Domestic biogas & carbon revenue A strategy towards sustainability

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

2. 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 Domestic biogas & carbon revenue

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

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

5. Manure handling modality Methane emissions per animal type “i” in “j” systems: CH4i = ∑j Boi 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] Domestic biogas & carbon revenue

6. Biodegradability and volatile solids Domestic biogas & carbon revenue

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

8. Methane conversion factors Domestic biogas & carbon revenue

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

10. 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] Domestic biogas & carbon revenue

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

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

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

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

15. GHG reduction potential for domestic biogas GHG reduction range: 1.7 to 6 tons CO2 eq / plant / yr Domestic biogas & carbon revenue

16. CDM in practice Domestic biogas & carbon revenue

17. CDM in practice II Domestic biogas & carbon revenue

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

19. CDM project cycle Domestic biogas & carbon revenue

20. 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 Domestic biogas & carbon revenue

21. 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) Domestic biogas & carbon revenue

22. (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. Domestic biogas & carbon revenue

23. (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 Domestic biogas & carbon revenue

24. 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. Domestic biogas & carbon revenue

25. 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 Domestic biogas & carbon revenue

26. 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 Domestic biogas & carbon revenue

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

28. Example SD matrix Domestic biogas & carbon revenue

29. An overview of methodologies Domestic biogas & carbon revenue

30. 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 Domestic biogas & carbon revenue

31. 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. Domestic biogas & carbon revenue

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

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

34. 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 Domestic biogas & carbon revenue

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

36. The dairy cow Mature “developed (!)” dairy cow Live 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: Nitrogen Nk: 0.39 kg (organic) Phosphorus P: 0.04 kg Potassium K: 0.16 kg “Developing” cattle: Live weigt <250 kg Milk production 1-5 kg/day TS >20% of fresh wght Biochemical processes and biogas