HUNAN CDM PROJECT SERVICE CENTER
——Utilization of waste gas and heat in Changde Shengli
chemical engineering Co.,Ltd.
PROJECT IDEA NOTE
A. Project description, type, location and schedule
Name of Project: Utilization of waste gas and heat in Changde Shengli chemical
engineering Co.,Ltd._
Technical summary of the project
Objective of the project
Project description and
proposed activities
Date submitted: 2005.12.14
The project aims to recovery waste heat for power generation ，
extract and flare(burnt) CH4 from waste gas to generate heat,
reduce fuel consumption, reduce greenhouse gas emissions and
promote sustainable development.
Changde Shengli Chemical Industry Co.Ltd has annual production
capacity of synthetic ammonia 60,000 tons. There are currently
parts of residual heat in convension-gas system processes and
water-gas creation system processes have not been used because
of low-value heat grade. High-pressure steam produced in Fluid
Bed Boilers that was sent into water-gas generator through the
pressure-release (pressure-reducing) valve did not make use of
the residua pressure. Part of the methane from the synthetic
ammonia tail gas directly platoon in the air without gas
collection ，too.
The project plan to set up a hot network among production
switched systems, creates gas systems and boiler system to make
use of the residual heat and pressure respective, which have not
been used currently in Changde Shengli Chemical Industry Co.Ltd,
by heating to the soft water and power generation with synthetic
ammonia tail gas recovery and combustion of methane in the heat
provision for the post-construction section.
Through the implementation of project activities, fuel consumption
and greenhouse gas emissions can be reduced.
Overall the project activities include three aspects :
(1), Heat exchangers and thermal conversion system between
soft water and converted gas system processes .Soft water heated
continues to water-gas heating system; Residual heat from watergas
processes and their co-heating systems control system
Technology will be used continually to further heat exchange of soft
water. Temperature of soft water will be up to 95 degrees and then
be sent to the boiler as a water supply for the production of steam.
The technology has been widely adopted.
(2), The use of cogeneration technologies: using thermal
heating network soft water as a water supply for production
3.82Mpa steam and power generation.The generation of low
pressure steam sending water-gas stove for gas production. The
technology has been used widely in Russia, the US, Japan and
other countries.
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HUNAN CDM PROJECT SERVICE CENTER
——Utilization of waste gas and heat in Changde Shengli
chemical engineering Co.,Ltd.
(3), Burning the methane gas extracted form synthetic
ammonia tail gas for steam production to provide heat for postproduction processes section. The technology has been widely
used in industrial production.
Technology to be employed
Water heating boilers used for heat exchangers, co-generation
technology using high-pressure stream, molecular sieve CH4 gas
collection form synthetic ammoniatail gas and CH4 fuel for the
boiler heat production were used in this project. These
technologies are mature commercial viable technology，which has
been widely applied in industry.
Project developer
Name of the project developer
Changde Shengli Chemical Co.Ltd.
Organizational category
d. Private company
Other function(s) of the project b. b. Operational Entity under the CDM
developer in the project
Summary of the relevant
The company has the relevant construction and quality control
experience of the project
experience of analogical project.
developer
Address
425700
Changde Shengli Chemical Co.,Ltd. Bazi Road,
Zhangjiang Town, Taoyuan County, Hunan Province, China
Contact person
Cai dayun
Telephone / fax
0086-0-13907420076;0086-0736-6678956
E-mail and web address, if any
ZHL4912@yahoo.com.cn
Project sponsors
(List and provide the following information for all project sponsors)
Name of the project sponsor
Changde Shengli Chemical Co.,Ltd.
Organizational category
d. Private company
Address (include web address, if
any)
Main activities
Summary of the financials
Type of the project
Greenhouse gases targeted
Type of activities
Field of activities
a. Energy supply
d. Waste management
Location of the project
Region
Country
City
Brief description of the location of
the project
425700
Changde Shengli Chemical Co.,Ltd. Bazi Road,
Zhangjiang Town, Taoyuan County, Hunan Province, China
Provide the financing of project construction
Self-financing fund of US$1.296 million of the project is obtained at
the end of the year of 2005. Another US$0.64 million will be ready
before June, 2006. Fund of US$3.42 million altogether including
financing from the bank will be available before June, 2006.
CO2 , CH4
Abatement / CO2 Sequestration
cogeneration
utilization of waste and wastewater emissions
East Asia & Pacific Area
China
Taoyuan County, Changde City, Hunan Province ,China
The project is located in the Changde Shengli Chemical Co.,Ltd.
Bazi Road, Zhangjiang Town, Taoyuan County, Hunan Province,
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HUNAN CDM PROJECT SERVICE CENTER
——Utilization of waste gas and heat in Changde Shengli
chemical engineering Co.,Ltd.
China
Expected schedule
Earliest project start date
Estimate of time required before
becoming operational after
approval of the PIN
Expected first year of verified
Emission Reduction or CER /
ERU delivery
Project lifetime
Current status or phase of the
project
Current status of the acceptance
of the Host Country
The position of the Host
Country with regard to the
Kyoto Protocol
Year 2006
Time required for construction: 6 months
Year 2006
30 years
Feasibility study finished
The feasibility study report has been approved by Taoyuan County
Development and Reform Commission
The Host Country has signed and approved the Kyoto Protocol
B. Expected environmental and social benefits
Estimate of Greenhouse Gases Annual: 84307 tCO2-equivalent
abated / CO2 Sequestered (in
Up to and including 2012: 505 842 tCO2-equivalent
metric tons of CO2-equivalent) Up to a period of 10 years: 843 070 tCO2-equivalent
Up to a period of 7 years: 590 149 tCO2-equivalent
Up to a period of 14 years: 1 180 298 tCO2-equivalent
Baseline scenario
CDM/JI projects must result in GHG emissions being lower than
“business-as-usual” in the Host Country. At the PIN stage
questions to be answered are at least:
 Which emissions is the proposed Clean Development
Mechanism (CDM)/Joint Implementation (JI) project
displacing?
The proposed CDM activities use residual heat in convensiongas system processes and water-gas creation system
processes for heating system boiler water and high pressure
stream to achieve cogeneration.The project will reduce CO2
emission through reduction in fuel consumption and power
generation. The proposed CDM activities use CH4 contained
in synthetic ammonia tail gas for combustion and heating,
thereby realizing CH4 emission reduction.

What would the future look like without the proposed
CDM/JI project?
Chinese government did not clearly define limits on CO2
emissions and emissions of CH4 in synthetic ammonia
indusry .The CDM projects mainly rely on the enterprise
conscious and voluntary act. The main aim of enterprises
always focused on economic efficiency. In order to carry out
CDM activities, the additional input project activity funds and
personnel is needed .If no carbon financing, there will be a
loss of about 46,700 US dollars annually. Staff input into CDM
activities, if put into production, research and development,
enterprises will increase their economic efficiency. Therefore,
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HUNAN CDM PROJECT SERVICE CENTER
——Utilization of waste gas and heat in Changde Shengli
chemical engineering Co.,Ltd.
enterprises probably would not undertake such activities. CDM
project could help China enterprises overcome projects
commercial risks, thereby bringing additional emission
reductions.

What would the estimated total greenhouse gas (GHG)
reduction be?
The proposed CDM project activities bring emission reductions
from three parts：（1） to reduce fuel consumption for soft water
heating and （ 2 ） to reduce fuel consumption the power
generation and (3) CH4 emissions reduction in synthetic ammonia
tail gas emission for heating . In accordance with calculation of
AM0002, AM0018 and ACM0004, the total emission reductions air
is 84,307 tCO2-eq/a.
For sequestration projects only:
Existing vegetation and land use
Specific global & local
environmental benefits
Which guidelines will be applied?
Local benefits
Global benefits
NA
The Environmental Protection Law (1989)
Standards for comprehensive air pollutants discharge (GB162971996) Grade 2.
Standards for comprehensive wastewater discharge (GB89781996) Table 4-Grade I.
No significant adverse environment impacts are likely to be
caused by the project. Characteristics of the Project activities and
its environment friendly technologies will not permit a negative
damage to the ecosystem. Moreover, it will allow the project to
conserve the biodiversity of this particular zone and therefore be
conducive to the protection of the local ecological and tourism
resource development.
The abatement of these chemicals has local benefits for the
habitants who are living closely to the company. Project activities
the recovery of the production process CH4 gas for the production
of heat, the residual heat and pressure arising from production
processes to reduce consumption, while reducing fuel of
greenhouse gases emissions.
The utilization of waste heat and exhaust reduced emissions by
the use of other fuel consumption and consequent emission of
harmful substances such as SO2,NOx, thus conducive to the
surrounding population's health.
The project will abate GHG emissions, through displacement of
thermoelectric generation. Through the implementation of project
activities, it will reduce approximately 50852.3tCO2 equivalent per
year, in favors of easing global warming trend and contributing to
mitigate the Climate Change.
Socio-economic aspects
The implementation of project activities which will help reduce the
What social and economic effects fuel consumption of factories to reduce greenhouse gas emissions,
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HUNAN CDM PROJECT SERVICE CENTER
——Utilization of waste gas and heat in Changde Shengli
chemical engineering Co.,Ltd.
can be attributed to the project
and which would not have
occurred in a comparable
situation without that project?
Indicate the communities and the
number of people that will benefit
from this project.
Which guidelines will be applied?
will help to improve the local environment and the protection of
local
tourist
resources,
and
promote
local
tourism
development .economic and social improvements brought by the
project will enhance the net environmental benefiting from the
project. Therefore the project will contribute to the overall
sustainable development attributes.
Direct & Indirect employment is going to be generated during the
construction phase and during all of its lifespan. This effect permits
the community to improve incomes and standards of living.
The project will comply with rules and requirements regarding to
social impacts and community participation. In analyzing socioeconomic effects, some important programs and plan are referred:
The 10th Five-year Plan of Hunan province.
The 10th Five-year economic and development Plan of Taoyuan
county.
What are the possible direct
effects (e.g., employment
creation, capital required, foreign
exchange effects)?
During the project construction, there is a peak labor force of 46
and during the operation and maintenance period, there are about
5 permanent project staffs, which will create a corresponding
increase in the size of employment services and commodities
markets.
The situation improved as a result of cheaper electricity and less
fuel consumption, the situation will be improved enterprise
production; can produce hours, improve economic efficiency.
Project participants Changde Shengli Chemical Industry Co.，.Ltd.
will pay a certain proportion of local government revenue for
education, including poverty and other various uses. The
increasing incomes and improving standards of living, play a role in
promoting the region economic development.
What are the possible other
effects? For example:

The project is a demonstration performance according to the
Commercial and general international rules for developing a CDM
capacity building in numerous small and medium nitrogen plant
waste heat, exhaust management and development of similar
situation in Hunan and other places in China.
Environmental strategy/
priorities of the Host Country
To pay much more attention to environmental protection in a high
growth rate of economic development is one of the PRC
government's fundamental environmental strategies. And, to
protect and improve air quality, development of clean energy to
reduce pollutant emissions is one of the effective options.
Development of cleaner production, reduce pollution emissions,
protect and improve the air quality is an important measure for the
Chinese government. Project activities are consistent with the
Chinese government current thrust to reduce energy consumption,
environmental protection existing policy.
C. Finance
Total project cost estimate
Development costs
1.3739 US$ million
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HUNAN CDM PROJECT SERVICE CENTER
——Utilization of waste gas and heat in Changde Shengli
chemical engineering Co.,Ltd.
Installed costs
Other costs
Total project costs
Sources of finance to be
sought or already identified
Equity
Debt – Long-term
Debt - Short term
Not identified
Carbon finance contribution
sought
Carbon finance contribution in
advance payments. (The
quantum of upfront payment will
depend on the assessed risk of
the project by the World Bank.)
Sources of carbon finance
Indicative CER/ERU or vER
Price (subject to negotiation )
Total Emission Reduction
Purchase Agreement (ERPA)
Value
A period until 2012 (end of the
first budget period)
A period of 10 years
A period of 7 years
A period of 14 years (2 * 7 years)
1.8608 US$ million
0.2043 US$ million
3.439 US$ million
Annual: 84307 tCO2-equivalent
Up to and including 2012: 505 842 tCO2-equivalent
Up to a period of 10 years: 843 070 tCO2-equivalent
Up to a period of 7 years: 590 149 tCO2-equivalent
Up to a period of 14 years: 1 180 298 tCO2-equivalent
Changde Shengli Chemical Co.,Ltd. (in 1.95 US$ million)
Bank loan (in 1.49 US$ million)
None
None
None
None
Not identified
7US$/tCO2-eq
3 540 894 US$
5 901 490 US$
4 131 043 US$
8 262 086 US$
If financial analysis is available for
NA.
the proposed CDM activity, provide
the forecast financial internal rate of
return for the project with and without
the CER revenues. Provide the
financial rate of return at the
expected CER price above and
US$3/ tCO2e. DO NOT assume any
up-front payment from the PCF in the
financial analysis that includes PCF
revenue stream.
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