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    Tao Wang - World Bank Experience On Carbon Finance Operations in Biogas

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    Energy for All
    The World Bank has extensive experience with carbon finance operations related to biogas projects. It has partnered with over 90 governments and companies on funds totaling over $3.1 billion since 2000. Notable biogas projects include those in Nepal, China, the Philippines and Thailand involving technologies like household and livestock biogas. Lessons learned include that carbon finance can successfully support scaling up biogas programs but challenges include long lead times and price variability for carbon revenues. Ensuring good maintenance and monitoring systems is also important. A strong coordinating managing entity is key to success for bundled small-scale projects and programs of activities.

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    Tao Wang - World Bank Experience On Carbon Finance Operations in Biogas

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    Energy for All
    204 views20 pages
    The World Bank has extensive experience with carbon finance operations related to biogas projects. It has partnered with over 90 governments and companies on funds totaling over $3.1 billion since 2000. Notable biogas projects include those in Nepal, China, the Philippines and Thailand involving technologies like household and livestock biogas. Lessons learned include that carbon finance can successfully support scaling up biogas programs but challenges include long lead times and price variability for carbon revenues. Ensuring good maintenance and monitoring systems is also important. A strong coordinating managing entity is key to success for bundled small-scale projects and programs of activities.

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    Presentations from the International Workshop on Domestic Biogas, November 2012, PRC

    Original Title

    5. Tao Wang - World Bank Experience on Carbon Finance Operations in Biogas

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    The World Bank has extensive experience with carbon finance operations related to biogas projects. It has partnered with over 90 governments and companies on funds totaling over $3.1 billion since 2000. Notable biogas projects include those in Nepal, China, the Philippines and Thailand involving technologies like household and livestock biogas. Lessons learned include that carbon finance can successfully support scaling up biogas programs but challenges include long lead times and price variability for carbon revenues. Ensuring good maintenance and monitoring systems is also important. A strong coordinating managing entity is key to success for bundled small-scale projects and programs of activities.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    204 views20 pages

    Tao Wang - World Bank Experience On Carbon Finance Operations in Biogas

    Uploaded by

    Energy for All
    The World Bank has extensive experience with carbon finance operations related to biogas projects. It has partnered with over 90 governments and companies on funds totaling over $3.1 billion since 2000. Notable biogas projects include those in Nepal, China, the Philippines and Thailand involving technologies like household and livestock biogas. Lessons learned include that carbon finance can successfully support scaling up biogas programs but challenges include long lead times and price variability for carbon revenues. Ensuring good maintenance and monitoring systems is also important. A strong coordinating managing entity is key to success for bundled small-scale projects and programs of activities.

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    WORLD BANK EXPERIENCE ON CARBON FINANCE OPERATIONS IN BIOGAS

    INTERNATIONAL

    WORKSHOP ON DOMESTIC BIOGAS

    Table of contents

    1. Introduction of WB CF Business

    2. Biogas Project Experience

    3. World Banks View Forward

    INTERNATIONAL

    WORKSHOP ON DOMESTIC BIOGAS

    Evolving role and activities of World Bank in carbon finance


    2000 2001 2002 2003 2004 2005

    KP & EU-ETS effective


    2006 2007

    2008

    2009

    2010

    2011

    2012+

    Partnership for Market Readiness

    innovation
    INTERNATIONAL

    access

    quality

    efficiency

    scale

    predictability

    confidence

    WORKSHOP ON DOMESTIC BIOGAS

    Carbon Finance Unit introduction of business

    The Carbon Finance Unit has pioneered multiple funds bridging innovative public private partnerships
    Overview of Carbon Activities

    Delivery of Carbon Credits


    250 225 200 175 Mt CO2e

    Established Prototype Carbon Fund in 2000 and then family of 11 additional innovative funds and facilities linked to carbon >$3.1bn of funds committed since 2000; >$900m currently under management for post 2012 funds Partnered with >90 companies and governments in funds Projects in >50 countries with over 110 million emission reductions delivered to investors todate

    150 125 100 75 50

    25 0 2001 2005 Contracted 2009 2013 2017 2021 Delivered Projected Delivery

    Total Contracted Emission Reductions: 229 Mt Total Expected Delivery: 203 Mt

    INTERNATIONAL

    WORKSHOP ON DOMESTIC BIOGAS

    *Future delivery rate based on World Bank risk adjusted estimates of future ER generation. Past delivery based on date the assets were forwarded to fund participants.

    Public Sector Partners

    AUSTRIA

    FINLAND

    JAPAN

    SPAIN

    AUSTRALIA

    AGENCE FRANAISE DE DVELOPPEMENT

    JAPAN INTERNATIONAL COOPERATION AGENCY

    SWEDEN

    REGIONAL GOVERNMENTS OF BRUSSELS-CAPITAL, FLEMISH AND WALLOON REGIONS GERMANY

    LUXEMBOURG

    SWITZERLAND

    NETHERLANDS

    DENMARK

    IRELAND

    NORWAY

    THE UNITED KINGDOM

    THE EUROPEAN COMMISSION

    ITALY

    PORTUGAL

    THE UNITED STATES

    INTERNATIONAL

    WORKSHOP ON DOMESTIC BIOGAS

    Private Sector Partners


    Financials Others Industrials Utilities Oil & Gas

    INTERNATIONAL

    WORKSHOP ON DOMESTIC BIOGAS

    Table of contents

    1. Introduction of WB CF Business

    2. Biogas Project Experience

    3. World Banks View Forward

    INTERNATIONAL

    WORKSHOP ON DOMESTIC BIOGAS

    How carbon finance works

    A stream of payments based on results

    Carbon project cycle (validation and verification) Purchase agreement signing

    INTERNATIONAL

    WORKSHOP ON DOMESTIC BIOGAS

    Overview of biogas carbon finance projects


    12

    biogas related projects (incl. 3 programs)

    Projects

    aim to reduce 10+ mega tons of

    CO2e
    Current

    projects in China, Nepal, Philippines and Thailand

    Technologies such as household biogas, poultry manure, ethanol wastewater, and household livestock management

    New projects in early stages of development in Nepal and Ethiopia

    INTERNATIONAL

    WORKSHOP ON DOMESTIC BIOGAS

    Biogas projects in Nepal


    Project description
    CDM Projects are part of the broader national biogas program 2 CDM projects (PA1 and PA2) each having about 10,000 Household Level Biogas Plants were registered in December, 2005 following bundle approach Alternative Energy Promotion Center (AEPC), a Government Agency is the Project Entity that claims the emission reductions

    Methodology and baseline scenario


    Emission reduction is claimed against reduction in consumption of non renewable biomass only, which is established through Biogas User Surveys Subsequently the methodology was withdrawn and a new methodology to claim emission reductions against displacement of NRB was approved

    Scale up strategy
    2 additional CDM projects (PA3 and PA4), each having about 20,000 HH level biogas plants were developed and registered in December, 2011 following the same bundling approach In order to avoid the project by project approach, a new CDM program of Activity has been prepared which is expected to be registered soon.

    INTERNATIONAL

    WORKSHOP ON DOMESTIC BIOGAS

    Carbon Finance Contributions


    The Biogas Program in Nepal has been largely supported by donor resources Carbon revenues generated from the projects are used in the following areas
    Financing the program implementation cost Financing the biogas subsidy program Financing after sales services beyond the normal guarantee period assured by the biogas companies

    Success in tapping the carbon market has proved to be a sustainable model to raise resources for the program The approach to access the carbon market is being replicated for the Improved Cook Stoves Program where carbon credits can also be claimed against reduction in consumption of non renewable biomass.

    INTERNATIONAL

    WORKSHOP ON DOMESTIC BIOGAS

    Biogas Projects in China: Hubei Eco-farming Household biogas project


    Background Reducing Livestock manure pollution -- one of the top priorities in Chinese governments rural development strategy. Biogas utilization -- identified as a means of addressing rural environmental degradation and improving the living conditions of rural households, as well as an important tool for climate change mitigation. Objective Deliver environmental and economic benefits by integrating biogas from livestock farming and cooking in rural households by introducing carbon finance as an instrument to increase incentive for rural households participation and to strengthen the digester service extension network. Description The project is part of the World Bank lending program which covers 200,000 rural households in 4 provinces and 1 municipality. The first household biogas Clean Development Mechanism (CDM) project from China Target eight counties listed as national poverty county in Hubei province significant poverty alleviation benefit A bundled small scale project comprising 33,000 households Baseline is methane emission from anaerobic open pit and coal burning for household cooking Status Registered and CER issued for first reporting period. CER for the second reporting period is awaiting issuance
    INTERNATIONAL

    WORKSHOP ON DOMESTIC BIOGAS

    Biogas Projects in China: Shandong Minhe Animal Manure Management Project


    Background
    Livestock farming is becoming progressively more intensive in order to realize economies of production and scale Result in large amount of manure and wastewater that create profound environmental consequences, such as GHG emissions, odor nuisance, and water/land contamination from animal waste. Confined Animal Feeding Operations (CAFOs) use similar AMMS- uncovered anaerobic lagoons to treat and store animal manure, uncovered anaerobic lagoons emits large amounts of GHGs from the anaerobic decomposition processes.
    To bring environmental and economic benefits to livestock farms by improving manure management practice and utilizing biogas co- generation system to meet captive power demand. To convert the high-GHG of animal manure management system (AMMS) uncovered anaerobic lagoons to low GHG AMMS with mesophilic temperature anaerobic digesters with biogas capture and power generation at chicken farms. Biogas capture and utilization reduces the GHG emissions from manure management systems and biogas-based power generation will supply electricity to the grid replacing electricity that would otherwise be generated from coalfired power plants, reducing coal-based GHG emissions as well.

    Objective

    Description

    Status
    Registered and CER issued for the first reporting period as the first CDM project applying ACM0010 with successful issuance. CER for the second reporting period is awaiting issuance

    INTERNATIONAL

    WORKSHOP ON DOMESTIC BIOGAS

    Biogas Projects in China: Hebei Animal Manure Management System GHG Mitigation Program
    Policy Context

    Pollution in rural area as a result of rapid expansion of intensive livestock farming. Biodigester identified as a key pollution control technology A subsidy program set up by Gov. of China to provide a small portion of construction subsidies for biodigester investments. Take-off has been slow due to investment and technological barriers.

    Objective establish a sustainable livestock waste management model to


    improve rural environment and reduce GHG emissions through a programmatic approach that allow livestock farms to access carbon revenue to improve investment return and strengthen operations and maintenance of biodigesters through training and regular services .

    Description Install advanced biodigester to replace baseline open anaerobic


    lagoons and establish training and service system that livestock farm owners can readily access. Phase I targets at 42 large pig farms in 12 prefectures in Hebei Province

    Status Submitted for registration


    INTERNATIONAL

    WORKSHOP ON DOMESTIC BIOGAS

    Lessons Learnt (1 of 2)
    # 1: Good understanding of benefits and challenges in the use of carbon finance Carbon Finance can be accessed successfully to support scale-up of biogas program Challenges: long lead time of getting carbon revenue and price variability Benefit sharing arrangement for carbon revenue - Nepal model replenish subsidy funding and strengthen underfunded biodigester service network - China model annual carbon revenue payment to incentivize farmers who otherwise dont see revenue generation from biodigester installation and strengthen underfunded biodigester service network
    #2. Ensure good maintenance and establish a solid monitoring system Design of the Biogas User Surveys has evolved over the years and UNFCCC guidance has ensured an uniform approach Multiple-level monitoring and reporting structure Standard monitoring procedures and recording tables, and training courses Frequent and timely data aggregation in central database system Initial verification crucial to detect any change occurred and quality gap of monitored data
    WORKSHOP ON DOMESTIC BIOGAS

    INTERNATIONAL

    Lessons Learnt (2 of 2)
    #3. A strong CME is key to success of bundled small scale projects and PoAs Strong commitment from senior management and extended multiple-level implementation network Resources available to invest in training and setup of monitoring system

    # 4: Challenges in financing upfront project costs Carbon Finance can be used as collateral (future revenue streams) for debt financing Government subsidy to support project development Strong additionality
    #5. Price Variability Variable price indexed to a market reference with floor and ceiling Floor price reflects the project maintenance costs to keep the project viable Subsidy to bridge the price gap
    INTERNATIONAL

    WORKSHOP ON DOMESTIC BIOGAS

    Table of contents

    1. Introduction of WB CF Business

    2. Biogas Project Experience

    3. World Banks View Forward

    INTERNATIONAL

    WORKSHOP ON DOMESTIC BIOGAS

    Responding to the challenges in the market


    WB Facility Focus Resources Partners

    Scaling-up carbon finance

    $147 million^

    6 selling country, 3 buying country and 2 donor participants

    Testing purchase of REDD+ credits

    $220 million

    7 public and 2 private and 1 non-profit participants

    FCPF Carbon Fund


    Scale up of afforestation & reforestation and soil carbon

    Raising resources

    Anticipating mix of public and private participants

    BioCarbon Fund Tranche 3

    Support lowincome countries to benefit from carbon finance


    INTERNATIONAL ^All components

    Raising resources

    Donor governments aiming to sustain carbon market capacity and test results based finance frameworks

    WORKSHOP ON DOMESTIC BIOGAS

    Expanding carbon finance for household/community level programs like biogas Carbon Initiative for Development

    Build readiness and capacity to access carbon markets and support a pipeline of low-carbon investment opportunities in low-income countries with a focus on fighting energy poverty. This initiative will work through complementary components
    Ci-Dev Readiness Fund

    Ci-Dev Financing Fund

    Promote reforms in carbon market rules to benefit low income countries: Suppressed energy demand to combat energy poverty Standardized baselines Support the definition of and transition towards the next generation of market mechanisms Build capacity & lend technical assistance to carbon finance project entities Support African and LDC climate negotiators Research and Develop innovative carbon financing

    Allowing carbon finance to contribute to closing the critical investment financing gap Well adapted to micro / community level investments w/ high capital cost such as biogas systems Testing results based finance delivery mechanisms for potential use in future climate finance instruments, with possible deviation from todays market prices

    UNDER DEVELOPMENT

    INTERNATIONAL

    WORKSHOP ON DOMESTIC BIOGAS

    Our Mission:
    Catalyze climate action by enabling payment mechanisms for measurable results through public-private partnerships and markets

    Thank you

    INTERNATIONAL

    WORKSHOP ON DOMESTIC BIOGAS

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