The proposed project involves the construction of two urea-formaldehyde concentrate units (UFC) and energy efficiency improvements at PJSC “Metafrax” located in Gubakha town, Perm region. The implementation of the project will help “Metafrax” to increase production of UFC required by the wood processing industry and to reduce production costs. These investments are a part of a long-term programme for the modernisation and expansion of the Company, aiming to shift production downstream towards high value-added methanol derivatives.
Screening categories and rationale for classification
The size, in proportion to the existing production, location and nature of the construction and operation of two new urea-formaldehyde concentrate plants do not raise any significant issues of concern. The key environmental issues associated with the Project include air emissions of VOC, formaldehyde and NOx as well as raw material storage and handling, which in new plants like this can be easily mitigated with modern technology, project design and construction planning and work practises. The environmental impacts of the expansion and modernisation of existing production facilities can be readily identified and assessed. For the above reasons, the EBRD has classified the project B/1, requiring an Environmental Analysis of the proposed investment programme and an Environmental Audit of the existing facilities.
Information studied in the course of ecological assesment
- Ecological assessment is supported by the following information from “Metafrax”:
- Ecological, social and personal policy;
- Five-year Ecological program (2002-2006);
- Statistics of environment protection, health care and safety engineering, reports to the environmental protection authorities;
- «Energo Group»: “Metafrax” Company auditит, May 2004;
- AМЕК Eurasia: Ecological audit and ecological analysis of “Metafrax” Company, May 2004.
The Project site is located in a distance of 2.6 km from residential areas and there are no natural parks, protected areas or other known environmentally sensitive areas within the range of potential impact from the plants. The environmental audit did not identify any potential soil and the groundwater contamination. No significant accidents or spills of harmful substances have occurred during the construction or operation of the current facilities.
The current production facilities have been existed over 50 years and include a methanol, pentaerythritol, urotropine, formalin, urea resin, urea formaldehyde concentrate, urea formaldehyde resin and polyamide production, and auxiliary services. The Environmental Analysis and the Environmental Audit conducted by the Bank’s environmental consultant verified that the present operations comply with Russian and in most cases also with EU standards, including EU IPPC Directive’s best available technology (BAT) guidelines for large volume organic chemical industry. The identified issues relating to existing operations have been addressed in the agreed Environmental Action Plan (EAP), the implementation of which will bring the Company into full compliance with Russian and EU environmental and health and safety standards by the end of 2008.
Water is supplied from the Shirokovsky water reservoir (9.6 million m3/year) and from the Company’s own wells (183,000 m3/year). The annual energy consumption amounts to 148 GWh electricity and 1.04 billion m3 of natural gas for heating and production.
All other air emissions than those of NOx comply with EU BAT guideline levels for the best technologies existed. The implementation of the agreed new EAP for 2004-2008 will bring also NOx emissions in compliance with the EU BAT guidelines.
The wastewater treatment plant is being reconstructed as a part of the ongoing 2002-2006 EAP. The majority of the investment programme has been already completed and compliance with EU and national standards is anticipated by 2005.
Chemical and oil storage
The chemical storage and methanol storage tanks have secondary containment in compliance with Russian and EU regulations.
The solid waste management and temporally storage on site is well organised. Hazardous and communal waste is collected by certified companies.
Fire protection and emergency response
Equipment is in place in all production buildings and staff is trained.
The environmental risks associated with the investment programme are limited. The Environmental Analysis verified that the two UFC plants supplied by Swedish Perstorp Formox AB will meet EU environmental standards. The new urea formaldehyde concentrate facilities will be built to comply with EU standards. The chosen technology conforms to EU and international requirements for BAT. The contractors will be required to adhere to international standards and work practices and will be closely supervised.
The Bank’s eco-efficiency consultants conducted an energy audit of the Company and identified US$7.75M worth of energy efficiency investments which will be part of the Bank’s project. This will result about 15% reduction in electricity use and 10% reduction in natural gas consumption. The Company is committed to implement a certified Environmental Management system by the end of 2008.
In accordance with its corporate policies, Metafrax is committed to operate as good corporate citizen and maintain open dialogue and close relationship with the surrounding community and local population. Metafrax will keep the community informed via its websitehttp://www.metafrax.ru/ and other forms of communication.
The Bank will evaluate the project's compliance with the applicable environmental and social requirements during the lifetime of the project by reviewing annual environmental reports (AERs) prepared for the project covering:
- ongoing performance of project-specific environmental, health and safety activities in the frame of this project as reflected in the results of periodic and quantitative sampling and measuring programmes,
- status of implementation of environmental mitigation and improvement measures.
The Bank’s representatives will also conduct periodic site supervision visits when deemed appropriate.