CDM Project Activities in Laos: Eucalyptus Plantations and Use of Biomass Energy

Global Environment Centre Foundation(GEC)

Reports of CDM/JI Feasibility Studies

Title of the researchCDM Project Activities in Laos: Eucalyptus Plantations and Use of Biomass Energy
FYFY 2005
Main research orgnisationOji Paper Co., Ltd.
Research partner(s)Oji Lao Plantation Forest Co., Ltd.
Mitsubishi Research Institute, Inc.
ChuoAoyama PwC Sustainability Research Institute Co.Ltd.
Location of the projectLaos
Summary of the research report (PDF)Summary
Description of the projectThis study aims to create an A/R CDM Project Design Document on the industrial plantation that has already launched for pulpwood as a CDM project. A document concerning a new methodology is currently being prepared by us and will be submitted to the PDD.
This study also aims to determine the feasibility of biomass-fuelled electricity power generation using wood residue from the plantations as a CDM activity and to create the project design document.
Sector of the projectAfforestation/Reforestation & Biomass Utilisation
Duration of the project activity/ crediting period2007 - 2036
Baseline methodology/additionality[Reforestation]
The areas for plantations by LPFL are mainly lands degraded by slash-and-burn farming, as previously mentioned and spontaneous second-growth is hardly expected. In addition, the inhabitants do not have steady incomes and must continue to rely upon slash-and-burn agriculture. In 1999, a New Zealand fund invested in a plantation business. However, it was difficult to maintain the business due to low profitability. Therefore, the status quo is the baseline and the carbon stock change in the scenario is set to nil.
Based upon the tool for the demonstration and assessment of additionality approved at EB21, the demonstration and assessment of this project’s additionality was tested as outlined below. The result shows that this proposed project complies with the forestry policy and CDM policy of the Laos government and with the laws of the land and the laws of forestry. Also, the result indicates that the local inhabitants in the subject area continue to practice illegal slash-and-burn farming and the spontaneous recovery of the forest cannot occur due to the land degradation. The alternative scenario, “keeping the current non-forest” land-use will not be prevented by any of the barriers.

[Electricity Generation from biomass residues]
This project applies to the small-scale CDM project, Type I.A.; Renewable energy project (by the user/house). In the baseline, electricity output is calculated. For the simplified baseline, it will be estimated by multiplying the generated kWh by the coefficient of diesel power generation.
This project is to electrify the village where there is no access to the national power system. Obviously, diesel power generation will increase GHG emission unless biomass power generation is implemented. It matches the investment barrier and the simplified baseline and monitoring methodology that are described in the CDM Guideline can be applied.
Estimation of GHG emissions[Reforestation]
The total pure carbon sink in the project period of 30 years is calculated as 1,279,729 tCO2. The total leakage in the project period is calculated as 159,519 tCO2.
GHG emission reduction by anthropological activities is calculated as 1,120,210 tCO2 of GHG in total of 30 years.

[Electricity Generation from biomass residues]
GHG emission reduction by anthropological activities is calculated as 756tCO2 in total of 14 years.
Monitoring methodology[Reforestation]
In order to comply with “Approach 3” of IPCC-GPG, we have examined monitoring methods and sampling methods, and collected data for each item monitored throughout the project period. The methodology that is currently being developed by our company will be applied to this project.
Monitoring of the baseline
Unless this project is implemented, illegal slash-and-burn farming will be continued by the locals, who have no other means to secure food. There is a period when shrub biomass increases, but the amount hardly changes in total. Therefore, the net GHG removal is set to nill in the baseline and there will be no fixed plot to represent the baseline for monitoring. Alternatively, satellite image data for the project area and the neighborhood will be taken regularly and the shrub areas will be monitored.
Monitoring of the project
The above/below-ground biomass will be monitored for carbon pools. The biomass decrease by site preparation, machinery use, vehicle use for seedling transport, fossil fuel consumption by tractors for logging, and nitrogen fertiliser are assumed to be emission sources.
To assure greatest accuracy, monitoring will be undertaken by the satellite data biomass amount estimation method and the measured weight of the shipped wood, as well as by conventional measurement of plots.
Monitoring of leakage
Vehicles, machinery used for the project outside of the boundary, consumption of fossil fuels and electricity for chip processing and the like, and the amount of used nitrogen fertilizers will be monitored.

[Electricity Generation from biomass residues]
In the case that the simplified baseline is based upon power generation, the measurement of the whole system, or the sample, will be monitored. The electricity generated at the power plant and the consumption by the users will be measured.
Environmental impact[Reforestation]
The project has already begun and the research studies of environmental and social impact have been conducted. In addition, we assigned an environmental consultant for additional research on environmental and social impact, and commissioned ChuoAoyama of PriceWaterhouse Coopers Japan for re-evaluation.

[Electricity Generation from biomass residues]
We assume that detailed analysis of the environmental impact is not necessary because the scale of this project is relatively small in the biomass power generation domain, and the organisation of the project is simple.
Issues and tasks for project implementation[Reforestation]
Acquisition of the credits by the A/R CDM project (i.e., tCER and 1CER) requires future compensation and is worth less than other Kyoto Protocol credits (i.e., CER, AAU, ERU). The cost effectiveness is, therefore, not expected to be high.
However, we would like to implement this A/R CDM project in a scope of “Corporate Social Responsibility” by contributing to the sustainable development of the host country.

[Electricity Generation from biomass residues]
The cost of the facility has to be reduced for profitability in the power plant business. Therefore, we will consider collaborative research and development with a manufacture of the facility.