"Bundling" small waste recovery for carbon credits

Proponents of small Philippine-based projects aimed at reducing greenhouse gas emissions are advised to "bundle" their projects to satisfy the requirements of companies or banks who buy carbon credits in bulk. German bank KfW Bankengruppe, for instance, which acts as intermediary for European firms wishing to buy carbon credits to meet their emission reduction commitments under the Kyoto Protocol, requires a minimum of 30,000 tons of carbon dioxide equivalent a year to keep its costs down.

At a forum organized by the European Chamber of Commerce of the Philippines yesterday, KfW announced the availability of a 225-million euro carbon fund co-financed by the European Investment Bank, the Belgian government, and other partners with which to buy carbon credits. Katja Eicher, senior project manager of the KfW Carbon Fund, said putting a floor on the number of tons of carbon dioxide equivalent was necessary for "keeping (the bank's transaction cost at a reasonable level" and suggested the bundling of projects in the Philippines.

Greenhouse gas emission reductions are measured per ton of carbon dioxide equivalent, carbon dioxide being the reference gas against which other greenhouse gases are measured. A carbon emission reduction (CER) certificate is issued for every ton of carbon dioxide equivalent.The Environment department has received a total of 80 applications for eligibility under the Clean Development Mechanism (CDM) of the Kyoto Protocol. It has approved 56 projects.Only 19, however, are registered with the CDM Executive Board in Bonn, Germany, which issues the CERs used as currency in carbon trading.

Of the 80 projects, 15 are regular-scale while 65 are small-scale. Regular-scale projects can generate a low of 53,000 to a high of 582,000 CERs a year and include renewable energy projects, a wastewater project and a landfill gas recovery and power generation project. Small-scale projects, on the other hand, can generate a low of 241 CERs and a high of 79,000 CERs a year. These include methane recovery and power generation from swine and poultry waste, methane avoidance from composting, power generation from biomass, mini-hydropower projects, and tricycle retrofitting.

Bundling of small-scale projects has been permitted under the Kyoto Protocol since mid-2007 to allow project proponents to participate in carbon trading.CDM projects of a similar type comprise a "program of activities." The program becomes the project that can claim CERs. Its implementing agent, be it a private firm, a nongovernment organization or an industry association, receives the revenues, which shall be partitioned among the program participants.

While ideal, the Environment department expressed its reservations. Manuel D. Gerochi, Environment undersecretary, said program participants might realize very low revenues as a result. However, Philippine Bio-Sciencies Co. Inc., which develops and implements biogas projects, has no qualms about the idea. Ellen Zanoria, CDM manager, said PhilBio was able to bundle several projects that capture methane capture from piggeries and poultry farms into one project.She said a project bundle usually consists of five to 10 similar ventures. The company is looking at facilitating three bundles in September.