Fair Oaks Dairy Farm, LLC Cyclus Designed Digester Project CAR477 Climate Action Reserve 12/09/2011 TUV SUD America, Inc 10 Centennial Drive, Peabody Massachusetts, USA 01960 GHG_F_09.08, Rev 2 Effective 2011-03-28 Page 1 of 14
Reporter (Client): Camco International Group, Inc. Street / P.O. box: 390 Interlocken Crescent City / State / post code Broomfield, CO 80021 Project contact person Name: Email: Telephone No. Project Title: Project Location: Street City, State and ZipCode Country Charles Purshouse Charles.Purshouse@camcoglobal.com Fair Oaks Dairy Farm, LLC Cyclus-Designed Digester Project 5431 East 600 North Fair Oaks, IN 47943 USA Standard/GHG Program: Climate Action Reserve Methodology Used/Version No. Livestock Project Protocol Version 2.1 Reported Emissions Reduction Vintage Year: TUV SUD America, Inc Lead Auditor: 2011 Marisol Bacong Telephone and e-mail 351-201-2979; mbacong@tuvam.com Accreditation: ISO14065 VCS CAR (Others) Verification Team: Lead Auditor: Marisol Bacong Internal Reviewer: Eric Ripley Summary of Findings: Verified emission reduction: 1,295 tco2eq 12/09/2011 Verification without qualifications Verified with qualification (explain qualification providing brief explanation of the reasons for each qualification and how and to what extent the GHG assertion is affected) Unable to verify (include reasons) Date Lead-Auditor GHG_F_09.08, Rev 2 Effective 2011-03-28 Page 2 of 14
1. Introduction 1.1 Objectives The objectives of this verification work were to: Determine conformance of the project activity with the applicable verification criteria: Climate Action Reserve (CAR) Livestock Project Protocol, Version 2.1 (August 20, 2008) and Errata and Clarifications to Livestock Project Protocol, Version 2.1 (October 26, 2011) including the principles and requirements of CAR s Program Manual (October 26, 2011) and Verification Program Manual (December 20, 2010) and the ISO 14064:2006 Greenhouse Gases Part 3; Specification with guidance for the validation and verification of greenhouse gas assertions; Assess completeness of the GHG project report and information; Evaluate the Project s GHG information system and its controls/management; and Confirm whether the GHG assertion is without material discrepancy, and whether the verification activities provide the level of assurance agreed to at the beginning of the verification process. 1.2 Criteria The criteria for the verification are the CAR s Livestock Project Protocol, Version 2.1 and Livestock Project Verification Protocol Version 2.1. All verification activities were conducted in accordance with the Climate Action Reserve s Program Manual (October 26, 2011), Verification Program Manual (December 20, 2010), and the ISO 14064:2006 Greenhouse gases Part 3: Specification with guidance for the validation and verification of greenhouse gas assertions. 1.3 Project Description The Fair Oaks Dairy Farm, LLC Cyclus-Designed Digester Project (the Project) consists of a biogas control system that captures and destroys methane through anaerobic treatment of manure. Its components include a series of vertical plug flow above-ground anaerobic digesters, two engines, boiler and a flare. The Project is located at Fair Oaks Dairy farm at 5431 East 600 North, Fair Oaks, IN 47943. The Project became fully operational on August 31, 2004. The Project managed an average of 2,984 lactating cows and 728 dry cows during the reporting period. The Project boundary encompasses waste production at barn 2 of Fair Oaks Dairy Farm. Manure from barn 2 is collected by a vacuum truck 2 to 3 times daily and temporarily stored and accumulated in a concrete pit prior to sending to the sand manure separator. The resulting manure effluent stream is thinned with recycled post AD liquid effluent and pumped through a series of Cyclus-designed digesters. The digesters have a designed hydraulic retention time of 11.5 days at temperature of 100 F. GHG_F_09.08, Rev 2 Effective 2011-03-28 Page 3 of 14
Effluent from anaerobic digesters is sent through a screw press to separate the solids from liquids. The liquids are held in a lagoon with 15.8 million gallon capacity each and used for flushing the milking parlor holding area or irrigation. The solids are spread on field. The captured biogas is sent to two engines, a boiler and an open-type flare. Heat from the boiler is used to keep the Cyclus digesters at operating temperature. 1.4 Scope TÜV SÜD America, Inc. (TÜV SÜD) performed verification of the Project according to the criteria mentioned in Section 1.2. The verification scope consisted of the following independent and objective activities: - Review of the Project s monitoring plan; - Site visit at the Project facility; - Review of Project boundaries; - Review of Project eligibility; - Review of operations and GHG management system; - Review of estimation methodologies and emission reduction calculations; - Issuance of request for additional data/proofs/documents and clarification and corrective action requests; and - Issuance of verification report and verification statement to Camco and CAR. The time period covered during verification activities was January 1, 2011 August 31, 2011. 1.5 Level of assurance and materiality A reasonable level of assurance was applied during verification activities. As per criteria requirements, projects registering 25,000 CRTs or less should achieve greater than +95% accuracy level relative to the verification body s calculated emission reduction. Therefore, a materiality threshold of +/- 5% was applied to the Project s reported 2011 GHG emission reduction. 2 Verification Process 2.1 Overview The verification process for the Project consisted of the following primary components: Conflict of Interest Assessment; Selection of Verification Team; GHG management system, criteria, and data/information assessments, and Verification of emission reduction quantification as presented through the Project s data collection and quantification spreadsheets. GHG_F_09.08, Rev 2 Effective 2011-03-28 Page 4 of 14
In completing the above primary verification components, the following specific activities were conducted: Conflict of Interest Assessment TÜV s internal conflict of interest (CoI) process ensures that verification activities will not be compromised by questions of impartiality. Furthermore, CAR s CoI process is a required verification component designed to provide an additional assessment to avoid a potential conflict of interest during verification activities. The assessment conducted for the Project resulted in a low potential for CoI. Verification Team Selection The verification team (see Project Summary Page 2) was selected based on experience and training possessed by the verifiers. Initial Strategic Review An initial strategic review was conducted to understand the scope of the Project, the Project s GHG emission sources, and methods of collecting and managing GHG data. During the initial strategic review, the following documentation was utilized: Eligibility documentation, Required CAR Attestation forms, Monitoring plan and associated documentation, Baseline manure management map and BCS metering diagram, Livestock categories and monthly herd population, Biogas flow and methane concentration data, and Discussions with Lauren Wittig of Camco and representatives from Fair Oaks Dairy Farm. Kickoff Meeting The Project verification kickoff meeting was conducted on August 22, 2011. During this teleconference, formal introductions of the verification team and the primary Project representatives were made, the verification process was reviewed, and various logistical issues were discussed. Verification and Sampling Plan Development The development of the verification and completion of the sampling plan followed the kickoff meeting. The verification plan was communicated verbally and presented to the Project representatives during the site visit. The verification plan serves as a basic guide to completing verification activities while the sampling plan was developed to guide the site visit and desk review assessments. Verification planning consisted of preparation for verification activities including further definition of verification approach, team responsibilities, and performance schedule. GHG_F_09.08, Rev 2 Effective 2011-03-28 Page 5 of 14
Site Visit A site visit was conducted at the Fair Oaks Dairy Farm September 1, 2011. Site visit activities consisted of a dairy farm tour to identify and confirm emission sources, review of the Project s GHG management system, inspection of Project monitoring equipment, and interviews with relevant personnel associated with the Project s GHG management and data collection system. Assessments and Corrective Action/Additional Information Assessments of the Project s GHG management system, criteria requirements, and GHG data and information were completed via site visit and desk review of Project information. TÜV SÜD issued clarification and corrective action requests during the verification process. Internal Review Following completion of verification activities, an internal review was conducted to ensure that all verification activities were completed adequately and in accordance with the criteria. Verification Reporting Verification reporting consists of a written account of verification activities, list of findings resulting from these verification activities, and a conclusion regarding the verification team s confidence in the Project s GHG assertion. The final verification report and verification statement were provided to Camco and CAR and constitute verification reporting activities associated with the verification from January 1, 2011 to August 31, 2011. 2.2 Verification Plan The verification plan serves as a guide for verification activities. It provides the objectives, criteria, scope, level of assurance and materiality threshold applied during the verification. Additionally, the plan provides an overview of the schedule of verification activities as well as an overview of the data and information to be reviewed during the site visit and desk review assessments. As verification planning is an iterative process, revisions to the verification plan were necessary due to changes such as site visit scheduling, revisions to the verification time period, and revisions to the GHG assertion. 2.3 Sampling Plan The sampling plan provides documentation of the assessments conducted during the course of verification activities. It is developed taking into consideration the results of the initial review and identifies the specific data and information that will be reviewed during verification performance. As part of its risk-based sampling approach, TÜV SÜD conducted a site visit to the Project site at Fair Oaks Dairy Farm to assess operations, management systems, QA/QC procedures, personnel training, and the Project s conformance with the requirements of the criteria. TÜV requested and reviewed all data associated with project eligibility, operational and monitoring requirements and quantification of GHG emissions reductions GHG_F_09.08, Rev 2 Effective 2011-03-28 Page 6 of 14
for the period of January 1, 2011 to August 31, 2011. All calculations and quantification methods were reviewed for the verification time period. 3 Assessments 3.1 Eligibility 3.1.1 Project Start Date and Location As the Project is located in Fair Oaks, Indiana, the project is eligible to register emission reductions with CAR under the Livestock Project Protocol, Version 2.1. The Project became operational on August 31, 2004. Fair Oaks Dairy Farm, LLC submitted a fixed asset accounting report that specified the date the BCS was put into service. As the Project commenced operation after January 1, 2001 and the project submittal form was submitted on July 8, 2009, the Project was eligible to list with CAR. 3.1.2 Anaerobic Baseline TÜV SÜD verified the anaerobic baseline requirements from the baseline manure management diagram submitted by Camco and through interviews of Fair Oaks personnel during the site visit. The sand laden manure, consisting of 90% of manure at Fair Oaks, was cleared from free stalls by skid loaders and emptied into concrete holding ponds located at each barn. The holding ponds had an average retention time of greater than 30 days. The ponds are completely emptied in October of each year. The remaining 10% of manure from the milking parlor was sent to an anaerobic lagoon. TÜV SÜD verified and confirmed that the concrete holding ponds and anaerobic lagoons used in the baseline have depths of 7 to 8 feet and therefore met the Protocol requirement of greater than 1 meter depth for anaerobic baseline. 3.1.3 Additionality 3.1.3.1 Performance Standard Test TÜV SÜD verified that the Project passes the performance standard test by meeting CAR s performance threshold for livestock projects. Specifically, the Project installed a biogas control system to manage livestock manure consisting of a vertical plug flow anaerobic digester to capture biogas and destruction devices to destroy methane. 3.1.3.2 Legal Requirement Test To ensure that project emission reductions would not have otherwise occurred due to legal requirements, CAR requires demonstration that the project is not required by any federal, state, or local regulation or other legally binding mandates. In support of this requirement, Camco submitted the signed CAR Attestation of Voluntary Implementation form. TÜV GHG_F_09.08, Rev 2 Effective 2011-03-28 Page 7 of 14
SÜD further reviewed the Indiana Department of Environmental Management (IDEM) Permit Program website for Concentrated Animal Feeding Operations and concluded that there are no State or local regulations requiring installation of biogas control systems at a dairy. Based on the above information, TÜV SÜD confirmed that the Project passes the legal requirement test. 3.1.3.3 Regulatory Compliance To ensure that the Project is in material compliance with relevant regulations, Camco supplied a signed CAR Attestation of Regulatory Compliance form. During the site visit, TÜV SÜD reviewed on-site permits and interviewed personnel on all applicable regulations and ordinances to which Fair Oaks Dairy Farm and the Project are subject. The Project met the State of Indiana s requirements for Concentrated Animal Feeding Operations (CAFO) by obtaining and retaining current National Pollutant Discharge Elimination System (NPDES) Permit for CAFO ID No.: ING806036 (Site 2). TÜV SÜD further reviewed IDEM s permits, compliance and enforcement database and concluded that there were no compliance issues that would affect CRT crediting during the reporting period. Based on the above information, TÜV SÜD confirmed that the Project is in regulatory compliance with the all applicable laws. 3.2 GHG Reduction Credit Ownership TÜV SÜD determined that Camco International Group, Inc. has clear and explicit title to the GHG reduction credits associated with the project activity. The Carbon Asset Development Agreement between Ag Business Solutions LLC and Camco International Group, Inc. executed on December 19, 2008 and its first amendment dated April 6, 2010 authorizes Camco to take title to the verified emission reductions (VER) generated by the Project. Ag Business Solutions, LLC entered into an agreement with Fairy Oaks Farm, LLC on December 19, 2008 to implement the Camco agreement. Additionally, Camco has provided a signed CAR Attestation of Title form. 3.3 Project Monitoring and GHG Management System 3.3.1 Assessment Against Protocol Monitoring Requirements 3.3.1.1 Livestock Category and Population The Project tracks livestock categories and population on a monthly basis. The number of animals per livestock category was recorded and aggregated monthly by Fair Oaks Dairy Farm and submitted to Camco. During the site visit, TÜV SÜD interviewed the Fair Oaks Dairy Farm operator to understand the herd management system. Additionally, TÜV SÜD GHG_F_09.08, Rev 2 Effective 2011-03-28 Page 8 of 14
reviewed herd management reporting and concluded that the reported herd population is accurate. 3.3.1.2 Biogas Flow Measurement Biogas flow is directed to two engines, one boiler and an open flare. Gas flows to the two engines and the boiler are measured by Sage flow meters located before each destruction device. The gas flow to the flare is measured by one Sage flow meter. A programmable logic controller records the flow meter data in 15 minute intervals and saves to a personal computer. Gas flow data is automatically sent from the PC to farm personnel and Camco on a daily basis. The Sage flow meters are programmed to adjust biogas flows to 70 F at 1 atm. TÜV SÜD reviewed flow rate adjustments in the Project emissions calculation within the Livestock Beta Calculation Tool to confirm that flow rates are adjusted to the 60 F at 29.92 Hg as required by the Protocol. TÜV SÜD confirmed that the monitoring instruments are inspected, cleaned and calibrated at least bi-annually and are sufficient to detect any operational irregularities. The verification team reviewed the flow meter inspection, cleaning and calibration check forms completed on December 8, 2010, June 3, 2011 and August 26, 2011, the Project Monitoring Report, and interviewed Camco and Farm personnel. Calibration checks were done in accordance with the Sage Meter Manual. TÜV SÜD verified that calibration drifts are within the ±5% accuracy threshold. 3.3.1.3 Methane Concentration Measurement The Protocol requires that methane concentration in the biogas be measured continuously or, alternatively, with quarterly measurements prior to delivery to the destruction devices. The fraction of biogas was measured by extracting samples from the gas pipe header and analyzed by GTI Testing Laboratories according to the ASTM1946 standard. TÜV SÜD confirmed that GTI Testing Laboratories is accredited by the American Association for Laboratory Accreditation in compliance with ISO/IEC 17025. TÜV SÜD verified that methane concentrations were measured on December 30, 2010, February 28, 2011, May 13, 2011 and August 30, 2011 in accordance with the Protocol s quarterly measurement requirement. 3.3.1.4 Project Emission Sources and Monitoring Four sources of project emissions were identified within the project boundaries during the reporting period: project methane emissions from the biogas control system, methane emissions from the BCS effluent pond, carbon dioxide emissions from fuel use by skid loaders and carbon dioxide emissions from fuel use by vacuum trucks. Methane emissions from the biogas control system are those not captured and destroyed by the control system. Distillate fuel oil No. 2 consumption by the skid loaders and vacuum GHG_F_09.08, Rev 2 Effective 2011-03-28 Page 9 of 14
trucks were estimated by Camco. CO 2 emissions from fossil fuel use were found to be less than 5% of the total baseline emissions. Camco s best estimate of de minimis CO 2 emissions from mobile fossil fuel combustion was accepted. 3.3.2 Project Monitoring Plan The Project Monitoring Plan guides the GHG data collection and reporting requirements stipulated by criteria requirements. TÜV SÜD verified that the Project s monitoring plan sufficiently meets all GHG data collection, data quality management, and reporting requirements. 3.3.2.1 Implementation of Project Monitoring Plan During the desk assessment and on-site presentation and interviews with Fair Oaks Dairy personnel and Camco representatives, TÜV SÜD reviewed completeness of documentation, confirmed data review processes, document control, and capability and training of personnel associated with GHG data collection and quantification processes. Based on the completed assessment, TÜV SÜD has concluded that the Project sufficiently meets the GHG data collection, data quality, and reporting requirements of the CAR Livestock Project Protocol and that the Project s monitoring plan was adequately implemented during the reporting period. 3.4 Emission Reduction Calculations The Project s emission reduction calculations were reviewed to ensure accuracy and to ensure that the formulas employed meet criteria requirements. The formulas used were found to meet the criteria requirements. TÜV SÜD verified that the modeled methane emission reduction results were compared to the ex-post metered quantity of methane that is captured and destroyed by the biogas control system and the lesser value represented the total methane emission reduction for the reporting period. The livestock categories; default values of maximum methane producing capacity for manure by livestock category and daily volatile solid production; fraction of manure handled by manure management components; and methane destruction efficiencies were reviewed and found to be consistent with Fair Oaks Dairy Farm, LLC Cyclus Designed Digester Project operation and the Protocol. The quantity of un-combusted methane was verified from the gas usage recorded continuously by a programmable logic controller and methane concentrations measured quarterly. TÜV SÜD recalculated the GHG emission reductions associated with the reporting period (January 1, 2011 to August 31, 2011) and found the emission reductions claimed to be within the materiality threshold set forth by criteria requirements. GHG_F_09.08, Rev 2 Effective 2011-03-28 Page 10 of 14
4. Summary of findings TÜV SÜD issued a list of findings to Camco during the verification process. Camco provided adequate response to clarification and corrective actions requested during the verification process and all findings associated with the verification time period have been closed. 5. Verification Conclusion In conclusion, and based on the assessments performed for the Fair Oaks Dairy Farm, LLC Cyclus Designed Digester Project for the verification time period of January 1, 2011 to August 31, 2011, it is TÜV SÜD America s conclusion that: 1. the Fair Oaks Dairy Farm, LLC Cyclus Designed Digester Project meets the requirements of the CAR Livestock Project Protocol, Version 2.1 issued on August 20, 2008 and Errata and Clarifications to Livestock Project Protocol, Version 2.1 issued on October 26, 2011 including the principles and requirements of CAR s Program Manual (October 26, 2011) and Verification Program Manual (December 20, 2010) and the ISO 14064:2006 Greenhouse gases Part 3: Specification with guidance for the validation and verification of greenhouse gas assertions, 2. the reported GHG emission reductions of: Vintage Baseline Emissions (tco 2 e) Project Emissions (tco 2 e) GHG Reductionsmodeled * (tco 2 e) GHG Reductionsmetered* (tco 2 e) 2011 2,483 1,188 1,295 5,108 *The lesser of the two values will represent the total emission reductions for the reporting period. resulting from operation of the biogas control system is free from material discrepancy, and 3. A reasonable level of assurance has been achieved through verification activities. Lead Auditor Internal Reviewer 12/9/2011 12/12/2011 Date Date GHG_F_09.08, Rev 2 Effective 2011-03-28 Page 11 of 14