1. Domestic biogas & carbon revenue A strategy towards sustainability PPRE Oldenburg April 26 - 28, 2011

2. Domestic biogas & carbon revenue Content Greenhouse emission reductions by domestic biogas installations –Changing the manure management modality –Substituting biomass and fossil fuels –Substituting chemical fertilizer –GHG emission reduction potential Reducing global GHG emissions –The Clean Development Mechanism Project cycle Methodologies –The voluntary market Methodologies Notes to the methodologies Voluntary or CDM? The value of carbon revenue for biogas projects Conclusions

3. Domestic biogas & carbon revenue Introduction Domestic biogas installations Biogas Bio-slurry Carbon revenue Greenhouse gas emission reductions Baseline minus project emissions Up on delivery Sustainability Financial Technical Programmatic

4. Domestic biogas & carbon revenue GHG reduction by domestic biogas plants

5. Domestic biogas & carbon revenue Manure handling modality Methane emissions per animal type “i” in “j” systems: CH 4 i = ∑ j B o i x VS i x MS% ij x MCF j CH 4 =Methane emissions [kgm -3 ] B o =Biodegradability [m 3 CH 4 (kgVS) -1 ] MS%=Manure management system usage [%] MCF=Methane conversion factor [%] VS=Volatile solids [kgyr -1 ]

6. Domestic biogas & carbon revenue Biodegradability and volatile solids

7. Domestic biogas & carbon revenue Characteristics of manure management systems

8. Domestic biogas & carbon revenue Methane conversion factors

9. Domestic biogas & carbon revenue MMM spreadsheet lay-out Baseline side only

10. Domestic biogas & carbon revenue Biomass and fossil fuel substitution Baseline emissions for thermal energy for one household: BE th, h = ∑ j (( F i,bl,h ) x NCV i x EF co2 i ) Be th,h =Baseline hh emissions from thermal energy[t CO 2 eq] F i, bl, h =Amount of fuel i in baseline situation per hh[kg, m 3 or ltr] NCV i =Net calorific value fuel i [GJkg -1 etc] EF co2 i =CO2 emission factor for fuel i [tCO 2 kg -1 ]

11. Domestic biogas & carbon revenue NRB & FF spreadsheet lay-out Baseline side only

12. Domestic biogas & carbon revenue … and some charts..

13. Domestic biogas & carbon revenue Chemical fertilizer substitution Avoiding emissions from chemical fertilizer application and production, however: Complicated calculation; no methodology available Even more complicated to monitor / verify Up to now excluded for biogas programmes

14. Project boundary Animal manure storage Biogas stove (thermal energy to the user) Fertilizer for fields manurebiogas Bio- slurry

15. Domestic biogas & carbon revenue GHG reduction potential for domestic biogas GHG reduction range: 1.7 to 6 tons CO 2 eq / plant / yr

16. Domestic biogas & carbon revenue CDM in practice

17. Domestic biogas & carbon revenue CDM in practice II

18. Domestic biogas & carbon revenue Reducing GHG emissions ET JI CDM –Annex 1 - non-annex 1 party –Technology transfer –Sustainable development »Economic »Social »Environment.. and … Voluntary market

19. Domestic biogas & carbon revenue CDM project cycle

20. Domestic biogas & carbon revenue Methodologies Describe how to measure baseline and project manure management change and fuel substitution. How to monitor and verify baseline and project situation. How to calculate eventual emission reductions. Exist as: Large scale: not available for domestic biogas plants Small scale: Simplified methodology: monitoring requirement, registration fee Project size restricted (=“small”) PoA:Grouped small scale projects Many large, institutional buyers insist on emission reductions verified by a “recognized” methodology: CDM: AMS I.C. (AMS) I.E. AMS III.R Voluntary: Gold standard

21. Domestic biogas & carbon revenue AMS I.C. “Thermal energy for the user with or without electricity” Renewable thermal energy for households Substitution of fossil fuel In examples “biogas” is not specifically mentioned, but “implied” Project size limited to 45 MW th A-priori household identification (canceled)

22. Domestic biogas & carbon revenue (AMS) I.E. “Switch from non-renewable biomass for thermal applications by the user” Small thermal appliances for households Substitution of non-renewable biomass In examples “biogas” is specifically mentioned. Project size limited to 45 MW th A-priori household identification (canceled) Specification establishment non-renewable fraction of biomass.

23. Domestic biogas & carbon revenue (Non-) renewable biomass Biomass is renewable if it comes from: sustainably managed forests sustainably managed croplands / grasslands residues Industrial / municipal waste Non renewable: Land-use data plus surveys on: Trend in fuelwood collection time Trend in fuelwood prices Trend in type of collected biomass

24. Domestic biogas & carbon revenue AMS III.R “Methane recovery in agricultural services at household / small farm level ” Small farms / households. Manure management modality change. Only applicable in combination with AMS I.C. ((AMC I.E. not yet mentioned). Methane recovery systems up to 5 tons CO 2 eq. Project size up to 60 kt CO 2 eq. Specification establishment non-renewable fraction of biomass.

25. Domestic biogas & carbon revenue Programme of Activities Not a methodology as such Several projects, meeting the PoA eligibility criteria, can be included when: Using approved methodologies Avoiding double counting Accounting for leakage ERs are measurable, verifiable and additional Then: Only one single registration Inclusion of new, additional projects relatively simple Some requirements could be shared (e.g. EIA) Validation and verification at project level But: Application of one methodology only (seems to be adjusted now) DoE is accountable

26. Domestic biogas & carbon revenue Gold Standard “small biodigester” methodology “Implementation of biodigesters in households within the project’s boundaries” “…the individual hh will not act as project participants” Substitution of NRB and fossil fuel Manure management modality change Satisfied demand option in baseline No project size limitation (not “small scale”) NRB fraction calculation specified But: Statistical correction for sample size and standard deviation “Heavy” on additionality and sustainability

27. Domestic biogas & carbon revenue Gold Standard “small biodigester” methodology Sustainable development matrix Environment Social development Economic and technological development Safeguarding princples Human rights Labour standards Environmental protection

28. Domestic biogas & carbon revenue Example SD matrix IndicatorMitigationRelevance to (localized) MDGsParameterScore (‘-‘ / ‘0’ / ‘+’) Brief explanation Social development Quality of employment Masons and technicians trained for (rural) artisan level employment MDG: SEDP: 9 # of biogas construction teams +Construction and quality control requires well skilled masons and technicians. Mason report better income then in regular construction sector Livelihood of the poor Workload reduction for women and children Health improvement / injury reduction High upfront investment The programme will assist hh with bearing the investment costs with an investment subsidy to the tune of ~ 25%, and will develop –in cooperation with national finance institutions- a biogas micro-finance component to reduce the burden of the high investment costs MDG: 1.1; 3.4; 4.5 SEDP: 9; 10 Workload reduction for women. Incidence of illnesses and injuries resulting from conventional energy use. +Biogas plants are an economically viable investment for small livestock holders that –often- live in rural areas. Investment costs, however, are entirely up-front, posing a barrier for poorer hh. Many of the micro-level benefits of biogas directly benefit women and children, an often more deprived section of society. Access to affordable and clean energy services MDG: SEDP: 1; 7 # of biogas installations constructed +Domestic biogas installations produce clean energy. The cost of operation of the installations is negligible. For small holder hh, biogas installations are a viable investment. Human and institutional capacity Biogas technical training Biogas multi-actor support network MDG: SEDP: 9 # of participating government, non-government and private organizations +The programme aims to (further) develop a commercially viable domestic biogas sector for which it heavily invests in human and institutional capacity Construction and quality control requires well skilled masons and technicians, for which the programme will run a comprehensive training component (total professional training over 53,000 person-days) The programme is establishing a provincial – district - commune support network nation wide. Sub-total social development+4

29. Domestic biogas & carbon revenue An overview of methodologies

30. Domestic biogas & carbon revenue Notes Carbonese doesn’t always translate easily Pioneering due, few registered projects only No methodology for chemical fertilizer substitution Inclusion of manure management component? To NRBe or not to NRBe Suppressed and satisfied demand Safeguarding additionality The ODA issue … PoA: Opportunities and risks

31. Domestic biogas & carbon revenue CDM or voluntary? Considering that: CDM and GS differ little, post validation procedure with GS might be shorter But CDM procedure is much more complicated than other VER schemes CERs might be more attractive for institutional investers (WB, ADB) CERs might have higher, more predictable value than VERs (?) Absorption capacity voluntary market might be limited Voluntary market future perspective ? Commitment period risk CERs > VERs (?) It seems: Smaller or starting biogas projects should go for voluntary credits Larger projects, depending financially on carbon revenue go for CERs Programme of activities particularly interesting for expanding projects.

32. Domestic biogas & carbon revenue Carbon value for biogas projects: Pakistan

33. Domestic biogas & carbon revenue CARBON REVENUE PERFORMANCE FEEDBACK National domestic biogas programme Financial, technical and programmatic sustainability

34. Domestic biogas & carbon revenue Conclusions The good news : Biogas-carbon methodologies available Expertise and experience mounting Good demand for CER & VER Potential improving technical, financial and programmatic sustainability “However”: Methodologies still harbor uncertainties and risks Formulation is complicated Management of carbon projects extra complicated CER & VER market >2012 uncertain

35. Domestic biogas & carbon revenue Thank you for your attention.

36. Biochemical processes and biogas The dairy cow Mature “developed (!)” dairy cowLive weight 635 kg Milk production 20 – 35 kg / day Main dung characteristics: Daily fresh manure production:51 kg per day (61 litres / day) Total solids: 6.4 kg (TS (= DM) ~ 13% of fresh wght) Volatile solids: 5.4 kg (VS ~ 11% of fresh wght, VS ~ 85% of TS) Chemical Oxygen Demand:5.7 kg (COD ~ 11% of fresh wgt) Macro nutrients: NitrogenN k :0.39 kg (organic) PhosphorusP:0.04 kg PotassiumK:0.16 kg “Developing” cattle:Live weigt <250 kg Milk production 1-5 kg/day TS >20% of fresh wght