Carbon Credit Potential in Sugar & Distillery Sectors

1. Carbon Credit Potential in Sugar & Distillery Sectors

2. Who is Trio – Chem? • Established in 1992 • Works in multi-disciplinary fields like: • Environmental protection through pollution control • Organic farming and sustainable agriculture • Profitable animal husbandry • Turn-key solutions for – Zero Effluent Discharge (ZED) Presentation on Carbon Credits

3. Who is ICF International? • ICF is one of the world’s largest specialist energy and environment consulting firms • Publicly traded company (NASDAQ: ICFI) • 40 years of experience and sustained profitability • Worked extensively with energy companies, governmental and non-governmental agencies worldwide • 2,200 employees • $500 million revenues • More than 150 CDM/JI projects • Headquartered in Fairfax, Virginia • 15 offices around the United States • International offices in London, Moscow, New Delhi, Rio and Toronto Presentation on Carbon Credits

4. Presentation Outline • Introduction • CDM and Carbon Credit Process • CDM Case Study • CDM Implementation Model Presentation on Carbon Credits

5. What is in the mind of a Distiller? • Carbon credits can be generated • Money can be earned, atleast till 2012 • But is it really possible? • Are consultants taking us for a ride? • So far no one has really seen CC dollars! • Confusion! Caution!! …… INACTION. Presentation on Carbon Credits

6. Does Distillery qualify for CDM? • It is not the Distillery or Dairy or any other industry, which automatically qualifies for CDM • It is the Scientific action plan, which ensures reduction in GHG emissions, especially Methane, qualifies for CDM/CC Presentation on Carbon Credits

7. Carbon Credits Baseline Scenario Reduction in emission should commence after implementation of project Additionality The project idea should not be existing. It should not be part of routine business. It should be addition to routine. Social Benefits Project execution should result into new & permanent social benefits.

8. Presentation Outline • Introduction • CDM and Carbon Credit Process • CDM Case Study • CDM Implementation Model Presentation on Carbon Credits

9. CDM projects must satisfy three criteria • Voluntary participation • Project activity must result into emission reductions that are real, measurable and offer long term sustainable development in the host country • Emission reductions must be additional to what would occur in the absence of the project activity Presentation on Carbon Credits

10. Emission reductions demonstrated through project design document (PDD) • Project design document: • Based on UNFCCC approved methodology • Describes baseline scenario against which emission reduction happens • Project must be additional to baseline • Clearly demonstrates the calculation for emission reductions • Describes monitoring plan on how the emission reduction would be regularly monitored • PDD is the most critical document in CDM Presentation on Carbon Credits

11. What are the CDM challenges? • Methodology • If methodology is not available – new methodology approval takes long time • Baseline and additionality are difficult arguments • Project activity should not be baseline in itself • Emission reduction calculation based on real monitored data • Project Monitoring on annual basis – verification by an UNFCCC accredited auditor (DOE) Presentation on Carbon Credits

12. Comment Period Comment Period CDM process is lengthy but well defined… Project note Methodology Project design document Host Country DNA ~ 6-8 months DNA approval DOE (Validation) UNFCCC EB ~ 4 months Registration Annually CER UNFCCC EB DOE (Verification) Presentation on Carbon Credits

13. Carbon credits accrue from range of sectors… Presentation on Carbon Credits

14. CDM projects in Sugar Mills and Distilleries… • Bagasse-based co-generation at sugar mills • Electricity exported to grid displaces grid-electricity • Distillery effluent (spent-wash) treatment • The biogenic spent-wash leads to methane emissions • Composting leads destructs methane emissions and is potential CDM project • Bio-methanation extracts methane from the spent-wash • Methane could be used for heat or power generation • Is a potential CDM project • Baseline scenario and additionality arguments need to be in place for CDM to happen… Presentation on Carbon Credits

15. Presentation Outline • Introduction • CDM and Carbon Credit Process • CDM Case Study • CDM Implementation Model Presentation on Carbon Credits

16. Carbon credits could offset investment into ZED – Case Study – Composting • Distillery • Capacity: 30klpd operating 270days/annum • Spent-wash produced: 320klpd/day • 0.068tCOD/kl • Activity • RO/Evaporation to reduce spent wash volume by 60% • COD of the reject: ~0.17tCOD/kl • Composting of this reject with press-mud • Leads to ZED – destructs potential CH4 emissions • CDM Impact • Composting produces – 25K CERs p.a. • A version of methodology may lead to ~5K CERs p.a. • @ 6€/CER makes 150,000 €, i.e. INR 82.5lakh • These credits accrue for 10 years Presentation on Carbon Credits

17. A Case Study – Bio-methanation • Distillery • Capacity: 30klpd operating 270days/annum • Spent-wash produced: 320klpd/day • 0.068tCOD/kl • Activity • Bio-methanation achieves 70% destruction in COD • CDM Impact • Composting produces – 20K CERs p.a. • @ 6€/CER makes 120,000 €, i.e. INR 62lakh • These credits accrue for 10 years Presentation on Carbon Credits

18. Baseline Scenario CH4 Emissions Distillery Open Lagoons High Volume Spent Wash High COD Alcohol Presentation on Carbon Credits

19. Project Activity CO2 High Volume Incinerator Distillery Bio-digester Methane Spent Wash Steam CO2 Boiler High COD SW Power CO2 High Volume Low COD Generator Alcohol High Volume Evaporator Reverse Osmosis Clean Water Low COD SW Low Volume High COD Compost COD completely destructed Presentation on Carbon Credits

20. Steps of Calculations… Distillery Bio-digester Reverse Osmosis/Evaporation Composting Presentation on Carbon Credits

21. Parameters to be Monitored Distillery Vol. of Spent Wash COD of the Spent Wash Biodigester Quantity of Methane COD of the output Vol. of the output Evaporator Vol. of the output COD of the output Compost COD of the SW composted Depth of the lagoon Lagoon-ing Period Average Monthly Temperature Presentation on Carbon Credits

22. Bio-digestion Presentation on Carbon Credits

23. Project Activity CO2 High Volume Incinerator Distillery Bio-digester Methane Spent Wash Steam CO2 Boiler High COD SW Power CO2 High Volume Low COD Generator Alcohol High Volume Evaporator Reverse Osmosis Clean Water Low COD SW Low Volume High COD Compost COD completely destructed Presentation on Carbon Credits

24. CDM @ Bio-digestion CO2 High Volume Incinerator Distillery Bio-digester Methane Spent Wash Steam CO2 Boiler High COD SW Power CO2 High Volume Low COD Generator Alcohol High Volume Evaporator Reverse Osmosis Clean Water Low COD SW Low Volume High COD Compost COD completely destructed Presentation on Carbon Credits

25. Bio – digestion • The bio – digestion process extracts methane from SW • Methane is GHG with global warming potential of 21 • One tonne of methane = 21 tonnes of CO2 • The methane so extracted could be further: • Incinerated • Heat production • Electricity production • Methane is a clean fuel • Use of methane for energy begets additional CDM benefits (displacing fossil fuel from baseline) • No reduction in the volume of the SW • COD of the spent wash is reduced considerably Presentation on Carbon Credits

26. Reverse Osmosis & Evaporation Presentation on Carbon Credits

27. Project Activity CO2 High Volume Incinerator Distillery Bio-digester Methane Spent Wash Steam CO2 Boiler High COD SW Power CO2 High Volume Low COD Generator Alcohol High Volume Evaporator Reverse Osmosis Clean Water Low COD SW Low Volume High COD Compost COD completely destructed Presentation on Carbon Credits

28. Reverse Osmosis/Evaporation CO2 High Volume Incinerator Distillery Bio-digester Methane Spent Wash Steam CO2 Boiler High COD SW Power CO2 High Volume Low COD Generator Alcohol High Volume Evaporator Reverse Osmosis Clean Water Low COD SW Low Volume High COD Compost COD completely destructed Presentation on Carbon Credits

29. Reverse Osmosis and Evaporation • No direct carbon credit benefit • Does not lead to emission reduction • Both the processes require energy and lead to emissions • Reduces the overall emission reduction from the project activity • Reduces the volume of spent wash to be used for composting • Reduction of volume is important as press-mud is in limited supply Presentation on Carbon Credits

30. Composting Presentation on Carbon Credits

31. Project Activity CO2 High Volume Incinerator Distillery Bio-digester Methane Spent Wash Steam CO2 Boiler High COD SW Power CO2 High Volume Low COD Generator Alcohol High Volume Evaporator Reverse Osmosis Clean Water Low COD SW Low Volume High COD Compost COD completely destructed Presentation on Carbon Credits

32. CDM @ Composting CO2 High Volume Incinerator Distillery Bio-digester Methane Spent Wash Steam CO2 Boiler High COD SW Power CO2 High Volume Low COD Generator Alcohol High Volume Evaporator Reverse Osmosis Clean Water Low COD SW Low Volume High COD Compost COD completely destructed Presentation on Carbon Credits

33. CDM in Composting leads to 100% destruction of methane • Composting destructs the high COD content of the spent wash • Destruction of COD leads to methane emission reduction • Methane emission destruction through composting qualifies as CDM project • Methane emission happens due to anaerobic decomposition of spent wash in the lagoon • Lagoon depth and lagoon temperature decides the methane emission potential of the process • CDM requires quality composting and monitoring of composting process to qualify for carbon credits year-on-year Presentation on Carbon Credits

34. Presentation Outline • Introduction • CDM and Carbon Credit Process • CDM Case Study • CDM Implementation Model Presentation on Carbon Credits

35. CDM Implementation Model Month 3-10/12 Month 1/2 Annually Decides to Pursue the Project Owns the Project Owns the Project You Conducts Project due-diligence Builds the Project Bio-methanation Evaporation Composting Operates the Project Trio-Chem Completes the CDM documentation and registration Conducts CDM due-diligence Supports CDM transaction ICF Presentation on Carbon Credits

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