Guilherme Corrêa Abreu Luiz Antônio Rossi Tsutomu Morimoto

1. Optimization and Co-Generation of Energy from Steel Making Process CDM Methodologies Process Approval Guilherme Corrêa Abreu Luiz Antônio Rossi Tsutomu Morimoto

2. Responsible Work Team Companhia Siderúrgica de Tubarão (coordination) (Technical support in the project development) (Validation Process)

3. Venturi Pumps Sludge Pumps The CDM Projects • Steel Making Gas (LDG) recovery for electric energy generation => Increasing the generation. • Electric energy consumption reduction at Steel Making Plant => Reduction of the consumption. • Total of 330.000 tCO2 in 07 years. LD gas recovery / Power Plant #4 Electric energy consumption reduction

4. The Proposed Methodologies • Baseline Scenario: • The future thermal participation on the grid expansions. • The hydrologic conditions for hydro energy generations. • Validation Process initiated at September 2003 (DNV). • New Methodologies: • NM0059: Energy co-generation from steel making gas recovery at Brazil. • NM0064: Electric energy consumption reduction in steel making process at Brazil. • Submission for Meth Panel: June 24, 2004. • Public comments: Jul 16 until August 05. • Meth Panel recommendation: Nov. 08~10.

5. Meth Panel Considerations • Final Recommendation (NM0059 and NM0064): Not to approve the proposed methodologies. • Additionality not clear and not rigorously supported (additionality test). • Proposed threshold (<50%) too high to establish “non common practice in the sector”. • Necessary an Investment Analysis to support additionality through Barriers Analysis. • Necessary to use the energy operating margin AND built margin. • Baseline Scenario not well defined (only one baseline scenario is considered). • Necessary of leakages expansion assessment.

6. Project Participants Comments • Technical questions and procedures questions have arose after Final Recommendation. • Additionality test, that has been asked for, was published by Meth Panel on 11th meeting July 09, 2004, therefore after the submission. • Even being published after the project submission, it is not clear in the additionality test (MP 11th meeting) that it is necessary an Investment Analysis AND Barriers Analysis. • The whole project including proposed methodologies and the additionality had been evaluated by DNV during the Validation Process, and was considered in accordance with Kyoto Protocol demands.

7. Project Participants Comments • Differences of individual analysis by experts on several points (ex. NM0059 with controversial positions between the experts related to the baseline establishment). • No possibility for any clarifications by project participants, even this phase is foreseen on Meth Panel procedures. Most of the technical aspects pointed by the experts could be clarified in case of explanations by project participants. • No support on the establishment why the “proposed threshold is too high”. • Participation of an expert (Ricardo Esparta) not in accordance with Meth Panel procedures regarding the total impartiality on the process.

8. Thank you for your attention !! Guilherme Corrêa Abreu Environmental Specialist gabreu@cst.com.br www.cst.com.br