|Title of Feasibility Study (FS)||CDM Feasibility Study on Eucommia ulmoides Reforestation in Henan Province, People's Republic of China|
|Main Implementing Entity||Hitachi Zosen Corporation|
|FS Partner(s)||Henan Lingbao Tiandi Technology Corporation, Academy of Forest Inventory & Planning, State Forestry Administration, Henan Province Forestry Department, China Northwest A&F University, Osaka University, Kyushu University, Smart Energy Co., Ltd.|
|Location of Project Activity||China (Sanmenxia City, Henan Province)|
|Category of Project Activity||LULUCF (Reforestation)|
|Duration of Project Activity/ Crediting Period||2012-2071 (60years)/ 2012-2031 (20 years)|
|Summary of FS Report||Summary(PDF 264KB)|
|Description of Project Activity||Forestation project of Eucommia ulmoides in Henan Province, China (hereafter “Project”) aimed to plant trees over three years between 2012 and 2014 in 1,700 hectare in Sanmenxia City of Henan Province, China of land. The Project choose Eucommia ulmoides a major planting species based on economic value of the forest products, suitability for the project site’s climatic conditions and expected carbon sequestration amounts. Hitachi Zosen Corporation and Henan Lingbao Tiandi Technology Corporation are the project participants for the Project.|
|Methodology to be applied||AR-AMS0001 Simplified baseline and monitoring methodologies for small-scale A/R CDM project activities implemented on grasslands or croplands with limited displacement of pre-project activities (Ver.6.0)|
|Baseline Scenario||Baseline scenario for the Project would be drawn based on AR-AMS0001 and applied a description of the methodology which is; "the land-use prior to the implementation of the project activity, either grasslands or croplands."|
The on-site survey identified the local vegetation of the project site is barren grassland and mostly covered by shrubs and grasses. Partially identify trees, however, the percentage of crown cover is less than 20% and tree height is less than 2m which does not satisfy Chinese government’s forest description. The survey also clarified the site was not forest at the time of 1989. Regional authority tried to plant trees to recover forestation at the Project site to prohibit illegal grazing and illegal fire-wood collection activity. The measure was ineffective due to financial shortage and results in barren land.
The amount of ex ante baseline net GHG removals by sinks is calculated as a sum of carbon pool within project boundary.
|Demonstration of Additionality||Project's additionality will be proven with an application of "Tool for the demonstration and assessment of additionality".|
1. Investment barrier:
For the Project, with an absence of credit sales, the IRR is calculated at 5.94% (EAT) and lower than national benchmark. If the project counts credit sales, IRR would be improved. Therefore, it is fair to assume that the turning project into CDM will improve project economy and realize loan arrangement from local financial institutions. The credit revenues are utilized for forest maintenance and project’s continuousness.
|Estimation of GHG Emission Reductions||Annual average: 13,518tCO2/yr; 270,360tCO2/20years|
|Monitoring Plan||Location of the areas where the project activity has been implemented, size of the areas where the project activity has been implemented for each type of strata, location of the permanent sample plots, diameter of tree at breast height, height of tree, basic wood density and ownership of land are the major monitoring contents for the Project.|
|Environmental Impact Analysis||The Project proposed at the site where serious soil erosions are observed. The Project is expected to increase forest density to decelerate erosion and other positive effects as follows;|
(1) Cultivation of biodiversity:
|Project Feasibility||The immediate hurdle for the Project is fund-raising. |
Total investment costs of the Project reaches RMB 37.65 million, among which includes RMB 34.96 million of construction costs. The Project planned to loan 50% of project costs from local banks with interest costs RMB 1.64 million and Liquidity of RMB 1.05 million. Henan Lingbao Tiandi Technology Corporation will acquire RMB 20.17 million (53.6% of total project costs) and lend from local banks with RMB 17.48 million (46.4% ditto). In case these projections are not accepted by local banks, the party may consider either subsidies program by the international financial institutions, government’s subsidies programs and/or a loan arrangement under the name of Hitachi Zosen Corporation. Upon clarifying funding issues the Project could easily take off.
|"Co-benefits" (i.e. Improvement of Local Environmental Problems)||The Project performed research over numerical measurement of soil erosion and quantitative measurement of improvement of biodiversity through project implementation. Since the Project, itself has a multiple positive impacts regardless directly or indirectly to the society, the co-benefit measurement as outline in the "Manual for Quantitative Evaluation of the Co-Benefits Approach to Climate Change Projects".|
|Contribution to Sustainable Development in Host Country||The Project will dedicate to the Chinese sustainable development through following functions. First, the native species Eucommia ulmoides could easily adopt local climate and reduce disaster risks by improving water-shed and stabilize agricultural activities. Second, Hitachi Zosen Corporation’s technology is an established technology and improves rural Chinese economy by transferring technology. Lastly, the Project involves Chinese local communities to be eligible for small scale sink CDM project.|