Biofuel and CDM - Multiple Asian Countries

8/14/2019 Biofuel and CDM - Multiple Asian Countries

1/16

Institute for Global Environmental Strategies

Biofuel and CDM:An assessment

Jane Romero

Institute for Global Environmental Strategies

4 March 2009


2/16

Jane Romero IGES | http://www.iges.or.jp

Biofuel Use Strategies for Sustainable Development (BforSD)

2

Contents

o

Biofuels and CDMo Overview of biofuel policies in Asia

o Assessment of current situation

o Future of biofuels in CDM

o Way forward


3/16



3

Biofuels and CDM

As petrol prices continue to rise, biofuel production, domesticuse and trade reduce oil import dependency and increase energysecurity. Biofuel production creates employment, encourageseconomic diversification and promotes rural development. Itcontributes to the Kyoto Protocol reduction targets, using the

financial incentive provided by the Clean DevelopmentMechanism. Biofuels can help developed and developingcountries alike meet commitments to combat climate change andachieve the Millennium Development Goals.

~ Supachai Panitchpakdi, Secretary-General of UNCTAD

Video Message to the 11th Session of the Conference of the Parties of the UN Framework Conventionon Climate Change and the First Meeting of Parties of the Kyoto Protocol on the occasion of the launch

of UNCTADs Biofuels InitiativeMontreal, Canada, 7 December 2005


4/16



4

Biofuel policies in selected Asian countries

Country Blending rate Major

feedstocks

Strategy/ Goal/ Economic measures

India E5 Jatropha,sugarcane

Indian Biofuel National Strategy, 2008 / 20% biodiesel and bioethanol by2017 / 11.2 mil ha of jatropha planted and matured by 2012 for the targetblend of 20% / f ixed prices for purchase by marketing companies

China E10 Corn, cassava Biofuel share 15% of transportation energy by 2020; incentives, subsidiesand tax exemption for production

Malaysia 5% Palm National Biofuel Policy, 2006 / B5; Diesel: plans to subsidise prices forblended diesel

Indonesia BDF: 10%E5

Palm, jatropha National Energy Program, B20 and E15 in 2025; Diesel: subsidies (at samelevel as fossil fuel)

Thailand E5, E10; B2 Palm Biodiesel Development and Promotion Strategy / Enforce nationwide B2 in April, 2008 / B5 in 2011 / B10 in 2012;Ethanol: price incentives through tax exemptions

Philippines BDF: 1% Coconut Biofuel Strategy 2006 / BDF mixing rate 1%, 2% by 2009 / Ethanol: 5% by2009, 10% by 2011; tax exemptions and priority in financing

Japan upper limits E3B5

Sugarcane, wasteoil

Plan to replace 500 ML/year of transport petrol with liquid biofuels by 2010;subsidies for production

Source: IGES (2008), Romero (2008)


5/16



5

Indian biofuel national policy

o Blending mandateo Indicative 20% blending by 2017 for biodiesel and bioethanolo Current blend: 5% ethanol in gasoline in 20 stateso Planned to double to 10% ethanol in gasoline starting Oct 2008 but was

postponed due to surge in sugarcane costs

o Sustainableproduction & land usageo Focus on non-edible energy crops: jatropha, pongamia (keranj), sugarcane,

sweet sorghum; more R&D for second-generation feedstockso Propagation in marginal / waste / degraded / under utilized land

o Fiscal and financial incentiveso Promote biofuels by classifying biodiesel and bioethanol as declared goods

to ease commerce within and outside the countrys states

o Elimination of tax and duties on biodieselo Minimum price for oil seedso Minimum price for bioethanol based on actual production and distribution

costs


6/16



6

Theoretical potential of biofuel in Asia (2030)

biofuels can a complementary solution ifplanned and managed well

Source: MRI, 2007


7/16Jane Romero IGES | http://www.iges.or.jp


o Overestimated whatwe know

o Underestimated theuncertainties

7

energy security

climatechange

economicgains

Current situation...




8

The future aint what it used to be ~ Yogi Berra

o falling oil price

o globalrecession




9

Who gains?

o Greening of the environmento Rural economy and livelihood

o pro-poor initiative to cultivate underutilized marginal lando labor intensive (could employ village women and children)

o plantingo fruit picking

o jatropha oil could be utilized to fuel simple machines in villages ruralelectrification

o Commercialviability still in questiono marginal land ~ marginal harvesto must be produced in volumeo current technology still inefficient

o germplasmo harvesting processo logistics

o limited number of established refinerieso relies on government subsidies

The jatropha case:

Should governments

infuse more money forR&D and demonstrationprojects given the currentfinancial crisis?




10

Who gains?

o Greening of the environmento 1,200 ha planted in hillside

o Rural economy and livelihoodo to augment farmers incomeo jatropha planted not in arable land

o Feedback from farmerso wait and see attitudeo no existing market for jatrophao they will only harvest the fruits if the price will be competitiveo no established refinerieso deemed too risky

Jatropha case study in Yunan, China:




11

Good for environment?

o Biofuels are not created equalo LCA results still fuzzyo The gains in burning cleaner fuel can be offset by

unsustainable production practiceso rainforest destruction

o peat land conversiono heavy fertilizer use

o induce water scarcity

o Questions on sustainability of biofuels partly derails itsinclusion in the CDM portfolioo as of 1 January 2009, no biofuel projects among the 1300 projects

approved in the CDM portfolio




12

Overcoming barriers in CDM

o Biofuels perceived as carbon neutral have initial highexpectations to be a major focus of CDM projects

o Co-benefits from biofuel production (job creation, ruraldevelopment) reinforces the SD component of CDM

o Currently only the CO2 reduction potential is monetized in

CDMo Under the current system with limited approved

methodologies applicable to biofuels, the chance forapproval of biofuel CDM project on a significant scale ishighly unlikely.




13

Biofuels in CDM

Meth.

No.

Title / Description GHG

reduction

Host

country

Remark

69 30 TPD Biodiesel project using oil seeds from jatropha and pongamiain Andra Pradesh, India

26 ktCO2 India C

82 Baseline methodology for the production of sugar cane basedanhydrous bio-ethanol for transportation using LCA

53 ktCO2 Thailand C

108 Biodiesel production and switching fossil fuels from petro-diesel tobiodiesel in transport sector

26 ktCO2 India C

109 Sunflower Methyl-Ester Biodiesel Project in 33 ktCO2 Thailand C

129 Generalized baseline methodology for transportation biofuel productionproject with LCA

33 ktCO2 Thailand C

142 Palm Methyl Ester Biodiesel Fuel (PME-BDF) production and use fortransportation

218 ktCO2 Thailand C

180 BIOLUX Benji Biodiesel Beijing Project production of waste cooking oilbased biodiesel for use as fuel

123 ktCO2 China A

185 Khon Kaen Ethanol Project 40 ktCO2 Thailand B

223 Biodiesel Project 205 ktCO2 South Africa C224 Manufacturing of Biodiesel from Crude Palm Oil and Jatropha Oil 60 ktCO2 India C

228 AGRENCO Biodiesel project in Alta Araguala 335 ktCO2 Brazil WIP

233 Palm Methyl Ester Biodiesel Fuel (PME-BDF) production and use fortransportation in

143 ktCO2 Thailand WIP

Note: A = Approved by the Executive Board (EB); B = Project participants / EB must make some changes;C = Rejected / new Project Design Document (PDD) must be submitted; WIP = work in progress

Source: Woo (2008) using data from UNEP Risoe.




14

Biofuels in CDM

Methodology Description

AM 0047 Production of biodiesel based on waste oils and/or waste fatsfrom biogenic origin for use as fuel

AMS-II.F Energy efficiency and fuel switching measures for agriculturalfacilities and activities

AMS-III.B Switching fossil fuels

AMS-III.C Emission reductions by low-greenhouse house emittingvehicles

AMS-III.T Plant oil production and use for transport applications

Note: AMS refers to Small Scale CDM MethodologiesSource: http://cdm.unfccc.int/methodologies/PAmethodologies/approved.html

Current CDM approved methodologies applicable to biofuels

S S S
http://cdm.unfccc.int/methodologies/PAmethodologies/approved.htmlhttp://cdm.unfccc.int/methodologies/PAmethodologies/approved.html




15

Can CDM be made to work for biofuels?

o more CDM approved methodologies neededo second generation biofuels maybe more feasibleo explore use of biofuel feedstock wastes for use in biomass

energy generation

Methodology DescriptionAM 36 Fuel switch from fossil fuels to biomass residues in boilers for heat

generation Version 2.1

ACM2 Grid-connected electricity generation for renewable sources (nobiomass)

ACM6 Grid-connected electricity from biomass residues (includes AM4 &AM15)

AMS-I.C. Thermal energy for the user with or without energyAMS-I.D. Grid-connected renewable energy connection

AMS-III.E Avoidance of methane production from decay of biomass throughcontrolled combustion, gasification or mechanical/thermal treatment

CDM approved methodologies which could be applied to biomass

energy utilizing biofuel feedstock solid waste

Source: http://cdm.unfccc.int/methodologies/PAmethodologies/approved.html

Bi f l U S i f S i bl D l (Bf SD)
http://cdm.unfccc.int/methodologies/PAmethodologies/approved.htmlhttp://cdm.unfccc.int/methodologies/PAmethodologies/approved.html


16/16Jane Romero IGES | http://www iges or jp


16

Way forward

o

current biofuel situation maybe bleak need to revisitambitious targets

o change in policy direction biofuel for transport and ruralelectrification

o we need a way out of our shock and trance tendency

when oil prices are lowo work on sustainability issues - learning from mistakes not

just best practiceso more biofuel R&D will be needed, especially for second

generation biofuels

o more R&D for biofuel feedstock wastes for use in biomassenergy generation

o need to develop additional methodologies for biofuels inCDM or other future climate regime

Thank you for your attention.

Biofuel and CDM - Multiple Asian Countries

Documents

Transcript of Biofuel and CDM - Multiple Asian Countries