Publications > Agricultural Engineering in Support of the Kyoto Protocol - Clean Development Mechanism for Biogas Technology
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	Preface
	The Kyoto Protocol specifies binding commitments by most industrialized countries to reduce greenhouse gas (GHG) emissions. The Clean Development Mechanism (CDM) is one of the three flexible mechanisms established under the Kyoto Protocol. The CDM facility provides new opportunities for the promotion of biogas to reduce the greenhouse effect, through reduction of methane emission into the atmosphere. Biogas is a proven technology in rural areas in Asia, in particular in India, Nepal, Bangladesh, and China. Over the last 25 years, different types of digesters have been developed and their installation has been commercialized. Technical assistance agencies, bilateral donors and multilateral financing institutions have supported the promotion of biogas technology, and assisted the private sector with manufacturing and dissemination of the proper technology. The World Bank signed last year a Memorandum of Agreement that facilitates the trade in emission rights from biogas technology. Biogas projects in Brazil and Chile already apply the CDM. Nepal is expected to sign the Kyoto Protocol in 2005 and biogas programmes are in place which will benefit from the sale of CERs by Nepal. Under a proper policy regime, the income from sale of CERs can be used to reduce investment costs in biogas equipment. This will accelerate purchase of biogas digesters by private households and investment in large biogas plants by commercial enterprises, further reduce pollution, and provide cheap energy. Scope exists in Asian and Pacific countries for similar CDM applications. APCAEM conducts the study of the potential for application of the CDM facility from large scale industrial biogas plants to small household type digesters and summarise the technical, policy and institutional issues involved in the application of CDM in Asian and Pacific region. Wish you a lot of informative joy reading this report.
	Table of Content
	Table of content........................................................................................................... 2 List of Figures and Tables........................................................................................ 4 Abbreviations............................................................................................................... 5 Sources for further information................................................................................. 6 Acknowledgements.................................................................................................... 6 Abstract......................................................................................................................... 7 1 INTRODUCTION..................................................................................................... 8 A. Objectives of the Report ........................................................................................10 B. Integrated Biogas System.................................................................................... 10 2 LESSONS LEARNT FROM CURRENT CDM BIOGAS PROJECTS................ 12 A. Main issues for large scale biogas project........................................................ 15 B. Main issues for small scale biogas project...................................................... 16 i. Project size restrictions of the Simplified Small Scale methodology............. 17 ii. Inflexible bundling rules of the Simplified Small Scale methodology ...........18 iii. Exclusion of Non-renewable biomass in the baseline.................................. 19 iv. Perverse incentive – National Biogas Development Program as a Common practice......................................................................................................................... 20 v. Monitoring and verification plan........................................................................... 20 vi. [0] Limitation of CDM revenues in the raising of up-front investment within the first commitment period............................................................................................. 21 3 SECTORAL POLICY BASED OR PROGRAM-BASED APPROACH................. 21 A. Sectoral policy based CDM................................................................................... 22 B. Program based or Programmatic CDM............................................................. 23 i. Implications for national biogas program............................................................ 24 ii. Running transaction costs for programmatic CDM project............................. 24 4 COMMUNITY DEVELOPMENT CARBON FUND (CDCF) AND EMISSION REDUCTION PURCHASE AGREEMENT (ERPA)................................................ 26 A. Host country eligibility........................................................................................... 26 B. CDM project eligibility............................................................................................ 26 C. Project sponsor/developer eligibility.................................................................. 26 D. Types of financial options..................................................................................... 27 1 Payment on Delivery................................................................................................ 27 2 Pre-paid Purchase Contract:..................................................................................27 3 Debt Financing CDM Projects................................................................................ 27 5 BARRIERS AND RISK MANAGEMENT IN DEVELOPING CDM POJECT....... 28 A. Introduction............................................................................................................... 28 B. Country commitment.............................................................................................. 28 C. Institutional barriers............................................................................................... 28 D. Financial barriers................................................................................................... 28 E. Technical and managerial barriers..................................................................... 29 F. Social barriers.......................................................................................................... 29 6 POTENTIAL IMPACT OF CDM BIOGAS PROJECT............................................. 30 A. Impact of GHGs emission and revenues........................................................... 30 B. Impact poverty alleviation and gender................................................................. 33 7 RECOMMENDATIONS AND GUIDELINES FOR STAKEHOLDERS................ 33 A. Develop Pilot Biogas Project in Country with Low Biogas Experience.......... 33 i. Option1 – Feasibility study to identify barriers...................................................... 34 ii. Option 2 – Pilot Biogas Project ...............................................................................34 B. Develop CDM Project for Country with Mature Biogas Market.......................... 34 i. Option 3 – Development of CDM pilot project....................................................... 34 ii. Option 4 – Develop Program-based CDM............................................................. 34 C Research and Development on CDM Biogas Technology................................ 35 E. Conclusions and guidelines for Potential Developers..................................... 35 8 REFERENCES........................................................................................................... 36 Appendix 1: The Socio-economic and environmental benefits of IBS................ 38 Appendix 2: Due Diligence checklist for eligibility test for project developer....... 40 Appendix 3: Baseline methodology for small scale biogas project...................... 40 Appendix 4: Example of EU directive for landfill and climate change policy......... 41