Carbon Credit For Household Biogas Plant of INSEDA Members and Partners under the Gold Standard

By Raymond Myles, INSEDA / INFORSE-SouthAsia

Introduction

The Integrated Sustainable Energy and Ecological Development Association (INSEDA) is the national organization formed by the Indian grass-roots NGOs in 1995 involved in the promotion of renewable energy programmes with special focus on the implementation of biogas development in rural areas of India for over 15 years. For the past 4 years INSEDA with the assistance of the Carbon Procurement Unit (CPU) of GTZ International (India) has been involved in the development of a small scale biogas project for getting carbon credit. The project participants involved in the biogas activities are INSEDA and its member & partner NGOs from two Indian states, namely, Kerala and Madhya Pradesh (MP).

This project has been developed under the Gold standard VER. Like a Certified Emission Reduction (CER), a VER (Voluntary Emission Reduction) is also a tradable commodity and refers to reduction of one tonne of greenhouse gas (GHG). The difference between a CER and a VER is that while CERs are generated according to standards and requirements of the Kyoto Protocol and UNFCCC, VERs are independently verified by a third party according to criteria that confirms that the emission reductions are real, measurable and credible.

A Gold Standard (GS) project ensures that the project is sustainable, flexible and transparent through a participatory approach with initial and main local stakeholder meetings.

Purpose of the Project Activity

To contribute towards sustainable development of the country through the implementation of household biogas plant and switching from non-renewable biomass like firewood to renewable biogas generated from utilizing animal wastes and other organic wastes in the rural areas of Kerala and Madhya Pradesh. In project activity clean and environmental friendly gas from the household (family size) bio-digester is utilized which is generated by utilizing animal and other organic wastes. Thus, hygienic conditions in the rural areas will be improved. Also, they are leading to reduction in greenhouse gas (GHS) emission by displacing conventionally used firewood for cooking, and thus contributing to the mitigation of Climate Change. In addition, these household biogas plants (bio-digesters) are also removing drudgery of rural women in the collection of fire wood and cooking, reduction of indoor pollution as well as, positively contributing to the overall empowerment of women and adolescent girls in rural India. The residues (biogas digested manure in the slurry-form) discharged after giving the environment-friendly and non-polluting gas from the bio digesters are being used as enriched organic fertilizer, increasing water holding capacity of the soil and improve the soil conditions for the crop production.

Project Scenario

The biogas project activity is located in rural areas of Kerala and Madhya Pradesh. Consumption of firewood for household purposes in the rural areas is the main cause of deforestation in the surrounding areas of Kerala and Madhya Pradesh. The project comprehends around 4,000 household biogas plants in various districts of Kerala and Madhya Pradesh. In each of 4,000 households a biogas plant unit is installed, protecting the trees, thus reducing the release of greenhouse gases (GHS) to the atmosphere, positively contributing towards the mitigation of climate change. The biogas unit is of different capacities depending on the number of people in the household, and the availability of dung from their domestic farm animals. Biogas is generated in the bio-digesters, in which bovine (cattle & buffalo) dung (manure) and other organic waste is fed and allowed to be digested under anaerobic (in the absence of air) condition for few days, biogas (mainly a mixture of Methane-CH4 & Carbon dioxide-CO2 plus traces of other gases) thus generated is utilized for household purposes, mainly for cooking (using stove with specially designed burners) and to some extent for lighting (using especially designed biogas lamps with mantle).

Project Contribution to the Sustainable Development

The project has the goal of dissemination of biogas technology to improve socio-economic condition of the rural people and reduce GHG emissions. This biogas project is also contributing to the improvement of living standard of the rural people. Brief advantages of the project are given below:

Environmental well being:
· Utilizing biogas as an energy resource contributes to clean environment.
· Transformation of organic wastes in to high quality fertilizer.
· Improvement of hygienic conditions through reduction of pathogens by utilizing the animal and other organic wastes in the bio digesters.
· Contribute to the global environment improvement by reducing deforestation and improving biodiversity.
· It will lead to improvement in soil condition by providing high quality manure.

Social-Economic well being:
· This project is providing employment opportunities for the local people during construction and maintenance of the plants.
· It leads to improve the economic level of the local community.
· The project is reducing cooking time, thus providing women to take up other activities.
· Increase overall health situation by reducing smoke and soot in the kitchen, thus eliminating health hazards from indoor air pollution.

Technology well being:
· Better biogas digester models, thus improving biogas yield.

Apart from the initial and main stakeholders’ consultations, the project cycle for a Gold Standard (GS) project is not very much different from a regular CDM project. It is essential, however, that the project is sustainable, is without negative environmental impacts and complies with the UNFCCC additionality requirements.

Various Steps Involved in Retroactive GS Cycle are:

· INSEDA started the dialogue with its members and partners for developing Biogas carbon credit project and GTZ-CPU unit-India in the middle of 2007.
· Collection of data on the biogas built by INSEDA members and partners, using a standard form and compiling them and creating database in late 2007.
· Initial meeting with the local stakeholders was held in early 2008
· Development of Project Design Document (PDD) and Passport and submitted for Gold Standard pre-feasibility assessment in February 2009
· Received positive pre-feasibility assessment from GSF in September 2009
· Initiated baseline survey in MP and Kerala using independent external experts to authenticate the information submitted by INSEDA members and partners to ensure that they were correct
· After receiving the positive pre-feasibility assessment report from GSF and after completion of baseline survey, proceeded with the main stakeholder consultation in MP and Kerala in October 2009. In the stakeholder meeting to share the revised PDD and Passport. INSEDA also sent letters to invite several international agencies as well as the representative of GSF to participate in both the stakeholder meetings.
· Report was prepared after the meeting for the consultation with the Local stakeholder
· Identified the DOE and signed agreement for validation in March 2010
· Process of validation was started by DoE accredited by UNFCCC with the visit of the validator to the two project states (MP and Kerala) in May 2010
· PDD was finalized along with passport and local stakeholder consultation report
· Revised PDD and Passport was uploaded on the INSEDA website in September 2010
· Sharing of revised PDD and Passport with the local people and other stake holders in a meeting of stakeholder organised in in MP and Kerala in October 2010. INSEDA also sent letters to several international agencies as well as the representative of GSF, inviting them to participate in these two meetings.
· During the period from May 2010 to May 2011, INSEDA answered various queries raised by the validator, as well as collected and sent additional supporting documents to fully satisfy validator to finalize the validation report
· Successful completion of the validation process and report was sent to Gold Standard Foundation (GSF) in June 2011
· Monitoring of forest cover in the districts where BG plants under the project were built by independent external experts was completed
· After review of validation report, some queries were raised by the GSF in the middle of August which were satisfactorily answered by the end of August 2011
· Formal letter of communication was received from the Gold Standard Foundation (GSF) in September 2011, informing that our project- "GS 666: Installation of Biogas Plant by INSEDA Members & Partners" is officially registered with the Gold Standard
· The project is uploaded on GS website changing the project status on the registry
· Then followed verification of the project by the same validator, and based on their report, issuance of VER by the Gold Standard Foundation (GSF). The first verification field visit by the validator of the biogas plants in MP state could only be done in February 2012 and the second and last visit of the biogas plants in the third week of April 2012.
· Following the verification came paper work and to supply a field record to by INSEDA, which was done before the end of May.
· Then the external validator shall finalize his work and send his report to his organisation (Det Norske Veritas - DNV) in Norway, expected in the first week of June 2012,
· Then DNV will finalise the report during and send it to the Gold Standard after 4-6 weeks.
· Then, in July 2012, the Gold Standard Foundation (GSF) will finally issue the VER to INSEDA.
· After the issuance of VER, INSEDA we can ask the buyers of the VER to transfer the the payment for them.
In total the process has lasted more than 4½ years from work started with data collection at the end of 2007, until payment for the VER in the second half of 2012.

Summary and Recommendations

It is very clear that the whole process of registering the carbon credit projects has been designed by the registration agencies that it is time consuming and resource guzzling for the stakeholders, like the project developers, the members, partners and the end users. After clearing each step successfully one wonders if it was worth going through it, and whether the next step will be cleared or not? The majority of NGO groups/NGOs network working in the developmental programmes/projects operate on meagre resources and try to reach the normally unreachable target groups in difficult situations. Their concern is to deliver the best to the target groups in as much cost effective manner as possible, as their resources, both in term of manpower and financial are very limited. At the same time, NGOs also have to maintain their credibility with the local people, as they have to continue working with them regardless of external support, as that is what they have choose to do. Therefore, in spite of good work, they could never do fool proof documentation of the entire process. On the other hand, the carbon credit projects are heavily loaded in favour of over documentation, perhaps not required so much for registration, but more to protect the registration agencies themselves and their reputation. Because of too much dependent on such approach, many very good grassroots projects which have very strong social dimensions perhaps will never get registered as Gold Standard projects, as the people managing and working for it are very far from the grassroots realities.

For the household biogas plants, which is highly decentralised programme, and so much relevant to be considered for carbon credit, only those who have long practical experience of implementing such projects can understand the many socio-economic benefits which it provides to the rural communities, without even studying such elaborate documents like, PDD, Passport and other reports based on new studies by highly paid external experts.

When looking back, why we got involved in the carbon credit project for household biogas plant of INSEDA member and partners under the Gold Standard, and continued going through the cumbersome process for registering the project, the reasons were several. Some of them being, INSEDA consultant, GTZ-CPU-India were so good in marketing that they sold us the moon in terms of this project, and also found us a very credible buyer, the First Climate. The First Climate signed the agreement with INSEDA in May 2008 to buy the VER generated from our biogas project, and ever since have been providing moral support. Their top executive even visited the project site in MP, which is one of INDSEDA biogas project states, to understand the project and realities at the grassroots level, meeting and talking with the local poor owners of the biogas plants about the direct and indirect benefits as well as made movie for awareness building of people in the western countries and for promotional aspects. Another reason for continuation with the process and not giving up in the middle was because of the faith and expectations of grassroots members and partners in INSEDA, who along with INSEDA had spent meagre resources for collection of data, information, documentation and in the development of this biogas project and in organising various stakeholders meetings as well as their own commitments to their end users. Therefore, in spite of over three years of long wait we continued in the entire process.

Conclusion and Recommendations

Carbon Credit projects can be a very relevant for the socio-economic benefit of the rural people in India and South Asia and other developing countries, but as mentioned, in the present form it has to face many problems. At present the CDM, Gold Standard and other registering bodies of the carbon credit projects, use the mechanism which are not only too cumbersome, but also time consuming, as it takes as much as 3 years. Presently, it is very heavily loaded in favour of external consultants, as it involves detail documentations, baseline survey, validation, verification and monitoring etc. Because of all these the transaction cost becomes too high and the main project developer has to be on the mercy of these highly paid external consultants, not knowing till the end (which could take up to three years or more durations) whether the carbon credit project will be approved for registry or not? For any reasons the project falls through at any of the stages, the project developer has to pay heavily, and if a small developer is involved, it can lose, both money and become bankrupt, as well as loose credibility with the other stakeholders. In this process the real stakeholders (project developer/holder and the local NGOs with meagre resources as well as the poor end users) suffer, and mistrust is generated amongst them due to these delays.

In view of the above, it is recommended that process should be completely revamped, to cut down the roles of external consultants, reduction in transaction costs and reduction of project registration time by at least one fourth of the present duration. There is also a need for providing some kind of development funds, in the form of grant from the donor groups, which could sustain the NGO project holders and members and partner grassroots NGOs till the project is registered.

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The role of registering agencies should be reviewed to ascertain what pro-active role they can play and become NGO friendly and hand holding role, especially in the case of socially relevant carbon credit projects for highly decentralized applications.

More information:
www.inseda.org
www.inforse.org/asia

INFORSE’s Manual’s Biogas section: “Sustainable Energy Solutions to Reduce Poverty in South Asia”
www.inforse.org/asia/M_III_biogas.htm