2011-12-30
Emissions of business today : Poor outcome of 4 Japan CDM projects in Indonesia, prolonged UN audit process blamed First period of the Kyoto Protocol to reduce greenhouse gases began in 2008 and ends next year with target of 6 percent carbon dioxide Year 1990 (CO2) reduction for Japan For the developing countries "Clean Development Mechanism (CDM)", strict audit procedure and time needed by he United Nation’s appointed examiner is proving to be a a major impediment for project development. Forthe Japanese companies involved in CDM projects in Indonesia, emissions reduction is monitored n only four of the past. We lookin into problem of the CDM, and consider its future ; by Yuka Yoshioka.
Every day trucks deiver 400ton municipal solid waste to delivered to 10 hectares Sumber Batu landfill in Bekasi, located in West Java.
A mountain of waste produce awful smell and there are people who picks up plastic bottles and other waste. 300 people live in shanty huts for 3 million rupiah per month (about 2,580 yen) in income.
PT Gikoko Kogyo Indonesia sells environmental equipment and power generation equipment (Kobe Head Office) and four years ago established system where methane is combusted. Methane combustion equipment and linked by pipeline garbage disposal hills, gas recovery and combustion of 130 tons per day (carbon dioxide equivalent). Methane has a high global warming potential than CO2, that there is a suppression effect of global warming just by burning the gas. Although some of the gas to fuel power generation, power generation scale is just 120 kW, the total being used at the project sites.
Besides the city of g Bekasi, Gikoko has been methane gas recoveryand flaring project in Indonesia in three other landfills.. The company raised capital for both plant construction, operation and holds the BOT scheme to transfer ownership to local governments.
For small businesses, such as the company's neck and the funding. Operating costs but also costs to the United Nations applying for CDM projects, including audit fees paid forapplications greater emissions. The project totatl investment is f more than US$ 4million with loans from the World Bank and Asian Development Bank (ADB) of US$2million. Emission Reduction is sold to the European government in a fixed forward prices. Initially Gikoko expected to produce the emissions of 200,000 tons per year.
However, even though you start monitoring as soon as the first CDM project approved inJuly 2009, significantly delayed than originally anticipated audit procedures, authorization of emissions is not approved yet and arrival of the maturities of loans in end 2012 is within just over a year.
Gikoko’s director Joseph Hwang said he was “aware of the risk was high, but now it is not economically viable," and laments. Emissions are audited by third party certification, after which UN issues the certicates. Audiors pick on deviation from the UN project design document (PDD) submitted to the company during project registration period in advance(PDD), and requests for many clarification information and data. “It's a very strict auditing. Combustion of methane gas recovery project in general, it is easily affected by weather conditions and the amount of garbage volume”.
Another headache is the management of garbage disposal procedure as there is a limit to the budget of local government, heavy equipment, lack of fuel trucks, heavy equipment in operational condition and repairs of perimeter road all affect mount of methane and gas collected at three other Gikoko projects have not reached the level planned till now.
Originally CDM is only recognized for “below a certain profitability" and and "there is no possibility to conduct business for profit if there is no institutional CDM" .This inevitably increases the risk of emissions trading revenue.
The difficulties faced by Gikoko include difference in the attitude of the government
As at August 1, CDM projects are registered in Indonesia 74. Emissions has been issuedout of this, only 12 Japanese companies involved, including the 4. Significant difference compared with the counting of 518 cases published in China. He has an Emissions Acquisition Program, New Energy and Industrial Technology Development Organization(NEDO), which has supported 10 projects so far in order to buy emission credits from companies directly, in China, Indonesia, in all cases of proven zero.
More research on emissions for Global Environmental Strategies (IGES), said aresearcher Jun Ichihara, Indonesia does not comply with the legal system, a problem that hinders national and transparent operations.
Compared with China, there is a big difference to the support of the central government. China has been working on such a national service center to open a parish ministry to promote the CDM. Data on CDM development in Indonesia is progressing but, still not enough support from Indonesia central government.
? New Initiatives
CDM projects have been published of the Japanese companies involved in emissions, 2 recovery of methane gas, power generation and has become 2.
Sumitomo Forestry in Central Java Province particleboard (PB) operates a woody biomass power plant in the factory, the minutes showed emissions of 982 tons in March 2009. 130 tons per day using biomass waste materials available in PB, which produces 4 megawatts of electricity. Total investment is $ 7.5 million (£ 648 million approximately). All switching from diesel to biomass power generation plant also led to cost reductions.
For power generation business, it helps that you manage your data, you make a big difference to the results of emission reduction monitoring. Also, without the need for coordination with local governments to manage the garbage disposal such as Gikoko , PB’s in-house power generation fuel supply and consumption are contributors to the project’s success factors.
Begin new projects now, the methane gas collected in the palm oil mill effluent with 72 plants nationwide that fuel for gas engine, there are plans for Shimizu. Investment of 2-3 billion yen forecast.
You can register a number of UN CDM project together a small program "CDM" is adopted, as well as to avoid lengthy procedures, the application of cost savings. In 14 years, are expected to total 10 million tons of CO2 reductions.
Opaque ? "Kyoto" after
Emissions trading price since July 2008, the decline in response to the global economic slowdown.?Maranai framework of international Kyoto Protocol ends next year, the outlook is uncertain. Examination of the United Nations as too restrictive, some new movement to introduce a system of bilateral or multilateral.
Gikoko’s Joseph Hwang stated, "The CDM is a high risk business. In future we shall do electricity sales, with a view to including recycling business.," he said. Since the policy listed the percentage of renewable energy to raise the Indonesian government has begun to show a positive attitude to small-scale purchasing power of national power PLN.
" We started business to contribute to environmental protection with our technology. Once emissions produce revenues we shall provide safety facilities for the poor living near garbage disposal total to 7% of carbon revenues .”
In order not to fail the CDM, developing countries, government support, development of financing systems, understanding and cooperation is required and above all local authorities and residents. |
