Bio-Diesel Oil Refinery Construction Plan in the Republic of South Africa | CDM/JI | Global Environment Centre Foundation (GEC)

Reports of CDM/JI Feasibility Studies

Title of the research	Bio-Diesel Oil Refinery Construction Plan in the Republic of South Africa
FY	FY 2004
Main research organization	Mitsui & Co., Ltd.
Research partner(s)	Austrian Biofuel Institute (Austria), Climate Experts Ltd. (Japan)
Location of the project	South Africa
Summary of the research report (PDF)	Summary(379kb)
Description of the project	The Project is to produce and sell bio-diesel oil from Jatropha Curcas seeds - at a rate of 100,000 tons per year - to chemical companies in South Africa and elsewhere, for the purpose of using it as fuel in mixture with the ordinary diesel fuel, thereby to reduce CO₂ and SO₂ emissions and to gain the carbon credit. In addition, as the Project includes the establishment of Jatropha Curcas plantations for a stable sourcing, it will ultimately create around 50,000 jobs, including the bio-diesel oil refinery and the plantations, thereby contributing to the reduction of the unemployment rate and regional development in the country.
GHG	CO₂
Sector of the project	Biomass Utilisation
CDM/JI	CDM
Duration of the project activity/ crediting period	Overall credit period: 10 years
Baseline methodology/additionality	1. Baseline methodology The baseline was established using the lifecycle assessment technique, and it was established as follows: While Jatropha Curcas is cultivated, there will be no additional removal of CO₂. Fossil fuel-based diesel oil is used in an amount equivalent to bio-diesel oil to be produced under the proposed project, which will cause emissions of global warming gases. 2. Additionality In South Africa, no project similar to the proposed one is not implemented, which indicates a presence of a technical barrier. Feasibility analysis indicates the IRR of 4.4%, which is much lower than the long-term interest of 11.5% in South Africa. Thus, the project is not attractive to investors unless the carbon credit is created. As a result, there is an economic barrier. In South Africa, bio-diesel oil to be produced under the proposed project is not produced at all, which indicates a presence of a barrier to penetration to customers.
Estimation of GHG emissions	GHG emissions = Baseline GHG emission ■Total project emissions = 370,000 - 110,000 [tCO₂eq/y] = 260,000 [tCO₂eq/y] GHG reduction is estimated at approximately 260,000 tons per year (tCO₂eq), which is equivalent to 2.6 million tons of CO₂ for the overall credit period of 10 years
Monitoring methodology	Monitoring will be carried out for the parameters directly related to CO₂ emissions. Major items are as follows; - Consumptions of heavy oil in the refinery (kl) - Annual sales of bio-diesel oils (kl) - Consumption of ordinary diesel oils for transportation(kl) - Consumption of fertilizer at plantation site(tons)
Environmental impact	In the event of construction of the project facilities, environmental impact assessment is required under the Environmental Management Law.
Issues and tasks for project implementation	To implement the proposed project successfully, the following factors are critical; (1) to select good partners; (2) to operate the Jatropha Curcas plantations commercially to ensure steady supply of Jatropha Curcas seeds for bio-diesel oil production; (3) to find markets for two principal products, bio-diesel oil and glycerol/strained lees; and (4) to obtain the carbon credit as expected in order to raise the project’s profitability.