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Reports of CDM/JI Feasibility Studies: FY2005

Title of the researchStudy for Laogang Landfill Gas Utilization and Energy Recovery Project in China
FYFY 2005
Main research orgnisationJapan Engineering Consultants Co., Ltd.
Research partner(s)Shanghai City Appearance and Environmental Sanitation Administrative Bureau
Location of the projectChina (Shanghai City)
Summary of the research report (PDF)200503.pdf
Description of the projectThe City of Shanghai in which the project site is located is the largest city in China and is the centre of the Chinese economy. The GDP of Shanghai has shown a rapid increase in recent years and the accompanying rapid increase of the electricity demand has created a very tight electricity supply and demand situation. The city’s Laogang landfill site has an area of some 600 ha and some 6,000 tons of waste are currently disposed of at this site per day. The Project aims at collecting LFG, which is a GHG produced at landfill sites and of which the main constituent is methane, and using this LFG for power generation.
Under the Project, LFG collection wells will be installed at the landfill site and the collected LFG will be fed to a gas engine for power generation after pre-treatment by a gas adjuster. The generated electric energy will be sold except for the portion used by the landfill site and the surplus LFG which is not used by the gas turbine will be burned by flaring.
Sector of the projectWaste Management
Duration of the project activity/ crediting period2007 - 2016
Baseline methodology/additionality・Establishment of the Baseline:
For LFG projects, a number of methodologies to determine the baseline (baseline methodologies) for the volume of GHG emission are already approved by the CDM Executive Board. The baseline methodology used for the Project is ACM0001 “Consolidated baseline methodology for landfill gas project activities.” As the purpose of the Project is to achieve an emission reduction effect through the use of an alternative energy source by using collected methane for power generation with a view to supplying the generated power to the grid, the application of a consolidated methodology is believed to be possible. Therefore, as the Project demands CO2 credit through the substitution of a system power source, ACM0002 “Consolidated baseline methodology for grid-connected electricity generation from renewable sources (the baseline methodology for substituted electricity/heat)” is also applied.

・Proof of Additionality:
Compared to the existing business practice (baseline) where LFG is neither collected nor burned, the development potential of the Project is evaluated by the bench mark determined by the IRR for the Project and the loan interest rate applicable to investment activities in China (host country). Here, the loan interest rate is 6.12% which is the interest rate charged by commercial banks in China for long-term loans. When the IRR for a project is equivalent to or lower than this rate, the feasibility of a project is considered to be low. The IRR for the Project, excluding the CO2 credit, is 3.8% and is lower than the commercial interest rate (6.12%). In other words, a methane collection and power generation project which does not anticipate CO2 credit is not attractive for investors and, therefore, its feasibility is low. China still does not have any law which makes methane collection at landfill sites a compulsory requirement. As such, most landfill sites do not meet either international construction standards or environmental standards because of the lack of sufficient capital as well as technology.
Estimation of GHG emissionsEstimated to be 8,486,000 tons-CO2 (total for the period from 2007 to 2016)
Monitoring methodologyThe monitoring methodology adopted by this CDM project is ACM0001 “Consolidated baseline methodology for landfill gas project activities.” A LFG collection and utilisation project is characterised by its ability to directly measure the amount of emission reduction achieved by the collection and utilisation of LFG which is not released into the atmosphere. For this reason, it is unnecessary to compare the baseline emission amount with the emission amount under the Project to calculate the amount of emission reduction to be achieved by the Project.
Environmental impactThe anticipated environmental impact factors involved in the present CDM project and their assessment results are described below.
Water Quality: The risk posed by effluent will be reduced due to the drainage of rainwater and reduction of effluent, in turn caused by the cover of the ground surface, alleviating the causes of soil and seawater contamination. The overall risk for a worsening of the water quality will, therefore be reduced.
・Air: The adverse impacts on the atmospheric conditions, including poisoning by the toxic gases contained in LFG, will be substantially reduced from the present levels. The beneficial effects include the curtailment of global warming through the collection of methane and other GHGs and the prevention of bad odour.
・Noise: The Laogang landfill site is located in a suburban area and there are no residents nearby. The huge area of this site will allow the installation of a gas engine, presumably the main source of noise, at an appropriate distance from the site boundary. Moreover, this gas engine will be installed inside a building and the resulting noise level should be reasonably low.
Issues and tasks for project implementationIt is planned to proceed with the necessary preparatory work for the Project with a view to commencing operation of the new system in January, 2007.

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