That's the swirl flap lever arm. If you search the forums there is lots of information.
Basically it is supposed to be connected to a ball joint on the top of the engine which controls the swirl flaps. If it is not connected the engine can suffer power loss and poor emissions.
First fix would be to replace the arm (£10 on ebay) and if that doesnt work and the ball joint on the engine is damaged it's an £800 job to get the new swirl flaps fitted.
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Current V70III 2.4D (163) SE Sport 4C (2008)
V70 T5 (1996)
V70 P2 D5 EUIII (2002)
XC90 V8 4.4 (2007)
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