520265 - EOFI Conox

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Environmental Review Summary

Project Number

520265

Company Name

INTERNATIONAL FINANCE CORPORATION

Date ERS Disclosed

Oct 16, 2003

Country

World Region

Region

Global

Environmental Category

B - Limited

Status

Completed

Sector

Other (For Non-Investment Projects)

Industry

Infrastructure

Department

Advisory Services

Project Description

Conox Ltd, a technology development company based in Finland, has developed a new and innovative proprietary technology to process black liquor from the straw pulp manufacturing process. This novel technology, called "thermal oxidation" is expected to eliminate the straw pulp mill''s largest source of pollution and hence has the potential to address the largest source of water pollution in China.

Conox Ltd is seeking financing from the IFC''s Environmental Opportunities Facility (EOF) to complete two projects in China. The first project will be a pilot, which consists of the installation of a recovery system at an existing straw pulp mill, the Kaiyuan Paper Industry Co. Ltd. This startup will be a joint venture between Conox Ltd. and Kaiyuan. The second project will be the installation of a similar recovery system in the Jiangsu Jinlian Paper Company.

Environmental and Social

The sponsor has presented plans to address these impacts to ensure that the proposed project will, upon implementation of the specific measures agreed, comply with applicable host country laws and regulations and World Bank/IFC requirements. The information about how these potential impacts will be addressed by the project is summarized in the paragraphs that follow.

The rice straw pulping process has traditionally had significant problem related to black liqueur treatment and discharge. The proposed project is to install full scale, Conox technology based, treatment units at two rice straw pulp mills located in China. These systems will in contrast to systems of the past be able to remove silica from the black liqueur and afterwards carry out a complete combustion of the dissolved solid concentrate in a nitrogen free atmosphere hereby allowing total destruction of the Chemical Oxygen Demand (COD) of the wastewater and chemical recovery of the active (soda) components in the liqueur components.

Silica will first be removed by a pH controlled precipitation process, and the silica can either be land filled or returned to the rice production fields as such field after years of rice production can have a silica deficit. This will be followed by a several step concentration process and final combustion in an enriched oxygen atmosphere. The concentration and combustion process is integrated and allows for full heat recovery hereby producing steam in excess. The excess steam will be returned to the pulping plant for process use.

The final combustion take place in an nitrogen free atmosphere and NOx formation will be limited to combustion of nitrogenous components in the black liqueur, this is in contrast to other combustion processes operating at similar high temperatures (approximately 1200 degree Celsius) where nitrogen from the combustion air will partly convert into NOx. The off gas will consist of around 90% CO2 and can either be released at low temperature after the heat recovery or can be purified and sold as industrial CO2.

The slag from the combustion will go to a dissolver and sodium hydroxide will be recovered and recycled to the pulping process. There is no wastewater discharge from the process. By removing the high COD load of black liqueur from the pulp plants discharge the wastewater treatment systems will be able to achieve an acceptable wastewater quality. Further information on the technology can be found at the following web page: http://www.conox.com

The project is to initial implementation the Conox technology at the Kaiyuan and the Jiangsoo (Jinhu) pulp mills located near Nanjing and Shenyang. Both these mills have significant potential for future expansions but are currently constrained by wastewater treatment problems preventing them from utilizing the expansion potential.

The current performance of the two mills were reviewed and compared to local regulations and World Bank guidelines where relevant, and their expected future performance after implementing the Conox process was evaluated during the appraisal visits. Both mills have undergone significant technical upgrades recently and have performed well with regards to employee health and safety, where both report Lost-Time-Accidents per Million Man-Hours (LTA/MMH) at or below 1.

Air emissions from combustion processes have been a problem, but these issues are either solved or solutions are under implementation with scheduled finalization in the autumn of 2003.

Wastewater is the single most pressing problem for both mills, and this needs to be addressed to allow for both continued operation and expansion. Both plants have extensive biological wastewater treatment systems but these are still having difficulties meeting future standards. The Kaiyuan mill has further implemented white liqueur water recycling. By implementing the Conox process both the Kaiyuan and the Jiangsoo (Jinhu) mills will be able to meet current and future wastewater discharge restrictions.

It is estimated that approximately 1000 similar rice straw based mills exist in China and these mills all face significant problems in meeting the wastewater requirements of today. The processes to be implemented at the Kaiyuan and the Jiangsoo (Jinhu) pulp mills are intended to carry a demonstration effect for these mills and hereby help obtaining a better water quality for Chinese rivers and water courses while allowing this industry sector to continue operation.

Conclusion & Monitoring

This Environmental Review Summary (ERS) is prepared and distributed in advance of the IFC Board of Directors' consideration of the proposed transaction. Its purpose is to enhance the transparency of IFC’s activities, and this document should not be construed as presuming the outcome of the Board of Director’s decision. Any documentation that is attached to this ERS has been prepared by the project sponsor or in conjunction with the project sponsor and authorization has been given for public release. IFC has reviewed this documentation and considers that it is of adequate quality to be released to the public but does not endorse the content. The following ERS is disclosed in accordance with IFC's Disclosure of Information Policy that went into effect September 1998.

The map is for illustrative purposes and does not imply the expression of any opinion on the part of the World Bank, concerning the legal status of any country or territory or concerning the delimitation of frontiers or boundaries. Country borders or names do not necessarily reflect the World Bank Group's official position. In some cases, available project location information is limited to the country of the project's activities. Locations are approximate.

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