new mechanism feasibility study 2011 final...

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New Mechanism Feasibility Study 2011 – Final Report

New Mechanism FS for Energy Application of Wastes and Wastewater Originated in Processing of Agricultural Products in Indonesia

By Chugai-Technos Corporation

FS Partners 【Indonesia】 PTPN-7(State-owned agricultural enterprise),

Indonesian Center for Agricultural Engineering Research and Development(ICAERD)

【Japan】Sojitsu Research Institute, Ltd., Nord Institute for Society and Environment, Satake Corporation, Biotec International Asia Sdn Bhd,, TIAET Co., Ltd.

Location of Project Activity

Indonesia

Category of Project Activity

Waste management

Outline of project activity - Our feasibility study is producing renewable energy from agricultural wastes and wastewater. - Recovered methane gas from agricultural wastewater is used for renewable energy source. - Agricultural solid wastes are used for biomass solid fuel product. - We estimated the potential reduction of GHG emission from palm oil, rubber and sugar mills operated by PTPN-7, our Indonesian counterpart, and studied the feasibility of the project. - We studied mills located in Lampung, Bengkulu and South Sumatera provinces. - Because our project involves a number of mills in wide area, we developed a simple and feasible MRV method.

Reference Scenario and Project Boundary

- We determined the reference scenario is equivalent to BAU. - The project boundary includes mills, plantations and renewable energy users.

Monitoring Method and Plan

From the feasibility study results, we proposed the following two methods: Method A is based on CDM methodology and uses the equations provided in the methodology, but applies abbreviated and automatic monitoring Method B is even simpler than Method A. Amounts of recovered methane gas and produced biomass pellets and chips are monitored, and GHG emission reduction is calculated based on the production volumes.

GHG Emission and Reduction

We estimated GHG emission reduction for the following three model cases about PTPN-7's mills and for the case where our project is implemented throughout the host country: <1> Model cases of mills owned by PTPN-7 Case-1: Each mill makes GHG reduction efforts. In this case

wastewater from rubber mills cannot be used for generating electricity because its COD concentration is not enough for methane gas production. Estimated reduction: 127,600tCO2/y

Case-2: Composite wastewater treatment system is devised to recover methane gas from mixed wastewaters of nearby mills. The wastewater of rubber mills is mixed with neighboring palm oil mills for electricity generation. Thus, wastewater from rubber mills, whose COD concentration is too low, can be used for electricity generation. Estimated reduction: 131,400tCO2/y

H23 新メカ FS 最終報告書(概要版)

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Case- 3: We estimate the potential reduction of GHG emission in the

case where EFBs which are now used for land application and fronds which are not collected, are used for energy source. Estimated reduction: 167,300tCO2/y

<2> GHG emission reduction potential of whole host country Wastewater treatment is conducted at each mill. For solid wastes, the use of only oil palm fronds are considered at mills owned by PTPN, and the use of EFBs are also considered at other mills where EFBs are not considered to be used for soil application. Estimated reduction - Use of wastewater: 14,992,000 tCO2/y

-Use of solid wastes: 4,145,000 tCO2/y Measurement, Reporting and Verification (MRV) method

-Indonesia is promoting a spread of Indonesian Sustainable Palm Oil (ISPO) system for a sustainable development of palm oil industry. Beside the enhancement of competitiveness of Indonesian palm oil industry in the international market, the objectives of this system include the promotion of GHG emission reduction. -If we add the following two items, we can establish a BOCM’s MRV system required for the project: <1> Monitoring of COD of inflow to lagoons, which is not legally

required but necessary to estimate the methane gas yield. At present COD of outflow from lagoons are monitored, so monitoring of COD of only inflow is needed.

<2> Compliance with ISO 14064 and 14065 concerning reporting and verification for GHG emission in addition to ISO9001 and ISO14001 which ISPO now complies with.

ISPO certificate is mandatory for all Indonesian palm oil mills. If the above items are included in ISPO, ISPO certified mills will systematically conduct from monitoring and verification. If the trials started at palm oil mills, which is an important industry in Indonesia, are spread to rubber and sugar mills through the state-owned agriculture enterprise, the MRV of our project will be implemented widely.

Environmental Impact, etc. It is expected that bad odor and harmful insects from lagoons will be prevented.

Financial Plan

We are studying the possibility of investment from the private sector and financing from the Japan Bank for International Cooperation.

Possibility of Installing Japanese Technologies

<1> Renewable energy generation from wastewater Japanese covered lagoon technology is not very competitive. But Japanese technologies for biogas desulfurization, purification, combustion and power generation and water - monitoring equipment are superior.

<2> Renewable energy generation from solid wastes Our project plans to supply biomass solid fuels as chips and pellets. So, the same production line should produce products of different qualities to meet the users’ demands or to ensure compatibility with equipment. And it should also produce biomass solid fuels of various specifications (moisture contents, forms, etc.) In this respect, Japanese companies, responsive to user’s demands, will be able to prove its superiority.

"Co－benefits" (i.e. Improvement of local environmental problems)

It is expected that the bad odor from lagoons will be prevented.

Contribution to sustainable development in host country

This project will promote the introduction of renewable energy in Indonesia. It will secure a stable renewable energy supply. It will contribute to the sustainable development of palm oil industry.


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Study title: “New Mechanism FS for Energy Application of Wastes and Wastewater Originated in Processing of Agricultural Products in Indonesia” Main implementing entity: Chugai Technos Corporation 1. FS Partners

Japanese partners and their assignments

Sojitsu Research Institute, Ltd. Research on Indonesian policies especially about NAMAs

Nord Institute for Society and Environment Research on capacity building to establish MRV

Satake Corporation Research on introduction of technology to produce fuel from solid wastes

Biotec International Asia Sdn Bhd Research on the introduction of technology to recover methane gas from wastewater

and generate electricity TIAET Co., Ltd.

Coordination in Indonesia and collection of information by local staff

Indonesian counterparts and their assignments

PTPN-7(State-owned agricultural enterprise No.7) Supply of information on production of wastes and energy consumptions, etc. Input

for establishment of MRV Indonesian Center for Agricultural Engineering Research and Development(ICAERD)

Supply of information on agriculture policy 2. Outline of Project Activity：

(1) Project Activity

Our proposed project deals with palm oil, rubber and sugar mills in Indonesia and uses

agricultural solid wastes and wastewater for renewable energy production. The renewable energy production is based on the following policy: ・ We studied the recovery of methane gas from wastewater its use to produce electricity. ・ Solid wastes are used to produce solid fuels in form of biomass pellets and chips. ・ Taking into consideration the current energy demand, the types of energy and the

targeted users are determined. Indonesian agribusiness processing plants can be classified into two groups; one group

operated by state－owned agricultural enterprises and another group owned by private farms. In the future, we envisage our project will be implemented in both groups throughout Indonesia.

We conducted a case study at mills in Lampung, South Sumatra and Bengkulu provinces

where PTPN－7 operates business.


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(2) Background Indonesian policy on climate change

Indonesia ratified United Nations Framework Convention on Climate Change (UNFCCC) in August 1994 and Kyoto Protocol in December 2004. In February 2010, the country submitted a document concerning NAMAs based on Copenhagen Accord to the Secretariat of UNFCCC.

With regard to GHG emission, Indonesia decided to achieve 26% reduction relative to Business as Usual (BaU) by its own effort and 41% reduction relative to BaU with appropriate international support by 2020.

Bilateral cooperation with Japan

Indonesia and Japan agreed on a document of bilateral cooperation on climate change issues prior to COP17 in 2011. (Announcements made on November 25, 2011 by Ministry of the Environment, Ministry of International Trade and Industry and Ministry of Foreign Affairs of Japan)

It is considered that this cooperation leads to the establishment of New Mechanism

which will supplement the activities of the United Nations framework. GHG emission reduction targets for the sectors covering our project

Indonesia’s total 26% reduction relative to BaU by 2020 is equivalent to CO2 value of 0.767 Gt CO2. Target values are set per sector. Our project falls into the categories of “Energy and transportation” and “Agriculture” Sectors.

GHG emission reduction target for Energy and Transportation Sector is 0.038 Gt CO2

which accounts for 5% of total reduction, and target value for Agriculture Sector is 0.008 Gt CO2 which accounts for 1% of total. According to Technology Assessment and Application Agency (BPPT), it seems that the reduction target for Agriculture Sector was lowered in the decision making process because the cost is high while only small emission reduction can be expected in this sector.

Climate change remedies in the palm oil industry

In Indonesia the palm oil business is promoted as an important industry because it greatly contributes to job creation and acquisition of foreign currency. On the other hand, this industry has some problems in the process of making massive plantations; the impact on ecosystem from the logging of forests; and the infringement of rights of native inhabitants.

Under such circumstances, World Wide Fund for Nature (WWF), nongovernmental

organization working for international nature conservation, and palm－oil－ related companies proposed to discuss the matter of plantation development and operation from environmental and social viewpoints.

In response to the above movement, stakeholders in palm oil business (oil palm oil

growers, palm oil processors, consumer goods manufacturers, retailers, banks, investors, environmental and social NGO, etc.) founded a nonprofit organization called Roundtable on Sustainable Palm Oil (RSPO) in 2004. It was an innovative trial. RSPO set rules also for GHG emission reduction in consideration of environment.


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Some Indonesian mills had already obtained RSPO certification. But Indonesia institutionalized its original Indonesian Sustainable Palm Oil (ISPO) in 2011. ISPO requires the environmental and social consideration, as does RSPO, and its mission includes GHG emission reduction.

What makes ISPO unique is that it is designed in the context of the actual situation of

palm oil industry in Indonesia. In addition, all business owners are legally obliged to get ISPO certification by 2014, which is a big difference from RSPO.

(3) Does our Project Qualify for New Mechanism?

Indonesia already promoted the introduction of renewable energy in the past. In the document submitted to UNFCCC in 2010, the action plan included the supply of renewable energy.

As stated in 2. (2) “Background,” the GHG emission reduction for agriculture sector accounts for only 1% of total reduction target due to its low cost - effectiveness.

Since Indonesia is the number one palm oil producer in the world, introduction of a lot of CDM projects have been studied in this field. But it cannot be said that they are actively making efforts to reduce GHG emission and produced renewable energy. We can cite the complex MRV system required for CDM as a reason for it. Both host countries and donor countries are suffering from its complexity.

To cope with this problem, we propose a project which offers some solutions which encourage the host countries to implement a CDM project. Besides, our project covers the whole area of Indonesia. In this respect, our project qualifies for the New Mechanism.

<1> Efficiency achieved by involving several mills in a large area

Our project is carried out not only at a single mill but at several mills of several types of

agricultural products.

Thus, we can efficiently consolidate the management of monitoring and reporting of GHG emission reduction. We can also achieve the economy of scale in connection with initial costs and running costs.

Compared with a project carried out at a single mill, larger amount of GHG emission can

be reduced when several mills jointly carry out the project.

We are also considering mixing the wastewater of palm oil mills and rubber mills, whose wastewater has too low COD value to produce methane gas in general, to generate electricity.

<2> Diffusion of abbreviated monitoring through an Indonesian system

To solve the problem of complex MRV of CDM, we are planning to establish and use

simplified monitoring methods which mill staff carry out easily at the sites. Palm oil, rubber and sugar mills have a similar production process. Considering these elements, we establish a methodology specialized for our project. The monitoring methods are simpler than those of CDM methodologies and applicable to various projects.

If our simplified monitoring methods are included in ISPO, the monitoring methods will

diffuse because ISPO certificate is mandatory for all Indonesian palm oil mills.


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(4)Diffusion of the Project Activity：

The state-owned agricultural enterprises including our counterpart take a leading role in agriculture industry in Indonesia. First, we introduce the project activity into our counterpart, PTPN-7, and next spread it across the state-owned agricultural enterprises and then diffuse it through private mills.

In Malaysia, there is a movement to institute Malaysian Sustainable Palm Oil (MSPO)

as a national system like ISPO. If our project could be developed taking advantage of ISPO, it would be possible to develop the project also in Malaysia in a similar way.

3. Description of our Study (1)Research Subject： <1> Research on measures and policies of Indonesia Research on the measures and policies for renewable energy generation of the host

country and a survey on recent trend of NAMAs

<2> Research on the current situation of mills Current situation of wastewater treatment at palm oil, rubber and sugar mills The types and amounts of solid wastes which can be used for energy production

The most voluminous solid waste is Empty Fruit Bunches (EFBs), residues of oil palm. But PTPN-7’s mills return EFBs to farmland to improve soil fertility, and it is difficult to use all of EFBs for energy production right now.

Oil palm fronds (the center parts of oil palm leaves) are proposed as a promising material for energy source, but there is a problem that there is no means to collect fronds at present.

<3> Research on how to produce and use renewable energy Survey about equipment of technology for the methane gas recovery from wastewater,

power generation and chip processing and pelletization of solid wastes Purchase price of electricity and the current situation/future plan of power grids Distance between mills and coal-fired power plants and distance between mills and

neighborhood communities Energy demand of the neighborhood communities

<4> Research on establishment of abbreviated monitoring and its diffusion Information collection about RSPO and ISPO certificates

At the start of the feasibility study, we were planning to monitor GHG emission for our project according to RSPO. But ISPO began to move during our study. So, we had to research also ISPO.

Only the outline of ISPO had been decided, the details were not determined yet, and the provisions on GHG emission were under consideration.


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Feedback from mill staff about the simplification of monitoring

Photo 3-1 Current situation of wastewater and EFBs (2) Description of the Study：

<1> Research on measures and policies of Indonesia We researched the host country’s policy on renewable energy and the current trend of

NAMAs. Besides, we collected the existing information and had a hearing survey at site. The results are described in 2. (2) “Background.”

<2> Research on current situation of possible project mills Current situation of wastewater treatments at palm oil, rubber and sugar mills:

The wastewater is currently treated in lagoon system at palm oil, rubber and sugar mills. We discussed with our counterpart, visited the sites and got the picture of actual monitoring activities which are conducted for the purpose of production control or according to the regulations.

The types and amounts of solid wastes which can be used for energy production:

We discussed with our counterpart and visited mills to garner information. We examined a method to estimate the EFB amount from Fresh Fruit Bunch (FFB)

amount as well as a method to estimate the frond amount from the number of palm oil trees and the number of leaves to cut. We further discussed how to carry the fronds to plant.

<3> Research on how to produce and use renewable energy

Survey about installation of technology for the methane gas recovery from wastewater,

power generation and chip processing and pelletization of solid wastes: We visited the mills to gather information and estimated the initial and running costs of

equipment for renewable energy production. We further calculated the energy consumption and the renewable energy production of the equipment.

Purchase price of electricity and the current situation/future plan of power grids; Distance between mills and coal-fired power plants and distance between mills and

neighborhood communities; Energy demand of the neighborhood communities:


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We collected existing data and gathered information through the discussions with our

counterpart and a hearing survey with the residents of neighborhood communities. <4> Research on establishment of abbreviated monitoring and its diffusion Information collection about RSPO and ISPO certificates

We collected existing data and information. We interviewed experts and our counterpart to hear about RSPO. As to ISPO, we had a meeting with ISPO Commission of Indonesia to get information.

Feedback from mill staff about simplification of monitoring

We had a meeting to discuss the simplification of monitoring and capacity building. We organized a seminar about international trend in global warming countermeasures

and the importance of effective use of methane gas from wastewater, followed by a demonstration of the abbreviated monitoring of water quality. Lastly, we had a meeting to exchange opinions.

4. Outcomes of Feasibility Study on New Mechanism Project Activity (1)GHG Emission Reduction Resulting from Implementation of Project Activity <1> GHG emission reduction 1) Three cases of GHG emission reduction

Considering the current state of energy use at PTPN-7’s mills and the neighborhood

communities, we simulated the following three energy supply situations and estimated GHG emission reduction for each case:

Case-1: Each mill makes GHG reduction efforts. Each mill recovers methane gas from wastewater and produces electricity. The surplus electricity is sold to PLN. The wastewater from rubber mills are not used for energy generation because its COD

concentration is too low to produce methane gas. COD concentration of more than 10,000mg/l are considered to be enough for methane gas production

according to a Thai study on the methane gas recovery from Palm Oil Mill Effluent (POME)1. 1 Taniya Sattaphai , Nipon Pisutpaisal , Chantaraporn Phalakornkule . “Thermophilic Methane Production from Palm Oil Mill

Effluent “ Faculty of Engineering, Kasetsart University 85.


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Case-2: Methane recovery from the mixed wastewater from nearby mills Wastewater from nearby palm oil mills is collected to joint wastewater treatment

facilities. If a rubber mill is located near a palm oil mill, the wastewater from these mills is mixed

for energy generation provided that the COD concentration of the composite wastewater is appropriate for methane gas production.

The surplus electricity is sold to PLN. Case-3: Use of solid waste for energy production Like the above Case 2, wastewater from nearby palm oil mills is collected to joint

wastewater treatment facilities. The surplus electricity is sold to PLN. We simulate the use of solid wastes for energy production as follows (this cannot be

implemented for the time being): EFBs which are currently used for land application are used for energy

production. The mills near coal-fired plants produce EFB pellets to co-fire with coal. The mills distant from coal-fired plants produce EFB powder and generate power.

Other power than used at site for project is sold to PLN. Oil palm fronds which are not currently utilized are used for cooking fuel instead

of firewood at households near the mills. If oil palm fronds are used, we face a problem of how to collect and carry the

fronds. In this view, we set an upper limit on the amount of fronds to be used. The amount of fronds to be used is limited to the amount which the same number of trucks, which currently carry EFBs from mills to farmland, can carry.

2) Points where GHG emission is reduced

The GHG emission is reduced at the following two points for the cases mentioned in above 1). Recovery of methane gas and switch from fossil fuels

Methane gas is recovered from the wastewater from palm oil, rubber and sugar mills to generate power, replacing fossil fuels.

Switch from fossil fuels to biomass solid fuel made from solid wastes EFB chips/pellets and oil palm frond chips are used in place of fossil fuel.

We determined to estimate no emission reduction through methane gas recovery by

EFBs because EFBs are currently returned to farmlands and do not produce much methane gas.

<2> Estimation method

We propose the following two methods to estimate the project GHG emission reduction:

A. Simplified methodology for Small Scale Clean Development Mechanism (SSC CDM) The basic concept of this method complies with SSC CDM methodologies, and the

monitoring methods are simplified.

Table 1: Applied methodologies


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Emission reduction SSC CDM Version

Prevention of methane gas release

Ⅲ.H. Methane gas recovery in wastewater treatment

16

Production and sale of electricity from biogas

Ⅰ.D. Grid connected renewable electricity generation

17

Biomass chips made from oil palm fronds and switch from fossil fuel

Ⅰ.I. Biogas/biomass thermal applications for households/small users

02

EFB powder production, power generation on site and sale to PLN

Ⅰ.D. Grid connected renewable electricity generation

17

We propose the following abbreviated monitoring:

1) CODcr of inflow and outflow of lagoons is substituted by Suspended Solids (SS). 2) EFB production amount is estimated from the amount of FFB, raw material of EFBs. 3) After the start of the project, automatic meter reading will be used to monitor the amount of wastewater, suspended solid concentration, electricity consumption of equipment, and methane gas and power production.

The reasons why we devised this method are as follows:

1) Substitution of SS for CODcr The wastewater from palm oil, rubber and sugar mills contains a lot of SS

coming out in the squeezing process. Most of SS are presumed to be organic matters, and the indicator of SS has a high correlation with CODcr, indicator of organic matter.

Because automatic meters (IR transmission meter, scattered light meter, etc.) for SS concentration are available in the market, SS concentration is easily measured with an automatic meter. So the monitoring of this parameter does not increase the workloads of the mill staff so much.

But the ratio of SS and CODcr possibly varies according to mills. It is necessary, therefore, to measure SS and CODcr by standard methods and to determine a relational equation in advance.

2) Estimation of EFB amount EFBs are produced at a constant rate in the palm oil production process. Therefore, we can estimate the amounts of EFBs from the delivered amount of raw material (FFBs).

3) Monitoring using automatic meter reading devices Once the project starts, the value will be measured automatically if automatic meter reading devices are attached to energy generation equipment.

B. Estimation of GHG emission reduction based on renewable energy production

Method B is simpler than Method A. The difference from the SSC CDM methodologies

in the above table of Method A is that GHG emission reduction is calculated from the production amount of renewable energy. Table 2 and Table 3 show the difference of concepts.


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Table 2: GHG emission reduction by prevention of methane gas release

Item SSC CDM methodology Estimation of GHG emission reduction based on renewable

energy production

Concept Estimation based on recovered amount of methane gas

Estimation based on renewable energy production by the project activity

Equation

Amount of produced methane gas (from COD removable rate, wastewater amount, etc.)

－ Leakage, flare, etc.

Renewable energy production × Energy conversion factor

Monitoring COD of inflow, COD of outflow, amount of methane gas which are not used for energy generation (leakage, flare, etc.)

Renewable energy production

Table 3: GHG emission reduction by switch from fossil－fuel

Item SSC CDM methodology Estimation of GHG emission reduction based on renewable

energy production

Concept Estimation based on the renewable energy generated by project activity

Estimation based on the renewable energy generated by

project activity

Equation

Electricity Power generation × Emission factor of the electricity displaced by the project activity

Power generation × Emission factor of the electricity displaced by the project activity

Heat Solid fuel × Unit calorific value ×Emission factor of the heat replaced

Solid fuel × Unit calorific value ×Emission factor of the heat replaced

Monitoring Electricity Power generation Power generation Heat Fuel consumption Fuel production

Different SSC CDM methodologies are applied to the calculations of “the methane gas

recovery from the wastewater” and “the use of renewable energy.” Our project, however, “recovers the methane gas from the wastewater and utilizes the methane gas for the production of renewable energy.” Therefore, we consider it possible to calculate, based on the final renewable energy consumption, both the amount of methane gas prevented from release and the amount of GHG emission reduction resulting from the switch from fossil fuel.

In other words, we thought we can estimate the GHG emission reduction due to the

project activity by back calculation method if we figure out the amount of electricity which can be generated from the recovered methane gas.

Concerning the switch from fossil fuel to electricity and heat produced from solid wastes,

we also think that we can estimate the GHG emission reduction based on the amount of fuel production.

To make such calculation, however, we have to know the energy conversion efficiency of

the energy production facility/equipment. The energy conversion efficiency varies according to types of facility/equipment. Therefore, the followings are necessary: ・ The energy efficiency shall be monitored at the time of maintenance activity of the

facility/equipment. ・ Like methane correction factor, different factor values should be determined for

respective energy production process.


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(2) Reference Scenario and Project Boundary：

<1> Reference scenario Methane gas recovery from wastewater and power generation

Some CDM projects had been studied for wastewater from palm oil mills in the past, but they were not implemented. There is no fixed plan for the future for PTPN-7’s mills.

It is difficult to use the wastewater from rubber mills for energy production because its COD concentration is too low for methane gas production. There is no plan to use the wastewater for energy production at present.

As to wastewater from sugar mills, there is no clear plan to use for energy production now for PTPN-7’s mills.

Use of EFBs for the solid fuel production

All EFBs are currently returned to farmland for soil conservation. But the effect of soil conservation by EFBs is not assessed quantitatively. If total amount of EFBs is not necessary for land application, we would be able to use some EFBs for energy production. First of all, we have to clarify the quantitative effect on soil conservation.

At present, there is no definite plan to use EFBs for energy production for PTPN-7’s mills.

Use of oil palm fronds for the solid fuel production

Fronds of oil palm are not collected at present and there is no plan to use for PTPN-7’s mills.

Indonesian national policy

GHG emission reduction target of agriculture sector accounts for only 1% of total Indonesian target of 26%. According to BPPT with whom we had a meeting, the reduction target of agriculture sector seemed to be reduced from a cost-effectiveness viewpoint.

Considering the above, we think it is unlikely that they actively take their own measures

to use wastes and wastewater originated in processing of agricultural products for energy production to reduce GHG emission. Therefore, we determined that the reference scenario is equivalent to BaU scenario.

<2> Project boundary

We defined the project boundaries for the three cases as follows: Case-1: Each factory makes GHG reduction efforts.

Reference scenario Project scenario

Figure 1: Boundary (Case-1)

Plantation

Boundary

Mill Lagoons

Plantation

Boundary

Lagoons

Grid connection

Facility to recover methane from

wastewater and produce electricity


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Case-2: Methane gas recovery from the mixed wastewater from nearby mills Reference scenario Project scenario


Case-3: Use of solid waste for energy production

Reference scenario Project scenario


Boundary of a single mill

Plantation

Mill

Lagoons

Boundary of a single mill

Plantation

Mills

Lagoons

Plantation

Mill

Lagoon

Plantation

Mill

Lagoon

Grid connection

Plantation

Boundary

Mill Lagoons

Households

Plantation

Boundary

Mill Lagoons

Households

Solid fuel

processing

facility Coal-fired

power plant

Coal-fired

power plant

Grid connection






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(3) Monitoring Method and Plan：

Tables 4 and 5 show the monitoring plans for “A. Simplified SSC CDM methodology,” and

Tables 6 and 7 show the monitorin plans for “B. Estimation of GHG emission reduction based on renewable energy production.”

Both methods do not increase the counterpart’s workload substancially and seem to be

practical.

To have these methods applied in various mills, they need to be included in ISPO and encouraged by the state-owened agricultural enterprises as mentioned in Sector 2.(3)

“Does the Project Qualify for New Mechanism?” A. Simplified SSC CDM methodology

Table 4: Monitoring plan concerning prevention of methane gas release from wastewater based on simplified SSC CDM methodology

Monitoring required by SSC CDM methodology

Monitoring plan

Parameter Frequency Item Frequency Method

Referen

ce scenario

Wastewater volume

Historical data of one year

or 10 days of

measurement

Wastewater volume10 days of

measurement Triangular weir

COD concentration of inflow

to anaerobic lagoon

COD concentrationof inflow

10 days of measurement

COD concentration (Measurement

according to standard method)

COD concentration of outflow

from anaerobic lagoon

COD concentrationof outflow


COD concentration (Measurement

according to standard method)

Project scen

ario

Wastewater volume Hourly Wastewater volume Continuously Use of flow meter COD concentration of

inflow to anaerobic lagoon

A 90％ confidence interval and 10％

margin of error requirement

should be achieved.

COD concentration(Estimation from

SS concentration*)Continuously

Use of automatic SS concentration meter

COD concentration of outflow

from anaerobic lagoon


SS concentration*)Continuously

Use of automatic SS concentration meter

Electricity consumption of equipment

Continuously Electricity

consumption of facility

Continuously Use of power meter

Methane gas flow Continuously Methane gas flow Continuously Use of flow meter Methane gas concentration

At the same time with flow

Methane gas concentration

Continuously Use of concentration

meter Methane gas leakage

volume Continuously

Methane gas leakage volume

- Use of methodology

default value Electricity supplied to

grid Continuously

(Hourly) Electricity

production amountContinuously Use of power meter

n.b.: To be estimated using a relational equation determined in advance based on the COD (standard method) and SS concentrations (automatic measurement).


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Table 5: Monitoring plan based on simplified SSC CDM methodology for switch from fossil fuel to biomass solid fuel


Monitoring Plan


Referen

ce scen

ario

Solid waste production amount

Annually

Amount of raw materials

Annually Data from mill

records Cultivated area Number of oil

palms per unit areaNumber of cut

fronds


records

Project scen

ario

Solid waste production amount

Annually

Cultivated area Number of oil

palms per unit areaNumber of cut

fronds

Every time when raw materials are delivered

Use of truck scale


Annually Data from purchase

records

Electric consumption of facility

ContinuouslyElectricity


Continuously Use of power meter

Fossil fuel consumption of facility

Annually Diesel oil


Annually Data from purchase

records

Fossil fuel consumption of trucks increased by

project activity Annually

Diesel oil used to collect fronds

Annually Data from

purchase records

Net quantity of renewable biomass/biogas

consumption Annually

Pellet/chip production amount

Production period Use of meter

B. Estimation of GHG emission reduction based on renewable energy generation

Table 6: Wastewater monitoring plan under mothod of GHG emission reduction estimation based on renewable energy production


Monitoring Plan


Referem

ce scenario

Wastewater volume Historical data of

one year or


Wastewater volume10 days of

measurement Triangular weir

COD concentration of inflow

to anaerobic lagoon


SS concentration*)


Use of automatic SS concentration

meter COD concentration of

outflow from anaerobic lagoon


SS concentration*)


Use of automatic SS concentration

meter

Project scen

ario

Wastewater volume Hourly -** - - COD concentration of

inflow to anaerobic lagoon

A 90％ confidence interval and 10％ margin of error

requirement should be achieved.

- - -

COD concentration of outflow from anaerobic

lagoon - - -

Electricity consumption of facility

Continuously - - -

Methane gas flow Continuously - - - Methane gas concentration

At the same time with flow

- - -

Methane gas leakage volume

Production period - - -

Electricity supplied to grids

Continuously (1 hour)

Electricity production

Continuously Use of power

meter

*n.b.: To be estimated using a relational equation determined in advance based on the COD (standard method) and SS concentrations (automatic measurment).

**n.b.： “ - “ means that monitoring is not necessary for the item.


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Table 7: Solid wastes monitoring plan under the method of GHG emission reduction estimation based on renewable energy production


Monitoring Plan


Referen

ce scen

ario

Solid wastes production amount

Annually



records

Cultivated area Number of oil palms per

unit area Number of cut fronds


records

Project scen

ario

Solid wastes production amount

Annually


Every time when raw

materials are delivered -

Use of truck scale-

Cultivated area Number of oil palms

per unit area Number of cut fronds


records

Electricity consumption of facility

ContinuouslyElectricity consumption

of facility Continuously

Use of power meter

Fossil fuel consumption of facility

AnnuallyDiesel oil consumption

facility Annually

Data from purchase records

Fossil fuel consumption of trucks increased by project

activity

AnnuallyDiesel oil used to

collect fronds Annually

Data from purchase records

Net quantity of renewable

biomass/biogas consumption

Annually

Cultivated area Number of oil palms

per unit area Number of cut fronds

Production period

Use of meter

(4) Amounts of GHG emission and reduction: <1> Quantification method of GHG emission of reference scenario and project

activity.

1) Quantification of GHG emission at each mill

Table 8 below shows our concept how we quantified GHG emission and reduction. We estimated GHG emission reduction for the three cases described in 4. (1) “GHG emission reduction resulting from the implementation of project activity.”

The mark ● means that the GHG emission/reduction should be considered for the case.


＜17＞

Table 8: Calculation method used for quantification

Category Description of GHG emission/reduction Calculation method Case 1 Case 2 Case 3

Wastewater

a) Prevention of methane gas release

SSC CMD methodology Ⅲ.H. Ver.16

● ● ●

b) Biogas power generation and electric power selling

SSC CMD methodologyⅠ.D. Ver.17

● ● ●

c) Transportation of wastewater for composite wastewater treatment

Estimation based of the vehicle fossil fuel consumption ● ●

Solid wastes

d) Biomass chips made from oil palm fronds and switch from fossil fuel

SSC CMD methodologyⅠ.I. Ver. 02

●

e) EFB powder production, power generation on site and sale to PLN

SSC CMD methodology I.D. Ver.17

●

f) Co-combustion of EFB pellets at coal-fired power plant

Estimation based on transportation and amount of fuel used for co-combustion

●

2) The way how we estimated the total GHG emission reduction of all project

mills

We conducted detailed surveys at Rejo Sari palm oil mill, Way Berulu rubber mill and Bungamayang sugar mill owned by PTPN-7. In addition, we collected the data from existing records (production records, wastewater records, specifications of mills, etc.) of all mills including the said three mills.

We analyzed the wastewater volumes, COD concentration of wastewater and production

amounts of solid wastes and correlated them with the data from existing records by detailed surveys. Based on the analysis, we estimated the wastewater volumes, COD concentration of wastewater and production amounts of solid wastes for other mills.

3) Composite wastewater treatment

We studied the possibility of collecting and carrying wastewater from nearby mills by

vehicle (tanker truck) to a mix wastewater treatment facility.

To select the mills for composite wastewater treatment, we made a calculation using the formula below and studied whether the GHG emission reduction would be larger than the case where the wastewater treatment is conducted at each mill. In the case of combination of rubber and palm oil mills, the COD concentration of mixed wastewater should not be lower than the adequate concentration for methane gas production.

Total GHG emission reduction of wastewater treatment at each mill ≧

Total GHG emission reduction of composite wastewater treatment － GHG emission of transportation

We further studied the possibility of transporting wastewater by pipeline, but the construction cost would be high and the pipelines would be constructed on someone's land. Because the pipeline seems unrealistic, we selected vehicle transportation.


＜18＞

4) Co-combustion of EFB at coal-fired power plant

Within the area of PTPN-7, only one coal-fired power plant is operated in Lampung

Province. The transportation of more than 100km each way is impractical in Indonesia where road networks are not developed sufficiently. Therefore, we calculated the GHG emission reduction due to the use of EFB pellets for co-combustion at the power plant only for Rejo Sari and Bekuri palm oil mills which are located within 100km each from the power plant.

<2> Calculation result of GHG emission reduction

Table 9 shows the estimated GHG emission reduction.

As you can see, in Case 2 where wastewater is jointly treated, more GHG emission would

be reduced than Case 1. If fronds and EFBs are used for energy production in addition, GHG emission reduction would be even larger.

Table 9: Estimated GHG emission reduction

Unit: ：tCO2/y

Case Electricity

power selling

Oil palm frond chips EFB pellets Total

Case 1 127,600 - - 145,200

Case 2 134,300 - - 134,300

Case 3 134,300 17,600 20,000 171,900

<3> GHG emission reduction potential in the case where the project activity is

spread throughout the host country

1) Method of estimation

It is difficult to assess the respective locational conditions, production management and wastewater management in detail of all palm oil, rubber and sugar mill throughout Indonesia. Therefore, we estimated the GHG emission reduction equivalent to Case 1 where each mill makes GHG reduction efforts.

As to wastewater, we estimated the GHG emission reduction of palm oil and sugar mills

whose wastewater’s COD concentration values are considered to be enough to produce methane gas.

For solid wastes, we considered only oil palm fronds of plantations owned by PTPN

because EFBs are returned to plantations for land application. With regard to other mills where the EFBs are not supposed to be returned to plantation, we considered EFBs as well.

Based on the calculation results of mills owned by PTPN-7, we analyzed the relation

between the GHG emission reduction and the production amounts of palm oil, rubber and sugar mills. And we estimated the total GHG emission reduction based on the total production amounts of palm oil, rubber and sugar in Indonesia.


＜19＞

2) Estimated GHG emission reduction

Table 10: Estimated GHG emission reduction of allover host country

Category GHG emission reduction (ｔCO2/y) Recovery of methane gas fromwastewater and electric power

generation and selling at each mill 14,992,000

Utilization of solid wastes 4,145,000

(5) Measurement, Reporting and Verification (MRV) Method for GHG Emission Reduction： <1> MRV method concerning GHG emission reduction from the implementation

of the project

Indonesia is promoting the diffusion of Indonesian Sustainable Palm Oil (ISPO) system. Besides the sustainable development of palm oil industry and the enhancement of competitiveness of Indonesian palm oil in the international market, the objectives of this system include the promotion of GHG emission reduction.

If we add the following two items to this system, we will be able to establish a MRV

system required for the project: Monitoring of COD concentration of inflow to lagoons, which is not legally required but

necessary to estimate the methane gas yield. At present COD of outflow is monitored, so monitoring of COD of inflow only should be added.

Compliance with ISO 14064 and 14065 concerning reporting and verification for GHG

emission in addition to ISO9001 and ISO14001 which ISPO now complies with.

Table 11: Objectives and principles of ISPO Objectives (1) Awareness－raising about palm oil production (2) Enhancement of competitiveness of Indonesian palm oil in the international market (3) GHG emission reduction ISPO principles cover:

1. Licensing and plantation management 2. Cultivation and processing 3. Environmental monitoring and management 4. Labor empowerment 5. Social empowerment 6. Economic empowerment 7. Business

<2> Reasons why we think MRV method is appropriate

Indonesian government obliges palm oil mills to get ISPO certification by 2014. If the

items described in above <1> are included in this system, we can say that the palm oil mills which obtained ISPO certificate will systematically conduct monitoring and reporting GHG emission.


＜20＞

<3> Reasons why we think MRV method can be accepted by the host country of

the project activity

As mentioned in above <2>, ISPO is mandatory for palm oil mills. Therefore, we think MRV method can be accepted in Indonesia.

The palm oil mills’ GHG emission reduction reporting will be an advanced model and

will be adopted by rubber and sugar mills if the PTPN encourages MRV method. <4> Is MRV method adequate as an international guideline?

ISPO complies with the following international standards: ・ ISO 9001: requirements for quality management systems ・ ISO19011: guidelines on quality and/or environmental management systems auditing ・ ISO14001: requirements for environmental management systems ・ ISO/IEC 17021: conformity assessment - requirements for bodies providing audit and

certification of management systems ・ ISO/IEC 17011: conformity assessment - general requirements for accreditation bodies

accrediting conformity assessment bodies

Figure 4: ISPO and International MRV standard -ISPO Commission approves accreditation organization which complies with ISO/IEC 17011 as ISPO Accreditation Body.

-ISPO Accreditation Body establishes a certification system which conforms to ISO/IEC 17021 and grants certification.

-ISPO certification is granted by a third party certification body in accordance with ISO 19011.

-ISPO Certified organization manages measurement, recording and reporting according to ISO 9001 and ISO 14001.

It is considered that the ISPO certified mills can establish management system of

measuring, recording and reporting and that they can implement necessary

ISO14065 ISO14064-3 ISO14064-1,2

ISPO

Certified

Organization

ISPO

Accreditation

Body

ISPO

Commission

certification

ISO/IEC 19011 ISO/IEC 17011

ISO/IEC 17021Certified

ISO 9001/14001

I SPO

addition

I n t e r n a t i o n a l ＭＲＶ s t a n d a r d

MRV of GHG reduction activity

ISO14064-1,2 ISO14064-3 ISO14065

MMeeaassuu rr ii nn gg

RReeppoo rr tt ii nn gg

RReeccoo rr dd ii nn gg

approval

addition addition

Underlying law


＜21＞

monitoring/measuring, and recording and reporting of measured result.

Because ISO 9001 and ISO14001 include the concept of PDCA cycle, the management system can be maintained and improved continually.

As mentioned above, ISPO does not comply with ISO 14064 which specifies the

requirements for measuring, recording and reporting GHG emission and ISO 14065 which specifies the requirements of accreditation bodies.

ISO 14064 specifies the requirements for monitoring of GHG emission in addition to the basic requirements which are common to ISO9001 and ISO14001.

If ISPO, which already requires the monitoring of GHG emission, complies with ISO 14064 and ISO 14065, stricter MRV which can be internationally accepted would be ensured.

International standards concerning GHG emission reduction: ISO 14064-1: Greenhouse gases -- Part 1: Specification with guidance at the

organization level for quantification and reporting of GHG emissions and removals ISO 14064-2: Greenhouse gases -- Part 2: Specification with guidance at the project

level for quantification, monitoring and reporting of GHG emission reductions or removal enhancements

ISO 14064-3: Greenhouse gases -- Part 3: Specification with guidance for the validation

and verification of greenhouse gas assertions ISO 14065: Greenhouse gases -- Requirements for greenhouse gas validation and

verification bodies for use in accreditation or other forms of recognition （6） Securement of Environmental Integrity： <1> Environment improvement Construction of covered lagoons will mitigate the methane gas emission and will reduce

the GHG emission. Besides methane gas, ill-smelling ammonia and hydrogen sulfide comes from lagoons at

present. The covered lagoon will prevent the bad smell as well. The lagoons, which are scummy and infested with maggots, are breeding source of flies.

If the lagoons are covered, the injurious pests will be eliminated.

<2> Environment impacts and steps to prevent such impacts When the old covers used to prevent methane gas release should be replaced, they cause

large quantities of waste. To cope with this problem, the contract with supplier need to cover such agreements on how to deal with the wastes and on who should assume the responsibility to dispose of the wastes.

In the case of power generation from methane gas, the power generator may cause a noise problem. To prevent such a problem, the generator with soundproofing and vibration-proofing technology should be installed.

<3> Conformity to AMDAL According to the Indonesian regulation for Environmental Impact Assessment (Analisis

Mengenai Dampak Lingkungan, or AMDAL) biomass electricity generation units having a larger capacity than 10MW should attain AMDAL approval. The biogas electricity generation unit from biomass which the project plans to install is less than 10 MW capacities.


＜22＞

But there is a possibility of installing multiple generation units at the same time.

There is no precise rule in AMDAL for the case where multiple operations are conducted in the same province. Accordingly, AMDAL Committee would determine the necessity of AMDAL approval in such a case. When the project is implemented, we have to file to the local office of Ministry of Environment and follow their decision.

(7)Other Indirect Impacts

We anticipate no indirect impacts of our project. (8)Comments of Stakeholders：

The possible stakeholders in our project are PLN, which purchases the renewable energy,

and the residents near the mills where power generation plants are installed. We received the following comments from them:

<1> PLN According to Ministerial Regulation, PLN has obligation to purchase electricity from

small to medium scale renewable energy power plants which are developed by governmental, community or business entities or NGO with up to 10 MW capacities to strengthen local power supply system.

PLN said they positively respond to power purchase from small to medium sized power producers in line with the governmental policy.

<2> Residents living in the neighborhood communities The residents near the mills expect that the project will ensure the stable energy

supply. At present, the communities are connected to the grid of PLN, but people suffer from

blackouts and they hope to be supplied enough amount of electricity to meet the demand.

They expressed interest in solid fuels as cooking fuel but showed concern about prices which might be higher than current LPG and firewood prices. They said they want to use bottled gas if available.

They did not make complaints about bad odor because the plantations have vast areas of land.

(9) Implementation Structure of Project Activity:

We need further discussions with other project participants to design the implementation structure of project activity, but we are currently considering the following structure for Case-1 and Case-2 which are feasible:

A joint venture between Japanese and Indonesian companies will implement and

operate the project. The joint venture will get export financing from Japan Bank for International

Cooperation (JBIC). The profit from sale of electricity and solid wastes will be the income source of the joint

venture.


＜23＞

Figure 5: Structure of project activity

(10) Financial Plan

Funding of project was set bank loans by operating body (80%) and investments to operating body (20%). A bank loan was assumed that use (USD) financial system export of JBIC. Interest rate is 1.89%, and the lump sum repayment was 8 years later.

Figure 6: Concept of project

We made a benefit-risk analysis and a free cash flow analysis for 10 years after the full-scale implementation of the project for Case-1 and Case-2 which are feasible. A result, the project is not only expected non profits in the long term, it is impossible to repay bank loan was clarified. To compensate for the loss of the project, it is necessary that the carbon credits can be sold in more than ¥315/tCO2 in Case-1 and ¥558/tCO2 in Case-2.

(11) Measures to Promote Japanese Technology <1> Renewable energy generation from wastewater

Covered lagoon systems are not common in Japan. Japanese technology in this field is not competitive with what exists in the developing countries of South East Asia. However, Japanese technology for biogas desulfurization, purification and combustion and power generation, are superior. To promote Japanese technology, therefore, the introduction of

Joint venture

PLN

JBIC

Financing Investment

Investment

Japanese company

Indonesian company

Sales contract for electricity

PLN power selling

POMEWaste-

water

■Initial CostBuilding ¥4,780,000～9,560,000Equipment ¥95,127,000～191,036,000

■RunningCostPlant operator labor cost ¥478,000/person/year

Plant operator numbers 14 persons/energy produce equipment

Annual Maintenance cost 4% of initial costAnnual another budget 10% of running cost

Methane Recovery

methane

Biogas Generation

electricityPower selling price：¥ 8,480/MWh

Energy Produce Equipment （operating body）

Stand-alone Wastewater Treatment（Case-1） Composite Wastewater Treatment（Case-2）

PLN power selling

POMEWaste-

water

■OutsourcingCostDelivery labor cost ¥255,000/person/year

Deliverynumbers 4 persons/energy produce equipment

Diesel oil rate ¥71/L

■Initial CostBuilding ¥4,780,000～9,560,000Equipment ¥95,127,000～191,036,000

■RunningCostPlant operator labor cost ¥478,000/person/year

Plant operator numbers 14 persons/energy produce equipment

Annual Maintenance cost 4% of initial costAnnual another budget 10% of running cost

Methane Recovery

methane

Biogas Generation

electricityPower selling price：¥ 8,480/MWh

Energy Produce Equipment （operating body）

POME・Wastewater

Delivery


＜24＞

Japanese secondary equipment to add value to primary system is worth considering. If a Japanese company can develop a durable and reasonably priced membrane gas holder for covered lagoons, Japan should be able to gain an advantage.

<2> Renewable energy generation from solid wastes

Our project studies the possibility of supplying solid fuels for cooking and co-fire fuels for coal-fired power plants. For that purpose, the operation of solid fuel production needs to fine tune its response to various requests. The same production line would also need to produce fuels of different qualities to meet the users’ demands or to ensure compatibility to equipment that consumes the fuel. Additionally, pellet specifications (moisture contents, forms, etc.) need to be customized in accordance with the intended use. In this respect, Japanese companies, responsive to users’ demands, will be able to demonstrate its superiority.

<3> Establishment of service system

There are often problems in the operation of equipment/facilities that require complicated maintenance. If a Japanese manufacture or the possible joint venture, which the project envisage, can establish finely tuned maintenance system and easy to operate and trouble free equipment which can be easily checked and adjusted, then Japanese technology will garner a high reputation and be competitive.

A good training system to instruct how to use and maintain the equipment/facilities is also required to prevent or deal with troubles at an early stage.

(12) Future Prospect and Problems Left to be Solved: <1> Problems left to be solved for implementation of the project

Integrate with ISPO system

To take advantage of our project activity which combines nearby mills to reduce GHG

emission, the efficiently integrated management, under PTPN’s control, of monitoring and monitoring result of each mill is inevitable.

For that purpose, we think the monitoring of COD concentration of inflow to lagoons should be included in ISPO and that ISPO need to comply with ISO14064 and ISO14065 as stated in 4. (5) “Measurement, Reporting and Verification (MRV) Method for GHG Emission.” Determination of EFB amount which can be used for energy production

State-owned agricultural enterprises return most of EFBs to plantation for soil conservation, but they have no data which prove quantitative effect. So it is needed to analyze the composition of soil to check nutrition status and determine the volume of EFBs to be used for soil conservation and how many EFBs can be used for renewable energy production.

Actually, all mills do not return all EFBs to farmland. Some private mills keep EFBs in their premises because the farmlands are located too distantly from mills to carry back EFBs. Such EFBs should be used for energy production, but their quantity is not checked at present.


＜25＞

<2> Steps to be taken to solve the problems Proposal for ISPO system

ISPO was established in March 2011 and is still under study with regard to detailed procedure for GHG emission monitoring, etc. We will appeal to ISPO Commission to include the above mentioned elements into ISPO.

Monitoring of COD concentration of inflow to lagoons is useful not only for monitoring of methane gas yield but also for the wastewater management. If the COD concentration of inflow is clarified, we will be able to take effective measures for effluent water quality management. For example, the retention time of wastewater can be adjusted according to the COD value. Therefore, the inclusion of the monitoring of COD concentration of inflow into ISPO is important also in view of wastewater management. Check of amount of EFBs which can be used for energy production

One method to estimate the necessary amount of EFBs for land application is to analyze

the content of fertilizer components in soil. For this purpose, the followings are necessary:

To evaluate the status of whole plantation, a wide area survey is necessary at regular intervals in a grid pattern.

The survey should be made periodically at least for a year to assess seasonal variation.

In our study, we demonstrated abbreviated monitoring to our counterpart.

In the future, we need to collect the actual data to estimate the amount of EFBs which

we can use for energy production.

We also need to calculate the amount of EFBs currently left on roadsides without being returned to farmland for land application. It is possible for us to propose the control of these EFBs as a part of waste management in ISPO.

5. Survey Results on Co-benefits

We assessed the co-benefits of the project according to "Quantitative Assessment Manual

for Co-benefits" (June 2009)

The evaluation method tiers are determined according to the manual as shown in Table 13.

We decided not to take into consideration the improvements in COD removable rate after the installation of covered lagoons, which has many uncertainties. Accordingly, COD is exempted from the evaluation of "co-benefits."


＜26＞

Table 12: Evaluation of “co-benefits”

Target category Target area

Evaluation indicator

A. Simplified SSC CDM

Methodology

B. Estimation of GHG emission reduction based on amount of renewable

energy generation Selected

evaluation methodology

Selected evaluation methodology

Water pollution

prevention

Climate change countermeasure

Methane Tier 2 Tier 3CO2 Tier 2 Tier 3

Environmental pollution

countermeasure

Odor Tier 1 Tier 1Nitrogen Tier 1 Tier 1

Phosphorus Tier 1 Tier 1

Waste management

Climate change countermeasure CO2 Tier 2 Tier 3

Environmental pollution

countermeasure

Reduction of waste disposal Tier 2 Tier 3

Odor Tier 1 Tier 1

Concerning water pollution prevention, the evaluation results of co-benefits for methane and CO2 are described in 4.(4) “Amounts of GHG emission and reduction”. Quantitative evaluations are not made for nitrogen, phosphorus and odor.

CO2, waste disposal amount and odor are evaluation indicators for water pollution

prevention category of “co-benefits”. But our Indonesian counterpart does not treat EFBs and oil palm fronds as wastes. If we can monitor the amount of EFBs and fronds which are not used for soil application and if they are defined as wastes in the future, we will be able to take into consideration “co-benefit” effect from these wastes.

6. Research on Contribution to Sustainable Development

Our project will promote the introduction of renewable energy which Indonesian government adopted as national policy.

Besides, the project will produce the renewable energy used at mills and the employees’

households near the mills. Accordingly, the corresponding energy cost will be reduced.

Our project will contribute to the sustainable development of palm oil industry because we will use the wastes for the production of renewable energy and reduce the GHG emission reduction.

new mechanism feasibility study 2011 final...

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