Is utilization of landfill gas might be considered as a profitable carbon monoxide project?

D. Kolganov, PricewaterhouseCoopers Russia

Until recently, any landfill gas project being developed by the analysts of Net Development Mechanism was considered as of first-priority nature. Pursuant to the data issued by World Bank, the amount of landfill gas projects total up to 7% of its total portfolio. Executive Committee of Net Development Mechanism was the one that approved four methodologies to be applied for adjustment of the procedures specified for preparation and implementation of landfill gas projects. Besides, the carbon market statistics identify annual permanent growth of a number of landfill gas developed projects.

Two landfill gas projects including the one of gas utilization at such polygons as “Khemetyevo” and Dmitrovsky” (Moscow) were listed among of 35 Russian CO projects that had already been published on the website of U.N.O Climate Change Committee. As per the regulations determined by International Climate Fluctuation Analytical Group (ICFAG), the rate of design volume specified for Russia should amounts to 0.93 kg/person/day, that is 338.45 kg/person/year, with the rate conforming to 130 million m³/year or about 30 million tons per year. Within the territory of Russia, polygons and dumps cover the area of about 2 000 square km. Besides, more than 80 billion tons of wastes have been accumulated last years. The very optimistic prerequisites make the Russian project developers and polygon operators convinced about economic efficiency and legal regulative consistency of any landfill gas projects implemented in Russia. But, it is necessary to account for the project characteristics that may lead to occurrence of any unexpected developments and failures to gain expected results. 

Along with such engineering processes, as compacting, covering, leaching, incineration and flooding of holes that can influence the rates of gas utilization, any prosperous landfill gas utilization project may be fit out with other components.  Upon examining the potentialities of landfill gas extraction, one of the most problematic matters concerned to projected reduction of estimated gas emissions – gas sampling factor – was reveled. As a rule, between gas-sampling factors and its actual amount quite a large discrepancy may be found. In compliance with the experience, some problems that may occur in the course of optimization of gas extraction system are also able to obstruct implementation of any project. The above gas utilization factors may be affected by frequent failures and considerable change of landfill gas flow generated by organic remains disposed at the areas with high methane concentration.  

From the point of verification view, landfill gas projects are also quite the problematic ones for their monitoring. Project developers used to pay much attention to precision of system operation and just copy control techniques in their project documentation. Also, information of the efficiency tends to be documented, but if any verifier would ask the question of practice testing, any answer might be of negative nature. This kind of common problem may lead to considerable reduction of emissions approved by verifiers.

It is necessary to point out the model applied for the purpose of forecasting with respect to gas utilization factors. Some models including the ones of ICFAG and USA Environment Protection Agency “E-Plus” were successfully developed and applied. It is necessary to account for the fact that the ICFAG model was developed for registering of greenhouse gas emissions and may be not considered as the perfect one, as it can not provide the respective estimation and forecast relative to conditions of object, activities and contract terms. Each model should fit the specific conditions of a certain country to be used for its implementation. While implementing one of the Mexican largest projects, the rate of gas recovery output made up 70%, as in the course of its implementation the applied gas recovery system was found to need changes. As a result, the project partners had to apply an additional polygon for production of a certain amount of methane required for functioning of the power station. So, the project was subject to its additional development and the new problem had to be resolved. Within the region of Rio Asul, due to the level of leaching, the rate of gas recovery output made up 25% of the forecasted one and the project partners had to install additional facilities required for full evacuating of gas out of the landfill holes.

In terms of the previous cases related to implementation of landfill gas project, it might be concluded that any forecast or expectation must be of quite of conservative character to be enough for avoiding of possible obligations in case of inefficient usage or non-usage of emission reduction units.

Who could be called as the gas market customer and what potentialities might the Russian project partners and developers have with the procedures of project joint implementation being available and in some cases unavailable? Russian sellers may apply two variants of reduction concerned to organic gas emissions: carbon credits for implementation of specified legislative requirements and carbon credits for retailing. The first variant is chosen by the purchasers represented by European energy and industrial companies that are looking for any possibility to avoid the emission trade restrictions adopted at the markets of Europe, investment banks and other financial intermediaries, special carbon funds (private and public), other country governments that wish purchasing the reduction emission units for the purpose of meeting the requirements regulated by Kioto Protocol. The second variant is chosen by the companies that officially announced about their neutral position in respect of carbon emissions (especially these kinds of companies operate in financial and retail sectors), private companies, which business is related to creation of carbon credit portfolio or other intermediate organizations, brokers and financial funds. As well as you can see, Russian companies have an amount of perfect prospects, but due to market competitiveness and for the purpose of maximal profits, any Russian project should be fast at its advancement.