Following a period of extensive market research, and consultations with reputable advanced technology vendors, project funders and regional regulators, SLP Environmental Consultants (Thailand) are pleased to offer to the SE Asian market CDM consultancy services. Clean Development Mechanism (CDM) is a market mechanism under the Kyoto Protocol, which aims to reduce greenhouse gas emissions while promoting sustainable development in developing countries by encouraging environmentally friendly investment and technology/knowledge transfer from the industrialized countries. As an incentive the industrialized country participant (i.e. government or company) receives credits in the form of certified emission reductions (CERs) which they can use against their Kyoto emission targets, and the developing country participant (project owner) receives revenues from the sale of the CERs.
For a project to be eligible under the CDM it has to satisfy two critical criteria, namely ‘additionality’ and ‘sustainable development’. For a project to satisfy the additionality criteria it must be demonstrated that the reductions in emissions are additional to those that would occur in the absence of the project activity (i.e. the business as usual scenario). It is up to the Designated National Authority (DNA) in the host country to set the specific sustainable development criteria against which the project proposal will be assessed, although these will likely include social, economic and environmental improvement requirements.
Under the Kyoto protocol, small-scale CDM project activities include renewable energy projects, energy efficiency improvement and methane recovery or avoidance projects. The food, agriculture, starch and palm oil processing sectors in SE Asia all have significant potential to benefit under the CDM, as many of these processes generate solid and liquid waste streams that can be used as biomass, or to generate biogas, both of which can substitute fossil fuels. Furthermore, biogas harnessing projects also reduce the volume of methane (a greenhouse gas some 21 times more potent than CO2) that would have otherwise have been emitted to the atmosphere, and these reductions also qualify for CERs.
The CDM project cycle is a fairly complex process which we have attempted to simplify into 10 stages in the flow diagram that can be found in our CDM Capability Sheet. SLP primarily offer CDM consultancy services and client support from Stages 1 through to 4 and independent auditing and monitoring services for active projects. We start by working with the local project proponent/s to assess whether it is likely to qualify for CDM by undertaking a Pre-screening and Feasibility Assessment. If the result is positive we would produce a synopsis of the proposal in the form of a Project Idea Note (PIN) for submission to the host country approvals body, referred to as the Designated National Authority (DNA), and potential carbon credit buyers for their feedback. Once comments have been received we would produce the detailed Project Design Document (PDD) which is submitted to the DNA to obtain the necessary Letter of Approval (LoA), after which the PDD and LoA are submitted to a CDM Executive Board (EB) accredited Validator for the their independent review and validation. Once the project has the necessary approvals it is submitted to the CDM EB for Registration, at which point the Project Implementation works can commence. The first batch of Certified Emission Reductions (CER’s) will be issued approximately 1 year after the GHG emission reduction operations commenced, and at the end of every subsequent year, over the project crediting period, which is typically ten years for a small scale CDM project.
Project owners can sell the generated CER’s at marketplaces such as the European Climate Exchange to generate an additional revenue stream for their businesses. The carbon market's total value for 2008 was estimated at €92bn (US$125bn), more than double the €40bn it was worth in 2007, and many analysts predict the price of carbon credits will rise significantly once the global economy stabilizes and the European Union Emissions Trading Scheme (EU ETS) links with similar cap-and-trade schemes proposed for both North America and Asia.
As a simplified example; the production of 600 tonnes of palm oil a day has the potential to generate approximately 20m3 of biogas/day, thereby reducing GHG emissions by some 46,000 tonnes a year and generating a yearly revenue stream of c.$670,000 at today’s prices. In this example, and if carbon credit prices remained unchanged, the project owner/s would generate a revenue stream of $6.7m over a ten year crediting period.
Put simply, implementing CDM is good for business and good for the environment. Depending on the scheme, the project owner can potentially benefit via technology transfer, reduced energy bills and the sale of the CER’s, whilst actively doing their bit in the fight against global warming and climate change. Treating wastewater effluents to higher standards and capturing fugitive gaseous emissions also has obvious local environmental benefits, as the risks of polluting groundwater and local rivers are reduced and nuisance odours are controlled.
To date approximately 105 CDM projects have been registered by the CDM EB in the ASEAN region, with numerous more in the pipeline. Between them these projects have reduced annual average GHG emissions by some 10 million tonnes or the equivalent of the total yearly CO2 emissions from fossil fuel combustion in the
Kingdom of Brunei.
Whether you are a potential project host, investor or technology vendor interested in learning more about our CDM consultancy capabilities please do not hesitate us at: info@slpenvironmental.com