Domestic biogas & carbon revenue A strategy towards sustainability

Biogas Practice AreaBiogas Practice AreaBiogas Practice Area

Domestic biogas & carbon revenue


A strategy towards sustainability

PPREOldenburg

April 26 - 28, 2011



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



Introduction

Domestic biogas installations• Biogas• Bio-slurry

Carbon revenue• Greenhouse gas emission

reductions• Baseline minus project emissions• Up on delivery

Sustainability• Financial• Technical• Programmatic



GHG reduction by domestic biogas plantsBiogas & GHG reduction

Manure handling modality

Fossil- and NRB fuel

substitution

Chemical fertilizer

substitution



Manure handling modality

Methane emissions per animal type “i” in “j” systems:

CH4i = ∑j Bo

i x VSi x MS%ij x MCFj

CH4= Methane emissions [kgm-3]Bo= Biodegradability [m3 CH4 (kgVS)-

1]MS%= Manure management system usage [%]MCF= Methane conversion factor [%]VS= Volatile solids [kgyr-1]



Biodegradability and volatile solids



Characteristics of manure management systems



Methane conversion factors



MMM spreadsheet lay-out

Baseline manure management GHG emission for dairy cattle IPCC 2006 Table 10A-5

4.1.1 dairy cattle characteristics

1.5.1 VS [kg/hd/d] 1.851.5.2 Bo [m3CH4/kgVS] 0.133.1.3 hdnd [# of nd-cattle] 23.2.3 Collnd [%] 60%

4.3.1.1 N-excrnd [kgN/hd/yr] 40

4.1.2a CH4 & N2O emissons total

Lagoon Liquid / slurry Solid storage DrylotPasture /

range Daily spread DigesterBurned for

fuel Other

4.1.2.1a MCF 78.0% 42.0% 4.0% 1.5% 1.5% 0.5% 10.0% 10.0% 1.0%4.13.2.2a MS% 0.0% 1.0% 0.0% 0.0% 27.0% 19.0% 1.0% 51.0% 0.0%

4.1.2.3a Efk [m3CH4/hd/d] 0.00 0.21 0.00 0.00 0.21 0.05 0.05 2.61 0.00 3.134.1.2.4a Efknd-plant [kgCH4/pl/yr] 0.00 0.29 0.00 0.00 0.28 0.07 0.07 3.54 0.00 4.25

4.1.2.5a EF3 [%] 0.1% 0.1% 2.0% 2.0% 0.0% 0.0% 0.5%4.1.2.6a EF3nd [kgN2O/hd/yr] 0 0.0004 0 0 0.216 0 0 0 0 0.224.1.2.7a EF3nd-plant [kgN2O/pl/yr] 0.00 0.00 0.00 0.00 0.43 0.00 0.00 0.00 0.00 0.43

Baseline side only



Biomass and fossil fuel substitution

Baseline emissions for thermal energy for one household:

BEth, h = ∑j (( F i,bl,h) x NCVi x EFco2i)

Beth,h = Baseline hh emissions from thermal energy [t CO2eq]

Fi, bl, h= Amount of fuel i in baseline situation per hh [kg, m3 or ltr]

NCVi = Net calorific value fuel i [GJkg-1etc]

EFco2i= CO2 emission factor for fuel i [tCO2kg-1]



NRB & FF spreadsheet lay-out

Avg

su

bstit

uted

fu

el

Cal

orifi

c va

lue

subs

titut

ed

fuel

Ene

rgy

subs

titut

ion

biog

as p

lant

reference 2.5 2.2unit [kg/pl/yr] [MJ/kg] [GJ/pl/yr]factorGWP (IPCC 3rd assessment report 2001)

Agricultural residue (LHV on wet basis) 0% 664 12.6 8.361Fuelwood (LHV on wet basis) non renewable: 75% 1752 15 26.283Charcoal 75% 0 29 0.000Dung cake 0% 1095 15.5 16.974Kerosene 100% 0 45.6 0.000LPG 100% 51 47.8 2.438

54.056

Fuel characteristics

Em

issi

on

Fact

or

CO

2

redu

ctio

n pe

r pl

ant

IPCC 2006 table 2.5[kgCO2/GJ] [kgCO2eq/pl]

1

100.0 0112.0 2208112.0 0100.0 071.9 063.1 154

2362

Carbondioxide

N2O

em

issi

on

fact

or

N2O

re

duct

ion

per

plan

t

CO

2eq

redu

ctio

n pe

r pl

ant

IPCC 2006 table 2.5 5.3[gN2O/MJ] [kgN2O/pl/yr] [kgCO2eq/pl/yr]

296

0.0040 0.033443 9.900.0040 0.105133 31.120.0010 0 0.000.0040 0.067896 20.100.0006 0 0.000.0010 0.002438 0.72

61.84

Nitrous oxide

Baseline side only

CH

4 em

issi

on

fact

or

CH

4

redu

ctio

n pe

r pl

ant

CO

2eq

redu

ctio

n pe

r pl

ant

IPCC 2006 table 2.5 5.2[kgCH4/GJ] [kgCH4/pl/yr] [kgCO2eq/MJ]

23

0.300 2.51 57.690.300 7.88 181.350.200 0.00 0.000.300 5.09 117.120.010 0.00 0.000.005 0.01 0.28

356.44

Methane



… and some charts ..

Fuel substitution mix [kg/plant/yr]

Agric residue, 664

LPG, 51Kerosene, 0

Dung cake, 1095

Charcoal, 0

Fuelwood, 1752

GHG reduction by source [kgCO2eq/plant/yr]

Fuelwood, 2404

Dung cake, 127

Kerosene, 0

LPG, 155

Agric residue, 63 GHG reduction by GHG type

Carbon dioxide

86%

Methane12%

Nitrous oxide2%



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

Biogas Practice AreaBiogas Practice AreaBiogas Practice AreaProject boundary

Animal manure storage

Biogas stove(thermal energy

to the user)

Fertilizer for fields

manure biogas

Bio-slurry



GHG reduction potential for domestic biogas

Summary greenhous gas reduction

Component[kgCO2/pl/yr] [%] [kgCO2/pl/yr] [%]

1 Manure management 1050 27% 518 98%2 Chemical fertilizer 0 0% 0 0%3 Fuel 2780 73% 2 0%4 GHG construction plant @ 2% 0% 8 1%

3830 528

baseline biogas

Domestic biogas plant GHG reduction

-1000

-500

0

500

1000

1500

2000

2500

3000

Manuremanagement

Fuel substitution Plant construction

kgC

O2e

q/pl

/yr

baseline project

GHG reduction range: 1.7 to 6 tons CO2 eq / plant / yr



CDM in practice



CDM in practice II



Reducing GHG emissions• ET• JI• CDM

– Annex 1 - non-annex 1 party

– Technology transfer– Sustainable development

» Economic» Social» Environment

.. and …• Voluntary market

Emission trading under the CDM



CDM project cycle

CDM project activity cycle



MethodologiesDescribe • 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 plantsSmall 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



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 MWth

A-priori household identification (canceled)



(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 MWth

A-priori household identification (canceled)Specification establishment non-renewable fraction of biomass.



(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



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 CO2 eq.Project size up to 60 kt CO2 eq.Specification establishment non-renewable fraction of biomass.



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



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 baselineNo project size limitation (not “small scale”)NRB fraction calculation specified

But:• Statistical correction for sample size and standard deviation• “Heavy” on additionality and sustainability



Gold Standard “small biodigester” methodology

Sustainable development matrix• Environment• Social development• Economic and technological development

Safeguarding princples• Human rights• Labour standards• Environmental protection



Example SD matrixIndicator Mitigation Relevance to (localized) MDGs Parameter Score

(‘-‘ / ‘0’ / ‘+’)Brief explanation

Social development

Quality of employmentMasons 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 poorWorkload reduction for women and childrenHealth improvement / injury reductionHigh 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; 4.5SEDP: 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 capacityBiogas technical trainingBiogas 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 capacityConstruction 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



An overview of methodologies



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



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.



Carbon value for biogas projects: Pakistan

Project expenses and carbon revenue

0

100

200

300

400

500

600

700

800

Expenses Carbon revenue

Euro

Carbon revenue

Carbon rebate

Support

Investment



CARBONREVENUE

PERFORMANCEFEEDBACK

Nationaldomestic biogas

programme

Financial, technical and programmatic sustainability



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



Thank you for your attention.


Biochemical processes and biogas

The dairy cow

Mature “developed (!)” dairy cow Live weight 635 kgMilk 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:Nitrogen Nk: 0.39 kg (organic)Phosphorus P: 0.04 kgPotassium K: 0.16 kg

“Developing” cattle: Live weigt <250 kgMilk production 1-5

kg/dayTS >20% of fresh wght

Documents

Domestic biogas & carbon revenue A strategy towards sustainability