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Reports of CDM/JI Feasibility Studies: FY2005

Title of the researchPromotion of Palm Oil Based Biodiesel Project in Thailand
FYFY 2005
Main research orgnisationALMEC Corporation
Research partner(s)Japan Transport Cooperation Association, Japan Weather Association
Location of the projectThailand
Summary of the research report (PDF)200513.pdf
Description of the projectPalm oil produced in the southern region of Thailand as feed stock for the production of bio-diesel is transported by liquid carrier to Bangpakong located around 70km east of Bangkok.. The production capacity of bio-diesel in Bangpakong is 300 tons per day. The product is sold to and distributed to the bus depot of the public bus company (BMTA) operating in Metropolitan Bangkok..
GHGCO2
Sector of the projectBiomass Utilisation
CDM/JICDM
Duration of the project activity/ crediting period10 years
Baseline methodology/additionality1. Baseline Methodology

The baseline was established using the lifecycle assessment technique. The new methodology has been prepared and submitted to UNFCCC for the approval (NM0142) was used for the proposed project. The baseline scenario applied are:

l Fossil fuel-based diesel oil is used in an amount equivalent to bio-diesel to be produced under the proposed project.
l A possibility to use other alternative source of fuel such as CNG, LPG, electric power, etc. were denied under the proposed project operation scheme.

2. Additionality
* In Thailand, no project similar to the proposed one is not implemented, which indicates a presence of a technical barrier.
* Feasibility analysis indicates the IRR of 9.4%, which is much lower than the long-term interest of 12.0% in Thailand. Thus, the project is not attractive to investors unless the carbon credit is created. As a result, there is an economic barrier.
* In Thailand, bio-diesel oil to be produced under the proposed project is not produced at all, which indicates a presence of a barrier to penetration to customers.
Estimation of GHG emissions
Year
Estimated Project Emission
(tons of CO2e)
Estimated Baseline Emission
(tons of CO2e)
Emission of Leakage
(tons of CO2e)
Estimated Reduced Emission
(tons of CO2e)
1st year
39,915
295,643
37,973
217,755
2nd year
39,915
295,643
37,973
217,755
3rd year
39,915
295,643
37,973
217,755
4th year
39,915
295,643
37,973
217,755
5th year
39,915
295,643
37,973
217,755
6th year
39,915
295,643
37,973
217,755
7th year
39,915
295,643
37,973
217,755
8th year
39,915
295,643
37,973
217,755
9th year
39,915
295,643
37,973
217,755
10th year
39,915
295,643
37,973
217,755
Total
399,150
2,956,430
379,730
2,177,550
Average
39,915
295,643
37,973
217,755
Monitoring methodologyIn accordance with the monitoring methodology (NM0142) following items shall be monitored to estimate emission volume for each aspect of project, baseline and leakage, respectively.

Project
Emission volume from
1. transport of raw material by coastal tanker
2. transport of raw material by trucking
3. production of PME-BDF
4. transport of PME-BDF from factory to blending facility by lorry
5. transport of PME-BDF from blending facility to fuel depot by lorry
Volume of PME-BDF production, sale, and export.

Baseline
1. Total sale volume of PME-BDF to each fuel service station
2. Calorific value of PME-BDF
3. GHGs emission coefficient at the time of crude oil production and transport, and refining of diesel and transport.
4. CO2 emission coefficient of fossil fuel-based diesel fuel

Leakage
Emission volume from
1. cultivation of oil palm
2. transport of Fresh Fruit Bunch (FFB)
3. production of Crude Palm Oil (CPO)
Environmental impactDirect impact:
The proposed project is designed to use crude palm oil (CPO) produced by existing palm oil mills as feed material for the production of bio-diesel. The national bio-diesel production plan has set its development target at 2012 and aims to expand the land planted for palm oil production to around 450,000 hectares to meet an increased demand. This expansion of cultivated land will be realized through crop conversion, i.e. from planting durian, rambutan, etc. whose commercial values have decreased significantly to palm. In this way, there will be no direct impact on the environment with the expansion of palm oil cultivation.

Indirect impact:
The estimated factory effluent from the proposed bio-diesel production plant is around 100 tons per day of which a mere 600 liters contains some liquid matter such as soap.
Issues and tasks for project implementationIssues and tasks for project implementation:
The most important issue to successfully carry out this bio-diesel production project is how a stable supply of raw material with uniform characteristics and at stable prices can be realized. A long-term sale and purchase contract among all concerned parties (i.e. BDF user – off-taker -, BDF producers, raw materials suppliers, and farmers is a must. Raw materials suppliers will find the merit of a long-term contract that ensures a stable transaction when the downtrend of palm oil market prices starts due to the effect of the expansion of palm oil cultivation area.

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