Standardised methodology for the production of sustainable ...

METHODOLOGY JUSTIFICATION DOCUMENT:

NEW PROPOSED SMALL SCALE CDM METHODOLOGY

“STANDARDISED METHODOLOGY FOR THE PRODUCTION OF SUSTAINABLE CHARCOAL AND CHARCOAL BRIQUETTES”.

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TABLE OF CONTENTS

1. ACKNOWLEDGEMENTS 3

2. HISTORY OF THE METHODOLOGY DEVELOPMENT AND SCOPE OF THE METHODOLOGY 3

3. INTRODUCTION 43.1 Basic problem: 63.2 The link between charcoal and deforestation 73.3 The opportunity: 7

4. SOURCE, DEFINITIONS AND APPLICABILITY 84.1 Selected approach from paragraph 48 of the CDM modalities and

procedures 84.2 Definitions 94.3 Applicability conditions 104.4 Project boundaries 134.5 Identification of the baseline scenario 174.6 Additionality 194.7 Fast track procedure 194.8 Baseline emissions (standard procedure) 204.9 Project emissions (standard procedure) 214.10 Leakage 214.11 Monitoring 22

5. ANNEX 1: OVERVIEW OF FLOWS IN LOW GHG CHARCOAL PROJECTS:23

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1. ACKNOWLEDGEMENTS

The justification document was prepared by Nicolas Mueller from Perspectives Climate Change (Zurich), with funding from the DFID Standardised Baseline Project. The inputs from Randall Spalding-Fecher (Pöyry), Daisuke Hayashi and Axel Michaelowa (Perspectives), Anja Kollmuss, Sophie Tison and Christoph Sutter (South Pole Carbon Asset Management) and Sam Bryan (GERES) in this project have been invaluable.

In addition to that, credit should be given to the group of methodology experts which has provided very valuable input during the methodology development. Input has been received from the following experts: Gareth Philips, Naoki Matsuo, Felicity Spors, Michael Lazarus and Juerg Fuessler.

Many elements which have enabled the discussion on standardised approaches have been made possible by the previous DFID funded assignment “Towards a more standardized approach to baselines and additionality under the CDM”.

2. HISTORY OF THE METHODOLOGY DEVELOPMENT AND SCOPE OF THE METHODOLOGY

The overarching goal of the present assignment has been the development of three new methodologies based on a standardised approach and with high relevance to LDCs.

Perspectives Climate change has identified the production of charcoal as having both a large potential for emission reductions and a high relevance to LDCs. In turn, Perspectives Climate Change started developing a broadly applicable methodology for the production of charcoal which would also take into account the associated changes in the depletion of forest carbon stocks.

A review from the group of methodology experts highlighted the strong expectation to achieve a very strong level of simplicity. In trying to achieve this goal, Perspectives reached the following conclusions:

- A high level of simplicity could only be reached for the production of charcoal products from carbon neutral feedstock such as biomass wastes.

- The continued use of wood from the depletion of natural forests however requires the determination of project emissions from the consumption of partly non-renewable biomass.

In order produce an extremely simple approach, it has been decided to develop two distinct methodologies for each of the project type:

Methodology name

Standardised methodology for the production of sustainable charcoal and charcoal briquettes

Low GHG production of charcoal

Methodology type

Large scale Small scale

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Inputs Biowastes, wood from plantations,pruning of trees,shrubs,bamboos,etc.

Same wood mix as in the baseline (partly non renewable biomass)

Important note: the present document serves as justification document for the “Standardised methodology for the production of sustainable charcoal and charcoal briquettes”. This methodology is available in two forms:

(i) a complete version with all provision; (ii) a “fast track” version for a simplified calculation

The present justification applies to both forms of the methodology. Project relying on partly non renewable wood sources in the project should instead use the small scale methodology developed: “Low GHG production of charcoal”

3. INTRODUCTION

Traditional fuels are widely used in Sub-Saharan Africa, where most LDCs are located as can be seen in the figure below:

Algeria

Burundi

Cameroon

Cote d'voire

Egypt

Ethiopia

KenyaZambia

Morocco

Mozambique

Niger

Senegal

Sierra Leone

South Africa

Tanzania

Tunisia

Uganda

Malawi

Zimbabwe

0

10

20

30

40

50

60

70

80

90

100

0 20 40 60 80 100

Trad

ition

al B

iom

ass

Con

sum

ptio

n as

% to

Tot

al

Ene

rgy

Use

(199

7)

% Population Living Below $2 a day (1990-2001)

Figure 1: Share of traditional fuels (wood and charcoal) as a function of income levels

While wood remains the key fuel in most rural areas, charcoal is often the primary fuel for cooking in urban areas. As noted by E.Smeets and al., in 2009 “While information on charcoal use in the region is sparse, available estimates indicate that the fuel provides energy for a majority of urban households.” The following information indicates the share of charcoal as a fuel in urban areas:

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Table 1: Examples of charcoal use in urban centers

Country Share of charcoal as fuel in urban areas Year Source

Kenya 80% 2002 (Republic of Kenya, 2002).

Tanzania 80% 2003 (Ngerageza, 2003).

Ethiopia 97% (urban areas consume 70% of the charcoal in the country

2009 E.Smeets and al.

Zambia 85% 2000 (Chidumayo et. al., 2002).

In addition, the switch from wood fuel to charcoal in urban areas is well documented as illustrated below:

Figure 2: Switch from wood fuel to charcoal in Bamako, Mali, as retrieved from Girard, 2002

In addition, the switch to charcoal will continue at a rate between 4% and 10% per year as found in the literature. At the same time, the further switch to more convenient fuels on the energy ladder is expected to be hampered by high oil prices

Figure 3: The energy ladder (source: Sawadogo, A.; August 18, 2008; Women and household energy in Sahelian countries- A BP56 special supplement from PREDAS. As retrieved at: http://www.hedon.info/BP56:WomenAndHouseholdEnergyInSahelianCountries)

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http://www.hedon.info/BP56:WomenAndHouseholdEnergyInSahelianCountries

Improvements in the conversion of biomass to charcoal in Sub-Saharan Africa show a substantial potential for reductions in the associated GHG emissions. This potential consists in both avoided consumption of non sustainable biomass and mitigation of CH4 emissions during the production process. The strong and growing demand for charcoal fuel is an important cause of deforestation. Due to a lack of affordability for other fuel types, a switch to fossil fuels is presently highly unlikely under business as usual. Due to the affordability and convenience domestic consumers of fuels in low income countries are increasingly switching to charcoal, especially in urban areas. The production of charcoal in low income countries is however overwhelmingly dominated by the “informal sector” in which small scale producers use traditional technologies to produce charcoal. Wood is almost always sourced from natural forests and very often harvested illegally, despite forest management systems implemented in some countries. Traditional charcoal making technologies typically lead to high CH4 emissions and commonly require 6 kg of wood per kg of charcoal produced.

Several possible alternative sources of biomass could replace wood from natural forests in the production of charcoal. Charcoal products can be produced from biomass sources such as charcoal from wood, bamboo, coconut shells, etc. Also dedicated plantations can supply the necessary woody biomass for the production of charcoal without driving deforestation. Finally, a large range of biomass residues can be carbonized and agglomerated into charcoal briquettes which can be substituted to regular wood-based charcoal. The use of such carbon neutral biomass sources avoids the production of charcoal from fully or partly non renewable biomass.

The identified ancillary benefits from producing charcoal from carbon neutral biomass sources which do not lead to deforestation are huge and well understood. Numerous low income countries suffer from energy poverty, fuel scarcity and deforestations which are often linked to the need for fuels.

So far, no CDM methodology has been able to deploy improvements in the charcoal production chain in low income countries at the adequate scale to reduce deforestation, greenhouse gases emissions in the charcoal making and increase energy security. Existing methodologies have so far only focused on the decreased methane emissions (AM0041, AMS-III.K.) and have been complex to apply. Many of the possible options for reducing emissions from an improved charcoal production are presently either not possible to implement or would not gain an adequate amount of CERs compared to their contribution.The purpose of this proposed new methodology is to grant access to carbon markets to high priority projects which strongly reduce GHG emissions in the production of charcoal for low or medium income countries

3.1 Basic problem:

- Charcoal is one of the main fuels in Least Developed Countries especially in Sub-Saharan Africa;

- The production and consumption of charcoal leads to a lot of GHG emissions. The high GHG emissions associated with the production of charcoal are the result of three factors:

o An unsustainable supply of biomass

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o The use of inefficient technologies to convert wood into charcoal with yields as low as 10% observed in certain countries (10 kg of wood required to produce 1kg of charcoal).

o The use of specific technologies/processes in which the conversion of wood into charcoal leads to a high level of methane emissions.

In turn charcoal is one of the most GHG intensive fuels used:

Figure 4: net carbon dioxide equivalent emissions per cooking task for various biomass and fuels (from Kammen and Lew)

3.2 The link between charcoal and deforestation

Sources of literature confirm charcoal as a source of deforestation. A portion of such evidence is presented in the table below:

Table 2: Link between charcoal and deforestationSource Claim with regard to charcoal and deforestation:Kammen and Lew, 2005 (page 5) ...Charcoal production, on the other hand, is

responsible for the large scale felling of wood, which may lead more directly to deforestation.

GERES – case study (Cambodia), 2011Francis Yamba, CEEEZ – case study (Zambia), 2011

3.3 The opportunity:

Types of opportunities: Opportunities exist to greatly reduce emissions associated with the production of charcoal. These opportunities can be divided in two types: (i) opportunities related to technology and practices for charcoal making and (ii) opportunities related to a decrease in non-renewable share of biomass used.

(i) Opportunities related to technology and practices for charcoal making

o Low CH4 emitting technologies.

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o Efficient conversion of biomass to charcoal which leads to biomass savings. For example yields up to 40% can be achieved instead of the 10 to 20% in the baseline.

(ii) Opportunities related to a decrease in non-renewable share of biomass used.Production of charcoal from carbon neutral biomass sources:o Production of charcoal from dedicated plantations (wood, bamboo,

etc.).o Production of charcoal briquettes obtained from the carbonization and

agglomeration of biomass residues

4. SOURCE, DEFINITIONS AND APPLICABILITY

4.1 Selected approach from paragraph 48 of the CDM modalities and procedures

Approach 48a: “Existing, actual or historical emissions.”This approach is considered the most plausible for the informal charcoal sector as a whole, both for the level of efficiency and the inputs used (wood from natural forests). No autonomous improvements have been observed in the informal charcoal sector as the same ancestral technologies are still in use nowadays and supply the overwhelming majority of the charcoal produced in low income countries. Wood from natural forest is still the source of biomass for the overwhelming majority of the charcoal produced. Only an extremely small share of charcoal products is obtained from carbon neutral sources of biomass, mostly under supported efforts.This approach is selected, referring to the “existing, actual or historical emissions” for the whole informal charcoal sector. Although large discrepancies in wood to charcoal yield are observed, an average performance based on a broad set of reliable figures found is found to be adequate.

Approach 48b: “Emissions from technology that represents an economically attractive course of action, taking into account barriers to investment.”This approach is very difficult to apply in practice. Charcoal production technologies in low income countries and least developed countries are the result of a combined opportunity to produce a good with close to zero initial investment and extremely low operating costs, especially when wood from natural forests is sourced for free, either legally or illegally. Small-scale producers from the charcoal sector which form the baseline simply do not have access to finance and increase their efficiency. Even where improved technologies have been externally financed, it has been observed that this “economically attractive course of action” has been discarded1. This corresponds to observation by Kammen and Lew (Kammen and Lew, 2005) noting that “in many countries, the rural people and even charcoal producers are too poor to use charcoal, and the demand for charcoal is found in the urban areas”.

1 Quote: „Evidence that local charcoal makers had previously tried several" improved methods was found in the remains of metal kilns and metal pit covers which were scattered throughout the forest.“Source: Feinstein and Van der Plas, 1991, Improving charcoal efficiency in the traditional rural sector.

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Approach 48c: “Average of similar plants, previous 5 years, in similar economic, environmental and technological circumstances and whose performance is among the top 20% of their category.”This approach is not applicable due to several constraints. The data availability is low and it is unsure how representative the average of the top 20% performers collected would be as it might be dominated by local parameters influencing the performance such as practices. In addition to that, large discrepancies have been observed in the performance level of conversion of wood to charcoal. In turn selecting the average of the top 20% performers creates a too stringent baseline, relying on values which are not representative for the sector. This approach would severely undercut the incentive to reduce emissions under this methology.

4.2 Definitions

Charcoal and Renewable charcoal: Definition taken from AM0082

Charcoal products: Adapted from the definition of “charcoal and renewable charcoal” in AM0082. The concept has been expanded to also include under charcoal products both charcoal and “charcoal briquettes” (defined below) as charcoal briquettes can be used as a substitute to charcoal. While wood produces blocks of charcoal, several types of biomass produce charcoal fines which have to be agglomerated, either before the carbonization process or after the carbonization process. The definition makes it clear that the methodology is equally applicable to such products.

Charcoal products: own definition.

Biomass: definition from the latest version of ACM0006.

Forest plantation after its last rotation: definition from the latest version of AM0082.

Dedicated plantation: definition from the latest version of AM0082.

Biomass residues: definition adapted from the latest version of ACM0018. The second sentence has been changed from “shall not include municipal waste” to “shall not include mixed municipal waste” in order to allow projects which specifically only used the biogenic fraction of municipal wastes.

Informal charcoal sector: own definition based on a broad literature review2. The two technologies not requiring an investment in brick or metal-based components and established ad-hoc on the site of wood collection are the pit kiln and earth mound kiln technologies.

Charcoal production facility: own definition adapted from the definition of “carbonization units” under the proposed new methodology NM0341.

2 Application of Biomass Energy Technologies (HABITAT, 1993, 168 p.)

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Gravimetric yield: definition from the proposed new methodology NM034. This definition complies with figures provided by the consolidated GHG database for the informal charcoal sector in which relevant charcoal yields for traditional technologies are also expressed on a dry yield basis.

4.3 Applicability conditions

This methodology applies to project activities that produce charcoal products from biomass residues, dedicated plantations or wood from forest plantation after its last rotation from new facilities.

The methodology does not have necessary provisions to determine the project emissions from the use of non-renewable biomass. For this reason, only carbon neutral biomass inputs are allowed under this methodology.

Only newly established charcoal production facilities characterized by a new investment are included in the project. Replacement and upgrades of existing facilities cannot be part of a project under this methodology. Low investment or zero-investment technologies as found in the charcoal informal sector (e.g. pit kilns, earth mound kilns, casamance kiln, oil drum, etc.) are excluded.

A new investment is required to ensure the materiality of the measure. In addition to that, projects eligible under this methodology are intended to replace existing practices characterized by zero-investment or low investment technologies. No existing facility is eligible as project.The methodology is not adequate for replacements and retrofits as no procedure for the determination of baseline emissions for a specific site are included. Instead, the methodology relies on a market based displacement of charcoal which is otherwise produced by the informal charcoal sector.The cost of Casamance kilns has been found to be only an additional $1.7 to $5.9 per tonne of yearly charcoal production capacity (see table below). This technology is a chimney upgrade of earth mound kilns. It has been decided to exclude this technology as its low cost could not ensure its additionality, especially as this methodology relies on a concept of deemed additionality.

Table 3: Simple cost analysis for the casamance kilnTechnology Capacity

(tonnes per year)Capital cost Specific investment

($ per tonne of output)Yearly Total

Casamance kiln 503 CFA 30’0004 1.7

Casamance kiln 8.6Error:Reference source

not found

CFA 23’3335 5.93

Casamance kiln 50Error:Reference source

USD 2006 4

3 Ndiaye, I., Affoudji, M., Niang, I., 2004, Carbonisation et agglo-briquettage au Sénégal. 4 Based on the assumed investment of CFA 20‘000 with the indicated chimney lifetime of 1-2 years (1.5 selected as average)5 Based on the assumed investment of 35‘000 with the indicated chimney lifetime of 1-2 years (1.5 selected as average)6 Skutch M., Sanogo C., 2001, A tale of two women and their charcoal technology, Energia News vol. 4 nr 2 2001, as retrieved at: http://doc.utwente.nl/42778/1/Sanogo01tale.pdf

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http://doc.utwente.nl/42778/1/Sanogo01tale.pdf

not found

No charcoal manufacturing equipment transferred from existing or former charcoal production facilities are transferred to the project.

Standard applicability condition which avoids leakages from equipment transferred from outside the project.

No significant quantities of auxiliary energy (power, fuel) are required to prepare the biomass or the charcoal briquettes.

Small quantities of fossil fuel might be used for the preheating in order to restart the carbonization unit and/or the carbonization process. From a correspondence with Pronatura, based on real data, the corresponding quantity has been estimated at 40 litres of liquid fuel per week compared to emission reductions of 2’077 tCO2e/year. Based on a liquid fuel density of 0.85 kg/litre, a net calorific value of 45 MJ/kg, an emission factor of 63 tCO2/TJ of LPG and 52 weeks of operation, the associated emissions would be around 5 tCO2e/year. This is the equivalent to 0.2% of the emission reductions. In addition to that, there is no incentive to increase the use of modern fuels for the production of charcoal as charcoal is precisely still in use due to the lack of affordability of commercial fossil fuels for households. In turn, it can safely be assumed that this condition is sufficient.

The biomass utilized by the project activity shall not be chemically processed (e.g. esterification to produce biodiesel, degumming and/or neutralization by chemical reagents) prior to the pyrolysis but it may be processed mechanically (e.g. pressing, filtering, agglomeration) or thermally (e.g. drying, roasting).

Standard applicability condition for methodology based on the use of biomass. The version of the applicability condition is taken from AMS-III.A.S. It has been modified to specifically allow the process of “agglomeration” which is used either before or after the carbonization process to produce charcoal briquettes from biomass residues. Drying and roasting are possible processes for the preparation of the biomass before its carbonization.

Biomass used by the project facilities is not stored for more than one year; No storage of the biomass is done in anaerobic conditions.

Standard applicability condition for methodology based on the use of biomass. The first sentence is taken from AM0042. The second associated condition is a standard applicability condition for biomass related methodology which excludes projects in which the anaerobic storage would lead to unaccounted emissions.

The project supplies charcoal to one or more identified areas in which charcoal is consumed as fuel for households, small and medium businesses and cottage industries. The charcoal is not supplied to large scale industries.

Own applicability condition. The present methodology is only applicable for projects which displace charcoal produced from the informal charcoal sector. Charcoal consumed by households and small scale users in lower income countries is produced by the informal charcoal sector. To ensure the displacement, it has to be ensured that the pool of users is the same as in the baseline.

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The supply of charcoal to large scale industries is excluded for the following reasons: (i) the proposed baseline in this methodology is specifically for the production of charcoal from the informal sector; It is very unlikely that large scale users would source their charcoal from the informal charcoal sector; (ii) the inclusion of large scale users such as large scale industries could lead to a dangerous increase in the demand. Project intending to produce charcoal for industrial applications should use the approved methodology AM0082.In order to displace charcoal produced from the informal charcoal sector, the methodology requires the supply of the charcoal to an area where charcoal is already consumed. This also ensures that the methodology does not create new pools of charcoal users where only fuelwood was previously used.

In addition, if the project includes the establishment of new plantations, the following conditions apply:

The dedicated plantation must be newly established as part of the project activity for the purpose of supplying biomass exclusively to the project;

Evidence (e.g., official land use maps, satellite images/aerial photographs, cadastral information, official land use records) demonstrating the location of plantations in the project boundary are established in areas that fall in one or more of the following categories:

(a) Grasslands;

(b) Land not under agricultural use;

(c) Forest plantation after its last rotation7;

(d) Degraded areas8.

The land degradation can be demonstrated using the .Tool for the identification of degraded or degrading lands for consideration in implementing CDM A/R project activities.

In case the plantation is implemented on land previously hosting a forest plantation after its last rotation, it shall be demonstrated that this land would not be replanted in the absence of the project activity. In order to demonstrate that a forest plantation is in its last rotation, the project proponent shall refer to the plantation management practices which are common practice in the region for the considered species.

Grazing will not occur within the plantation;

Flood irrigation is not expected to take place on the plantation sites.

7 See definition of “Forest plantation after its last rotation” in definitions section.8 Degraded lands are the lands whose edaphic conditions and /or biotic richness have been reduced by humanactivity to such an extent that their ability to satisfy productive uses has declined (Source: BROWN, S.;LUGO, A. E. Rehabilitation of tropical lands: a key to sustaining development. Restoration Ecology. 2(2):97-111, 1994).

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For at least ten years before the implementation of the project activity, no forest stocks were on the land where the dedicated plantations will be established; this condition does not apply to forest stocks in the form of productive forest plantations;

Standard applicability conditions for projects which include the supply of biomass from plantations. The applicability conditions have been sourced from AM0042 (e.g.: Grazing will not occur within the plantation) as well as AM0082.

For plantations registered as A/R CDM project activity, the following applies:

The dedicated plantation shall not be included in the project boundary as per paragraph 38 EB 25. The demonstration that the biomass originates from renewable source is not required in such a situation. In case only a part of the dedicated plantation is covered under a registered A/R project activity this condition is applicable only to this part of the plantations;

Upstream emissions from biomass projects registered as the A/R CDM project activities, do need not be accounted if they are accounted under the respective A/R CDM projects9;

Standard applicability conditions for projects which might combine CDM A/R activities. The sentence used is taken from the approved methodology AM0082.

In addition, the applicability conditions included in the tools referred to above apply.Standard applicability conditions for all CDM methodologies.

Finally, this methodology is only applicable if the application of the procedure to identify the baseline scenario results in that the supply of charcoal products from the informal charcoal sector is the most plausible baseline scenario.

Key applicability condition of this methodology. The methodology relies on one single standardised baseline. This standardised baseline is the production of charcoal from the informal sector. Projects applying this methodology shall lead to the displacement of charcoal produced from the informal charcoal sector with charcoal from carbon neutral biomass. As a consequence, projects in which the most plausible baseline scenario is not the production of charcoal from the informal sector shall be rejected.A standardised test is applied to determine the validity of the baseline and establish the project additionality. Projects which do not satisfy the conditions detailed in this test shall all be rejected.

4.4 Project boundaries

The project boundary uses the spatial extent of the charcoal production facility in which the project carbonization units are located.

The following rationales have been used to decide on the inclusion of emission sources:

9 As per paragraph 38 of the of the twenty-fifth meeting of the Board decision, for the cases where renewable biomass is procured from a registered CDM AR project activity, project emissions are accounted within the respective project so as to avoid double counting of project emissions.

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Table 4: Emissions sources included in or excluded from the project boundarySource Gas Included? Justification / Explanation

Bas

elin

e

Electricity consumption

CO2 No The baseline only consists in pit kilns and earth kilns which are generally built on the site of the wood harvest. Such kilns never have an associated electricity consumption. It is safe to assume that number in the baseline and derived from the consolidated GHG database for the informal charcoal sector are from earth mound kilns and earth pit kilns without associated electricity consumption

CH4 No

N2O No

Auxiliary fuels

CO2 No Assumed negligible. The objective reached with charcoal is the production of a convenient fuel which unlike commercial liquid fuel is affordable to households. The quantity of expensive auxiliary fuels is assumed to be either non existing or negligible.

CH4 No

N2O No

Carbonization activity

CO2 Yes Included both for direct CO2 emissions and CO2 from the oxidation of the emitted CO.

CH4 Yes Included – this is a major source of emissions.N2O

No

Excluded for simplification. Overall, project kilns if at all, will result in lower emissions N2O emissions due to improved processes with sometimes a full combustion of pyrolysis gases. The following average values of N2O emissions per tonne of charcoal have been found in the literature:

Smith et al. (1999): 0.0458 g N2O / kg charcoalBrocard et al. (1996): 0.11 g N2O / kg charcoalPennise et al. (2001): 0.15 g N2O/kg charcoal

In turn the average emission factor found from the literature is 0.10 g N2O / kg charcoal, or an equivalent of 0.03 tonne CO2e / tonne of charcoal.

As a comparison, around, in the present status of the consolidated GHG database for the informal charcoal sector, around 4.20 tCO2e are emitted from the informal charcoal sector if 50% of the biomass is from non renewable sources and 7.67 tCO2e are emitted if 100% of the biomass used is from non renewable sources.

Proj

ect a

ctiv

ity

Transportation related emissions

CO2 No Determined to be very small. An evaluation of the transportation related emissions can be found in Table 6.

CH4 NoN2O No

Auxiliary fuels

CO2 No Similar to the baseline, this source is assumed to be very small. As already discussed, one applicability condition of the methodology is that “No significant quantities of auxiliary energy (power, fuel) are required to prepare the biomass or the charcoal briquettes”.From the corresponding preliminary assessment, it has been established that auxiliary fuels represent around 0.2% of the total emission reductions, thus can be neglected.

CH4 No

N2O No

Carbonization activity CO2 Yes

Only zero-carbon sources of biomass are allowed in the project. For all other biomass types, leakages would need to be taken into account.

CH4 Yes Included – depending on the technology this may be an important source of emissions in the project.

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N2O No

Excluded for simplification – this source of emissions is considered to be very small (as already demonstrated in the baseline) and only lower than the baseline in the project due to the use of more advanced technologies.

Leak

ages

Power consumption

CO2 Yes To be considered in leakages. Depending on the case, this source of emissions might be important.

CH4 No This source of emissions is assumed to be very small.

N2O No This source of emissions is assumed to be very small.

Transportation related emissions:Unlike pit kilns and earth mound kilns which are built on the site where wood is harvested, the biomass under this methodology will be converted in a fixed kiln. This means that the biomass has to be brought to the charcoal production facility. Compared to the baseline, this represents an increase in project emissions.

In the following, the relative impact of transportation related emissions is evaluated. The following data is used:Table 5: Assumptions used for the calculation of the transport related emissions

Item Value Unit SourceCharcoal production: 1,000 tonnes per year (assumption)Biomass conversion yield: 33.3% % (assumption - based on the

Pronatura project)Corresponding biomass input: 3,000 tonnes per year CalculatedDensity of diesel fuel: 0.89 t/m3 IPCC 2006Emission factor of diesel fuel 0.865 tC/t IPCC 2006

Table 6: Emissions sources included in or excluded from the projectTruck

capacity (tonnes)

Fuel consumption

(l/km)

Average distance to the biomass source

50 km(100 km round-trip)



5 0.167 28 56 85 9 0.223 12 24 35

16 0.308 4 8 12 27 0.444 1 2 3

Truck capacities and corresponding fuel emission factors are taken from the report “India Road Transport Service Efficiency Study, World Bank South Asia Regional Office”

To evaluate the relative share of transport emissions in the project, we use the following values mostly derived from the consolidated GHG database for the informal charcoal sector to evaluate the relative impact of transport emissions to the overall baseline emissions:Table 7: Assumptions for the calculation of baseline emissions

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Item Value Unit SourceCharcoal production: 1,000 tonnes per year (assumption)Correction factor for carbon content

0.66 t charcoal / t standard charcoal

(conservative assumption - based on the Pronatura project)

Equivalent standard charcoal 667 t standard charcoal per year

Calculated

Emission factor for CO2 emissions (assuming 100% Xnrb)

6.95 tCO2e / t standard charcoal

Consolidated GHG database for the informal charcoal sector

Xnrb – Fraction of non renewable biomass

50% % Assumption

Emission factor for methane emissions for the informal charcoal sector

0.034 tCH4/t standard charcoal


Latest IPCC global warming potential of methane

21 tCO2e/tCH4 IPCC 2006

From the values in the table above, the following value is obtained for baseline emissions:BL=2,799 tCO2e/y.

The resulting ratio of transportation emissions compared to baseline emissions is provided in the table below:

Table 8: Estimated share of project transportation emissions to baseline emissions

Truck capacity (tonnes)

Fuel consumption

(l/km)

Average distance to the biomass source




5 0.167 1.0% 2.0% 3.0%9 0.223 0.4% 0.8% 1.3%

16 0.308 0.1% 0.3% 0.4%27 0.444 0.0% 0.1% 0.1%

It appears in turn that transportation related emissions would only be above the 1% threshold if very small trucks (5 tonnes capacity) are used over long distances or medium-small sized trucks are used over very long distances (150 km and above). This is however unlikely due to the transportation time required. Project proponents will on the contrary tend to locate their kiln where large amounts of biomass are available and source biomass around the charcoal production facility. In turn, the likelihood for transportation related emissions to exceed the threshold of 1% is small.

Not credited emission reductions:

Projects under this methodology lead to a reduction of deforestation as less trees have to be cut to produce charcoal. (i) This methodology only credits emission reductions from the carbon saved in

the wood which would have been used for charcoal production.

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(ii) The total carbon stock of a tree (which is cut for the production of charcoal) exceeds however by at least 20%10 the carbon stock of the wood which would be used in the charcoal production11.

(iii) In turn, this methodology avoids the total loss of the tree carbon stock12 (by avoiding the cutting of the tree) yet only credit a certain share of this tree carbon stock. As a consequence, real emission reductions are well in excess of the CERs generated.

4.5 Identification of the baseline scenario

This standardised additionality test is one of the important innovations proposed in the methodology, and builds on the recent history of special additionality guidance for LDCs. Similar to the EB Guidance on micro-scale additionality, this test allows for automatic additionality in socio-economic settings where it is extremely likely the charcoal consumed by end-users would be produced by the informal charcoal sector using earth mound kilns and pit kilns.

The methodology only proposes one baseline scenario (identified as CC1) and is only applicable if this baseline scenario is identified as the most plausible:

CC1: The baseline scenario is the production of charcoal from the informal charcoal sector

Globally, it has been observed that for all countries with a low income level, wood resources and high costs for modern fuels, there is only one likely baseline which is the production of charcoal by a pool of small-scale producers using similar the same technology, practices, the same input and producing the same output. For this reason, the baseline determination procedure mostly focused on the identification of economic parameters which drive the existence of an informal charcoal sector.

Indeed it has been observed that under the present situation of poverty and high prices of modern fuels the existing demand as well as added demand for charcoal is overwhelmingly supplied by small scale producers operating traditional kilns such as earth mound kilns and earth pit kilns. For example, close to 100% of the production observed in 2011 in Cambodia was from traditional kilns with only one single industrial producer of charcoal in the whole country. Similarly in Zambia, 100% of the production was estimated to be from earth mound kilns. In Mali, the production was estimated to be over 90% from traditional kilns.

Overall no “modern efficient” charcoal making technologies have been found in low income countries unless supported by a specific programme with only very few exceptions. This means that no autonomous market penetration of efficient technologies has been found. Past efforts to introduce more efficient technologies

10 Table 4.4 „Ratio of below-ground biomass to above-ground biomass” of the IPCC Vol. 4 on “Agriculture, Forestry and other Land Use” puts the ratio of biomass in the root system between 20% and 56% for tropical and subtropical climate systems where most of the eligible countries for this methodology are located.11 Typically, only stems above knee high and branches with over 2 cm in diameter are used in the production of charcoal. The associated carbon stock in small branches, leaves, the lowest part of the stem and roots represents more than 20% of the wood harvested for charcoal.12 With the exception of deep roots which are expected to partly fossilize.

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have for example failed as can be seen from abandoned kilns installed under such programmes in African countries13.

The example of Brazil and Thailand which enjoy a higher GDP per capita show the switch to modern fuels, a more modern charcoal production chain which is no longer dominated by inefficient technologies as well as a decreased pressure on forest from charcoal production.

Empirical evidence can be used to show that in low income countries, charcoal is the most affordable and convenient fuel and that the charcoal sector is overwhelmingly dominated by small scale producers. It can be demonstrated that charcoal making is a subsistence activity and that for such entities; no switch to modern technologies is likely, unless supported by specific programmes.

Evidence for the informal sector being the adequate default baseline for least developed countries, special underdeveloped areas and areas with observed poverty is detailed in the table below:

Table 9: Adequacy of the baseline for countries in which the baseline scenario CC1 is assumed to be the most plausible:

Baseline alternatives in AM0041: Rationales for the exclusion of the baselines and justification of their exclusion:

Adoption of minor efficiency upgrades / refurbishments / improvements of carbonization kilns that are readily available.

Literature:

- This option is only viable for stationary kilns. The projects under this methodology replace the earth mound kilns and earth pit kilns which are built on the harvest site and discarded after only a couple of weeks. Existing kilns can only be improved in the form of adding a chimney on earth mound kilns to turn them into Casamance kiln. The corresponding investment of $200 associated with barriers prevent however this switch to happen under business as usual.

Development and adoption of technology or process innovations or improvements that limit methane emissions from kilns.

Literature:

- Eligible countries for this methodology do not mandate efficient technologies or enforcement has been much lower than 50% as demonstrated by the dominance of earth pit kilns and earth mound kilns. In general, LDCs and areas affected by poverty have a low level of enforcement of laws.

- No improvements are possible as kilns are built ad-hoc on the site of wood collection and discarded afterwards. For this reason, improvements cannot pay off without the switch to a sedentary production site.

Aggregated barrier analysis from the literature:

- Investment barrier: lack of affordability of efficient kilns (at €500, even an Adam Retort kiln costs the

13 Quote: „Evidence that local charcoal makers had previously tried several" improved methods was found in the remains of metal kilns and metal pit covers which were scattered throughout the forest.“Source: Feinstein and Van der Plas, 1991, Improving charcoal efficiency in the traditional rural sector.

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equivalent of the average income of an average charcoal maker).

- Insufficient return on investment without CDM-related income: Without CDM, the only possible savings for charcoal producers comes from the improved ratio between the wood required (cost) and the charcoal sold (profit). In the absence of an enforced fee for wood collection, the cost of harvested wood is low. In turn, the decreased cost in wood collection is not sufficient to make the project attractive without CDM.

- Practice barrier: The practice for charcoal maker is to create kilns at the harvest site. These kilns are discarded afterwards as the charcoal makers starts harvesting a new area.

- Common practice: charcoal making is hugely dominated by the production of charcoal from wood. The production of charcoal from alternative sources of biomass from biomass residues or plantations has nearly not been observed and is only the result of specific supported efforts.

It should be noted that the procedure allows for an automatic additionality determination in specific countries provided that evidence can be produced to support the claim of baseline CC1 being the most plausible baseline scenario.

4.6 Additionality

Projects are deemed additional if it can be proven that the baseline CC1 is applicable. A switch to a more sustainable charcoal production has not been observed in the set of eligible countries without supported efforts.

4.7 Fast track procedure

The methodology offers two procedures for calculation:

- The fast track procedure

- The standard procedure

Key differences are presented in the table below

Table 10: Comparison between the fast track procedure and standard procedure for the calculation of emission reductions

Item Standard procedure Fast track procedure

Baseline emissions calculation

Baseline emissions are calculated on the basis of emissions related to the non-renewable biomass used and baseline methane emissions in

This procedure is skipped

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the pyrolysis process.

Project emissions calculation

No emissions from the use of non-renewable biomass are taken into account as only carbon neutral biomass is eligible.

A total of four options are proposed for the calculation of methane emissions.

This procedure is skipped

Calculation of leakages The procedure to rule out emissions from the use of biomass is detailed.

Leakages related to the consumption of electricity are calculated on the basis of an emission factor of 1.3 tCOe2/MWh consumed.

The procedure to rule out emissions from the use of biomass is detailed.

Emission reduction calculations

Regular procedure All emission reductions are calculated in one term which takes into account:

- The emissions from the use of non renewable biomass in the baseline

- The change in methane emissions between baseline and project in the form of the flaring efficiency and the adequate discount factor of 0.9 as accepted in the CDM.

- A discount factor of 0.95 to take into account possible emissions related to the power consumption.

4.8 Baseline emissions (standard procedure)

Baseline emissions are calculated based on a standard average value of dry yield for charcoal production in low income countries and calculated as follows:

Where:BEy = Baseline emissions in year y (t CO2e/yr)QCCP,PJ,i,y = Produced quantity of charcoal product i in year y (t CO2e/yr)CFNCV,i,y = Correction factor for the project to baseline net calorific value of charcoal product i

in year y (-)fNRB,BL,wood,y = Fraction of biomass of type i used in the absence of the project activity in year y

that can be established as non-renewable biomass using survey methodsKCO2 = Emission factor for CO2 emissions as found in the consolidated GHG database for

the informal charcoal sector (tCO2e/t standard charcoal)KCH4 = Emission factor for methane emissions as found in the consolidated GHG

database for the informal charcoal sector (tCH4/t standard charcoal)GWPCH4,y = Latest IPCC global warming potential of methane (tCO2e/tCH4)

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In order to allow for the calculations in this methodology to be based on the same level of service in the project and in the baseline, the project output is used and corrected for the baseline to project ratio of net calorific value of charcoal products.

Procedures to correct for the net calorific values can be found in annexes. The reference net calorific value used is provided in the “consolidated GHG database for the informal charcoal sector” in order to ensure consistency with other factors provided and sourced from the same data collection.

Two types of emissions are taken into account:

- CH4 emissions from the pyrolysis gases. Such emissions are derived from the factor KCH4

- Emissions from the use of non-renewable biomass. These emissions are derived from the factor KCO2. This factor KCO2 represents the average level of emissions resulting from the use of 100% non renewable biomass to produce one tonne of charcoal with the average yield observed for the informal charcoal sector. The figure is therefore multiplied by the fraction of biomass which sourced from non renewable sources in the baseline.

Both emission factors shall be taken from the “consolidated GHG database for the informal charcoal sector”. The database derives the numbers from one of the most complete collection of tests performed in countries representative of those eligible under this project. Due to the larger number of performance tests collected, figures from the database are thought to be generally robust and representative.

4.9 Project emissions (standard procedure)

As no biomass other than carbon neutral biomass is allowed in the project, no emissions from the use of partly non renewable biomass have to be accounted for. Project emissions solely consist of methane emissions from the pyrolysis gases. In total, four different procedures are proposed for the evaluation of methane emissions. Procedures M1 and M3 are based on the average baseline methane emission factor for traditional kilns and assume either no destruction of methane emissions or a partial destruction by flaring. This is conservative as the value taken for KCH4 is for traditional kilns which is the least controlled pyrolysis process.

The default value of 0.9 for flaring efficiency is commonly used in the CDM and is for example used in AMS-III.H. for CFEww(capture and flare efficiency of the methanerecovery and combustion equipment in the wastewater treatment).

4.10 Leakage

Two types of leakages are taken into account under this methodology: leakages from the use of biomass as well as power consumption related leakages.

(i) Leakages from the use of biomass: standard applicability conditions for the exclusion of biomass-related leakages are taken from AM0036. Approach L4 as found in AM0036 is not offered. Instead the use of biomass from newly established dedicated plantations is proposed.

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(ii) Leakages related to the power consumption can be calculated using the default conservative emission factor of 1.3 tCO2e/MWh as found in the latest version of the “Tool to calculate baseline, project and/or leakage emissions from electricity consumption”.

(iii) Under the “fast track” procedure use a discount factor of 5% (factor of 0.95) is applied to conservatively correct for power consumption related leakages. The discount factor is applied to emission reductions from non-renewable biomass. The calculation in the table below show the appropriateness of this factor:

Table 11: Adequacy of the 5% standardised discount factor to account for power consumptionItem Value Unit SourceCharcoal production: 1,000 tonnes per year (assumption)Correction factor for carbon content

0.66 t charcoal / t standard charcoal

(conservative assumption - based on the Pronatura project)

Equivalent standard charcoal 667 t standard charcoal per year

Calculated

Emission factor for CO2 emissions (assuming 100% Xnrb)

6.95 tCO2e / t standard charcoal


Xnrb – Fraction of non renewable biomass

50% % Assumption

Emission factor for methane emissions for the informal charcoal sector

0.034 tCH4/t standard charcoal


Latest IPCC global warming potential of methane

21 tCO2e/tCH4 IPCC 2006

Total baseline emissions 2799 tCO2e / year Calculated from items aboveNameplate capacity of motors 10 kW (based on the Pronatura project)Utilization factor 80 % AssumptionHours per year 8769 h/yEmission factor 1.3 tCO2e/MWhResulting power consumption related leakages

91.1 tCO2e/y Calculated from the lines above

Ratio of power related leakages to baseline power consumption

3.4 % Calculated on the basis of the determined 91.1 tCO2e/y and calculated baseline emissions of 2799 tCO2e/y

Overall, power related leakages are expected to be similar to the ones presented above or lower. There is no reason to believe alternative systems proposed as projects will have a higher specific power consumption per tonne of charcoal product. The design used here is for an extremely small scale system intended for projects in which the biomass input has to be shredded and the output needs to be agglomerated. In turn the calculated example represents a high estimate for the specific power consumption required. The application of a discount factor representing 5% of baseline emissions is very conservative as it overestimates leakages by 1/3rd. In addition to that most projects will in all likelihood present lower specific power consumptions with more efficient and larger charcoal production facilities. No smaller facility has been observed to consume power for the production of charcoal.

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4.11 Monitoring

This methodology relies on an extremely simple monitoring. Since the methodology prevents the use of other biomass inputs than carbon neutral biomass sources, the methodology does not require the monitoring of the type and quality of the biomass used. The conversion efficiency in this case does not need to be calculated. The incentive to adopt efficient technologies remains in order to maximize the project output (thus CER generation) compared to the biomass sourced.

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5. ANNEX 1: OVERVIEW OF FLOWS IN LOW GHG CHARCOAL PROJECTS:

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Baseline

Project

Mass of charcoal

Mass of charcoal

Carbon in charcoal (85% mass)

Carbon in charcoal (85% mass)

Mass of wood input

Mass of wood input

Water content in wood

Mass of dry biomass

Water content in wood

Mass of dry biomassCarbon in

charcoal (85% mass)

Non renewable fraction (e.g. 50%)




NR carbon

R carbon

NR carbon

R carbon

Carbon not embodied in charcoal

Carbon not embodied in charcoal

Biomass input Charcoal output By-products, wastes and emissionsReduction in carbon

stocks associated with non-harvest biomass in

deforested areas (branches, leafs, etc.)

Non emitted carbon (tar, ash, brands, condensables, etc

Non emitted carbon (tar, ash, brands, condensables, etc

Yield= (Mass of charcoal / mass of wood input)

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