1. GIS links to the voluntary market: CO2 mitigation potential of agriculture manure management Csaba Fogarassy – Akos Lukacs – Bence Huba Szent Istvan University Research Group of Biomass Economics and The Energy Centre of Hungary Facilitation Green Investment Scheme: first lessons learnt and the way forward, Central and Eastern Europe, Belarus, Russia, and Ukraine, April 24-25, 2008, Budapest

2. The voluntary carbon market Voluntary commitments shaping the market Projects with face or commodities in institutionalised markets (as CCX) Rapidly growing and flexible changing Risks covered by standards and protocols: VCS, Gold Standard, CCX CFI etc. Market based mechanism, which reflects a real price on carbon Different market types in the US and in Europe

3. Green Investment Scheme Voluntary achieveable reduction are looking for markets Best and cheapest or sometimes even only option for EIT countries Denial of US participation in Kyoto was an economic incentive to start GIS, and trading AAUs with Russia and EITs New mechanism to establish a price for a tonne of CO2 reduction Can be more succesful than JI for the more independent legal framework background

4. GIS options Hard greening preferred (1t = 1t) Potential areas: building efficiency, alternative energy, agricultural methane emission Good opportunity to link to exchanges (CDM to CCX) Price should drive the investment into projects (cofinancing source) Therefore transparency, low-risk projects, higher value of AAUs (hard greening) and link to more markets (competing buyers) is needed

5. Solution for agricultural manure management is biogas production Inputs come from: –Animal production –Manure management –Organic waste –Agricultural waste, byproducts –Biogas crops etc. Biogas usage can be diverse (electricity, heat, methane enrichment etc.) Objective is to reduce methane emissions coming from manure and waste management systems

6. Trends in Biogas usage BIOGAS VISIONARYFUTURETRADITIONAL METHANE ENRICHMENT HYDROGEN GENERATION HYDROGEN CLEANING AND PRODUCTION BIOTMETHANE DISPLACES NATURAL GAS ELECTRICITY AND HEAT ENERGY PRODUCTION WITH GASENGINES INDUSTR IAL GAS FUEL CELL FUELINTO THE GRID LOW HEAT AND ELECTRIC EFFICIENCY

7. Biogas potential of CO2 mitigation Methane emissions reduction quantified in tCO2e (1= 21-23) Estimate of: –55 million tonne liquid manure –Biogas cleaned into biomethane (natural gas quality) –Potential 40 million CO2/year (based on Palhalma) Balances to investigate: –CO2 balance - negative –Energy balance - positive –Cost of production is 6-8 (cent/KWhel)

8. Advantages of the biogas as alternate energy source Most competitive alternate energy source for reducing CO2 emissions even among traditional fuels Establishment of a sustainable (waste to energy) supply chain (from agriculture to energy use) Intergrated approach of investigating CO2 and energy balance and cost efficiency Emissions reduction takes place by project start and not later (short lifecycle emissions reduction strategy) Multiple win situation to all stakeholders (society, economy, government)

9. Existing and changing schemes for voluntary emissions reductions CCX Agricultural offsetts JI project Palhalma biogas plant New JI project for aggregated german boiler facilities Lessons learned from pCDM GIS – no practise or model yet, but An option: –Hungarian agricultural methane emissions reduction – 30 biogas plant inclusion in pilot programme

10. Our picture of structuring GIS for biomethane Using the offset protocol of CCX for measuring, verification, monitoring etc. Inclusion of this (or other worldwide accepted) methodology and protocol under GIS Successful entry of projects into GIS and issuance of AAUs closing the circle Market the issued AAUs on those markets, where the price is higher

11. Conclusions By voluntary systems we will be able to use our Hot Air capacities for innovation Voluntary market protocols can help setting up good GIS projects Free linkage beetwen the different emission markets GIS is a great opportunity for EITs to understand the sustainable development and maximising benefits should be an objective Because of the efficient CO2 emissions reduction crediting, biogas seems to be one of the areas, that can contribute fast and efficient to mitigation of climate change

12. Thanks for your attention! lukacs.akos@gtk.szie.hu