Fact Sheet - the Thailand AEP Livestock Waste Management Project

Background:
 
In 2003, Thailand was selected by the Global Environment Facility (GEF) to be one of the three beneficiaries of the Livestock Waste Management in East Asia project, known by its abbreviation: LWMEA. (The other two are China’s Guangdong Province and Vietnam).

The LWMEA project was designed to protect the environment from the growing industrial-scale livestock production in the region. In 2001, pig stocks in China, Thailand and Vietnam combined accounted for 52% of the world’s pigs and the portion is growing. However, improper management of pig manure has caused pollution run-off and inland discharges to the South China Sea. This could pose serious environmental and health risks.

To address this challenge, the GEF-funded Livestock Waste Management in East Asia project was created.

The objective was to help participating pig farmers secure funding to improve their waste management systems and install technology to convert waste into power. This enabled farmers to reduce consumption of electricity from national grid as well as carbon dioxide emissions, thus marketable as “carbon credits.”

The same concept is applied to the Thailand AEP Livestock Waste Management Project, named after the project’s implementing agent, but with a slightly different approach.

Under this Project, the reduction of carbon dioxide emissions by all participating farms is bundled and marketed as one unit. This is to help smaller pig farmers save on transaction cost, thus making the Project more attractive to them.

How does the Project work?

The Thailand Livestock Waste Management Project will use the Channel Digester Plus (CDP) system, developed at the Energy Research and Development Institute at Chiang Mai University. 

A system will be installed at each of the participating pig farms.  The animal waste will be regularly collected through the canals that are already present in most farms.  However, rather than flow into open lagoons as is now the case, the CDP system will include a filter and sand trap to remove undesirable solids.  The waste will then be collected in tanks and fed to a digester, where it will generate biogas.

That biogas will then power a generator which will provide electricity, largely for on farm use.  The CDP system produces a thick sludge, which after drying, is used for fertilizer.  Liquid by products will be treated biologically in lagoons until they meet environmental standards.

A flare system will also be incorporated to manage any excess accumulated gas, such as during maintenance of the generator.  We estimate that the ten farms participating in the project, with a total pig population of 131,000, will generate 6,250 kWh of electricity per day, reducing carbon dioxide emissions by 58,000 tons per year. 

What role does Advance Energy Plus play in this project?

AEP serves as the representative of participating farms and has overall responsibility for project preparation and implementation.

Specifically, AEP will (a) sign an emission reduction purchase agreement with the World Bank and make certified emission reduction (CER) revenue payments to the participating farmers; (b) cooperate with the World Bank in the due diligence aspects of the project including safeguards, validation, registration, verification, and CER issuance; (c) prepare an Initial Environmental Evaluation (IEE); (d) assist the farmers in using appropriate technology and procurement of works and equipment as required; (e) cooperate with Department of Livestock Development and the World Bank to monitor the implementation of the improved waste treatment and electricity generation; (f) coordinate with farmers and collect data for verification and training; and (g) implement the community benefit plan in consultation with the selected communities.

What is the Community Development Carbon Fund?

The CDCF is a public/private initiative designed in cooperation with the International Emissions Trading Association and the United Nations Framework Convention on Climate Change.

The CDCF became operational in March 2003. Financial support for the CDCF comes from countries in the Annex 1 of the Kyoto Protocol. The CDCF provides carbon finance to projects in the poorer areas of the developing world.

It is unique to other Carbon Funds in that it supports only projects that combine community development with emission reductions, creating "development plus carbon" credits that will significantly improve the lives of the poor and their local environment. For more information, visit www.carbonfinance.org.

What is GEF?

GEF is the global fund that helps developing countries finance projects or programs that protect the environment. It is managed by the United Nations Environment Programme (UNEP), the United Nations Development Programme (UNDP), and the World Bank.

Since 1991, the Global Environment Facility has provided $6.8 billion in grants and generated over $24 billion in co-financing to support roughly 1,900 projects in more than 160 developing countries.

GEF provided a $2 million grant to the Thai Government to fund the Thailand portion of the Livestock Waste Management in East Asia project, implemented by the Department of Livestock Development, Ministry of Agriculture and Cooperatives.

What is Clean Development Mechanism?

Clean Development Mechanism, CDM, is an arrangement under the Kyoto Protocol, which allows industrialized countries to invest in emission reduction projects in developing countries as an alternative to more expensive emission reductions at home.

For list of countries in Annex 1, visit the United Nations Framework Convention on Climate Change at: http://unfccc.int/parties_and_observers/parties/annex_i/items/2774.php.

What is the rationale for the World Bank’s involvement in CDM project?

The World Bank has been a pioneer in the carbon market under the Kyoto Protocol, helping to develop policy, regulatory, fiscal, and financial instruments across sectors and countries to generate incentives to reduce greenhouse gas emissions.

Over the past decade, the World Bank has managed 12 Carbon Funds including the CDCF established in 2003. These Carbon Funds do not finance projects, but contract to purchase Certified Emission Reductions in a commercial transaction, with annual or periodic payments following verification by a third party auditor.

These transactions have provided an additional revenue stream to reduce financial risks and to leverage new private and public investment into projects that reduce GHG emissions. 

What is the Thailand-World Bank Group Country Development Partnership for Environment CDP-E)?

For the past several years, the World Bank has been working closely with Thai public and private institutions through the Country Development Partnership (CDP) framework. This framework provides for Bank support in areas selected by the Thai Government.

The Bank’s engagement takes the form of analytical and advisory activities, technical advice, donor coordination, and investment, if appropriate.

The CDP-E is then the main platform for the Bank to support the Thai Government’s effort to improve environmental quality and address emerging environmental challenges.

After the first CDP-E came to a close in 2007, the Ministry of Natural Resources and Environment expressed a strong interest in renewing the partnership. It is most likely that the new CDP-E will be built around the theme of climate change.