IFC’s appraisal considered the environmental and social management planning process and documentation for the Project and gaps, if any, between these and IFC’s requirements. Where necessary, corrective measures, intended to close these gaps within a reasonable period of time, are summarized in the paragraphs that follow and (if applicable) in an agreed Environmental and Social Action Plan (ESAP). Through implementation of these measures, the Project is expected to be designed and operated in accordance with Performance Standards objectives.
PS1: Assessment and Management of Environmental and Social Risks and Impacts
E&S Management System & Programs. The Company has established an Environmental, Social, Health and Safety (ESHS) Management System based on ISO 14001 (Environmental management), ISO 45001 (Occupational Health and Safety management), national E&S regulations and international sustainability standards. To ensure the proper implementation of the ESHS system, the Company developed an ESHS-MS Manual containing procedures to guide its activities in meeting applicable ESHS obligations and policies, through the integration of Good International Industry Practices, including the IFC Performance Standards.
E&S Policies. ATOME has developed a suite of policies as part of its ESHS-MS, including Sustainability, Human Resources (HR) and Occupational Health and Safety (OHS) policies, all of which consistent with the principles set forth in the IFC Performance Standards, including commitments to address biodiversity conservation and management in line with PS6 to ensure No Net Loss of Natural Habitat.
Identification of E&S Risks and Impacts. Throughout the planning and design phase of the Project, the Company identified potential E&S risks and impacts associated with the construction and operations of the Project and integrated best available technologies and controls into the project design to prevent and/or minimize such risks and impacts, thus ensuring compliance with national and international standards. ATOME has developed an ESIA for the construction and O&M phases of the facilities funded under the project. The ESIA was prepared to ensure compliance with national laws and IFC Performance Standards, WBG General EHS guidelines and WBG EHS Guidelines for Nitrogenous Fertilizers. The ESIA assessed impacts on flora and fauna, water resources, air quality, soil quality and socioeconomic aspects such as potential impacts to stakeholders, social infrastructure, employment and impacts to the local economy. The Company conducted a Cumulative Impacts Assessment to identify potential E&S impacts and risks induced by the Project and other planned and foreseen activities by third parties in the area of influence. Moreover, the Company has obtained the necessary E&S regulatory permits and authorizations. Once the project design is finalized, the Company will, as per ESAP item #1, update air emission dispersion modeling to include N2O, effluent discharge modeling and ambient noise levels modeling to demonstrate predicted residual E&S impacts by the ESIA and the Project will operate in compliance with applicable national and good international industry standards. As planned in the ESMS Manual, the Project will implement an E&S management plan per IFC PSs, WBG General EHS Guidelines and WBG Guidelines for Nitrogenous Fertilizers focusing on N2O emissions modelling and air emissions management control measures and potential impacts on the Paraguay river. From this, the project will update mitigation measures, if needed, and include a comparative analysis between local regulatory requirements and WBG EHS General and Nitrogenous Fertilizers. Further details are explained in the sections below. The outcomes of the additional studies will be reflected in the project ESMS and related operational E&S management and monitoring plans.
Management Programs: The Company’s ESHS-MS includes an E&S management plan (ESMP) commensurate to the level of E&S risks and impacts of the Project. The ESMP includes roles and responsibilities, controls, mitigations and monitoring requirements for air emissions, solid and hazardous waste, environmental noise and vibrations. The ESMP also includes a biodiversity action plan for the management of fauna and flora, emergency preparedness and response, a traffic management plan, provisions for workforce management, E&S training requirements, security management, and stakeholder engagement and grievance mechanism. The ESMP is in line with Paraguayan legislation and is aligned with IFC PS. As per ESAP item #1, ATOME will update the ESMP for the O&M phase to align the outcomes of the updated air emission dispersion modeling and effluent modeling, as described in ESAP #1, taking due consideration of the requirements set forth in the WBG HS General EHS and Nitrogenous Fertilizers Guidelines.
E&S Organization Capacity/Competency. The Company’s organizational charts outline a robust EHS corporate structure with multiple in-house teams to manage E&S matters. For the planning phase, the Company has an ESHS Manager, a Project Engineer, and an ESHS Advisor. For the construction and O&M phases, the Company will incorporate H&S, Environmental, Communications and Social Specialists, and HR personnel. The EPC and O&M contractors will mirror the Company's EHS structure. In addition, the Company is considering hiring external E&S consulting firms and other third parties to implement ESHS plans and conduct specific activities related to biodiversity, noise, water, and air quality monitoring. The ESHS Manager has a direct reporting line to the Company’s General Manager.
Emergency Preparedness and Response. As part of the ESIA, ATOME developed an Emergency Preparedness and Response Plan (EPRP) per national law for construction and operations, addressing scenarios like: (i) spills and leaks of hazardous materials; (ii) extreme climate events such as tropical storms and droughts and (iii) fires and explosions. The EPRP integrates stakeholders to be involved in the response depending on the level and severity of the emergency. ATOME will, as per ESAP item #2, supplement the EPRP for the construction and O&M phase with due consideration of the following aspects: (i) update the emergency scenarios reflecting results of the QRA, HAZID, HAZOP and FEED, including transportation of raw materials and final products, (ii) include a training program for the Company's emergency brigade in the new scenarios, (iii) incorporate emergency contacts and flow of communications both for internal and external parties (e.g. potentially affected stakeholders and government authorities), (iv) define roles and responsibilities between ATOME, the EPC and O&M contractors, (v) establish protocols for the use of equipment for responding to specific types of emergencies, (vi) develop a drills schedule including the participation of the potentially affected closest off-site stakeholders, (vii)establish strategies for business continuity and recovery after an emergency, (viii) define processes for updating the EPRP to incorporate lessons learned from drills and actual emergencies.
E&S Monitoring and Reporting. As part of the ESHS-MS, ATOME has developed an EPC Contractor Supervision Plan and an Internal Audit Procedure to determine whether both the EPC Contractor and Project are in compliance with national law legislation and applicable international guidelines. Moreover, the project also developed an Environmental Monitoring Plan with site -specific monitoring programs to update existing E&S parameters before the start of operations, including surface water quality, ambient noise and air quality. As per ESAP item #3, the Company will update the E&S Monitoring programs and Reporting requirements to include details on the methodologies, frequency, KPIs and responsible parties. The program should align to the requirements set forth in the WBG EHS General and Nitrogenous Fertilizers guidelines, country regulations, and ESIA commitments. As good practice, the Project will also conduct bi-annual monitoring of heavy metals and organic components in the treated effluent discharge. The monitoring programs will be participatory in nature, involving communities and relevant stakeholders, as referenced in the Biodiversity and Stakeholder Engagement sections, for fish fauna and river monitoring.
PS2: Labor and Working Conditions
During construction, the Project labor needs will fluctuate between 200 to 500 workers. At the peak of the construction, the Company's workforce will consist of approximately 1,000 workers. Operation activities will require about 100 workers on site only.
ATOME’s Human Resources Policy includes comprehensive provisions in line with Paraguayan labor regulations and is generally aligned with the requirements of PS2. It will be applicable to all employees, EPC, subcontractors, and consultants. The Policy encompasses principles on human rights, non-discrimination, health and safety, recruitment and selection, and prohibition of child and forced labor. It also includes commitments to maintaining fair and equitable standards for wages, benefits, health and safety and working conditions, in accordance with Paraguayan labor laws. It also recognizes and respects the right of workers to form and join trade union organizations, as well as to participate in collective bargaining. During the Project’s construction it is expected that workers will stay and be transported from nearby cities, especially from Villeta and Asunción. ATOME’s HR policy includes commitment to providing safe and adequate temporary facilities for workers, in accordance with the Worker’s Accommodation: processes and standards – A guidance notes by IFC and the EBRD (2009).
As per ESAP item #4, ATOME will update the Company’s HR policy to include provisions for preventing Gender-based Violence (GBV) and will also develop project-specific HR procedures for staff, EPC, and contractors. These procedures will cover aspects such as: (i) Code of Conduct; (ii) working conditions (e.g., hours, overtime, rest days, contract duration, wages, benefits) and its inclusion in the labor contract clauses; Moreover, ATOME will update the Grievance Management Procedure (GMP) aligned with PS2 requirements, ensuring multiple channels for reporting grievances, including anonymous reporting, and GBV grievances are addressed with a survivor-centered approach and managed by a designated team that has received specific GBV training, available for contractors and third-party workers. If during the construction phase the project proceeds to establish on-site accommodation for workers, ATOME will require that the EPC Contractors develop and adopt the requirements included in the IFC guidelines for Worker’s Accommodation Plan, accordingly.
Occupational Health & Safety (OHS). The Company has an Occupational Health and Safety (OHS) Policy that includes ATOME’s guiding principles and commitments for OHS management applicable to contractors and subcontractors. The Company also developed a Front-End Engineering Design (FEED) to preliminary identify OHS risks and impacts of the process, HAZID and HAZOP studies to assess potential uncontrolled reactions, leaks, fires and explosions, including recommendations and mitigation measures spanning on different scenarios. As per ESAP Item #5, ATOME will develop and implement a comprehensive OHS plan for construction and O&M stages in line with the requirements set forth in IFC PS2, and WBG EHS General and Nitrogenous Fertilizers guidelines. The OHS plan will include roles and responsibilities, hazards identification, risk control measures, OHS training, incident investigation, KPIs, and a process to assess and mitigate climate-related hazards such as extreme weather events, heatwaves, and flooding. ATOME will also update the QRA, HAZID and HAZOP with the detailed project designs and will conduct a Layer of Protection Analysis (LOPA) and Safety Integrity Level (SIL) and its results will be integrated into the OHS and Process Safety Management Plan (PSMP) for the O&M phase, accordingly. The PSMP will be based on industry-recognized process safety management guidelines such as the CCPS Risk-Based Process Safety Framework or an equivalent standard.
Supply Chain: ATOME will source 60,000 tons per year of dolomite from a small number of medium-sized local third-party quarries based in the Villeta municipality. ATOME will, as per ESAP item #6, develop and implement a Supply Chain Management Plan (SCMP) per requirements of PS2 including supply chain mapping, Code of Conduct for suppliers, E&S due diligence of suppliers monitoring and reporting on the compliance of suppliers. The SCMP will include provisions to require suppliers to adhere to environmental regulations, obtain necessary permits, and refrain from impacting sensitive ecosystems.
PS3: Resource Efficiency and Pollution Prevention
Resource Efficiency. The Project will use electricity from the national power grid that is entirely sourced from renewable sources and will be connected by a 220kV interconnection line from ATOME substation to the existing Buey Rodeo substation. The Project is also considering on-site generators for emergency situations, preliminary sized at 0.75 MW. ATOME has estimated that the Project's CAN production carbon footprint will be 480,000 tCO2eq/year for Scopes 1, 2 and 3, approximately 100% less than grey CAN production. Major sources of emissions for ATOME in Scope 1 are Ammonia and Nitric Acid production, minor emissions from hydro power for Scope 2, and CAN applications in agriculture and road, river and sea transportation and distribution for Scope 3.
The Project has an estimated water consumption of 260 m3/h sourced from the Paraguay River to feed both electrolysis and fertilizers production plants. As part of ESAP item #7 ATOME will develop a Resource Efficiency Strategy tailored to the construction of the Project aiming to improve efficiency in energy and water consumption, as well as in construction material inputs.
Pollution Prevention:
Air Emissions. Main sources of air emissions during the construction include earthworks and truck traffic. During operations, air emissions will primarily come from various industrial processes related to the ammonia synthesis plant, the nitric acid plant, the granulation plant, electrolysis and ASU plants. The main pollutants during operation will be particulate matter (PM10 and PM2.5) nitrogen oxides (NO2), carbon monoxide (CO), ammonia (NH3), and nitrous oxide (N2O), which is effectively controlled through an abatement system. Besides traditional air emission controls of selective catalytic reduction, scrubbing, and filtration, the Company is also implementing catalyst decomposition to confirm N2O emissions remain below WBG EHS Nitrogenous Fertilizers (2007) air emission guideline values. All the data reviewed to date, according to the ESIA and EPC equipment specifications, indicate that the Project will be compliant with WBG EHS for Nitrogenous Fertilizers (2007) air emissions guidelines.
Ambient Air Quality and Environmental Noise. The Company, as part of the ESIA, carried out an air dispersion model to predict potential impacts on the ambient air quality resulting from future plant production processes. The AERMOD model was carried out following standards requirements and the results were compared to ambient air quality standards set forth in Paraguayan and Argentinian legislation as well as guidance values included in the WBG General EHS Guidelines. The air dispersion modeling included CO, CO2, PM10, PM2.5, NO2 and NH3. Modeling results show that ground level concentrations are located near the project site, and results foresee that future ambient air quality complies with local ambient air quality standards. As stated under ESAP item #1, once the Project design is finalized, the Company will update, as part of ESAP item #1, the air emissions, including N2O emissions modelling and controls measures, and will update the site – specific operational E&S management and monitoring programs (ESAP item #2 and #4) to update mitigation measures for air emissions and wastewater discharge following the mitigation hierarchy accordingly.
As per the ESIA, sound pressure level modelling was carried out to identify potential impacts on the ambient noise levels and closest off-site sensitive receptors. The model indicates that during plant operation, ambient noise levels will comply with national ambient noise standards and WBG General EHS Guidelines. As per technical design, noise abatement includes equipment with low noise levels and preventive maintenance to compressors and hammers. The E&S monitoring program indicated in ESAP item #4 will include air emissions, ambient air quality and ambient noise monitoring provisions in line with WBG EHS General and Nitrogenous Fertilizers Guidelines and will confirm through supplemental assessments if there could be any exceedances, which if observed, will be mitigated by the Company, including mitigation measures for the receptor identified.
Solid waste. Industrial solid waste for CAN production is associated with nitrogen-containing dust particulates from granulation, sludge generated in water and wastewater treatment plants, organic and inorganic waste, which will be segregated at source and classified in hazardous, non-hazardous, and domestic streams. Hazardous waste associated with CAN facilities include spent catalysts after their replacement in scheduled turnarounds of gas desulphurization, ammonia plants, and nitric acid plant. Waste will be temporarily stored in a dedicated area and disposed of by a licensed third party following local regulations, procedures, and best practices.
Hazardous materials. Hydrogen and ammonia are considered hazardous materials, and its production, handling and storage pose inherently OHS risks, including leaks, fires and explosions. As per ESAP item #8, ATOME will develop a Hazardous Materials Management Plan for construction and operations with due consideration of PS3 and the WBG EHS General and Nitrogenous Fertilizers guidelines.
Liquid effluents. Wastewater will be generated from various manufacturing processes, sanitary purposes, and reverse osmosis (RO) rejections. On site wastewater treatment plant (WWTP) will consist of standard physical, chemical, and biological treatment with both aerobic and anaerobic processes to remove nitrogen. Cleaner streams, including cooling tower blowdown, will go through tertiary RO treatment for onsite reuses. WWTP effluent will be discharged to Paraguay River through the 2.5 km offsite pipeline at a rate of ~84.20 m3/h (23.3 l/s), representing less than 0.005% of the river’s historical minimum flow. As per the ESIA, the main pollutants expected in liquid effluents are suspended solids, dissolved salts and minerals, oil and grease, and potential traces of ammonia (NH3) and nitrate (NO3). As per ESAP item #1, ATOME will; (i) conduct an effluent dispersion modelling prior to the commencement of the O&M phase to confirm the extent of impacts and, if needed, update the E&S impacts (ESAP item #1) and the ESMP (ESAP item #2) accordingly, ensuring that any treated effluent discharge into the Paraguay River complies with the most stringent effluent standards between local regulatory requirements and the WBG EHS General and Nitrogenous Fertilizers effluent guidelines.
PS4: Community Health, Safety and Security
Community health and safety impacts from the Project construction and O&M are related to the water intake and wastewater discharge pipelines within a 5-meter-wide right-of-way, ambient noise and ambient air quality during construction. Potential affected stakeholders include the residents of the adjacent ranch, and a farmer house located ~1 km from the site. However, the project has integrated best available technologies to prevent/minimize environmental impact including a wastewater treatment plant, air emission controls, ambient air quality, noise levels, baseline and monitoring programs for aquatic biodiversity groups focused on ichthyofauna along with the fishing community.
Emergency and Preparedness and Response Plan. As part of ESAP item #2, the company will (i) develop an off-site emergency response and evacuation protocols based on the results of detailed QRA and (ii) prepare and implement mitigation measures for the farm structures within the safety impact zone in line with PS5, if required based on the findings of the detailed QRA.
Road Safety. ATOME will primarily outsource the truck fleet, with an estimate of 4 trucks and 4 shuttle buses per day during construction and O&M phases respectively, for raw materials, and personnel transportation, from suppliers that comply with legal regulations, including OHS requirements. No nearby communities are identified, and overnight drivers are not considered by the Project, therefore, impacts due to transportation are not anticipated in the direct area of influence. The Company will, as per ESAP item #9, develop and implement a corporate Road Safety and Transport Procedure in accordance with ISO 39001(Road Traffic Safety Management Systems), and WBG General EHS Guidelines (Section 3.4 - Traffic Safety). This procedure will include provisions to avoid transit through neighboring communities, safety measures for workers, assessing GBV risks in the resting points for trucks, adequate road safety signs, mechanisms for managing the driver’s fatigue, safe driving protocols, and safety measures for hazardous materials transportation.
Security Personnel. ATOME and the EPC contractor will oversee providing security through privately certified companies. The Company will, as per ESAP item #10, develop and implement a Security Management Plan following PS4 requirements, including the recommendations from IFC's Good Practices on the Use of Security Forces. The plan will include identification of security threats, a risk assessment, vulnerability analysis and corresponding risk mitigation measures. The plan will be updated once the O&M contractor is onboard.
PS6: Biodiversity Conservation and Sustainable Management of Living Natural Resources
Protection and Conservation of Biodiversity. The Project is located in the Humid Chaco Ecoregion (WWF classification), at the border with the Paraná Flooded Savanna Ecoregion, which is situated west of the Paraguay river. The surrounding landscape contains a mix of agricultural areas (irrigated rice paddies and pasturelands), large patches of Natural Habitat (NH), and scattered industrial sites and river ports. It is located ~ 2.5 km west of the KBA (IBA) Valle Fluvial del Rio Paraguay. There are no Legally Protected Areas in proximity to the Project. Baseline surveys included rapid fauna assessments carried out in March 2023 (dry season) and June 2023 (wet season), a quantitative assessment of the sub-humid semi-deciduous forest vegetation, and a qualitative assessment of the hydromorphic savanna. No aquatic biodiversity assessments were conducted. Per ESAP item #3 the Company will select and monitor appropriate aquatic biodiversity indicator groups aimed at confirming that no measurable impacts are occurring. Baseline studies will focus on the ichthyofauna, and work along with social specialists, as referenced in ESAP item #15 in the section below, on the monitoring of local fisheries in the general area of the water uptake structure and effluent discharge to the Paraguay river, both during the installation and operation phase of the project. The company will assess whether mitigation measures are adequate and, if needed, implement additional mitigation measures.
Conversion of both Natural Habitat types will occur on ~24 ha, corresponding to approximately 10% of the NH cover in the Project’s direct area of influence. The Project footprint on NH would consist of ~22 hectares within the project’s 30 ha land plot; on ~1.3 ha along the easement strip of a 550m, 220kV interconnection line; and on ~0.7 ha along a 5m wide right-of-way for the industrial plant’s water intake and effluent pipelines.
Planned avoidance include the establishment of a fenced ~8 hectare set aside within the Company’s land plot, while other mitigations include rescue and relocation of wild flora and fauna specimens; the acquisition of ‘Environmental Services Certificates’, as per Paraguayan legislation – a form of land lease aimed at contributing to the protection and conservation of ecosystems that provide environmental services; and environmental compensation for felled trees. ATOME’s Sustainability Policy adopts compliance to IFC PSs as a guiding principle and explicitly commits to the design and implementation of a Biodiversity Offset Plan aimed at meeting PS6 No Net Loss (NNL) requirement. Furthermore, the ESIA contemplates the development of a voluntary Biodiversity Action Plan (BAP) to integrate all mitigation and monitoring measures. Per ESAP item #11, as part of the voluntary BAP, the Company will develop a Biodiversity Offset Program that will include NH Loss and Gain calculations, with the identification of offset measures to meet NNL of biodiversity – to which the acquisition of Environmental Services Certificates may contribute, provided it meets the principles of equivalence (‘like-for-like or better’), additionality and permanence; and monitoring requirements to ensure its effectiveness. Additionally, per ESAP item #12, ATOME will adopt a bird-friendly design of the proposed interconnection line to prevent bird electrocutions and install flapper bird flight diverters to prevent collisions, subject to agreement with national authorities, including Administracion Nacional de Electricidad (ANDE).
Management of Ecosystem Services. No direct impacts on priority ecosystem services to surrounding communities have been identified in the ESIA, however, the Ypeka’e fishing community is located ~7 km downstream of the plant site and its fishing activity might be impacted from the water uptake (e.g., due to water pump vibration) and treated effluent discharge to the Paraguay river. The E&S Monitoring and Reporting program (ESAP item #4) will include ichthyofauna activities along with fisherman as explained in the sections above, reflecting baseline and impacts assessment results.
