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:
Environmental and Social (E&S) policies, risk assessment and management system: ComBio is required to obtain operating licenses and related authorizations for the installation of the biomass boilers. These have already been obtained for the four boilers at Ingredion’s two operating facilities and will be obtained for the boiler at Pirelli facility which is under construction. There is no requirement for a separate environmental clearance and associated Environmental Impact Assessment (EIA) as per the applicable local legislation. However, atmospheric dispersion modeling is required to be carried out as per local permit requirements. This has already been done for all the five boilers at the three facilities.
A Hazard Identification and Risk Assessment (HIRA) and Environmental Aspects and Impact Analysis is done for all projects in line with ComBio E&S policy and risk assessment procedures. This covers aspects such as the identification of OHS hazards and risks, assessment of the significance of OHS risks and identification of risk control measures, including a register of OHS risks and hazards. ComBio has an Occupational Health and Safety Management System (OHS MS) in place covering the environmental and occupational health and safety requirements and includes 67 management procedures. ComBio also has in place a Quality Management System (QMS). Annual audits are conducted to assess the alignment of the company’s operations with its E&S policies and SOPs.
The Company has been publishing sustainability report since 2020. The 2022 report is available at https://combioenergia.com.br/wp-content/uploads/2022/04/relatorio_sustentabilidade_2023_ComBio_Ingles_230828.pdf . This report has been prepared in accordance with the Global Reporting Initiative (GRI) standards. Its purpose is to highlight ComBio’s commitment to sustainability, safety, operational performance and customer focus. ComBio has obtained certification from The Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) for the reduction and offsetting of CO2 emissions. ComBio will develop and implement an overarching Environmental Health and Safety (EHS)/sustainability policy defining its environmental and social objectives and its commitment to comply with the applicable laws and regulations, compliance with IFC Performance Standards and commitment to align with industry-specific good management practices for its forestry operations meeting PS6 requirements (ESAP#1). As included in ESAP#2, the Company will develop a Supplier Code of Conduct and require that all primary suppliers sign this Code of Conduct committing to limit conversion of natural habitats and to ensure that products are traceable (to extent possible for recycled material). Additionally, ComBio will update onboarding procedures acceptable to IFC, and once in place will conduct independent verification of its sourcing by experienced professionals.
E&S organizational structure: ComBio has established an E&S function, including organization chart with clearly defined roles and responsibilities and reporting lines for staff managing the EHS issues. The ultimate oversight of ComBio’s E&S performance is under a Sustainability Director at the Board of Director’ level. There is a HSE manager at corporate level with two supervisors responsible for the Brazilian north and south regions and with a total of 21 E&S team members responsible for overseeing ComBio’s compliance with environmental licenses, legal EHS requirements and for monitoring and reporting safety, resource efficiency and pollution control aspects. Each of the facilities have EHS teams at site which are supported by the corporate EHS team. There is a biomass sourcing team in place lead by the Director Forestry.
E&S Training: Regular EHS trainings are conducted on various aspects including on legal/labor compliance, process safety management, firefighting, first aid, emergency response, behavioral based safety and Hazard Identification and Risk Assessment (HIRA). In addition to EHS monitoring program at facility level, a corporate level monitoring and reporting system is in place, whereby the EHS performance of each facility is reviewed monthly at the business level. Going forward, as included in ESAP#3, ComBio will upgrade the current training plan to socialize the policies as included in ESAP#1 (EHS/sustainability policy) and strengthen the training of biomass sourcing team to ensure effective implementation of the Supplier Code.
Emergency Preparedness and Response: ComBio has in place documented emergency preparedness and response plans for each facility detailing roles and responsibilities, emergency equipment, and response protocols for the identified emergency scenarios. The relevant emergency scenarios are listed together with recommendation on actions to be taken in the case of emergency.
E&S Monitoring & Review: Environmental monitoring is governed largely by the Brazilian’s permit requirements. Annual measurement of boiler stack emissions is required. In addition, water and energy consumption are regularly monitored for internal benchmarking and reporting. Each of the operating facility monthly reports on standard safety related key performance indicators (KPIs) such as lost time accidents, recordable injury, first aid cases, and safety inspections. The same monitoring protocol will be replicated for the project under construction once it becomes operational. ComBio will monitor ambient noise levels, and workplace air quality at all three facilities and also include audiometry and spirometry test as part of annual health check-up for the workers that work continuously in close contact with the boiler. (ESAP#4).
Supply Chain: ComBio’s main suppliers for the production of its boilers are Brazilian, with most of its equipment being nationally manufactured. The main feedstock (raw material) for the boiler is biomass. Characterization of the biomass sourced is from forest residues, such as wood chips and sawdust from sawmills, wood leftovers in eucalyptus plantations, as well as residues from other food processors (e.g. sugarcane bagasse).
PS2: Labor and Working Conditions:
ComBio has a workforce of about 70 employees between Mogi Guacu and Balsa Nova facilities. The facility in Pirelli is under construction and a workforce of about 150 workers is likely to be engaged during peak construction period. The Pirelli facility when operational will have a workforce of around 20 employees. In addition, there are roughly 15 contract workers hired directly by the Company through a third-party contractor mainly for security and housekeeping services.
HR Policy/Procedures, Working Conditions and Terms of Employment: ComBio has in place a documented Code of Conduct approved by the Board of Directors and is applicable to all employees. This Code also provides guidance for internal and external relationships, including those with primary suppliers. ComBio has an Ethics committee responsible for analyzing and addressing reports of unethical situations. ComBio has an Employee Handbook which is consistent with the Brazilian labor regulations and PS2 requirements and apply to all employees (permanent, seasonal and contractors). Each worker receives a written contract that describes the working conditions and terms of employment, including wages, workhours, rest periods, and overtime. Overtime work is electronically monitored and paid as per national regulations. The Code of Conduct includes a section on freedom of association, allowing employees to join unions and/or other types of associations. ComBio has signed collective bargaining agreements with labor union at each of the facility on salary structure and working conditions (work shift, collective salary increases). ComBio’s Code of Conduct prohibits child and forced labor and is also a requirement included in contract with primary suppliers.
Retrenchment: ComBio will update its Employee Code of Conduct and include retrenchment policy aligned with PS2 requirements (ESAP#5).
Non-discrimination and Equal Opportunity and Worker’s Grievance Mechanism: ComBio’s Code of Conduct encourages non-discrimination and equal opportunities and condemns all forms of harassment, including sexual harassment. ComBio has a grievance mechanism accessible 24/7 that allows for submission of anonymous grievances by employees and workers from contractors and suppliers. ComBio has a specific channel for complaints, that can be used not only by employees, but also by clients, suppliers and others stakeholders (https://www.contatoseguro.com.br/combio). There is a documented procedure on Internal Procedure of the Ethics Channel which summarizes how the complaint would be screened and steps for further investigation. ComBio will update the Employee Code of the Conduct and include a formal grievance redressal mechanism to address and resolve grievances (for employees and contract workers). The procedure will cover the way grievances can be submitted to HR (including anonymously), how they will be logged, processed and resolved, and outlining steps available to appeal any decision.
Life and Fire Safety: Fire protection systems have been provided at both existing facilities of Mogi Guacu and Balsa Nova. Both facilities have also obtained the required license from the fire department. The fire protection system includes portable fire extinguishers, fire hydrant systems (with dedicated fire water storage), fire alarms, automatic sprinklers, smoke detectors, emergency exits and marking of evacuation routes. No fire incident has been reported so far at the two operational facilities. The facility at Pirelli will have similar fire protections systems.
Workers Engaged by Third Parties: ComBio engages various contractors for maintenance, erection of equipment, electrical and mechanical works. There is a robust contract management system in place (named RAINBOW) which monitors and manages the contractor’s compliance to local labor law and permitting requirements. The contract agreement includes requirements for compliance with applicable labor laws for the respective facilities, including prohibition of using child and forced labor. The Company monitors contractor compliance with various statutory requirements including for minimum wages, social security related benefits and leave provisions, non-deployment of child and forced labor, alignment of working hours and overtime payment with statutory requirements, OHS guidelines for the workers. Copy of HSE manual is included in the contract and ComBio monitors the contractor compliance with various statutory requirements on providing wages, working hours, overtime, OHS, and benefits to their workers. ComBio outlines OHS contractor requirements in a documented contractor management procedure including instructions for critical activities. Before workers can enter the site, contractors must submit documentation confirming compliance with labor requirements and the necessary OHS training. Sedex Members Ethical Trade Audit (SMETA) audit was conducted in Oct/Nov 2023 for both operational facilities covering compliance to local labor law requirements. The audit reports confirmed satisfactory compliance on legal compliance of labor law provisions. The scope of workers included all types at the site e.g. direct employees, agency workers, workers employed by service providers and workers provided by other contractors.
Occupational Health and Safety: ComBio has internal guidelines in place for hazard identification and risk assessment (HIRA). An analysis is conducted to determine the probability of accidents occurring due to interactions with specific hazards and evaluate the severity of the consequences if an accident was to occur. The Company implements various mechanisms to identify and mitigate risks including holding daily meetings called "Minuto com Segurança" (Safety Minute) in all operational units to prevent accidents and incidents, online sessions called "Minuto com Segurança On" (Safety Minute Online) for administrative staff and "Fale Fácil" (Easy Speak) for employees to report deviations, unsafe conditions, and opportunities for working conditions improvement. Employees and service providers have the right to suspend activities if they believe there is an uncontrolled risk through the "Dever de Recusa" (Right to Refuse) policy. They also use technical reports, task safety analysis, work permits, and HSE inspections to evaluate and manage risks. ComBio provides occupational medicine services, including partnerships with accredited clinics for health exams, occupational medical control programs, ergonomic work analysis, and campaigns for worker health. They also have OHS training programs, with mandatory training specified for each position based on activities and associated risks. As included in ESAP#4, ComBio will include audiometry and spirometry test as part of annual health check-up for the workers. The company has Standard Operating Procedures (SOPs) in place for communication, analysis, and investigation of accidents and incidents. They require incidents to be reported within 48 hours, and there are specific procedures for reporting and determining actions. Incident management is carried out through a management system and comprises of the following steps: (i) classification and assessment of the accident and incidents’ severity, (ii) type and origin of the occurrence, (iii) detailed description of what happened, (iv) inclusion of images and photos, (v) root cause analysis, and (vi) development of an action plan containing corrective and preventive measures.
The OHS Management System is coordinated by the Health, Safety, and Environment (SSMA) function, which includes employees at corporate and facility-level. There are 67 SOPs, covering health management, occupational health, management of documents and interaction, communication of occurrences, management of documents and trainings, security management, risk management, and critical environmental management. There are a set of safety guidelines called "Rules for Life" that must be followed by all employees, suppliers, and service providers. These rules cover topics such as alcohol and drugs, restricted areas, task safety analysis, communication and investigation of accidents, energy lock, confined spaces, load lifting, falls prevention, work with machinery and equipment, vehicles and mobile equipment, classified areas, high-temperature surfaces, and safety in activities with process ash.
ComBio conducts regular risk identification and assessment using internal guidelines and considers various factors, such as audit reports, legal requirements, and recommendations from the Risk Management Program for continuous improvement. They also have mechanisms in place such as daily security dialogues, a tool for reporting deviations and unsafe conditions, the right to refuse policy, technical reports, task safety analysis, work permits, and general HSE inspections. In 2023, one Loss Time Incident (LTI) each was recorded at Mogi Guaçu and Bolsa Nova facilities.
The Company tracks mandatory training through a matrix that specifies applicable training for each position based on the activities performed and the associated risks. The control system is continuously updated to ensure compliance within the established validity period. Some of the main training programs include electrical installation and services safety, transport, handling, and storage of materials, safety in machinery and equipment work, safety and health in confined spaces, working at heights, and defensive driving, which is provided to all ComBio employees, including those in administrative roles.
PS3: Resource Efficiency and Pollution Prevention:
Resource Efficiency and Greenhouse Gas (GHG) emissions:
Water consumption: The supply of water for ComBio’s operation falls under the customers responsibility. Therefore, water supply and wastewater treatment issues are outside the scope of ComBio’s operational activities. ComBio’s customers have on-site Raw Water Treatment Plants (WTP) and Effluent Treatment Plants (ETP) in their facilities and are required to provide water in acceptable quality standards for the boiler operations.
GHG emissions: Since 2016, ComBio has had its direct emissions (Scope 1) and indirect emissions from electricity consumption (Scope 2) publicly disclosed as per the Brazilian GHG Protocol Emissions Registry. ComBio is in the process of calculating and disclosing Scope 3 emissions particularly those related to the biomass supply. The Project’s direct emissions (Scope 1 and 2) are estimated not to exceed 25,000 tons of carbon dioxide equivalent.
Pollution Prevention: Power is provided by the national grid and natural gas is used as start-up fuel for the boilers. Diesel-based backup generators are provided for emergency use. The boilers use biomass as the main feedstock.
Wastewater and water quality: The process wastewater includes boiler blowdown which is sent to client’s on-site ETP for further treatment. Domestic wastewater is required to be discharged to municipal sewer line as per the permit conditions.
Air emissions and ambient air quality: The monitoring of atmospheric emissions from ComBio’s boilers is done annually as per the Terms and Conditions of the permit. The boilers are/will be equipped with bag filters and electrostatic precipitators (to control atmospheric emissions). The two existing boilers comply with the established limits for particulate matter (PM) and NOx emissions as per local legislation. Each of the boiler is also provided with Continuous Emissions Monitoring System (CEMS) to monitor PM and NOx emission levels (these are in the process of being calibrated at both facilities). As per the requirement of the environmental authority (CETESB), ComBio has conducted air dispersion modeling for incremental PM10 and NOx emissions at all three facilities. Based on the findings of the study, it was noted that emissions from the boilers will be in compliance with the respective criteria established by the State Decree and accordingly recommended for environmental permitting. Final environmental operating license was issued after the results of air dispersion modeling which demonstrated compliance with legal limits for PM10 and NOx. ComBio will ensure that stack air emissions from the boiler at Pirelli (30 tonnes/hour) comply with WBG General EHS Guidelines (Table 1.1.2) (ESAP#6).
Noise: The source of noise includes operation of boiler and various equipment. ComBio will monitor ambient noise levels apart from workplace noise level at all three facilities. PPE usage was noted to be adequate and enforced strictly especially in high noise areas (ref. ESAP#4).
Waste management: Biomass ash is ComBio’s main byproduct generated during its operations, and given its nutrient-rich composition, the company is focusing on finding new alternative disposal methods to divert it from landfills such as for cement production. Residue ash is collected in trucks and transported to disposal sites (in case of Mogi Guacu)/compost facility (in case of Balsa Nova). ComBio will ensure that a designated storage area (paved and with raised walls) is provided at all facilities for storage of bottom ash (ensuring there is no water spillage) (ESAP#7). The ash at Balsa Nova facility is directly transferred to trucks through closed coveyor system while the transfer is manual at Mogi Guacu facility. ComBio will improve the housekeeping at Mogi Guacu facility, including improving the transfer protocol for biomass ash and seal the various leakage points (ESAP#8). Disposal of other solid wastes follows the waste management plan of their customers with ComBio being responsible only for proper packaging and transportation of waste to the designated collection sites. ComBio has guidelines for Operational Waste Management which is being implemented at all the facilities. There is HSE guideline in place for Storage, Handling and Disposal of Chemical Products.
Hazardous Waste and storage: The hazardous waste generated from the operations include small quantities of used paint/used chemical containers/waste or contaminated rags which is stored in temporary waste storage facility and then disposed of by companies licensed by the environmental authority. ComBio will ensure that hazardous waste is stored in designated hazardous waste storage area with appropriate roofing and paved floors and with provision for collection of any spill (ESAP#9).
Pesticide use and management: ComBio and its primary suppliers do not use active ingredients classified as WHO Ia (extremely toxic) or WHO Ib (highly toxic). ComBio will develop a list of chemicals/active ingredients being used (including for the leased eucalyptus farms) to ensure that these are not falling under WHO Ia or Ib class and will monitor the use of chemicals to ensure compliance (ESAP#10). The use of WHO Ia and IB will be prohibited at per its updated EHS policies (ref. ESAP#1).
PS4: Community Health, Safety and Security:
Transport Safety: The boilers installed and operated by ComBio are located within the client facilities which are themselves located near highways to allow ease of transportation. As per PS1 section above, site emergency plan is developed for each of the facility and mock drills conducted on a regular basis. Average number of trucks per day for transporting biomass for boilers is around 40-45 for Mogi Guacu, 10 for Balsa Nova and estimated to be 10 for Pirelli facility. The number of trucks for transport of biomass ash is 2 per day for Mogi Guacu, 1 per day for Balsa Nova and estimated to be one truck/week for Pirelli facility. The trucks are hired from a service provider. Volume of this traffic is not likely to have impacts on nearby communities as the facilities are located in the vicinity of good transportation networks.
Use of Security: Unarmed security personnel (1 at each site per shift) are employed through security contractors. The company briefs security personnel about EHS policies and provides training on basic safety, first-aid, fire safety and emergency response aspects.
PS6: Biodiversity Conservation and Sustainable Management of Living Natural Resources:
ComBio’s boilers are established within the industrial lots of their clients. Biomass for the boilers is sourced from a mix of processing residues and forestry products. The boiler locations under the Project are within the Alto Parana Atlantic forests, Araucaria moist forests and Cerrado ecoregions (as described by WWF), threatened ecosystems which have been converted or modified extensively by urban, forestry and agricultural expansion.
In 2023, ComBio supplied about a third of the biomass for target operations from 8 leased plantations (located in the Serra do Mar coastal forests, Alto Parana Atlantic forests, and Campos Rupestres montane savanna ecoregions, threatened ecosystems where very little natural habitat remains as a result of human actions. Three of these plantations overlap Legally Protected Areas (Area de Protecao Ambiental Bacia do Paraiba and Apa Sistema Cantareira). These plantations have been established decades ago and before the establishment of the Protected Areas.
ComBio manages its plantations either directly or through third parties respecting federal, state and municipal legislation. At appraisal, these plantations were not FSC certified. Sourcing risk screening procedures are in place to verify business licenses and registration in the Cadastro Ambiental Rural (CAR). ComBio will (i) commission an external audit of leased plantations to demonstrate that its forestry management practices are in line with industry-specific good management practices and available technologies as codified in recognized standard(s) meeting PS6 requirements (ii) provide timetable to implement any identified corrective actions to achieve alignment with relevant standard(s), (iii) demonstrate implementation through annual independent verification (ESAP#11). ComBio will also implement sustainability programs to enhance the conservation objectives of the protected areas, provided they are in ComBio´s management, given the overlap of legally protected areas by three plantations and to ensure compliance with PS6 requirements (ESAP#12).
Supply Chain: The operations and associated supply chain are located within a region with highly degraded habitat. Significant additional habitat conversion in the Atlantic Forest region is considered unlikely given legal requirements, namely Mata Atlantica Forest Act and Brazilian Forestry Code. ComBio sources biomass from forest residues, such as wood chips and sawdust from sawmills, wood leftovers in eucalyptus plantations, as well as residues from other food processors. These products are sourced from third parties, both directly and through spot markets.
