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Environmental classification and rationale
The project was screened B/1, requiring an Environmental Audit and
Environmental Analysis in line with the Bank’s Environmental Policy and Public
Information Policy. The modernisation and replacement of an existing air
separation plant is associated with a number of environmental issues, which
can be readily identified, assessed and mitigated as part of an Environmental
Analysis. An Environmental Audit of the existing facilities was undertaken to
determine environmental risks and liabilities.
Key environmental issues and mitigation
Environmental issues associated with the operation of an oxygen plant are not
significant, notably as this will be a new installation constructed within the
existing steel plant complex, employing state-of-the-art technology. The plant
will be operated in accordance to Air Liquide’s environmental best practices,
which are based on EU environmental standards and requirements. Noise and
vibration, which are normally associated with such plants, will be mitigated
at the design stage and given the installations location will not affect the
background levels. All cooling water will be recycled. Waste oil will be the
only liquid effluent and this will be handled at Severstal’s oil regeneration
facilities. These measures are aimed to ensure that the environmental issues
will be sufficiently managed to prevent or minimise impacts on staff and local
population as well as on the environment.
Given that the plant will rely on the operation of the Severstal steel plant,
a top level review of the steel plant was also undertaken. The steel plant has
been meeting all local and regional environmental standards and is generally
in compliance with Russian regulations and the World Bank standards. The plant
has implemented an environmental management system and has been certified
according to ISO 14001. Severstal steel plant’s environmental track record is
better compared to the other Russian steel plants and the Company has been
active in trying to improve the environment within the city of Cherepovets.
The Company has reduced emissions by 50% in the last 10 yrs and 67% in the
last 15 yrs and has an ongoing improvement program and future improvements
projects planned for air, water and solid wastes.
Environmental opportunities
The project will allow for significant environmental opportunities, mainly
through energy efficiency at the steel plant. The new installation will
replace old units which date form the 1960s, and are characterised by low
efficiency. Alternative projects have been considered, including upgrading
existing installations. The Air Liquide option allows for a 30% reduction in
power use compared to the alternative studied and will also benefit from the
existing project through CO2 emissions reduction close to 50,000 tpa. The new
installation is part of an overall modernization program at Severstal.
Summary of Environmental Action Plan
The company will be required to adhere to Russian and EU environmental, health
and safety regulations and standards. All relevant permits will need to be
obtained during the construction period and prior to commissioning the plant.
As all environmental protection measures have been incorporated in the project
structure, there is no need for a stand alone Environmental Action Plan.
Disclosure of information and consultation
In the context of the EBRD’s participation in the project, the Company will
release locally a summary of relevant environmental issues associated with the
project and summarise mitigation measures, action plans and other initiatives
agreed.
Monitoring and reporting
The Company will monitor the environmental impact of its operations in
accordance with national law and regulations. 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
prepared for the project covering:
(i) ongoing performance of project-specific environmental, health and safety
activities as reflected in the results of periodic and quantitative sampling
and measuring programmes, and
(ii) the status of implementation of environmental mitigation and improvement
measures. The Bank’s representatives will also conduct periodic site
supervision visits when deemed appropriate.
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