biofuel and cdm:an assessment...anhydrous bio-ethanol for transportation using lca 53 ktco2 thailand...

Institute for Global Environmental Strategies

Biofuel and CDM:An assessment

Jane Romero

Institute for Global Environmental Strategies

4 March 2009

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

Biofuel Use Strategies for Sustainable Development (BforSD)

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Contents

o Biofuels and CDM

o Overview of biofuel policies in Asia

o Assessment of current situation

o Future of biofuels in CDM

o Way forward

http://www.clker.com/clipart-biofuel.html

http://www.clker.com/clipart-biofuel.html



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Biofuels and CDM

“As petrol prices continue to rise, biofuel production, domestic

use and trade reduce oil import dependency and increase energy

security. Biofuel production creates employment, encourages

economic diversification and promotes rural development. It

contributes to the Kyoto Protocol reduction targets, using the

financial incentive provided by the Clean Development

Mechanism. Biofuels can help developed and developing

countries alike meet commitments to combat climate change and

achieve 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 Convention

on Climate Change and the First Meeting of Parties of the Kyoto Protocol on the occasion of the launch

of UNCTAD´s Biofuels Initiative

Montreal, Canada, 7 December 2005



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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 by

2017 / 11.2 mil ha of jatropha planted and matured by 2012 for the target

blend of 20% / fixed prices for purchase by marketing companies

China E10 Corn, cassava Biofuel share 15% of transportation energy by 2020; incentives, subsidies

and tax exemption for production

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

blended diesel

Indonesia BDF: 10%

E5

Palm, jatropha National Energy Program, B20 and E15 in 2025; Diesel: subsidies (at same

level 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% by

2009, 10% by 2011; tax exemptions and priority in financing

Japan upper limits E3

B5

Sugarcane, waste

oil

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

subsidies for production

Source: IGES (2008), Romero (2008)



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Indian biofuel national policy

o Blending mandateo Indicative 20% blending by 2017 for biodiesel and bioethanol

o Current blend: 5% ethanol in gasoline in 20 states

o Planned to double to 10% ethanol in gasoline starting Oct 2008 but waspostponed due to surge in sugarcane costs

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

sweet sorghum; more R&D for second-generation feedstocks

o 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 country‟s states

o Elimination of tax and duties on biodiesel

o Minimum price for oil seeds

o Minimum price for bioethanol based on actual production and distributioncosts



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Theoretical potential of biofuel in Asia (2030)

• biofuels can a complementary solution – if

planned and managed well

Source: MRI, 2007



o Overestimated what

we know

o Underestimated the

uncertainties

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energy security

climate

change

economic

gains

Current situation...



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The future ain’t what it used to be ~ Yogi Berra

o falling oil price

o global recession



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Who gains?

o Greening of the environment

o Rural economy and livelihoodo pro-poor initiative to cultivate underutilized marginal land

o labor intensive (could employ village women and children)

o planting

o fruit picking

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

o Commercial viability still in questiono marginal land ~ marginal harvest

o must be produced in volume

o current technology still inefficient

o germplasm

o harvesting process

o logistics

o limited number of established refineries

o relies on government subsidies

The jatropha case:

Should governments

infuse more money for

R&D and demonstration

projects given the current

financial crisis?



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Who gains?

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

o Rural economy and livelihoodo to augment farmer‟s income

o jatropha planted not in arable land

o Feedback from farmerso “wait and see” attitude

o no existing market for jatropha

o they will only harvest the fruits if the price will be competitive

o no established refineries

o deemed too risky

Jatropha case study in Yunan, China:



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Good for environment?

o Biofuels are not created equal

o LCA results still fuzzy

o The gains in burning cleaner fuel can be offset byunsustainable production practiceso rainforest destruction

o peat land conversion

o 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



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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 inCDM

o Under the current system with limited approvedmethodologies applicable to biofuels, the chance forapproval of biofuel CDM project on a significant scale ishighly unlikely.



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Biofuels in CDM

Meth.

No.

Title / Description GHG

reduction

Host

country

Remark

69 30 TPD Biodiesel project using oil seeds from jatropha and pongamia

in Andra Pradesh, India

26 ktCO2 India C

82 Baseline methodology for the production of sugar cane based

anhydrous bio-ethanol for transportation using LCA

53 ktCO2 Thailand C

108 Biodiesel production and switching fossil fuels from petro-diesel to

biodiesel 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 production

project with LCA

33 ktCO2 Thailand C

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

transportation

218 ktCO2 Thailand C

180 BIOLUX Benji Biodiesel Beijing Project production of waste cooking oil

based 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 C

224 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 for

transportation 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.



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Biofuels in CDM

Methodology Description

AM 0047 Production of biodiesel based on waste oils and/or waste fats

from biogenic origin for use as fuel

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

facilities and activities

AMS-III.B Switching fossil fuels

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

vehicles

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

Note: AMS refers to Small Scale CDM Methodologies

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

Current CDM approved methodologies applicable to biofuels

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



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Can CDM be made to work for biofuels?

o more CDM approved methodologies needed

o second generation biofuels maybe more feasible

o explore use of biofuel feedstock wastes for use in biomassenergy generation

Methodology Description

AM 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 (no

biomass)

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

AM15)

AMS-I.C. Thermal energy for the user with or without energy

AMS-I.D. Grid-connected renewable energy connection

AMS-III.E Avoidance of methane production from decay of biomass through

controlled 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

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



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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” tendencywhen oil prices are low

o work on sustainability issues - learning from „mistakes‟ notjust best practices

o more biofuel R&D will be needed, especially for secondgeneration 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:an assessment...anhydrous bio-ethanol for transportation using lca 53 ktco2 thailand...

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