plan Template The chiller owner will prepare an EMP by completing the template below and submit it together with the chiller replacement implementation plan to the PMU for approval and inclusion in the sub-grant agreement. The environmental monitoring plan is designed to ensure that mitigation measures are implemented and have the intended result. Additional remedial measures must also be indicated in the EMP and be carried out if the mitigation measures identified below are inadequate or the impacts has been underestimated. Instructions: Please complete the following EMP template by initialing the following statements as appropriate and/or by answer the following question. Please provide details, any additional information and background documents as may be necessary A. Site Assessment Asbestos A site assessment has been undertaken and no asbestos has been found. Asbestos has been found. Where? (please describe) The asbestos removal plan is as follows / is attached. Laboratory analysis of asbestos has been / will be undertaken by: A contractor for asbestos removal, transportation, storage and disposal has been / will be selected, who will follow Government Regulation PP 74/2001 and the World Bank asbestos guidelines. The contractor will be required to ensure the use of proper personal protection equipment for all affected personnel. airtight isolation of the site during removal/demolition activities. proper handling, storage, transport of asbestos to an offsite disposal area. A certificate of orderly removal and disposal will be provided by the contractor. The following contractors are being considered: 8

9 The PMU will be invited to observe the asbestos removal process. Noise and dust pollution The possibility of noise and dust pollution and related grievances by neighbors and other affected people has been assesses and has been found to be (i) relevant, (ii) not relevant. If relevant, the following measures will be implemented to mitigate dust and noise pollution during removal of the old and installation of the new chiller: (please specify) Neighbors and other affected people will be informed about possible noise and dust pollution and mitigation measures taken. The supplier / contractor will ensure that ambient sound and pressure levels and dust levels during construction and replacement work will be measured and monitored. construction personal will use proper protection equipment. Other site-related issues Note any other that could result in negative environmental impacts due to the replacement of chillers such as difficult terrain and transportation issues / road safety (please describe) B. Chiller decommissioning Supplier / contractor The removal of the old chiller will done by a chiller supplier selected from among the following: (provide names of suppliers under consideration) contractor company selected from among the following: (provide names of suppliers under consideration) Refrigerant handling The supplier contractor will be required to follow the following procedures during the removal of refrigerant from the old chiller. The supplier / contractor will be required to use a state-of-the-art recycling and recovery machine to remove refrigerant from the old chiller and attached pipes (indicate which brand and model of the recycling and recovery machine should used): 9

10 provide and fill the appropriate containment and storage vessels for each refrigerant follow the appropriate occupational safety and health procedures for handling of pressure vessels document the extraction and bottling process (photos), the machinery and other equipment used, and the type and amount of refrigerant extracted from each old chiller. create an inventory record of the extracted and stored refrigerants, sign the inventory together with the chiller owner and transmit it to the PMU. remove the refrigerants for off-site storage recycling and reuse disposal (indicate how): ensure proper storage of removed refrigerants in a suitable on-site location. The PMU will be invited to witness and certify the removal process. Handling of old chiller The selected supplier / contractor will be required to follow proper safety procedures relative to work around heavy machinery render the compressor of the old chiller permanently unusable by cutting or another method. (explain how): remove / ensure removal of the old chiller in a safe and environmentally sound manner. document the decommissioning, destruction and removal of the old chiller. The old chiller will be (i) recycled as scrap metal (ii) stored as spare parts for later use The PMU will be invited to witness the destruction of the old chiller. C. Chiller installation Supplier / contractor The installation of the new chiller will done by the same supplier / contractor as above 10

11 a chiller supplier selected from among the following: (provide names of suppliers under consideration) a contractor company selected from among the following: (provide names of suppliers under consideration) Installation of new chiller The supplier / contractor will be required to follow the same general mitigation procedures for the installation of new chillers as laid out above. comply with ASHRAE (Safety Standard for Refrigeration Systems) and with ANSI/ASHRAE (Designation and Safety Classification of Refrigerants). take the utmost care with regard to the installation and filling of the new chillers with refrigerants to avoid any leakage during the filling process or in the future. test, calibrate and adjust and monitor or assist with monitoring of the new chiller to ensure its optimal operations. Maintenance and monitoring The new chillers will be maintained professionally for a period of at least five years to ensure (energy) efficiency of operation and avoidance of leakage of refrigerant (if an environmentally harmful refrigerant is used). The maintenance will be performed by (i) the chiller supplier per contract. (ii) the chiller owner / an on-site refrigeration engineer, (iii) a qualified contractor from among the following The PMU, its consultants and World Bank representatives will have access to the new chillers for at least one year after the incentive payment was received. refrigerant storage site for at least five years (or until the stored refrigerants have been removed), beginning with the 1 st of January following the year of installation of the new chiller. 11

12 ANNEX B World Bank Guidelines on Handling of Asbestos Asbestos: Occupational and Community Health Issues and Resources for Best Practice Standards 12