new mechanism feasibility study for energy generation by

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New Mechanism Feasibility Study 2011 – Final Report

New Mechanism Feasibility Study for Energy Generation by Waste Management Activities, through Anaerobic Digestion as

Model Technology, in Malaysia

By ICHIKAWA KANYO ENGINEERING CO.,LTD FS Partner(s) Turbine Technique（counterpart of the study）

UEM（Owner of the expressway） UEM Environment（Environment company） Kualiti Alam (Environment company, support of the study） Bioenergy Corporation ( Anaerobic digestion) CUES （Local coordinator）

Location of Project Activity Malaysia (northern states) Category of Project Activity Waste Management Description of Project/Activity Collect food wastes from waste dischargers located in and along the

highway of Malaysia peninsula, and produce electricity through “Anaerobic Digestion (AD)” facility, and sell to the national grid as green electricity.

Reference Scenario and Project/Activity Boundary

Current system (collection, transportation + final disposal) will be continued

Monitoring Methods and Plan Basically follow AMS-III.AO” Methane recovery through controlled anaerobic digestion’’ and AMS-I.D“Grid connected renewable electricity generation”, but simplify the procedure.

GHG Emissions and Reductions 1) GHG reduction from landfill site:5,133tCO2e/y 2) GHG reduction from grid:499tCO2e/y ＝ 5,632 tCO2e/year （average on first decade）

MRV System for GHG Reductions

There are multiple combinations of waste source and, waste treatment sites where target waste has been currently landfilled, method to measure baseline simply is needed.

Analysis of Environmental, Socioeconomic and other Impacts (including Securement of Environmental Integrity)

The project provides positive impact on: Reduction of waste flowing into landfill, Promoting recycling activities through promoting separation activities, Reduction of fossil fuel consumption by utilizing unused energy, Prevention of leachate from landfill site

Financial Planning Malaysian government is expecting private investment for the public services. Although our Malaysian counterpart has possibility to invest, tipping fee will be half if the facility will be owned by government.

Introduction of Japanese Technology

Possible. It is also necessary to establish a system of providing high value added technology and its service in order to introduce Japanese technology in the field of waste management

“Co-benefits” (i.e. Improvement of Local Environmental Problems)

(1) Saving landfill life: volume of food waste transported to landfill will be 1/5 without the project.

(2) Leachate quality improvement effect: Over 99% of COD will be treated through AD and waste water treatment procedure.

Contribution to Sustainable Development in Host Country

The project contributes to the effective use of unused food waste, which can also substitute the consumption of fossil fuel of the national electricity grid, meets to Malaysian renewable energy policy, produce employment and raise the awareness on environmental protection to the citizen through environmental education program.

New Mechanism FS 2011 – Report

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1．Study implementation structure: Host-country： Turbine Technique（counterpart of the study）

UEM（Owner of the expressway） UEM Environment（Environment company） Kualiti Alam (Environment company, support of the study）

Japan ： Bioenergy Corporation (In charge of technical matter of anaerobic digestion) Japan Environmental Consultants (local coordinator） 2．Summary of the business and activity：（1）Content of the business and activity 1) Business structure The business is to collect food wastes from waste dischargers located in and along the “PLUS North-South Expressway”, which extends 800 km from north to south of Malaysia peninsula, and produce electricity through “Anaerobic Digestion (AD)” facility, and sell to the national grid as green electricity.

＜Figure：Project activity＞

The entire business will; - Propose and develop food separation at source each discharging point (= customers), - Collect food wastes from expressway management companies and customers along the expressway by receiving certain tipping fee, - Transport the food wastes to the several AD facilities which will be located along (or inside the territory of) the expressway, - Generate electricity by gas engine co-generation, using biogas from the food waste . 2) Project size We divided the entire expressway into 3 blocks of North, Middle, and South. The model

AD Facility

Market Leftover From

Separation and collection of kitchen wastes and other food wastes

Separation and collection of food wastes from RSA

Gas engine Selling to the grid

Electricity ／


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project is targeted in the 4 states of North and minimum 40t/day AD facility is planned be set in Penang or Perak state which are considered to be a center. The target wastes include the food wastes from the expressway, canteens, restaurants and market nearby the expressway.

3) Calculation of collectable amount of food wastes The range of collectable wastes within the project 1 area is determined as follows and confirmed that collection of 40t of food wastes is possible. i) Restaurant and service area inside the expressway, within 200 km distance (both ways) of

AD facility. ii) Targeted waste generators along expressway is within 10km radius from the exit of

expressway which is within 100km of AD facility iii) Targeted waste generators around the AD facility is within 20km radius from AD facility

As a result, the figure below shall be the range of the business model. It includes 2 state capitols (Alor Setar and Georgetown), 8 cities and 33 towns, and industrial area nearby Butterworth in which many Japanese companies are located. The below figure was estimated based on the above ranging of collecting area. 70t/day food waste is possible to collect when we can cover 22% of the collection. Therefore it is considered feasible to collect 40t/day.

（Thailand border）

(Singapore)

E1

Kedah

Penang

Perak

Selangor

N.Sembilan

Melaka

Johor

E6

E2

Project 1

Project 3

Project Site JURU LB (N-S) Target

-RSA: 6

-LB: 20

-Penang

Project Site Not Decided Target

-RSA: 8

-OBR: 1

-LB: 18

Project Site Dengkil RSA (S-N) Target

-RSA: 2

-KLIA

Project 2


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＜Figure: Collectable amount of food wastes> Waste

Generator Target

number Expected food

waste discharging ratio quantity

per unit

Quantity of waste per day

Collection rate

RSA/LB Kitchens and shops

88 32 ㎏／shop 2.8t／day 100％（3t）

Hospitals 55 0.5 ㎏／person 100 ㎏／hospital

8t／day（leftovers） 5t／day（kitchen）

80％（10t）

Higher education

123 (70,000

students in 8 schools）

0.2 ㎏／person 14t／day （kitchen、leftovers）

50％（7t）

Primary and secondary education

487 （300,000 students）

0.1 ㎏／person 30t／day 10％（3t）

Hotels 290 40 ㎏／hotel 11t／day 50％（5.5t） Market wastes

180 1t／market 180ｔ／day 20％（36ｔ）

Shopping mall

23 0.5t／mall 11t／day 50％（5.5t）

Total 317t／day 70t／day 4) Quality of foods wastes in the expressway The result of the food waste composition analysis from the expressways in Malaysia and the equivalent data of Bioenergy Corporation in Japan were compared. Wastes from fruit stand contained a lot of moisture and less organic content. This was highly predictable because most wastes are fruit leftovers. In overall, there is not so much difference in the quality between the 2 data, Kitchen waste of Malaysia and Data of Japan. The similarity between kitchen waste in Japan and Malaysia can say that kitchen waste is basically similar everywhere.

＜figure: summary of waste analyzing＞

Average 75% of the waste collected from RSA/LB kitchens, food court and fruit stand was found to be suitable for digestion in the AD facility.

Data of JPNMin(%) Max(%) Min(%) Max(%) (for reference)

Water content 69.45 73.47 86.30 91.30 75.00Ash 2.62 9.07 2.07 4.40 1.80Fat 2.81 4.33 0.02 0.23 3.50Protein 3.23 3.84 0.14 0.63 6.10Carbohydrate 10.38 19.88 4.14 8.71 13.60

Kitchen Waste Fruit Stand Waste


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5) CO2 reduction amount The targeted wastes are basically dumped in the landfill site without any separation of each town. By separating target food wastes and introducing AD system between the waste generators and the landfill site, the total amount of 5,632t-CO2/year (40t/day) can be expected to be avoided being released to the atmosphere. i) Avoidance of expected GHG emission from landfill site(5,133t-CO2/year, 10 year a

verage) ii) Reduction of CO2 by supplying 827MWh/year of renewable electricity to the grid.

(499-CO2/year) （2）Situation at the host country 1) Host country CDM designated agency IKE visited the Ministry of Natural Resources and Environment (MNRE) 2 times during the survey. At this moment, MNRE is not considering bilateral dealing, but continuous promotion of CDM, and some revisions to CDM selection criteria are considered. Government of Malaysia is concerned that many of CDM projects which is now planed of in operation does not contribute to the GDP growth of Malaysia. Given the situation, MNRE is now attempting to set up the new criteria (such as “t-CO2/GDP1000RM/year”) to evaluate the contribution of the proposed project to the GDP growth of the country. The Malaysian government supports the status quo of Kyoto protocol but considers that rules should be revised, such as up-dating the “state-of-arts technology”. 2) Situation of the host country in the target sector i) Waste management sector Malaysian government shifted towards privatization of waste collection and treatment from the municipal governments. However, region governed by the opposition party is still operated by local governments. Meantime, the Ministry of Housing and Local Government (MHLG) have been engaged in recycling plan since 2001. MHLG intends to recycle 20% of wastes generated from households until 2020 but not so much progress can be seen. ii) Resources and energy sector Malaysian government set the goal to increase renewable energy ratio to be up to 5.5 % by 2015 from the 2009 line which was less than 1 % of the total power generation. The government plans to establish renewable energy fund operated by Renewable Energy Development Agency which is under the Ministry of Energy, Green technology and Water resources. The government introduced Feed In Tariff (FIT) system as an incentive through Malaysian 10th plan. According to this, electricity price has become 1% higher and it is used for renewable energy projects. （3）Suitability as new mechanism： One of the issues of CDM mechanism is that Project Design Document (PDD) has been an obstacle because it is not flexible to be used for business. Basically the contents of PDD can’t be changed easily, but even when the plan is designed carefully, there is still many chances and uncertainty which was not foreseen at the beginning of “Project Designing”. Therefore, the project must handle this issue and solve the way which the business will not lose chance, and it has a possibility to be the issue beyond the CDM mechanism. （4） Consideration of business promotion force:


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Additional incentive is required for private investment especially for waste management business which does not have high-added-value. Meantime, the government plans to set criteria, not to give approval for CDM projects which does not contribute to GDP growth, which means government does not approve non-value-added activities such as waste transportation or landfill operation CDM projects. It will be difficult for waste management sector to provide CDM projects in Malaysia. On the other hand, high-value-added waste management business model such as AD facility would not be feasible with the present tipping fee and selling price of electricity. To make our project feasible, new supporting system needs to be established such as; additional fee is added to the present natural gas price as “project operation support fund” and redistribute it to GHG reduction projects which are approved by the both countries, operating in the host country to run its business and also to contribute in GHG reduction and GDP growth. This system sustained by bilateral agreement would also contribute to the exporting various Japanese technology to overseas. 3. Survey Contents (1) Survey objectives By following below steps, we conduct studies and find required conditions to consider necessary elements to be installed in BOCM. Step①：Feasibility study of the business on the commercial basis ●Basic data collection(Number and types of shops/ number of customers at each

RSA, data of highland resort, population of the main cities and whole Malaysia). Conduct waste composition analysis and confirm the adaptability for anaerobic digestion technology. Confirm current waste generating activities and amount. ●Information collection on current waste collection and transportation system and treatment method/treatment site as well as other recycling activities. ●Research on candidate project site (obtain information on size of candidate site, infrastructure, city gas pipeline/grid driving power around the site, and confirmation of surrounding areas) ●Research on law/regulations/standards (general environmental standards, construction matters (land use/ facility setting /EIA etc.), quality standards for electricity/city gas supply (authorization entity, authorization procedure etc.) ●Interviewing to local engineering companies/ industrial plant manufacturer ● Confirmation of project income and expenditure/ unit price ● Developing business plan/finance plan, and establishing implementation structure ● Feasibility studies, calculation of required tipping fee for the project

Step②：Feasibility study as CDM project ● Study on applicable methodology

● Study on base line scenario ● Study on monitoring method/plan and integrity with the project ● Study on calculating GHG emission ● Collection of comments from stakeholders

Step③：Confirm barriers of CDM and proposal of new mechanism ● Study on validity and efficiency of applicable approved methodology/monitoring

method/calculation tools to the actual business operation. ● Setting reference scenario and providing its evidence ● Study on MRV method of GHG reduction ●Study on business plan and validation process between two countries


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Step④： Proposal of bilateral additional project support scheme as model project ●Data collection on natural gas (cost structure/trading procedure/government

involvement etc) ●Interviewing to related entities about proposal on additional economic incentive

(2) Survey contents Preliminary survey End of March 2011： Started discussion with Turbine Corp to develop ‘food waste

recycling by anaerobic digestion business’ overseas through human network in Malaysia. Middle of April 2011: IKE visited Malaysia. As a result of site visit, developed business idea targeting express way. Beginning June 2011: The executives of Turbine Corp. visited in Japan. Site tour to the Bionergy corp, affiliated company of IKE.

Study in Japan ・ Basic survey/data collection of Malaysia 、 Basic information collection on

expressway ・Considering detail business idea, preparation of documents ・Data collection and listing of all income/expenditure items ・Consideration of overview of CDM project (reference scenario, boundary, validity of applying approved CDM methodology)

First field survey （8th ,August, 2011～13th , August, 2011）・Introduction of project to related entities.(PLUS corp, UEM, MHLG, MNRE, KL

municipal council) ・Confirmation of current situation (Waste generation from express way and waste generation from KL city ・Discussion with Malaya university, candidate supporting entity of the survey ・Meeting with local engineering company

Second Field Survey（21st , August, 2011～24th,August, 2011）・Discussion with UEM (Deputy President, Strategy department of the UEM group,

UEM environment) Third field survey （13th ,October,2011 ～20th , October, 2011）・Developing business idea and selection of model project site.

・Selection of waste Composition/ Component analysis agency Fourth field survey（16th , November,2011～25th,November,2011）・Consideration of contents and policy of waste composition analysis.

・Site visit / interview to local engineering company ・Site visit to the north region to see current waste management situation

Fifth filed survey （11th , December,2011～24th,December,2011）・Conduct waste composition analysis

・Request for cost estimation and making localized specification of plant to local engineering companies.

Sixth field survey（20th , February,2012 ~25th, February, 2011）・Site visit to additional target site, additional disposal sites visit, additional survey at

Palm oil mill. ・Reporting the survey result and exchanging opinions with MHLG, MNRE


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・Discussion of direction of next research with UEM and Turbine Corp. 4. Survey result of FS for implementing New mechanism project activities （1） GHG reduction effect by implementing the project/activities 1) CH4 emission reduction from landfill CH4 has been generated and emitted from the landfill sites by treating organic waste such as food waste under anaerobic condition. The proposed project prevents CH4 emission to the air physically by anaerobic digestion of solubilized organic waste in the closed methane fermentation tank. By providing suitable condition to promote anaerobic digestion mechanically, rapid and higher digestion rate will be achieved compared to the exiting landfill. It is possible to measure amount of the bio gas comparatively higher accuracy by measurement equipment and to analyze composition of bio gas by full-time measurement and occasional measurement. From the technical viewpoints, AMS-III.AO” Methane recovery through controlled anaerobic digestion’’, of the approved methodology as small scale CDM, can be applied to this project. Meanwhile in this project, because it is expected that target waste generator will be large number and also widely spread, waste collection area will be wide, and the waste disposal sites that those waste are originally brought to will belong to the waste generation site, which is smaller number comparing to the waste generator number, but still very hard to manage. In such cases, it could be needed to write PDD for each waste discharger and the linking disposal site to follow the methodology. Also as this project will be the private business, it is needed to cope with the increase and decrease of the number of the customers all the time, if the project expects the CER income. In our case, there will be one facility that treats the waste, and many waste source and more than one waste disposal site that target waste are originally brought to, so the definition about the characteristic of the waste shall be various. In this aspect, it is difficult to handle the project within the CDM mechanism such as de-bundling of individual activities and/or programmatic CDM. Under existing CDM project, waste disposal site and target waste have been decided at the beginning of the plan. However, as mentioned above, to apply CDM project to the private business activities, the implementation process will be more complicated and cost will be higher, and the business will not be feasible to introduce CDM mechanism. To correspond to those problems, the project should be considered as one line of a GHG emission reduction project, and it is more realistic to set the groups of waste source, such as kitchen waste or waste from market, and consider as several waste source group depending on its tendency of the characteristics of the waste sources. 2) GHG reduction amount by utilizing methane gas delivered from food waste and

reduction of fossil fuel consumption

This project replaces fossil fuel that would have been consumed within the national grid, which was generated instead of electricity generated by anaerobic digestion of organic waste. In this case AMS-I.D“Grid connected renewable electricity generation” can be applied. （2）Setting the reference scenario and project boundaries 1) Reference Scenario Reference scenario of this project would be set by the following approach including guess of the present situation.


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The energy generation from waste is incidental activities to the proper waste treatment activity, and different from the other renewal energy project such as solar power generation is, that the tendency of income from the energy supply is lower and, on the other hand entire initial cost is bigger. Thus to make this project or similar project feasible, significant increase of the waste treatment fee will be needed because waste treatment itself is the major reason for the facility to exist. The feed-in-tariff which Malaysian government introduced is giving good unit price for the renewable power generators, but it is not enough for ours. Accordingly, it can be said that energy generation business from AD fermentation or heat recovery from the incineration would not be diffused unless the tipping fee will be increased to necessary level, based on the policy to provide better public service with additional value and sustainable society. In the case of Kuala Lumpur, capital of Malaysia, 60RM (approximately 1800 yen) per 1ton of waste is paid to the private waste management company for each of transportation (from city center to transportation point, transportation to point to landfill site in the north of the city) and treatment (controlled landfill). The AD project is considered being placed as intermediate treatment in the whole waste management process, which means additional treatment fee is needed, and not spared from the treatment fee which is originally paid for land fill. Malaysian government expects private investments for the further economic development of the country including public service field, and already started to entrust waste collection, transportation and treatment to the private sectors. However, considering present business environment of the waste management sector, the reference scenario will be 【”At this moment”, current system (collection, transportation + final disposal) will be continued, and its economical/financial efficiency will be only pursued】. Meanwhile, as a factor to change the above scenario and to start promoting the waste treatment by methane fermentation, development of “Strategy for food waste recycling” which had been started by MHLG by the support by Ministry of Environment Japan can be the reference scenario, but the strategy is not finalized yet. ＜references＞ 1) Malaysian government has issued an economic policy to entrust 90 percent of investment project to private sector（Economic Transformation Programme (2010)）＝unless business environment becomes feasible enough for private sector to have intention to invest to the business, the waste treatment activities would be extension of present activities and it is expected that additional investment to the project such as intermediate treatment project including methane fermentation would not be done. 2）Malaysian government introduced Feed in tariff as incentive to investment for energy generation by renewable energy in the 10th National plan（2011）＝This policy would promote the intention of private investment mentioned above 3）Generally, percentage of energy selling income in the methane fermentation business and heat recovery from the incinerator is small ＝In Bioenergy Corp, affiliated company of IKE, income from waste treatment fee to income from energy selling is 9:1 2)Necessity to set boundary Project boundary of this project will be series of activities starting from waste collection from waste source to landfill of solid residue, release of treated water to river, and selling extra electricity to grid driving power. Meanwhile, setting the geographical boundary is needed to be discussed, as both waste generating sites and waste disposal sites widely spread. Setting clear boundary can be obstacles for private business activity for its ‘creative business development’ after setting up


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the area-wise boundary and its implementation. Thus, geographical boundary of this type of project should be whole land of the host country (in this case, Malaysia) where the government can control the GHG emission and the BOCM has its power. (3)Monitoring plan Through whole procedure of this project, there is one increasing activity and two reducing activity of CO2 emission. The monitoring plan for each increase/reduce will be as follows. 1) Increase of CO2 emission by separate collection of food waste from other waste Monitoring target

Monitoring method

Monitoring frequency Monitoring system

Vehicle identification （load capacity）

Vehicle verification, manual book

Upon renewal vehicle Management department

Driving distance Distance meter and recording sheet

Everyday Management department, driver

Used fuel, consumption amount

Bill, Receipt inquiry

Once a month Management department, account department

2) Reduction of CH4 by avoiding landfill Monitoring target Monitoring

method Monitoring frequency Monitoring system

Amount of wastes Truck-scale, in-vehicle scale

Everyday Count once a month

Management department

CH4 containment Gas analysis Once a year Technical department, outside source

Biogas temperature Thermometer Consistent record on computer

Technical department

Biogas pressure Pressure gauge Consistent record on computer


Flaring time Driving signal Consistent record on computer


Flaring efficiency Catalog Consistent record on computer


Power consumption of facility

Wattmeter Consistent record on computer

Technical department, management department

Amount of dried sludge

Truck-scale Everyday Count once a month


In addition to above items, it is needed to ‘’confirm waste composition’ and ‘confirm the waste treatment method of targeted waste, if the project does not exist’’

In this project, there are multiple combinations of waste generation sites and waste treatment sites where target waste has been landfilled, and the target waste can be increased and reduced


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in the project period. Therefore, this is the barriers of setting project by PDD in CDM project and it is needed to establish effective (low cost and low burden for the workers) monitoring plan corresponding to this barrier. Detail of the monitoring plan is referred at 4.(5) 3)Reduction of CO2 by sending energy generated from biogas to the power driving grid and reducing consumption of fossil fuel Monitoring target Monitoring

method Monitoring frequency Monitoring system

CO2 emission coefficient of the grid

Data of the Malaysian government

Once a year Technical department

Amount of the electricity sold

Wattmeter Consistent record on computer


(4)Greenhouse gas emission amount and reduction amount 1) Reduction of CH4 emission from landfill sites Reference scenario of this project has set as 【”At this moment”, current system (collection, transportation + final disposal) will be continued and its streamlining will be pursued】. Thus CH4 emission amount is calculated on the condition that the waste is directly treated at the landfill sites. Also it is conditioned as follows; Capacity of the plant 40t/day There is only one type of target waste (Kitchen waste) 75% of separated food waste is organic waste which can be degraded by the methane

fermentation, according to the result of waste composition analysis

Baseline emission will not be the amount measured by the equipment of the methane fermentation plant, but virtual GHG emission amount calculated by “Tool to determine methane emissions avoided from disposal of waste at a solid waste disposal site” （“Baseline Emission” of the below chart） FOD model. Baseline emission is expected to be about 6,626t-CO2/year on average among the first decade. The amount of the GHG reduced by the project is the amount of the final emission of baseline emission deducted the project emission (GHG emission amount by electricity consumption) and leakage. GHG reduction by project will be estimated about 5,133t-CO2/year on average of first decade.

＜Chart：Baseline emission from landfill site and project emission＞


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Year 1 2 3 4 5 6 7 8 9 10

BECH4,SWDS,Y 2,729 4,559 5,785 6,607 7,158 7,527 7,775 7,941 8,052 8,127

0 0 0 0 0 0 0 0 0 0

Baseline Emission 2,729 4,559 5,785 6,607 7,158 7,527 7,775 7,941 8,052 8,127

PEy,transp 116 116 116 116 116 116 116 116 116 116

PEy,power 1,377 1,377 1,377 1,377 1,377 1,377 1,377 1,377 1,377 1,377

0 0 0 0 0 0 0 0 0 0

Project Emission 1,493 1,493 1,493 1,493 1,493 1,493 1,493 1,493 1,493 1,493

Leakage 0 0 0 0 0 0 0 0 0 0

GHG reduction by Project 1,236 3,066 4,292 5,114 5,665 6,034 6,282 6,448 6,559 6,634 Reduction amount of GHG is calculated by the following formula, either the smaller amount of baseline emission amount which is deduced project emission and leakage or recovered methane gas amount which is deduced project emission and leakage. Therefore, it is needed to simplify the calculation process because it is difficult to calculate when there are many baseline emission calculation points.

2) Reduction of CO2 by utilizing energy generated from biogas to the power driving

grid and reducing consumption of fossil fuel The amount of electricity generated above condition is 8,948kWh/day. Meanwhile, the electricity consumption amount in the methane fermentation plant of Japanese specification is 6,663kWh/day. Accordingly only 2,285kWh/day of electricity can be sold to the power driving grid and it is calculated that sold electricity amount will be about834MWh/year. As a result of the calculation by multiplying 0.603, grid CO2 coefficient referring Operating margin of peninsula Malaysia (2008), to the total selling electricity amount, 499t-CO2/year of GHG will be reduced.

3)GHG reduction by this project As a result of the calculation of above 1) and 2), average GHG reduction by this project for first decade will be as follows

1) GHG reduction from landfill site ＋ 2) GHG reduction from grid ＝5,133＋499

＝ 5,632 t-CO2/year （average on first decade） 4)Potential GHG reduction amount by diffusion of this project/activities whole host country (or whole sector) This project is expecting to collect food waste from kitchens and dining area of rest and service area of highway, hospitals, schools, markets, hotels and restaurants. Estimating from numbers of these facilities in the north 4 states in Malaysia Peninsula, the expected amount of


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food waste was approx. 850 tons per day. Central and southern area along the north-south expressway was estimated to discharge same amount as north although population of northern states has less population comparing to Central and Southern states. As a result, minimum 2,550 tons per day of food waste is expected to be discharged along the north-south expressway. <Table: Avoided methane amount to the air, by estimating 2,550 tpd of food waste have not flow into landfill site>

Year 1 2 3 4 5 6 7 8 9 10

BECH4,SWDS,Y 173,984 290,609 368,784 421,187 456,314 479,860 495,644 506,224 513,316 518,069

0 0 0 0 0 0 0 0 0 0

Baseline Emission 173,984 290,609 368,784 421,187 456,314 479,860 495,644 506,224 513,316 518,069

PEy,transp 7,411 7,411 7,411 7,411 7,411 7,411 7,411 7,411 7,411 7,411

PEy,power 1,377 1,377 1,377 1,377 1,377 1,377 1,377 1,377 1,377 1,377

0 0 0 0 0 0 0 0 0 0

Project Emission 8,788 8,788 8,788 8,788 8,788 8,788 8,788 8,788 8,788 8,788

Leakage 0 0 0 0 0 0 0 0 0 0

GHG reduction by Project 165,196 281,821 359,997 412,400 447,526 471,072 486,856 497,436 504,528 509,282

422399.05AMS.III.F first 10 years ave 413,611

Average avoided CO2 emission per year from landfill site is 413,611 tCO2e per year, and 31,811tCO2 per year will be avoided by sending electricity produced from biogas at AD facility. The total avoided CO2 amount is 445,422 tCO2e per year in total.

（5）Measuring, reporting, validating method of GHG reduction effects 1) Measuring The GHG reduction by this project is ‘avoiding methane gas emission from landfill sites’ and ‘reduction of CO2 by utilizing energy generated from biogas to the power driving grid and reducing consumption of fossil fuel’. ‘Reduction of CO2 by utilizing energy generated from biogas to the power driving grid and reducing consumption of fossil fuel’ can be measured without any big problems by securing reliability on the measurement equipment in the facility and control of CO2 coefficient of power driving grid. Meanwhile, for the measurement of ‘avoided methane gas emission amount from landfill sites’ , as mentioned above, because there are multiple combinations of waste generation sites and waste treatment sites where target waste has been currently landfilled, method to measure baseline simply is needed. The method will be developed based on the following steps.


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i)Precondition ：categorization of waste source by characteristics a)Preparation Considering reference scenario, without any expectation of obvious social economic changes or changes of the characteristic of target waste, this preparation is needed only once before the start of the project. However, if there is any suggestion from the government of the host country and third party evaluation entity, it is expected to be discussed on the contents, including numbers of the sampling items, and implement flexibly. In this project although characteristics of waste would not be changed so much, it is expected that the progress of the waste separation would be changed. So, the composition analysis would be conducted once in five years b)Confirmation of target waste source Waste source of target food waste will be as follows at the beginning of the project from the view point of (1) possibility of waste collection utilizing UEME infrastructure or territory, (2) feasibility of separation (3) possibility of stable collection of certain amount of food waste. For other project, target waste can be selected from other viewpoints. It is not needed to decide target waste in this step because as the measurement method is aiming to be flexible enough to simply add new target waste after started the project.

Precondition Categorize wastes by their origin

Step1 Specification of wastes origin and record of quantity

Step2 Understanding situation

Sub-Step① Confirmation of difference of the site area condition when compared with reference

Sub-Step② Constant monitoring of the characteristics of target wastes


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RSA Kitchen waste ,RSA fruits residue Hospital kitchen waste School kitchen waste Hotel kitchen waste Factory waste , Restaurant waste Market waste

c)Confirmation of major categorization (attribution) The following is the example on categorization of target waste by assuming its waste characteristics. Kitchen waste should be almost the same.

Major category Minor category Kitchen waste （processing residue＋ Leftover ・

residue/oil）

RSA kitchen Hospital Kitchen School canteen kitchen Hotel Kitchen Factory canteen kitchen Restaurants

Market waste （Homogeneous and Various kinds of

residue with certain amount）

Market Fruits Stands

d)Developing data base based on the composition analysis Next preparation is to develop a database by conducting composition analysis and component analysis (moisture contents, ash contents, organic substances: fat/protein/carbohydrate) in case of methane fermentation, like conducted in this survey. It should be analyzed as much as possible from the sampled waste source. The goal of this procedure is to simply calculate the baseline emission from multiple waste sources. In the case of methane fermentation, base line emission amount can be easily calculated by following formula by setting CO2 emission coefficient for each category.

e)Confirmation of consistency of the categorization by comparison of the data Data will be categorized by groups which is similar at appearance of the data. It is needed to show the adequacy of the categorization by making standard to indicate the similarity of the data and comparing other categories. Each waste source is categorized to either of the categorization before starting the collection and it would not be changed until updating period (more than 5years). ii)Step1：Specification of waste source and measurement of waste amount from the source

Average data of composition analysis by category X Decomposition rate

Baseline emission（BE) ＝ Coefficiency per category X Waste quantity per coefficiency


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Next step is just to follow the process of usual business activities thoroughly. When the discharge amount of target waste at waste sources are not enough to be collected individually by one truck, target wastes from various waste sources will be collected all together by one truck which is collecting under its transportation route. In this case, it is needed to link the waste generator and generated amount for correct estimation of baseline emission. This process can be accomplished by combining the data of “sales form/slip”, which is issued to charge the waste treatment fee to waste generators. There are vehicles which the weigh is equipped, and for the trucks without weighs, there are electronic scales which can manage the measured amount easily.

Baseline emission will be automatically calculated by input of the waste generator and result of weight measurement. 20XX result(example)

Waste generator Category Treatment capability

Baseline generation amount

Total tipping fee

● × hospital kitchen

A1 20t a＝（A1 coefficient）×20

4000RM

〇×market B1 150t b＝（B1 coeffcient）×100

30000RM

Total 170t a+b 34000RM

iii)Step2： Confirmation of present situation a)Sub-step1：Re-confirmation of surrounding activities Condition of baseline situation is to be monitored once year, such as situation of landfill site where the food waste collected at the AD facility would have been originally dumped, as if the situation has changed (from dumping site to sanitary landfill site or incinerator), the calculation factors of the baseline emission will also be changed.

(Cited ： Kyokuto kaihatsu kougyo

(Cited: Nihon Seiko Sho corporation HP)

Big lot Charter truck

Small

Small

Small

Small

Small


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b)Sub-step2：Periodical composition/component analysis Food waste characteristics should be also monitored periodically to show the categorization of waste is fair. Monitoring numbers will be decided based on statistical aspects and the monitoring facilities are mostly random selected but at least more than one location should be observed at fixed point to see the tendency of change in waste characteristics. 2)Report Monitored data collected until certain day at the end of the fiscal year (number of the customers, number of customers of each category, changes of the number of waste generating in each category, BE of each category, total BE, other remarks found through measurement activities) are reported. 3)Verification Technical verification shall be operated by Malaysian government oriented organization and/ or official certification authority such as ISO standards. But in terms of confirmation of sales amount and exchanged money through the business, it might be more efficient by verifying through the business audit procedure which the accountant engages to check the system is operated as expected. （6） Securing environmental integrity Reduction of waste flowing into landfill【positive effect】

Because organic waste which is formally landfilled will be treated at methane fermentation facility and separated paper and plastic might be recycled as a material, landfill amount of the waste will be reduced by implementing this project (however, dehydrated sludge will be landfilled, but the volume is very small comparing to the original volume)

Promoting recycling activities through promoting separation activities【positive effect】 To implement this project, it is better to instruct separation of the waste to simplify the pre-treatment system of the AD facility, and it will also be easier to recycle the plastics and papers.

Reduction of fossil fuel consumption by utilizing unused energy 【Positive effect】 The energy generated by methane fermentation of organic waste is the energy which could not be utilized formally but just thrown away. By utilizing this energy, it is possible to replace fossil fuel consumption.

Prevention of leachate from landfill site 【Positive Effect】 In many landfill sites in Malaysia, leachate is not collected nor treated. In this project the waste water derived from organic waste will be properly treated and released to the river by keeping industrial water disposal standard of Malaysia. Although it may cost energy and money, the environmental impact of the waste water will be mitigated.

Diffusion of odor to the surrounding area of AD facility 【Negative Effect】 The project will be collecting organic waste which will be easily fermented. The odor from methane fermentation facilities when the waste is unloaded from the vehicle can be prevented by controlling the air flow of the facility in negative pressure, in order to prevent the odor to flow out from the facility easily. The odor in the facilities will be treated by the deodorization equipment.

（7）Other indirect impact: There would be no indirect negative impact to the society. From the cultural/economical view point, the project might disturb small food recycling activity (composting / animal feed). If


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the treating amount is small and those activities are not causing environmental pollution, those activities can co-exist with this project. As those food waste that are difficult for composting or animal feed recycling can be treated by this project, it would be no problem to co-exist with local composting/animal feed enterprises. The separate collection will surely be cost-rising activity. But it can also provide social benefits such as employment generation. It is needed to evaluate separate collection not only by short-sighted cost evaluation, but also holistic evaluation. The project also can provide opportunity of environmental education. As the separation-at-source for this project takes places at attractive location such as Expressway RSA, schools, and hospitals, the awareness of the public to environmental protection and proper waste management can be easy to access. Environment education programs shall be developed under cooperation between both Japanese government and Malaysian government. （8）Feedback from stake holders: From tenants of RSA: Cooperative to the separation activities (waste management fee is

included in the tenant fee) but there were some comments that additional cost has not been estimated (though it is not denied)

Propel Corp: Collection and transportation is entrusted to the local private collection and transportation companies by the person in charge of the each RSA. Interview to the manager and director of the Propel Corp. have not been conducted yet.

PLUS Corp: The operator of express way business. It is expected to bear the cost for this project from the tenant fee and express fee. The meaning and benefit of the project is understood and it was suggested to discuss with UEM, the owner of the expressway.

UEM: Owner of target expressway, and it is expected to be an investor to this project. UEM interested in the technology which this project would adapt, and extremely positive to the business plan.

MHLG: The government organization in charge of solid waste management. Food waste recycling is a issue which attract strong interest.

MNRE: Contact point of CDM issue. This project is suitable for CDM project, but it is expected that the project would have additional value to the society which Malaysian government have plan to add to the CDM evaluation criteria. MNRE would wait and see on the new mechanism.

‘E-idaman’, one of the concession company which is entrusted municipal waste collection and transportation from state government (one of the four concession company in Malaysia peninsula which is entrusted in the north area): Quite positive to the recycling activities, and have already started small composting project by their own cost. One of the UEM group company, and interested in the activities in the north four states.

（9） Project implementation Scheme The investor of the project is expected to be UEM, which is the 51% shareholder of Plus (expressway operator). However, the tipping fee of waste generators will be large so the public build and private operation will also an option to be proposed. Actual business would be cooperated by UEM environment, 100% subsidiary of UEM (owner of the E-idaman which has concession of municipal waste collection and treatment from the federal government, Feber Corp which have entrusted to manage all the hospital utilities, and Kualiti Alam Corp. which has excusive interest to treat hazardous waste treatment in Malaysia), as well as Turbine Technique which will cooperate as investor and operator of the project, and from Japanese side, IKE and Bioenergy, affiliated company of IKE.


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Regardless of invest or not, the characteristic of our JV is that the PLUS is under the umbrella of UEM cooperation, and this makes the consortium possible to collect food waste from expressway facilities easily. Also it would be possible to propose high grand proposal from both cost and capacity, combining together UEME’s capability to collect waste and the infrastructure they have, with IKE’ experience on the food waste recycling business.

（10）Financial plan: Malaysian government is expecting private investment for the public services. This project would be considered that the UEM (owner of the express way) which is under the umbrella of Kazana national, the investment company under the Ministry of finance of Malaysia, would be a main investor of the project. However, in case the project operator owns the facility, the tipping fee will be very high comparing to the present waste tipping fee. It would be preferable to develop this project by utilizing the public funds and the facility owned by the government, to lower the tipping fee and promote the advanced waste treatment. Consequently, the project would contribute to the achievement of the target which the government set up. The cost estimation of the AD plant by the local engineering company was around 6 million JPY with the size of 40t/day, under the designing condition of Japanese specification. Although, the construction cost was lower than that in Japan, it would be needed to review the equipment to suit for Malaysian specification, and make the cost lower. The cost above is only initial cost for the facilities and the cost for the transportation vehicle and collection equipment are needed to be added. （11）Method of introducing Japanese technology: The AD technology itself is nothing new and already used in the world namely in Europe. This kind of technology using food wastes has also been introduced in China and Korea recently. Therefore making scenario to avoid a simple cost competition for the facility is crucial. In terms of service, it is not likely that Japanese waste management company provides the consistent service of “collection, transportation, final disposal” in which western waste


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management companies are strong. The reason for this is that Japanese waste management activities are very much detailed because of the waste management laws and regulations in Japan and it is highly difficult for the Japanese waste management companies to have consistent knowledge and competitive market competitiveness. Therefore it is necessary to establish a system of providing high value added technology and its service in order to introduce Japanese technology in the field of waste management. To operate AD facility, engineering and know-how is necessary and Japanese companies have is advantageous in the field because of long experience and knowledge. If this advantage is accepted in the host country, a long term stable service can be provided. A simple transportation and final disposal business might not be CDM project because of the stance of the Malaysian government that they will not approve projects which does not contribute to GDP growth. However, this study has shown that it is difficult to do AD business in the present Malaysian business situation especially with the waste treatment tipping fee and credit price. The following idea can be used not only in Malaysia but also in other countries for the introduction of Japanese technology and it is not limited to AD business. The idea is as follows: An additional fee is added to the present natural gas price as “project operation support fee” and redistribute it to GHG reduction projects in the host country and continue it for a certain period of time. Bilateral agreement between Japan and Malaysia enables to sustain the system.

＜Figure：Flow of the bilateral agreement＞

Japan grants CER with higher market price but the following benefits are expected; 1) Japan could secure energy sector by showing the cooperation with the Malaysian government to tackle GHG prevention and paying higher price. 2) Japan could diffuse technology and secure market share of AD technology in the host country. Given the greater need of fossil fuel such as natural gas in Japan after the earthquake, the idea needs to be included in the scenario. The added price is expected to be paid by energy user such as electricity companies. The host country can reduce GHG with Japan fund and CER price can be set high.


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Malaysia can get the knowledge of renewable energy through the introduction of renewable energy. Japan and Malaysia can expand business to another country with the condition to tie-up with Japanese technology.

＜Figure: Merits and demerits of bilateral agreement＞ Japan Malaysia Remarkable Policy

・GHG prevention ・Securing energy sources ・Promotion of exporting Japanese

environmental industry

・GHG prevention ・ Promotion of introducing renewable energy ・Building infrastructure by using private sector ・CDM adoption for high value added businesses ・ Promotion of 3R and modernization of waste treatment

Merit ・Promotion of exporting Japanese renewable energy technology/service, finding market.

・Securing CER ・Securing energy resources

・ Promotion of renewable energy infrastructure and waste management and recycling business by private investment.

・ Improve environment ・ Verification of 3R model/ diffusion ・ CER selling with high value added

・ Create employment and new industry

Demerit ・CER price becomes higher than the market price. The cost of the Japanese fuel users such as electricity companies becomes higher.

Remark （LNG import amount from Malaysia） 2,516,900 million RM（2010 年）＝67,956,300 million yen（27yen／RM）

（12）Next steps and challenges: 1)New Mechanism development and it challenges “Flexible-to-meet-the-reality method”, which is proposed to introduce for this project is not just only for AD project, but also can be modified and used in other GHG reduction activities, such as other waste management business activities (incineration, recycling) and for logistics businesses. For the AD project in Malaysia, we need to take more samples, analyze it and categorize them, in order to develop the data base for the development of “Waste Source Category”. We also can cooperate with our affiliate company which is running the AD business in Japan (Bioenergy Corporation), to test the possibility to introduce “Flexible-to-meet-the-reality method”. 2)Business development aspect


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It is confirmed that Malaysia has become active in the field of energy and waste management policies and food wastes are quite suitable for the AD facility. The collectable amount is sufficient as well. However, there is a wide gap between the cost in Japan and Malaysia. It is now considered to lower the spec and price from 27 yen/kg to about half. Even if this happened, the Japanese tipping fee is still 10 times higher than the Malaysian price. It has become clear that the cost for AD facility is high and the Malaysian government is still behind when it comes to waste treatment. Even with Feed-In-Tariff introduction, an additional income is essential. Therefore localization of the AD facility, lowering tipping fee by funds from the Malaysian government are necessary to implement this project. According to the calculation, tipping fee can be in the rage of 4 to 5 times higher than the present Malaysian tipping fee and it is competitive compared to incinerator, which is also considered as high value added waste treatment technology. 5. Study result related to Co-benefit (1)Saving landfill life Introduction of the AD facility contributes to reduction on dumping of organic wastes to the landfill site. AD facility discharges dehydrated sludge and non-fermentable matters (plastics, metals, etc) to the landfill. The residues from AD facility are expected to be 10% - 20% of the input amount to the AD facility (The project expects total amount of 40t/day with 4t/day of non-fermentable matters, 3t/day of dehydrated sludge, which will be 17.5% to the total input amount to AD facility). Without the project, Landfill site will be accepting following volume of food waste: 【Food wastes 40t/day ÷ apparent specific gravity(ASP) 0.8＝50m3/day】 When the project starts, landfill site will be accepting following volume of residues from AD facility: 【non-fermentable matters 4t/day÷ ASP 0.8＋dehydrated sludge ÷ ASP 0.6＝10m3/day】 The above simplified calculation shows that there is a possibility to decrease the dumping volume up to 1/5, comparing to the case without the project.

(2)Leachate quality improvement effect AD facility will be treating the wastewater from AD procedure, and this activity can be considered as decreasing the load of leachate from the landfill such as COD. The water treatment facility in AD is designed to meet the Malaysian waste water treatment standard “B” （BOD：50ｐｐｍ、COD：100ppm）. COD of food waste slurry before AD treatment is 150,000ppm or more. Therefore, the project can say that it decreased 99.93% of original COD 【100 ÷ 150,000 ＝ 0.07％】. 6. Study result of the contribution to sustainable development The Malaysian government requires CDM projects to match the sustainable energy policy and this project matches in most points. (1) Effective use of resources (How the project contributes to effective use of resources?)

= The applied technology generates energy from food wastes, and could accept organic wastes including food waste, either possible or impossible to recycle as composting and animal food.

(2) Sustainable use of resources (How this project promotes the use of sustainable energy?) = This project uses the food wastes which would have been landfilled if the project does not exist, and convert the food waste into energy resource. It can be alternative fuel for natural resources such as natural gas.


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(3) Energy policy (How this project relates to the government policy on energy sector?) = The Malaysian government targets to increase renewable energy from 1％ in 2009 to 15％ in 2015. This project generates renewable gas from organic wastes, therefore matches to the policy of the government.

(4) Environment: Leachate from food wastes which had been discharged at the landfill site will be prevented by the project. The project will also provide positive effect to both surface water and underground water condition which directly effect to the nature including Human being. Avoidance of dumping the food waste to the landfill site also prevents odor from fermentation process of organics.

(5) Economy: This project can create job opportunity (at least 10 for the AD facility, 20 to 30 for collection and transportation). More employments can be created if the business expands.

(6) Social：To conduct separation-at-source program in the targeted area and facilities (school, university, hospital, expressway, etc), the awareness for environmental protection can be raised among the citizens in behaving to take better actions for developing the sustainable society.

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