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Reports of New Mechanisms Feasibility Studies: FY2011

Title of Feasibility Study (FS)New Mechanism Feasibility Study for REDD+ through Revegetation at Denuded Lands and Woody Biomass-based Power Generation in Son La Province, Viet Nam
FYFY 2011
Main Implementing EntitySumitomo Forestry Co., Ltd.
FS PartnersVietnam Forestry University, Mitsubishi Research Institute, Inc. and Chiba University
Location of Project ActivityViet Nam
Category of Project ActivityREDD+, and Biomass Utilisation
Summary of FS ReportPDF (1.8MB)
Description of Project/ ActivityIn Son La Province, northwestern Vietnam, carry out revegetation of land used for slash-and-burn cultivation and denuded land, which make up a large portion of the area. Reduce pressure on existing natural forest, and quantify the resulting increase in carbon accumulation by plantations in order to acquire emissions credits for the reduction in GHG emissions. Large volumes of timber could be produced in the future if large-scale afforestation and revegetation activities were to be implemented, therefore also engage in timber processing business and biomass power generation, and reduce GHG emissions by using biomass to generate electricity instead of fossil fuels. The project will contribute to sustainable development in the region by developing forests, thereby helping to enhance their multi-faceted functions, such as cultivation of water resources, national land conservation, and biodiversity preservation, and by establishing new industry in northwestern Vietnam, one of the country’s poorest regions.
Reference Scenario and Project/ Activity BoundaryForest Management Segment: Three areas were established—project areas (approx. 16,000ha), leakage areas, and a reference area (approx. 205,000ha). The reference scenario is a situation in which forest depletion and degradation continue according to analysis of satellite images of the reference area at multiple points of time.

Biomass Use Segment: Based on CDM methodology AMS-I.A., importing electricity of the grid is the reference scenario as this is the most feasible form of power supply within Son La Province. Regarding the establishment of boundaries, a boundary shall be the "physical, geographical site of the renewable energy generating unit and the equipment that uses the electricity produced."
Monitoring Methods and PlanForest Management Segment: Data relating to changes in land use and land cover will be analyzed to estimate the change in forest growing stock. This will be carried out through combined use of remote sensing and ground data.

Biomass Use Segment: ISO 9001 certification will be acquired for timber processing mills/biomass power generation in order to establish a quality control framework. Monitoring procedure manuals will be incorporated into auditing systems related and not related to ISO so that monitoring will be integrated into business operations.
GHG Emissions and ReductionsForest Management Segment: Emission reductions expected over 20 years of the project are 59,510 – 63,518t-CO2/year. It was found that the expected emission reductions varied greatly depending on the assumed deforestation rate for the reference scenario.

Biomass Use Segment: Emission reductions of 20,197t-CO2/year are expected for each plywood factory, based on estimates for plywood factories to be built under Son La Province’s forest preservation and development plan.
MRV System for GHG ReductionsForest Management Segment: The degree to which forest depletion is prevented as a result of implementing revegetation activity as a forest depletion countermeasure will be quantitatively evaluated. Based on the results of monitoring, the project operator shall compile and submit monitoring reports containing related data such as the area of forest depletion and emission reductions. Regarding verification, required procedures and parameters of confirmation will be determined through reference to standards such as ISO 14064:2006.

Biomass Use Segment: Measurement reliability will be enhanced through conformance to methods stipulated under "Monitoring Methods and Plan." CDM methods will be referenced for reporting and verification.
Analysis of Environmental, Socioeconomic and other Impacts (including Securement of Environmental Integrity)Forest Management Segment: Negative effects on the environment are not expected to be great, but compliance with domestic regulations and international guidelines relating to areas such as biodiversity and forest preservation and development is required.

Biomass Use Segment: This is a project requiring an environmental impact assessment (EIA) based on Vietnam’s Law on Environmental Protection (Law No.52/2005/QH11), therefore an EIA-based study will be carried out and measures for avoiding or mitigating expected adverse impacts (noise, air pollution, water pollution etc.) will be taken.
Financial PlanningForest Management Segment: In terms of the balance of income and expenditure over 20 years of the project, revenue earned from GHG emission reductions will exceed the cost of planting activity. Because it will take a long time before revenue from log sales is received, a framework for ensuring early receipt of revenue from GHG emission reductions is desired.

Biomass Use Segment: It is assumed that public assistance will be received, but it is possible, if EVN's electricity retail price rises in line with the PDP7, that the return will exceed the State Bank of Vietnam's base rate (9.0%), which is a potential benchmark.
Introduction of Japanese TechnologyForest Management Segment: Application of Japanese know-how on sustainable forestry business, forestry road network design, forestry road development technology, and forestry machinery is possible.

Biomass Use Segment: In regard to installation of facilities prior to project implementation, investment should be kept as low as possible while taking advantage of incentives. An overall evaluation of machinery and equipment covering upkeep costs, maintenance, and utilization ratios needs to be performed to determine whether or not it should be installed.
"Co-benefits"
(i.e. Improvement of Local Environmental Problems)
An increase in biodiversity is expected in protected areas of the area designated for forest rehabilitation. The project will also contribute to cultivation of water resources, strengthening of the local economy and access to sustainable energy.
Contribution to Sustainable Development in Host CountryIn addition to preserving the environment by increasing the area of forest through planting, and carrying out sustainable forest management, livelihoods of local residents will be improved. At the same time, high value-added biomass use will be introduced. Thus, the project will contribute to sustainable development in the host country.

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