Sarah Radovan | Chief, Measurement and Reporting, Government of Canada Considerations for Building a Cost Efficient Environmental Technology Performance System November 27, 2007

A Programme Perspective Government of Canada Technology Early Action Measures (TEAM) Program Mission: Technology late stage development and first demonstration in support of reducing GHG emissions, nationally and internationally, while sustaining economic and social development Since 1998, 139 projects completed or allocated – total project value of over $1 billion (based on $128M from TEAM + $123M other government + $905M private) Projects include over 326 companies, 95 federal agencies and/or departments Total of 16 international projects in 14 countries

Measurement & Reporting for TEAM TEAM developed the System for Measurement and Reporting on Technologies (SMART) process to provide the programme with a rigorous, transparent and cost effective means of evaluating & measuring technical performance and GHG emission reductions for demonstration projects SMART development began in 1999, pilot testing in 2002, full implementation in 2003 It is a process specifying general requirements & guidance to develop and evaluate technical & GHG documentation and outcomes for technology projects The SMART Process: –Initial in-house pre-screening assessment (SMART-Lite) –SMART Project Master Plan (2 nd party validation) –SMART Verification (3 rd party verification)

Purpose/Costs of SMART Process SMART-Lite: Initial in-house pre-screening assessment –Quick calculation to estimate the technology potential –Assess project proposals and introduce proponents to the SMART process SMART Project Master Plan (2 nd party validation) - $25K –Prepared by 3 rd party contractor (pre-qualified by TEAM) –Validated in-house, final due diligence before funds are released –Ensures appropriate project design and establishes verification criteria –Compliant with ISO Part 2 SMART Verification (3 rd party verification) - $15K –Third party verification of project outcomes and stated GHG reductions –Useful step for companies wanting to pursue offset credits –Compliant with ISO Part 3

Benefits of the SMART Process Most companies are not adequately prepared to assess GHG impacts of their own technologies, processes, facilities, etc. – provides guidance and assistance Good experience for companies who are interesting in pursuing regulatory or voluntary GHG credits Provides a 3 rd party, credible assessment of technology performance that is often used by companies in replication and marketing efforts Transparent and rigorous programme due diligence and reporting that is cost effective (under $40K per project)

Advanced Dehydration System Using a Novel Vapour Permeation Membrane System Partners: Vaperma Greenfield Ethanol (previously Commercial Alcohols Inc.) Natural Resources Canada (CETC – Ottawa) Sustainable Development Technology Canada Benefits of SMART SMART analysis has assisted in in demonstrating the commercial viability of the membrane technology Led to strong commitment from Greenfield Ethanol Assisted Vaperma with receiving subsequent private and public sector funding Company is currently pursuing investment in a software tool that will help track GHG and energy-related savings real-time for their technology Project Summary: Demonstrate feasibility of a novel vapor phase water/alcohol membrane separation technology at a small industrial scale Enables the dewatering of a 40:60 ethanol to water vapor mixture into a 99+% w/w fuel-grade ethanol product Demonstrate major energy savings – replaces rectifier and molecular sieve

Technology Innovation & Information Continuum

Performance Measurement – Lessons Learned and Best Practices Setting programme priorities and sticking to them – performance measurement for the priority areas only (i.e., sectoral priorities, streamlined LCA, environmental parameters) Understanding programme and measurement drivers (regulatory vs. informative vs. policy), this translates into level of rigour required Importance of upfront dialogue, setting expectations and agreeing upon measurement and monitoring requirements Ensuring credibility of the system, make sure measurement/reporting is based on sound scientific principles and/or internationally accepted practices Create value-add for the companies Private sector will not pay for protocol development, this must be funded from within Leverage existing knowledge, expertise and tools

Contact Information Sarah Radovan Chief, Measurement & Reporting Technology Early Action Measures 55 Murray St., Suite 230 Ottawa, Ontario Canada K1A 0E4