verification report for offset project - csa registries · 3.1 procedure ... use of this document...

Tetra Tech Canada Inc. Riverbend Atrium One, 115, 200 Rivercrest Drive SE

Calgary, AB T2C 2X5 CANADA Tel 403.203.3355 Fax 403.203.3301

PROPONENT

Canfor Green Energy – Grande Prairie

PREPARED BY

Tetra Tech Canada Inc.

Verification Report for Offset Project

Canfor Grande Prairie Sawmill Biomass Energy Project (January 1, 2017 – December 31, 2017)

FEBRUARY 14, 2018 ISSUED FOR USE 704-ENW.EENW03239-01

PRESENT TO

Canadian Forest Products Ltd.

2017 Canfor Sawmill Biomass Energy Project 704-ENW.EENW03239-01 | February 14, 2018 | Issued for Use

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TABLE OF CONTENTS

1.0 PROJECT SUMMARY .....................................................................................................................................5

2.0 INTRODUCTION ..............................................................................................................................................8

2.1 Objective ................................................................................................................................................9

2.2 Scope .....................................................................................................................................................9

2.3 Level of Assurance ............................................................................................................................. 10

2.4 Criteria ................................................................................................................................................ 10

2.5 Materiality ............................................................................................................................................ 11

3.0 METHODOLOGY .......................................................................................................................................... 11

3.1 Procedure ........................................................................................................................................... 11

3.1.1 Verification Procedures ............................................................................................................ 11

3.1.2 Verification Steps ..................................................................................................................... 13

3.1.3 Site Visit .................................................................................................................................... 13

3.1.4 Risk Assessment ...................................................................................................................... 13

3.1.5 Verification and Sampling Plan ................................................................................................ 14

3.2 Team ................................................................................................................................................... 14

3.3 Schedule ............................................................................................................................................. 15

4.0 RESULTS ...................................................................................................................................................... 16

4.1 Assessment of Internal Data Management and Controls ................................................................... 16

4.2 Assessment of GHG Data and Information ........................................................................................ 18

4.3 Assessment against Criteria ............................................................................................................... 21

4.4 Evaluation of GHG Assertion .............................................................................................................. 21

4.5 Summary of Findings .......................................................................................................................... 21

5.0 CLOSURE ..................................................................................................................................................... 21

5.1 Verification Statement ......................................................................................................................... 21

5.2 Limitation of Liability ........................................................................................................................... 22

5.3 Confirmation ........................................................................................................................................ 22


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LIST OF TABLES

Table 1: Scope ......................................................................................................................................................... 10 Table 2: Verification Tests Conducted..................................................................................................................... 11 Table 3: Verification Procedures ............................................................................................................................. 12 Table 4: Risk Assessment for Applicable Emission Sources .................................................................................. 14 Table 5: Verification Schedule ................................................................................................................................. 15 Table 6: Non-Applicable Emission Sources ............................................................................................................ 16 Table 7: Summary of Internal Controls .................................................................................................................... 17 Table 8: GHG Data and Supporting Information ..................................................................................................... 19 Table 9: Eligibility Criteria Assessment ................................................................................................................... 21

LIST OF FIGURES

Figure 1: Verification Steps ..................................................................................................................................... 13 Figure 2: Summary of Internal Data Management and Data Flow .......................................................................... 16

APPENDICES

Appendix A: Final Verification Plan and Sampling Plan .......................................................................................... 23 Appendix B: Signed Statement of Qualification ....................................................................................................... 30 Appendix C: Finding Logs ....................................................................................................................................... 33 Appendix D: Signed Statement of Verificaton ......................................................................................................... 36 Appendix E: Signed Conflict of Interest Checklist ................................................................................................... 39 Appendix F: Limitation On the Use of this Document .............................................................................................. 42


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LIMITATIONS OF REPORT This report and its contents are intended for the sole use of Canadian Forest Products Ltd. and their agents. Tetra Tech Canada Inc. (Tetra Tech) does not accept any responsibility for the accuracy of any of the data, the analysis, or the recommendations contained or referenced in the report when the report is used or relied upon by any Party other than Canadian Forest Products Ltd. Any such unauthorized use of this report is at the sole risk of the user. Use of this report is subject to the Limitations on the Use of this Document attached in the Appendix or Contractual Terms and Conditions executed by both parties.


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1.0 PROJECT SUMMARY Project Title Canfor Grande Prairie Sawmill Biomass Energy Project

Project Description The Project involves direct Greenhouse Gas (GHG) emission reductions by:

reducing natural gas used at the sawmill;

reducing grid electricity used at the sawmill; and

supplying electricity to the Alberta grid generated from the combustion of biomass in the Canadian Forest Products Ltd.’s (Canfor’s) Combined Heat and Power facility (CHP) at Grande Prairie, Alberta.

Project Location The Canfor Grande Prairie sawmill is located on 108th Street in Grande Prairie, Alberta. The CHP Plant is located adjacent to the Grande Prairie sawmill at 8701 108th Street in Grande Prairie, Alberta.

Legal Land Location: Section 23, Township 71, Range 6, Meridian 6

Latitude: 55° 9' 56.1594" N

Longitude: 118° 49' 9.84" W

Project Start Date January 1, 2005

Offset Start Date January 1, 2005

Offset Crediting Period Initial project credit duration period: January 1, 2005 – December 31, 2012

Credit extension period: January 1, 2013 – December 31, 2017

Reporting Period January 1, 2017 – December 31, 2017

GHG Assertion (Actual Emissions Reductions /Removals Achieved)

2017: 80,025 t CO2e

Protocol Quantification Protocol for Energy Generation from the Combustion of Biomass Waste (Version 2.0, April 2014).

Ownership Canadian Forest Products Ltd.

Project Activity The activities undertaken include heat and power generation by combusting biomass, which results in direct GHG emission reductions by reducing natural gas used at the sawmill, indirect GHG emission reductions by reducing grid electricity used in Canfor’s Grande Prairie sawmill, and supply of electricity generated to the grid.

The Canfor Grande Prairie Sawmill Biomass Energy Project (the Project) meets the requirements for offset eligibility:

1. The project occurs in Alberta as outlined above.

2. The project results from actions not otherwise required by law and beyond business as usual and sector common practices.


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3. The Project results from actions taken on or after January 1, 2002, as outlined above.

4. The Project reductions/removals are real, demonstrable, quantifiable and verifiable: The Project is creating real reductions that are not a result of shutdown, cessation of activity or drop in production levels. The emission reductions are demonstrable, quantifiable and verifiable as outlined in the Project Developer’s Project plan.

5. The Project has clearly established ownership: The Proponent owns 100% of the Project activities at the Plant. Credits created from the specified reduction activity have not been created, recorded or registered in more than one trading registry for the same time period.

6. The Project will be counted once for compliance purposes: The Project credits will be registered with the Alberta Emissions Offset Registry (AEOR) which tracks the creation, sale and retirement of credits. Credits created from the specified reduction activity have not been, and will not be, created, recorded or registered in more than one trading registry for the same time period.

7. The Project is verified by a qualified third party, Tetra Tech Canada Inc.

Project Contact Matthew Warkentin, P.Eng. PMP, CEM Energy Manager, Environment & Energy Department Canadian Forest Products Ltd. Tel: (250) 962.3293 Email: [email protected]

Verifier Min Si, M.N.R.M, GHG-V Tetra Tech Canada Inc. 115, 200 Rivercrest Drive SE, Calgary, AB T2C 2X5 Tel: (403) 369 5254 Email: [email protected]

Verification Team

Brian Adeney, P.Eng. Designated Signing Authority. Mr. Adeney received ISO 14064 – 3 training in 2018.

Min Si, M.N.R.M, GHG-V, Lead Verifier. Mr. Si completed ISO 14064 – 3 training with CSA.

Bernard Zhang, M. Eng., P.Eng., Verifier. Mr. Zhang has completed ISO 14064 – 3 training.

Nelson Lee, M.A.Sc, P. Eng., GHG-V, Peer Reviewer. Mr. Lee has completed ISO 14064-3 training with CSA.

Designated Signing Authority Brian Adeney, P.Eng.


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Verification Strategy

The strategy used in this verification approach relies on substantive procedures. Tetra Tech applies predominantly substantive procedures during the verification process, with a focus on source data and evidence gathered during site visits and sampling procedures. Tetra Tech has developed the following steps to substantiate the greenhouse gas (GHG) assertion:

Conducted a site visit to confirm the boundary, physical sources, sinks and reservoirs (SSRs) at the facility.

Observed, interviewed personnel, and verified various processes, instrumentation and data management procedures during the site visit.

Conducted sampling on primary documentation to confirm the processes resulting in the GHG assertions.

Reviewed original data sources and calculations.


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2.0 INTRODUCTION Tetra Tech Canada Inc. (Tetra Tech) was contracted by Canadian Forest Products Ltd. (Canfor) to conduct verification of greenhouse gas (GHG) emission reductions from the Canfor Grande Prairie Sawmill Biomass Energy Project (the Project) for the period of January 1, 2017 to December 31, 2017.

The Project is located at Canfor’s Combined Heat and Power (CHP) plant adjacent to the Canfor Grande Prairie sawmill. The CHP facility was originally owned and operated by Canadian Gas and Electric Inc. (“CG&E”), a separate company from Canfor. Canfor purchased the CHP plant on October 1, 2011 from CG&E.

The offset quantification was conducted by PricewaterhouseCoopers LLP (PwC). The eligible heat is calculated by Amec Foster Wheeler (Amec).

Summary of Offset Project Baseline

The baseline condition for this project is the use of natural gas and purchased the grid electricity to operate the Grande Prairie sawmill and for space heating. Under baseline conditions, biomass was incinerated at the Grande Prairie sawmill site and other sawmill sites.

The baseline condition used for the Project during the first eight years of the credit duration period included the fossil fuel (natural gas) consumed by the lumber drying system and the space heating system for the sawmill and the electricity consumed by the sawmill in the pre-project condition. The baseline selected was historical and was the average of 2002, 2003, and 2004.

The baseline is considered as the condition that most likely would have persisted for the facility if the CHP plant was not installed. For the purposes of the Project (2005 – 2012), this is assumed to be a three-calendar-year period immediately preceding the calendar year in which the Project was implemented. From 2013 – 2017 a dynamic baseline will be used as specified in the Quantification Protocol (Version 2.0).

Summary of Changes to Baseline or at the Project Condition

Project Boundary

The project was developed to recover heat content in the low cost (or no cost) wood residue generated by the sawmill during sawmilling and planning by incinerating it and generating heat and power to displace high cost grid based electricity and natural gas. The Project was designed and built by Canadian Gas & Electric (CG&E), a wholly owned subsidiary of Canadian Hydroelectric Developers Inc. CG&E and Canfor entered into an agreement stipulating, among other things, the purchase and sale of land for the project, shared maintenance of the CHP project facility, wood residue supply to the power plant, heat energy supply to the sawmill, capacity and electricity supply to the sawmill, and environmental cooperation. As a part of this agreement, any domestic offset credits that may arise from, or be attributable to the operation of the power plant accrued to Canfor as to a pro rata share of electricity and heat energy purchased from the power plant and the displacement of natural gas consumption.

Canfor’s purchase of the CHP plant resulted in a change in ownership with respect to the overall green attributes associated with the project. Prior to the change in ownership, Canfor did not claim any of the green attributes associated with electricity sold to third parties (via the grid) from the CHP plant, nor did it account for transportation, CHP on site biomass handling, or CH4 and N2O emissions associated with the incremental biomass purchased by and trucked to the CHP plant as these were both outside of the boundary considered in the project. However, the change in ownership meant that the boundary for the project changed and Canfor now accounts for these sources and sinks. The change of the project boundary is described in detail in the Project Plan.


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Baseline

For the first eight years of the Project, a historical baseline from the 2002 – 2005 period was used to calculate the baseline emissions according to the Quantification Protocol (Version 1.0). With the updated quantification protocol (Version 2.0), a dynamic, projection baseline is applied for subsequent years of the Project. As a result, the baseline calculation methodology was changed in order to satisfy the requirement in the updated protocol.

Heat Calculation

For the first eight years of the project, the thermal energy calculations were based on the volume of natural gas combusted in the sawmill and in the CHP. The latest revision of the protocol quantifies the emissions for thermal production on an energy basis. As a result, the quantity of steam generated in the CHP and the quantity of steam used in the saw mill lumber drying process are now measured and recorded, and used to calculate the total emissions from heat generation.

Prior to 2016, the gross heat of Low Pressure (LP) extraction steam to the sawmill was taken from Steam Computer (Tag Number: UY 2607). In 2016, errors were noted in the steam computer data. For 2016 and 2017 reporting, the gross heat was calculated by using raw metering data of temperature, pressure and flow for the LP steam.

Diesel Calculation Methodology

Under the latest version of protocol, it states that the volume of each fuel combusted must be measured using “Direct metering or reconciliation of volume in storage (including volumes received)”. Since the biomass for the project comes from several sources and multiple suppliers external to Canfor in Alberta and elsewhere, this calculation methodology was not viable for the calculation of transportation emissions. Canfor has submitted a letter to Alberta Environment and Parks (AEP) – Climate Change Office (ACCO) requesting the use of the 2007 protocol methodology to calculate biomass transportation emissions. Canfor requested the use of the flexibility mechanism stated in Appendix A of the “Quantification Protocol for Diversion of Biomass to Energy from Biomass Combustion Facilities” from the old protocol (September 2007 – Version 1) to calculate the incremental emissions associated with the transportation of biomass. Canfor has received approval for this calculation methodology from AEP in a letter dated February 3, 2015.

2.1 Objective The objective of this verification is to provide an independent assessment of the offset project to identify any material and immaterial errors, omissions or misrepresentations, and to provide our opinion on the GHG assertion in the Offset Project Report.

2.2 Scope The scope of this Project level emission reduction verification includes the project boundaries, physical infrastructure, activities, technologies, and processes of the project, GHG sources, sinks, and/or reservoirs (SSRs), types of GHGs, and time periods covered.

The scope of the verification is listed in Table 1.


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Table 1: Scope

Item Canfor Grande Prairie Sawmill Biomass Energy Project

Geography The project is located adjacent to the Canfor Grande Prairie sawmill at 8701 108th Street in Grande Prairie, Alberta: Legal Land Location: Section 23, Township 71, Range 6, Meridian 6 Latitude: 55° 9' 56.1594" N Longitude: 118° 49' 9.84" W

Organization Canadian Forest Products Ltd.

Activities and Processes Combined Heat and Power Generation

SSRs Baseline: Emissions from collection, transfer and transport of biomass (B1), biomass disposal (B15) and processing (B3), facility operations (B12), displaced offsite and on site electricity generation (B6 and B13), displaced offsite and on-site heat generation (B16 and B18), and fuel extraction and processing (B4).

Project: Emissions from collection, transfer and transport of biomass (P1), biomass processing (P3), facility operations (P12), combustion of biomass and fossil fuel (P15) and fuel extraction and processing (P4).

GHG Carbon dioxide (CO2), Methane (CH4), Nitrous oxide (N2O)

GHG Assertion Baseline Emissions: 81,149 t CO2e Project Emissions: 1,124 t CO2e Reductions: 80,025 t CO2e

Time Period January 1, 2017 to December 31, 2017

*included sources as specified in the Protocol.

2.3 Level of Assurance The verification was conducted to a reasonable level of assurance as required by the Carbon Competitiveness Incentive Regulation (CCIR).

The level of assurance is used to determine the depth of detail that a verifier designs into their verification plan to determine if there are any material errors, omissions, or misrepresentations.

Reasonable level of assurance is conducted to evaluate whether the GHG assertion is deemed to be presented fairly and substantiated by sufficient and appropriate evidence. As such, the goal of verification is to provide positive, but not absolute assurance regarding the GHG assertions.

2.4 Criteria The verification assesses the Project against Alberta Offset program eligibility criteria, including:

Alberta Carbon Competitiveness Incentive Regulation (CCIR), December 18, 2017;

Standard for Greenhouse Gas Emission Offset Project Developer (Version 1.0, December 2017);

Standard for Verification (Version 1.0 December 2017);

Quantification Protocol for Energy Generation from the Combustion of Biomass Waste (Version 2.0, April 2014);


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Offset Project Plan for Grande Prairie Sawmill Biomass Energy Project; and

Offset Project Report for Grande Prairie Sawmill Biomass Energy Project.

2.5 Materiality A 5% materiality threshold is set to assess errors, omissions, and misrepresentations in the GHG assertion as required by the SGER. Quantitative discrepancies are aggregated and assessed on the basis of net and absolute values. Qualitative discrepancies are evaluated by professional judgement of the verification body, and assessed to determine if the discrepancies could be deemed to be material errors.

3.0 METHODOLOGY The verification is performed according to ISO 14064-3: Specification with Guidance for the Validation and Verification of GHG Assertions and Standard for Verification (ACCO, Version 1.0 December 2017).

Tetra Tech applies predominantly substantive procedures during the verification process, with a focus on source data and evidence gathered during site visits and sampling procedures. Tetra Tech has developed the following steps to substantiate the GHG assertion:

Conducted a site visit to confirm the boundary, physical sources, sinks and reservoirs (SSRs) at the facility.

Observed, interviewed personnel, and verified various processes, instrumentation and data management procedures during the site visit.

Conducted sampling on primary documentation to confirm the processes resulting in the GHG assertions.

Reviewed original data sources and calculations.

The verification tests conducted are summarized in Table 2.

Table 2: Verification Tests Conducted

Verification Test Applicable Sources/Element & Evidence Reviewed

Vouching Off-site electricity generation displaced by the Project (B6), Combustion of biomass (P15), Fuel extraction and processing (B4 and P4), Facility operation (P12)

Recalculation On-site heat generation displaced by the Project (B18)

Tracing Collection, transfer and transport of biomass (P1)

3.1 Procedure

3.1.1 Verification Procedures Verification procedures for the key components are provided in Table 3.


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Table 3: Verification Procedures

Verification Component Procedures

Description of the nature, scale and complexity of the verification activity

The verification is conducted for Canfor Grande Prairie Sawmill Biomass Energy Project for 2017 calendar year. The Offset Project involves direct GHG emission reductions by

reducing natural gas used; reducing grid electricity used; and supplying electricity to the Alberta grid generated from the combustion of biomass

The quantification for the offset project is conducted in accordance with Quantification Protocol for Energy Generation from the Combustion of Biomass Waste (Version 2.0, April 2014). As specified in the Protocol, the GHG sources include: Baseline: Emissions from collection, transfer and transport of biomass (B1),

biomass disposal (B15) and processing (B3), facility operations (B12), displaced offsite and on site electricity generation (B6 and B13), displaced offsite and on-site heat generation (B16 and B18), and fuel extraction and processing (B4).


The complexity of the verification is deemed to be medium.

Comparability with the baseline Review the baseline calculations and supporting documents. Review Project Plan and Report. Interview facility operators.

Confidence and completeness of the responsible party’s GHG information and assertion

Conduct a site tour to determine GHG sources and compare with the Protocol and calculation tool for completeness.

Check the quantification against the Protocol. Interview personnel for completing GHG quantification.

Assessment of GHG information system and its controls

Review data collection and transfer processes. Interview personnel for internal control procedures. Inquiry of data verification procedures for double entries. Examine natural gas and biomass records reconciliation. Examine the electricity and heat generation and reconcile.

Assessment of GHG data and information

Compare sources and sinks inspected through site visit to the GHG identified in the Project Report and calculator.

Review raw data, including metering data and third party records. Review emission factors used.

Assessment against criteria Review and check against related criteria. Conduct site visit for physical boundary.

Evaluation of the GHG assertion

Recalculate GHG assertions. Evaluate supporting documents.


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3.1.2 Verification Steps The verification follows the steps outlined in the following diagram (Figure 1).

Figure 1: Verification Steps

3.1.3 Site Visit Mr. Bernard Zhang of Tetra Tech visited the facility on January 16, 2018. The purpose of the site visit was to gain an understanding of the offset project’s operation, equipment, and control processes for assessment of the Project’s conformance with the Criteria. During the site visit, the emission sources, various processes, data acquisition and onsite records handling processes were observed. The control devices that were used to collect and monitor activity data for emission calculations were also observed.

3.1.4 Risk Assessment As part of the verification process, a risk-based verification and sampling plan must be developed that outlines:

The amount and type of evidence necessary to achieve the agreed level of assurances;

Methodologies for determining representative samples; and

Risks of potential errors, omissions, or misrepresentation.

Acceptance

•Client and verification evaluation• Independence and team evaluation

Planning

•Gain an understanding - data and process flow, historical analysis•Risk assessment, planining analytics, contribution analysis and materiality analysis•Verification strategy, verification plan, sampling plan

Execution

•Conduct verification procedures and collect evidence•Review evidence against program criteria•Document findings log and unadjusted differences

Completion

•Conclusion: senior review, Issue for Review verification report•Peer review: approval and sign off• Issuance: Issue for Use verification report


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Tetra Tech’s verification team utilizes the risk assessment process to develop a compliant verification and sampling plan. The risk assessment includes considerations associated with regulatory requirements, GHG program requirements, industry/sector specific factors, and other non-technical risks.

The risk assessment considers inherent risk, control risk and detection risk. Inherent risk is the Responsible Party’s risk of material error, omission, or discrepancy due to the complexity of the facility or lack of capacity by staff at the facility. Control risk is the risk that the Responsible Party’s control system will not detect and rectify a material error, omission or discrepancy. Detection risk is the risk that the Tetra Tech verification team will not identify a material discrepancy. The method to determine the risk is provided in Appendix A – Verification Plan.

The risk assessment for the applicable reporting elements are provided in Table 4.

Table 4: Risk Assessment for Applicable Emission Sources

Applicable Emission Sources Inherent Control

Collection, Transfer and Transport of Biomass (P1) Low Low

Fuel Extraction/Processing (P4) Low Low

Facility Operation (P12) Low Low

Combustion of Biomass(P15) Low Low

Fuel Extraction/Processing (B4) Low Low

On-site Heat Generation Displaced by the Project (B18) Medium Medium

Off-site Electricity Generation Displaced by the Project (B6) Low Low

3.1.5 Verification and Sampling Plan Convenience sampling methods are used for the verification. The sample plan is developed based on the risk assessment to achieve an overall low detection risk. The sample size is based on the Guidance Document for GHG verification sampling by the European Commission with verifier’s professional judgement. The sample size varies based on the number of evidence records. The type and amount of evidence reviewed for each emission source is provided in the Final Verification Plan (Appendix A).

3.2 Team The verification team meets the requirements under the Carbon Competitiveness Incentive Regulation (CCIR) and have the technical knowledge of GHG emission quantification methodologies required by Standard for Verification (ACCO Version 1.0 December 2017) Part 1 Section 3. The team members have experience in completing third-party GHG verifications, reviews and audits related to emission inventories, including verifications in Alberta. Verification team members have been trained under ISO 14064-3.

Mr. Brian Adeney, P. Eng., is a Professional Engineer registered by the Association of Professional Engineers and Geoscientists of Alberta. Mr. Adeney is the Designated Signing Authority and is Regional Manager in Tetra Tech Environment and Water Practice. He has reviewed and been involved in audits for permit compliance at construction sites, multiple verifications for Climate Change Emissions Management Corporation (CCEMC) and SGER verifications. He has over 4 years of GHG verification experience, and received ISO 14064-3 training in 2018. Mr. Adeney is responsible for ensuring:


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the verification acceptance requirements have been met as outlined in the Technical Guidance;

the verification was conducted in accordance with ISO 14064 standard, and the Tetra Tech’s management system for quality assurance and control and independence has been applied during the verification;

the verification was conducted in a professional manner; and

the verification report was presented appropriately.

Min Si, M.N.R.M., GHG-V, was the Lead Verifier for this verification. Mr. Si is an Environmental Scientist with Tetra Tech in Calgary. He has worked on GHG verification and quantification projects for a wide range of sectors, including oil and gas, pulp and paper, agriculture, manufacturing, etc. His emission experience includes GHG life cycle assessment, GHG quantification and verification for carbon offset projects, compliance report verification, National Pollution Registry Inventory (NPRI) and corporate GHG reporting. Mr. Si has completed CSA ISO 14064-3 training with CSA. Mr. Si is responsible for:

managing the verification project;

ensuring the team has appropriate competencies for the verification;

communicating to key members of the responsible party regarding the verification objectives and results

Nelson Lee, M.A.Sc., P.Eng., GHG-V is the Peer Reviewer for this verification. Mr. Lee has a B.Sc. in Chemical Engineering from the University of Alberta, and a M.A.Sc. in environmental engineering from the University of British Columbia. He has 20 years of experience in the oil and gas industry, and has completed over 100 GHG verifications in Alberta and BC. Mr. Lee completed ISO 14064 part 3 training with Environment Canada. Mr. Lee is a CSA certified GHG verifier, and a California Air Resources Board (ARB) registered offset project lead verifier. His responsibilities include independent review of verification deliverables and supporting documentation to confirm all verification activities have been completed, and conclude whether the GHG assertion is free of material discrepancy and the verification activities conducted achieved a reasonable level of assurance.

Bernard Zhang, P.Eng is the verifier for this verification. Mr. Zhang is an Environmental Engineer specializing in validation/verification of GHG offset projects and quantification/verification of air emissions for industrial facilities. His GHG experience covers different industrial scopes including renewable energy generation, coal mine methane power generation and industrial waste heat regeneration. Mr. Zhang’s responsibilities include data analysis, data evaluation, evidence review, etc. Mr. Zhang has completed ISO 14064-3 training.

The Statement of Qualifications is provided in Appendix B

3.3 Schedule The schedule for the verification is presented in Table 5.

Table 5: Verification Schedule

Activity Date

Project Awarded December 18, 2017

Site Visit January 16, 2018

Issued for Review Report February 9, 2018

Issued for Use Report February 14, 2018


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4.0 RESULTS The included GHG emissions identified in the Protocol were observed, assessed, and evaluated. It was determined that the following emissions are not applicable to the project (Table 6).

Table 6: Non-Applicable Emission Sources

Emission Source Rationale for Exclusion

Collection, Transfer and Transport of Biomass (B1)

In the baseline, a portion of biomass waste was sent to a particleboard plant in Wanham, Alberta for utilization. Canfor does not claim credits from transportation of biomass to offsite.

Biomass Disposal (B15) The trucked- in Biomass disposal in the baseline is not claimed for credits.

Processing of Biomass (B3 & P3) Biomass is waste residues from several sawmill operations. The wood residue is not processed further in either the baseline or project conditions.

Displaced Off-site Heat Generation (B16) Heat was provided by combusting natural gas on site in the baseline condition therefore no off-site heat was displaced by the project.

Displaced On-site Electricity Generation (B13) Electricity was purchased from the Alberta grid; therefore, no electricity was generated on site in the baseline.

Facility Operations (B12) In the baseline condition, wood residue generated by the sawmill was burned on site in an incinerator with no on-site energy recovery. Canfor does not claim credits from incineration.

4.1 Assessment of Internal Data Management and Controls A summary of the Responsible Party’s internal data management and data flow is provided on Figure 2.

Figure 2: Summary of Internal Data Management and Data Flow


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The data used to calculate the GHG assertion of emission reduction credits include metered, invoiced, and referenced data. The GHG data management system and its controls are assessed through a combination of verifier site visit activities, interviews with staff involved in the data flow and review of the data itself. These activities verify the data flow process and information management system.

A summary of the Responsible Party’s control is provided in Table 7.

Table 7: Summary of Internal Controls

Reporting Element Data Source Controls

Wood Waste

CHP Infeed conveyor belt weight measurement

Truck weigh scale tickets Moisture measurement (hardcopy log

and excel spreadsheet) Hog Database (monthly spreadsheet) Wood Tracking Inventory (excel

spreadsheet and hardcopy records)

Meter checks for normal operation, calibration Hog Database prepared and reviewed by

financial accountant, including reconciliation of weigh scale tickets with data electronically transferred from scale.

Wood Tracking Inventory spreadsheet prepared and reviewed by financial accountant.

Electricity

Meters with internal memory Third party data storage Monthly Generation Summary (excel

spreadsheet)

Electricity meters monitored and maintained by third party specializing in energy meters. Service also includes polling and retrieval of the meter data, identification of anomalies, notification of any irregularity with the meter or data and data storage.

Calculation spreadsheet prepared and reviewed by the financial accountant.

Steam

Flow, temperature and pressure meters Historian Database (Flow, temperature

and pressure) Steamheat_Invoicing Spreadsheet

(excel spreadsheet for BPP program)

Annual calibration of flow, temperature and pressure transmitters.

Net heat is calculated for BPP by Professional Engineer of Amec, and reviewed by Amec.

Natural gas Meters Invoices Historian Database

Invoice data against internal meter reading, summary spreadsheet reviewed by accounting.

Diesel Fuel Delivery Slips Division Monthly summary billing

(invoices)

Reviewed by accounting and reconciled with summary billing (with hardcopy records retained).

GHG Calculator Custom Excel based calculator Quantification completed by PwC with review

by senior personnel at PwC and Canfor Authorized Project Contact.

Offset report – Reviewed by PwC and Canfor Authorized Project Contact.


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Conclusion

The internal data management and controls are assessed based on the review of the Offset Project Plan, observations during the site visits, and interviews with key project personnel. The internal data management and controls for the offset project are deemed to be adequate.

4.2 Assessment of GHG Data and Information The GHG data and information provided to support the GHG assertion is deemed to be sufficient. The quantification methodologies used are consistent with the Offset Project Plan and the Quantification Protocol.

The information to support activity data is provided in Table 8, the emission factors used are taken from Alberta Environment and Parks’ (AEP) Emission Factors Handbook and Canada’s National Inventory Report.


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Table 8: GHG Data and Supporting Information

Applicable Emission Sources GHG Data and Information Results

Collection, Transfer and Transport of Biomass (P1)

Estimated based on average of truck load and millage of round trip.

The calculation methodology under the latest version of protocol was not viable for the calculation of transportation emission. Canfor has submitted a letter to AEP requesting the use of the flexibility mechanism stated in Appendix A of the “Quantification Protocol for Diversion of Biomass to Energy from Biomass Combustion Facilities” from the old protocol (September 2007 – version 1) to calculate the incremental emissions associated with the transportation of biomass. AEP approved the request on Feb 3, 2015.

Fuel Extraction/Processing (P4)

Natural gas invoices The natural gas consumption includes the natural gas supplied to the CHP plant and to sawmill. The natural gas consumed by the CHP plant is supported by supplier’s invoices. The natural gas consumed by the sawmill is supported by the internal gas meter readings.

Tetra Tech reviewed the invoices and metering data. The GHG data and information provided are deemed to be sufficient and appropriate.

Facility Operation (P12) Diesel invoices for on-site diesel used by loaders

The quantity of diesel consumed is determined by diesel supplier’s invoices. Average daily usage is used for calculating diesel consumption for the period of December 22 to 31, 2017. The assumption is deemed to acceptable.

Combustion of Biomass(P15) Biomass waste quantity is tracked by Canfor’s wood tracking inventory tool in kg on a wet basis. The average monthly moisture content from lab tests is used to convert from the wet basis to dry basis.

The dry based emission factors and biomass quantity are used.

The method to calculate emissions from biomass combustion is deemed be appropriate.

The eligibility of the biomass at Canfor is deemed to comply with the requirement as outlined in the Appendix A of the Protocol.

The emissions from sawmill biomass combustion is function equivalent. See Appendix C Issue 17-08 for more details.

Fuel Extraction/Processing (B4) The average of natural gas consumed in 2003 - 2005 is used for this baseline parameter.

The method is consistent with the Project Plan.


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Applicable Emission Sources GHG Data and Information Results

On-site Heat Generation Displaced by the Project (B18)

The net heat calculated for the Alberta Bio-Energy Producer Program (BPP) by a Professional Engineer is used as heat displaced by the project.

Monthly average pressure and temperature data is used to estimate the net heat generation. The historian data management system was updated in August 2017. The timestamps between the old and new historians are not exactly the same, which results in slight variations between the two historians. The discrepancy is 103.69 GJ understatement for the eligible heat (B18).

It is Tetra Tech’s opinion that the data used is deemed to be acceptable and it is also conservative.

Off-site Electricity Generation Displaced by the Project (B6)

Metering data is used. The displaced electricity calculated by using gross generation and subtracting the parasitic load and CHP wood handling usage.

No issues found


21

4.3 Assessment against Criteria The assessment against program eligibility criteria is provided in Table 9. It is our opinion that the eligibility criteria are met.

Table 9: Eligibility Criteria Assessment

Offset Eligibility Criteria Assessment

Reduction or sequestration occurs in Alberta Site visit confirmed the project’s physical location.

Result from actions not required by Law at the time the action is taken

Combustion of biomass waste is not required by law for energy generation.

Results from actions taken on or after January 1, 2002 and occur on or after January 1, 2002

Project started commercial operations January 1, 2005.

Reduction or sequestrations is real and demonstrable

Site visit confirmed the existence of the project.

Quantifiable and measurable Activity data is measured and emissions are quantified using the approved protocol.

Verified by a third-party verifier that meets the requirements in Part 1 for the Standard for Verification.

The verification team meets the requirements set out in the Standard for Verification (Version 1.0 Dec 2017) Part 1 Section 3. The designated signing authority and peer review have over 4 years of providing GHG verification and received ISO 14064 -3 training.

4.4 Evaluation of GHG Assertion The verification opinion is that the GHG assertion meets the requirements of the Carbon Competitiveness Incentive Regulation (CCIR). The GHG data and supporting documents are deemed to be sufficient and appropriate. The GHG assertion is calculated in accordance with the approved quantification protocol.

It is our opinion that 80,025 t CO2e of the emission reductions meet the materiality requirements and the reasonable level assurance criteria.

4.5 Summary of Findings During the verification, no material misstatements were identified. The detailed description of the findings is provided in Appendix C.

5.0 CLOSURE

5.1 Verification Statement The verification conclusion is positive.

Based on our review, it is our opinion that the Emission Reductions of 80,025 t CO2e contained in the GHG assertion generated from the Canfor Grande Prairie Sawmill Biomass Energy Project (2017) for the period of January 1, 2017 to December 31, 2017 is materially correct and presented fairly in accordance with the relevant criteria.

The Statement of Verification is provided in Appendix D.


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5.2 Limitation of Liability Tetra Tech has undertaken the verification of the asserted emission reductions associated with the Project in accordance with related program criteria. Tetra Tech has assessed the offset project GHG assertion using reasonably ascertainable information as defined by ISO 14064. The assessment represents the condition in the subject area at the time of the assessment. Tetra Tech did not conduct direct GHG emissions monitoring or other actual environmental data sampling or analysis as part of this verification.

The purpose of this report is to identify noted exceptions and observations in the quantification of emission reductions. This report is not intended to imply exhaustive compliance or non-compliance by the verification team. The verification team has made diligent effort to sample applicable information available regarding emission reductions by the Project during the verification. It should be noted that the inherent limitation in verification sampling and review practices may result in the verifier not identifying all potential aspects of the project. Observations, exceptions and conclusions are based on the judgment of the verifier.

The Conflict of Interest Checklist is provided in Appendix E.

5.3 Confirmation As required by ACCO, the verifier has confirmed the following information:

Consistency of offset project information across offset project documentation;

Offset project location;

Methodology document/Project Report exists;

Offset project contact and the amount of GHG emission reductions; and

Completeness and accuracy of process and data flow diagram.

If you have any questions or comments, please contact Min Si (403.723.1565, [email protected]).

Respectfully submitted, Tetra Tech Canada Inc.

Issued in Calgary, AB, February 14, 2018.

Prepared by: Prepared by: Bernard Zhang, P.Eng. Min Si, M.N.R.M., GHG-V Environmental Engineer Environmental Scientist Reviewed by: Brian Adeney, P.Eng. Designated Signing Authority


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APPENDIX A: FINAL VERIFICATION PLAN AND SAMPLING PLAN

2017 Canfor Sawmill Biomass Energy Project Appendix A Verification Plan 704-ENW.EENW03239-01 | February 14, 2018 | Issued for Use

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February 14, 2018 Issued for Use ENW.EENW03239-01 Canadian Forest Products Ltd. Via Email: [email protected] 100-1700 West 75th Avenue Vancouver, BC V6P 6G2 Attention: Matthew Warkentin, P.Eng. PMP, CEM

Energy Manager, Environment & Energy Department

Subject: Verification Plan Canadian Forest Products Ltd – Canfor Grande Prairie Sawmill Biomass Energy Project January 1, 2017 – December 31, 2017

A1.0 INTRODUCTION Tetra Tech Canada Inc. (Tetra Tech) was contracted by Canadian Forest Products Ltd. (Canfor) to verify Greenhouse Gas (GHG) emission reductions from Canfor Grande Prairie Sawmill Biomass Energy Project for the 2017 Calendar Year.

A1.1 Objective The objective of this audit is to provide an independent assessment of the offset project to identify any material and immaterial errors, omissions or misrepresentations and to provide our opinion on the GHG Assertion in the Offset Project Report.

A1.2 Assurance The scope and level of effort of this verification is planned to achieve a reasonable level of assurance as required by the Carbon Competitiveness Incentive Regulation (CCIR).

The level of assurance is used to determine the depth of detail that a verifier designs into their verification plan to determine if there are any material errors, omissions, or misrepresentations.

Reasonable level of assurance is to evaluate whether the GHG assertion is deemed to be presented fairly and substantiated by sufficient and appropriate evidence. As such, the verification is to provide positive, but not absolute assurance regarding the GHG assertions.

A1.3 Scope The scope of this Project level emission reduction verification includes the project boundaries, physical infrastructure, activities, technologies, and processes of the project, GHG sources, sinks, and/or reservoirs (SSRs), types of GHGs, and time periods covered.

The scope of the verification is listed in Table A1.


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Table A1: Scope

Item Canadian Forest Products Ltd – Grande Prairie Sawmill Biomass Energy Project

Geography The project is located adjacent to the Grande Prairie sawmill at 8701 108th Street in Grande Prairie, Alberta.

Legal Land Location: Section 23, Township 71, Range 6, Meridian 6

Latitude: 55° 9' 56.1594" N

Longitude: 118° 49' 9.84" W

Organization Canadian Forest Products Ltd.

Activities and Processes Combined Heat and Power Generation

Sources* Baseline: Emissions from collection, transfer and transport of biomass (B1), biomass disposal (B15) and processing (B3), facility operations (B12), displaced offsite and on site electricity generation (B6 and B13), displaced offsite and onsite heat generation (B16 and B18), and fuel extraction and processing (B4).


Sinks / Reservoirs N/A

GHG Carbon dioxide (CO2), Methane (CH4), Nitrous oxide (N2O)

GHG Assertion Baseline Emissions: 81,149 t CO2e Project Emissions: 1,124 t CO2e Reductions: 80,025 t CO2e

Time Period January 1, 2017 – December 31, 2017

*included sources as specified in the Protocol.

A1.4 Verification Standard The verification is performed according to ISO 14064-3: Specification with Guidance for the Validation and Verification of GHG Assertions.

A1.5 Verification Criteria The verification assesses the Project against Alberta Offset program eligibility criteria, including:

Alberta Carbon Competitiveness Incentive Regulation (CCIR), December 18, 2017;

Standard for Greenhouse Gas Emission Offset Project Developer (Version 1.0, December 2017);

Standard for Verification (Version 1.0 December 2017);

Quantification Protocol for Energy Generation from the Combustion of Biomass Waste (Version 2.0, April 2014);

Offset Project Plan for Grande Prairie Sawmill Biomass Energy Project; and

Offset Project Report for Grande Prairie Sawmill Biomass Energy Project.


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A1.6 Materiality A 5% materiality threshold is set to assess errors, omissions, and misrepresentations in the GHG assertion as required by the CCIR. Quantitative discrepancies are aggregated and assessed on the basis of net and absolute values. Qualitative discrepancies are evaluated by professional judgement of the verification body, and determined if the discrepancies could be deemed to be material errors.

A2.0 TEAM The verification team is presented in Table A2.

Table A2: Verification Team

Team Role

Min Si, M.N.R.M., GHG-V Lead Verifier

Nelson Lee, M.A.Sc., P.Eng., GHG-V Peer Reviewer

Xiaobo Zhang, P.Eng. Verifier

Brian Adeney, P.Eng. Designated Signing Authority

A3.0 SCHEDULE The schedule for the verification is presented in Table A3.

Table A3: Verification Schedule

Activity Date

Project Awarded December 18, 2017

Site Visit January 16, 2018

Issued for Review Report February 9, 2018

Issued for Use Report February 14, 2018

A4.0 RISK ASSESSMENT As part of the verification process, a risked-based verification and sampling plan must be developed that outlines:

The amount and type of evidence necessary to achieve the agreed level of assurances;

Methodologies for determining representative samples; and

Risks of potential errors, omissions, or misrepresentation.

Tetra Tech’s verification team utilizes the risk assessment process to develop a compliant verification and sampling plan. The risk assessment includes considerations associated with regulatory requirements, GHG program requirements, industry/sector specific factors, and other non-technical risks.

The risk assessment considers inherent risk, control risk and detection risk. Inherent risk is the Responsible Party’s risk of material error, omission, or discrepancy due to the complexity of the facility or lack of capacity by staff at the facility. Control risk is the risk that the Responsible Party’s control system will not detect and rectify a material error,


27

omission or discrepancy. Detection risk is the risk that the Tetra Tech verification team will not identify a material discrepancy.

The inherent risk and control risk are rated by likelihood multiplied by consequence in accordance with the matrix provided in Table A4. The detection risk is based on the combination of the inherent and control risks.

Table A4: Rating Matrix for Inherent Risk and Control Risk

Risk Matrix Consequence

Immaterial Minor Moderate Major Material 1 2 3 4 5

Like

lihoo

d

5 5 10 15 20 25

Almost Certain 4

4 8 12 16 20 Likely

3 3 6 9 12 15

Possible 2

2 4 6 8 10 Unlikely

1 1 2 3 4 5

Rare

The definition for the scoring is provided in Table A5, adapted from Intergovernmental Panel on Climate Change (IPCC) 2007.

Table A5: Scoring Definition

Score Likelihood Consequence

5 possibility of misstatement >95% misstated GHG assertion (threshold) >5%

4 66% < possibility of misstatement <95% 4%<misstated GHG assertion <5%



1 possibility of misstatement <5% misstated GHG assertion<1%

Inherent risk is determined to be low based on the following:

Third party invoiced data is used for natural gas consumption; and

Metering data is used for heat and electricity generation.

Control risk is determined to be low based on the following:

Data used for emission reduction quantification consists of manually recorded data, metered data capture, and manual entry into the Canfor offset quantification tool; and


28

Canfor completes an internal senior review in order to check both calculations and reports for transcription errors and omissions, correctly functioning links and formulas as part of their QA/QC (low risk).

Detection risk is the risk that Tetra Tech’s procedures do not detect a misstatement in the GHG Assertion. The detection risk is determined based on Table A6, as outlined in the Technical Guidance for Greenhouse Gas Verification at Reasonable Level Assurance (V1, January 2013).

Table A6: Design of Detection Risk

Control Risk

High Medium Low

Inherent Risk Score in Table 3 12-25 6-10 1-5

High 12-25 Lowest Lower Medium

Medium 6-10 Lower Medium Higher

Low 1-5 Medium Higher Highest

The verification procedures were designed and performed to achieve low detection risk so that the overall verification risk is low for a reasonable level of assurance, as specified in the Verification Technical Guidance.

A summary of risk assessment is provided in Table A7.

Table A7: Summary of Risk Assessment

Element Risk Assessment

Site Visit Low. Canfor Sawmill facility is a relatively small facility, major equipment was observed during the site visit.

Offset boundary Low. Site visit confirmed the offset boundary

Methodologies, emission factors and conversion used

Low. Quantification methodologies follow the approved protocol and emission factors. Quantification is conducted in the Excel spreadsheet. Emission factors and conversions are transparent.

Comparability with the baseline Low. No operational change.

Conformance to the program criteria Low. The offset project has been verified by several verifiers for over eight years.

Integrity for the responsible party’s data management system and control (e.g. organization chart, GHG management plan, personnel/consultant training, protocols used, control system documentation, software/program documentation/certifications

Medium. The Responsible Party’s data management system and control procedures are provided in the Verification Report.

Data transfer is a combination of digital and manual transfer.


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Element Risk Assessment

Greenhouse gas data and information, including the type of evidence collected, verification testing and crosschecking, inventory of emission sources

Medium. The GHG data and information are supported by the 3rd party invoices and metering data.

Suppliers’ invoices reviewed. The verification tests conducted include vouching, recalculation, and tracing.

Discussion of data management (e.g. measurement, fuel sampling, calibration, consistent use of standard conditions, data storage, procedures to fill missing data; procedures to repair inconsistent data, adjustment of variables and factors)

Low. The GHG data and information are supported by sufficient and appropriate evidence.

A5.0 SAMPLING PLAN Convenience sampling methods are used for the verification. The sample plan is developed based on the risk assessment to achieve an overall low detection risk. The sample size is based on the Guidance Document for GHG verification sampling by the European Commission with verifier’s professional judgement. The sample size varies based on the number of evidence records. The type and amount of evidence reviewed during the verification are summarized in Table A8.

Table A8: Sampling Plan

Reporting Element Type of Evidence Amount of Evidence Reviewed

Natural gas consumption Invoices 12 month records for sawmill 12 month records for the CHP

Heat Generation BPP calculation spreadsheet. 12 month records and hourly steam flow, temperature and pressure.

Electricity Metering data 12 month records

Diesel consumption Invoices monthly records for wood handling

Biomass combustion Wood tracking data monthly records

A6.0 CLOSURE If you have any questions or comments, please contact Min Si (403.723.1565, [email protected]).

Respectfully submitted, Tetra Tech Canada Inc. Prepared by: Reviewed by: Min Si, M.N.R.M., GHG-V Brian Adeney, P.Eng. Environmental Scientist Designated Signing Authority


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APPENDIX B: SIGNED STATEMENT OF QUALIFICATION

2017 Canfor Sawmill Biomass Energy Project Appendix B Statement of Qualifications 704-ENW.EENW03239-01 | February 14, 2018 | Issued for Use

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Statement of Qualification

Offset Report

Project Name Canadian Forest Products Ltd – Canfor Grande Prairie Sawmill Biomass Energy Project

Project ID 2255 - 1579

Project Developer Canadian Forest Products Ltd.


Report Type Offset Report

Report Period January 1, 2017 – December 31, 2017

Signature of Third Party Verifier

I, Brian Adeney (Third Party Verifier), meet or exceed the qualifications of Third-party verifiers described in Section 29 of the Carbon Competitiveness Incentive Regulation.

Tetra Tech Canada Inc. Per:

Signature of Third Party Verifier Date

February 14, 2018

Training Received Under ISO 14064 Part 3

Mr. Adeney received ISO 14064 -3 training in 2018, he has over 4 years of experience in providing verification.

Name Brian Adeney

Professional Designation P.Eng.

Email [email protected]

Phone Number (587) 460-3445

2017 Canfor Sawmill Biomass Energy Project Appendix B Statement of Qualifications 704-ENW.EENW03239-01 | February 14, 2018 | Issued for Use

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Lead Verifier

☐ Same as third party verifier?

Name Min Si, M.N.R.M., GHG-V

Professional Designation P. Ag.


Phone Number (403) 369 5254


Mr. Si is a CSA certified GHG verifier, and completed ISO 14064 – 3 with CSA.

Peer Reviewer

Name Nelson Lee, M.A.Sc., P.Eng. GHG-V





Mr. Lee is a CSA certified GHG verifier, and completed ISO 14064 -3 with CSA. Mr. Lee has over 4 years of experience in providing GHG verification.


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APPENDIX C: FINDING LOGS

2017 Canfor Sawmill Biomass Energy Project Appendix C Findings Log 704-ENW.EENW03239-01 | February 14, 2018 | Issued for Use

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Item (YR-##)

Description of the Issues Investigated During the Verification

Summary of Information Exchanged between Verifier and Client

Resolution Conclusion

(Including % Discrepancy if Applicable)

17-01 In the offset calculation spreadsheet, please update the description in

a. cell R11 in tab “OFFSET CREDIT” b. cell A2, A11, A12, E18, E36, F34, picture 2 in tab “2017 HEAT” c. cell A3, P7 in tab “2017 Transportation Emissions”

Response:

a. Cell R11 has been updated to reflect that the average in R12 is from 2005 – 2017.

b. All cells updated – no issues this year for Steam Production Calcs so only the Source remains for E36 cell.

c. Cells have been updated.

Resolved No further questions.

17-02 The Gross Electricity Generation (C55:C66) is based on the meter readings of GPEC (758S) E307-521 and the record is provided in the monthly generation summary.

However, please clarify why the quantity of Production Volume Gross (MWH), Electricity Consumption (kWh), Production Volume Net (MWH) in the Green Energy Key stats, is not consistent with the quantity provided in the monthly generation summary.

Please also clarify the date range for the Green Energy Key Stats since the data source of steam production volume is Green Energy Key Stat.

Key Stats Report is based on our accounting year, Dec 31, 2016 - Dec 29th, 2017. So the calendar month generation summary reports would not exactly match. The data set you have is from Jan 1, 2017 – December 31, 2017. The other data set exists, it’s just a question of what you want to use.

Resolved No further questions

17-03 Please clarify the reason for the gap of Net heat recovered between 2017_CGE_Steamheat_Invoicing_Spreadsheet_Jan16-18.xlsm and the invoices such as 2017_CGE_Steamheat_Invoicing_Spreadsheet_Q1_stamped_May15-17.pdf.

One example is that for Jan, 2017, the Net heat recovered is 32145.89 in the calculation spreadsheet while the amount in the invoice is 32044.80. The amount of 32044.80 is cited as old historian data calculated in the calculation spreadsheet.

What is the difference between data recorded in the old and new historian data storage system that led to the gap of calculation?

Please see the attached from Matthew Warkentin. Ralph indicated that there would be a difference and advised us of that with justification.


17-04 In the offset calculation spreadsheet, cell C6 of tab “2017 Natural Gas”, the actual meter start on Dec 20, 2016 should be 307,641 instead of the estimate value of 311,342 based on the invoice 02 Direct Energy.pdf.

Please provide the document for actual reading on Jan 31 in cell D7.

Please remove the comment in cell J18 since all the meter reading are up to date.

Please update the formula in I19 to improve transparency.

a. Change to value has been corrected. b. Meter reading from cell D7 is from Natural Gas Backup 2017 for

Power Plant, cell I6 – value taken by Canfor employees (see 17-05 for process).

c. Comment has been deleted. d. Formula has been updated.


17-05 In the offset calculation spreadsheet, tab “Nat Gas Back up”, please provide the data source for cell I6:I17.

These values are directly from Canfor employees. For CGE, the values are physically read and sent in an email (see document attached to email by Tracey Swant on Feb 7, 2018).

For the Sawmill, Eric Lister takes all the physical month end readings on Saturday morning of month end


2017 Canfor Sawmill Biomass Energy Project Appendix C Findings Log 704-ENW.EENW03239-01 | February 14, 2018 | Issued for Use

35

Item (YR-##)

Description of the Issues Investigated During the Verification

Summary of Information Exchanged between Verifier and Client

Resolution Conclusion

(Including % Discrepancy if Applicable)

17-06 Please provide the full year data for Hog_database, we only have spreadsheet for April.

See details in emails from Tracey on Feb 7, 2018.


17-07 The diesel volume calculated in cell B31 of tab “2017 Loader Diesel” overestimates the volume of diesel consumed in year 2017. Please explain.

Diesel Calculation in Cell B31 has been adjusted not to include the December invoice as this would overestimate the Diesel value for the year.


17-08 P15 biomass combustion. Please explain why only trucked in biomass is considered

The sawmill biomass is considered to be functional equivalent between the baseline and project conditions. The sawmill biomass was incinerated in the baseline, and is combusted for steam production.

Unresolved The project emission calculated based on the biomass quantity not from sawmill. There was an incinerator at the sawmill combusting the biomass before project operation. The supporting documents for incinerator is not readily available. Tetra Tech conducted interview, and testimonial evidence obtained to confirm the existence of incineration. The potential discrepancy is 2.5% overstatement of net reduction. As the potential discrepancy is within materiality threshold, and testimonial evidence obtained, it is Tetra Tech’s opinion that the data used is deemed to be acceptable.


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APPENDIX D: SIGNED STATEMENT OF VERIFICATON

2017 Canfor Sawmill Biomass Energy Project Appendix D Statement of Verification 704-ENW.EENW03239-01 | February 14, 2018 | Issued for Use

37

Statement of Verification

Offset Report

Project Name Canadian Forest Products Ltd – Canfor Grande Prairie Sawmill Biomass Energy Project





Statement of Verification

Total Baseline Emissions 81,149 t CO2e

Total Project Emissions 1,124 t CO2e

Other N/A

Net Reduction 80,025 t CO2e

Statement of Assertion In the period of January 1, 2017 – December 31, 2017, the baseline emissions were 81,149 t CO2e, the project emissions were 1,124 t CO2e, and the net reductions were 80,025 t CO2e

Responsibilities of Project Developer and Third Party Verifier

Canadian Forest Products Ltd was responsible for the preparation and presentation of information within the Project Report and GHG Assertion. Tetra Tech was responsible to provide a reasonable level of assurance to ACCO on the GHG Assertion contained the Canadian Forest Products Ltd. – Canfor Grande Prairie Sawmill Biomass Energy Project for the period of January 1, 2017 – December 31, 2017.

The objective of this verification is to provide an independent assessment of the offset project to identify any material and immaterial errors, omission or misrepresentations, and to provide our opinion on the GHG assertion in the Offset Project Report.

The verification was conducted to a reasonable level of assurance in accordance with ISO 14064-3: Specification with Guidance for the Validation and Verification of GHG Assertions.

The evidence reviewed includes but not limited to electricity generation data, natural gas invoices, wood inventory tracking records, etc.

2017 Canfor Sawmill Biomass Energy Project Appendix D Statement of Verification 704-ENW.EENW03239-01 | February 14, 2018 | Issued for Use

38

Conclusion

The verification conclusion is positive.

Based on our review, it is our opinion that the Emission Reductions of 80,025 t CO2e contained in the GHG assertion generated from the Canadian Forest Products Ltd. – Canfor Grande Prairie Sawmill Biomass Energy Project in the period of January 1, 2017 – December 31, 2017 are materially correct and presented fairly in accordance with the relevant criteria.




February 14, 2018

Name Brian Adeney





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APPENDIX E: SIGNED CONFLICT OF INTEREST CHECKLIST

2017 Canfor Sawmill Biomass Energy Project Appendix E Conflict of Interest Checklist 704-ENW.EENW03239-01 | February 14, 2018 | Issued for Use

40

Conflict of Interest Checklist Offset Report

Project Name Canadian Forest Products Ltd. – Canfor Grande Prairie Sawmill Biomass Energy Project




Report Type Offset Report


Conflict of Interest Checklist

1. The relationship between my firm and this reporting company poses unacceptable threat to or compromises the impartiality of my firm. False

2. The finances and sources of income of my firm compromise the impartiality of my firm. False

3. The personnel my firm has scheduled to participate in the verification may have an actual or potential conflict of interest. False

4. My firm participated in some manner in the development or completion of the associated offset submission for this reporting company. False

5. My firm provided greenhouse gas consultancy services to this reporting company. False

6. My firm will use personnel that have, are, or will be engaged or previously employed by the reporting company. False

7. My firm will outsource the Statement of Verification for the associated offset submission. False

8. My firm offers products or services that pose an unacceptable risk to impartiality. False

2017 Canfor Sawmill Biomass Energy Project Appendix E Conflict of Interest Checklist 704-ENW.EENW03239-01 | February 14, 2018 | Issued for Use

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Important: If you have checked "True" to any of the above, you may not fulfill the "independence" requirement for third party verifiers. Please contact Alberta Environment and Parks for further instruction. If the potential conflict of interest is a sufficient threat to impartiality (perceived or actual), or cannot be effectively managed, you Third Party Verification Report will not be acceptable to Alberta Environment and Parks.


I, Brian Adeney (Third Party Verifier), have personally examined and am familiar with the information contained in this Conflict-of Interest Checklist, and can demonstrate freedom from any conflict of interest related to the reporting company for which the verification was performed. I hereby warrant that the information submitted in this Conflict-of Interest Checklist is true, accurate and complete to the best of my knowledge, and that all matters affecting the validity of this Conflict-of-Interest Checklist have been fully disclosed. Impartiality shall be monitored over the duration of the verification and any identified actual or potential conflict-of-interest situations will be communicated to AEP directly.



February 14, 2018

Name Brian Adeney





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APPENDIX F: LIMITATION ON THE USE OF THIS DOCUMENT

LIMITATIONS ON USE OF THIS DOCUMENT

1

GEOENVIRONMENTAL 1.1 USE OF DOCUMENT AND OWNERSHIP

This document pertains to a specific site, a specific development, and a specific scope of work. The document may include plans, drawings, profiles and other supporting documents that collectively constitute the document (the “Professional Document”). The Professional Document is intended for the sole use of TETRA TECH’s Client (the “Client”) as specifically identified in the TETRA TECH Services Agreement or other Contractual Agreement entered into with the Client (either of which is termed the “Contract” herein). TETRA TECH does not accept any responsibility for the accuracy of any of the data, analyses, recommendations or other contents of the Professional Document when it is used or relied upon by any party other than the Client, unless authorized in writing by TETRA TECH. Any unauthorized use of the Professional Document is at the sole risk of the user. TETRA TECH accepts no responsibility whatsoever for any loss or damage where such loss or damage is alleged to be or, is in fact, caused by the unauthorized use of the Professional Document. Where TETRA TECH has expressly authorized the use of the Professional Document by a third party (an “Authorized Party”), consideration for such authorization is the Authorized Party’s acceptance of these Limitations on Use of this Document as well as any limitations on liability contained in the Contract with the Client (all of which is collectively termed the “Limitations on Liability”). The Authorized Party should carefully review both these Limitations on Use of this Document and the Contract prior to making any use of the Professional Document. Any use made of the Professional Document by an Authorized Party constitutes the Authorized Party’s express acceptance of, and agreement to, the Limitations on Liability. The Professional Document and any other form or type of data or documents generated by TETRA TECH during the performance of the work are TETRA TECH’s professional work product and shall remain the copyright property of TETRA TECH. The Professional Document is subject to copyright and shall not be reproduced either wholly or in part without the prior, written permission of TETRA TECH. Additional copies of the Document, if required, may be obtained upon request. 1.2 ALTERNATIVE DOCUMENT FORMAT

Where TETRA TECH submits electronic file and/or hard copy versions of the Professional Document or any drawings or other project-related documents and deliverables (collectively termed TETRA TECH’s “Instruments of Professional Service”), only the signed and/or sealed versions shall be considered final. The original signed and/or sealed electronic file and/or hard copy version archived by TETRA TECH shall be deemed to be the original. TETRA TECH will archive a protected digital copy of the original signed and/or sealed version for a period of 10 years. Both electronic file and/or hard copy versions of TETRA TECH’s Instruments of Professional Service shall not, under any circumstances, be altered by any party except TETRA TECH. TETRA TECH’s Instruments of Professional Service will be used only and exactly as submitted by TETRA TECH. Electronic files submitted by TETRA TECH have been prepared and submitted using specific software and hardware systems. TETRA TECH makes no representation about the compatibility of these files with the Client’s current or future software and hardware systems. 1.3 STANDARD OF CARE

Services performed by TETRA TECH for the Professional Document have been conducted in accordance with the Contract, in a manner

consistent with the level of skill ordinarily exercised by members of the profession currently practicing under similar conditions in the jurisdiction in which the services are provided. Professional judgment has been applied in developing the conclusions and/or recommendations provided in this Professional Document. No warranty or guarantee, express or implied, is made concerning the test results, comments, recommendations, or any other portion of the Professional Document. If any error or omission is detected by the Client or an Authorized Party, the error or omission must be immediately brought to the attention of TETRA TECH. 1.4 DISCLOSURE OF INFORMATION BY CLIENT

The Client acknowledges that it has fully cooperated with TETRA TECH with respect to the provision of all available information on the past, present, and proposed conditions on the site, including historical information respecting the use of the site. The Client further acknowledges that in order for TETRA TECH to properly provide the services contracted for in the Contract, TETRA TECH has relied upon the Client with respect to both the full disclosure and accuracy of any such information. 1.5 INFORMATION PROVIDED TO TETRA TECH BY OTHERS

During the performance of the work and the preparation of this Professional Document, TETRA TECH may have relied on information provided by persons other than the Client. While TETRA TECH endeavours to verify the accuracy of such information, TETRA TECH accepts no responsibility for the accuracy or the reliability of such information even where inaccurate or unreliable information impacts any recommendations, design or other deliverables and causes the Client or an Authorized Party loss or damage. 1.6 GENERAL LIMITATIONS OF DOCUMENT

This Professional Document is based solely on the conditions presented and the data available to TETRA TECH at the time the data were collected in the field or gathered from available databases. The Client, and any Authorized Party, acknowledges that the Professional Document is based on limited data and that the conclusions, opinions, and recommendations contained in the Professional Document are the result of the application of professional judgment to such limited data. The Professional Document is not applicable to any other sites, nor should it be relied upon for types of development other than those to which it refers. Any variation from the site conditions present, or variation in assumed conditions which might form the basis of design or recommendations as outlined in this report, at or on the development proposed as of the date of the Professional Document requires a supplementary investigation and assessment. TETRA TECH is neither qualified to, nor is it making, any recommendations with respect to the purchase, sale, investment or development of the property, the decisions on which are the sole responsibility of the Client. 1.7 NOTIFICATION OF AUTHORITIES

In certain instances, the discovery of hazardous substances or conditions and materials may require that regulatory agencies and other persons be informed and the client agrees that notification to such bodies or persons as required may be done by TETRA TECH in its reasonably exercised discretion.

verification report for offset project - csa registries · 3.1 procedure ... use of this document...

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