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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 Derelict Commercial Forested Lands and Fuelisation of Woody Biomass Chips for Cement Plants in Angola
FYFY 2011
Main Implementing EntityPricewaterhouseCoopers Aarata Sustainability Co., Ltd
FS PartnersSojitz Corporation, PwC Portugal, Sojitz Research Institute, Ltd, Kokusai Kogyo Co., Ltd., Development Workshop
Location of Project ActivityAngola
Category of Project ActivityREDD+, and Biomass Utilisation
Summary of FS ReportPDF (814KB)
Description of Project/ ActivityThis is an integrated project that combines a REDD+ project for restoration of vegetation in an abandoned industrial afforestation area in Angola and a project for the country’s utilization of chips from the afforested area as an alternative fuel in a cement plant. The activities for the whole project are summarized as follows:
  1. An afforestation project will be conducted on a site identified as reforestable land in an abandoned industrial afforestation area.
  2. A REDD+ project will be implemented covering newly emerging natural forests in the abandoned industrial afforestation site and natural forests in the vicinity of the abandoned industrial afforestation site.
  3. Eucalyptus logs derived from the afforestation operation will be transported by trucks and other means to the coastal city and processed into biochips in a chipping plant.
  4. The chips will be utilized for biomass energy in a private cement plant that adjoins the chipping plant.
Activities #1 to #4 above will be undertaken to obtain emissions credits over the entire project by CO2 sequestration from the REDD+ project and reducing emissions from the cement plant biomass fuel substitution project.
Reference Scenario and Project/ Activity Boundary<REDD+ project>
Two reference scenarios will be set up: #1 a business-as-usual (BaU) case and #2 a case where economic growth will allow deforestation to progress to the level of forest reduction rates similar to those of neighboring countries. The project boundaries cover about 0.11 million hectares in populated area from Alto Catumbela in Benguela Province to Cassoco in Huambo Province, and natural vegetation in their vicinities.

<Cement plant biomass chip fuel substitution project>
A reference scenario will be set up as a BaU case, including wood chip transportation from the abandoned industrial afforestation site to a cement plant several hundred kilometers away and utilization of wood chips in the cement plant.
Monitoring Methods and Plan<REDD+ project>
Monitoring must comprise quantifying the emission reductions in the project area to determine the effect of REDD+ activities, and quantifying the emission reductions in the leakage belt to confirm there is no leakage. Effective techniques for these purposes include generation of emission factors for respective major forest types by on-site surveys and forest typing using satellite images or similar.
It is important to reconsider the emission factors and regenerate the reference levels every 10 years.

<Cement plant biomass chip fuel substitution project>
Items for monitoring include the amount of clinker and cement produced, the amount of mineral components used for cement production, kiln fuel consumption (including heavy oil input and wood chip input, which are covered in the project/activities), energy consumption by non-kiln equipment, amount of wood chips produced in the chipping plant, energy consumption in the chipping plant, log transportation frequency and distance, kind, and consumption and efficiency of transport fuel.
GHG Emissions and ReductionsGHG emission reductions: 1,836,094 to 3,081,000 tCO2 (10 years)
MRV System for GHG ReductionsUsually, measurement, reporting and verification (MRV) for a bilateral project are conducted using methods specified by the agreement between the two countries and/or methods specified by the project sponsor country. However, no bilateral agreement exists between Angola and Japan, and no governance on MRV is available in Angola, the project sponsor country.
In this situation, first priority should be given to preparing a national system for accepting the MRV of each project. It is desirable that the MRV of each project be designed on the basis of the national system.
  1. Measurement: The aforementioned monitoring parameters are measured.
  2. Reporting: Provided that a simplified method is adopted as a means of reporting, it seems appropriate that reporting take place every 5 years.
  3. Verification: Conducted with reference to ordinary internationally recognized approaches to MRV.
Analysis of Environmental, Socioeconomic and other Impacts (including Securement of Environmental Integrity)The final decision on the necessity of conducting an environmental impact assessment (EIA) is to be made by the Ministry of the Environment after checking submitted project dossiers (objective, time schedule, project specifics, results). The findings in a hearing on the EIA for the present project from the EIA and Prevention Management Administration in the Ministry of the Environment are summarized below.

Afforestation project: An EIA need not be conducted in the case of an afforestation project alone; however, if a wood processing operation is included, an EIA is mandatory.
Wood chip processing project: Prior to constructing a wood chip plant, an EIA is needed. Should a former Companhia de Celulose e Papel de Angola (CCPA) plant be reconstructed for wood chip processing, a license must be obtained together with an EIA because the construction work for the plant took place before enforcement of the current Environmental Act.

Wood chip utilization in cement plants: A license with an EIA must be obtained before constructing a new cement plant.
Financial PlanningProject profitability was calculated by way of a trial to determine the feasibility of the present project as an integrated project to be undertaken by private companies, rather than as a voluntary project undertaken as an environmental CSR activity.
The profitability of the present project was assessed using the internal rate of return (IRR) and the net present value (NPV) method. A sensitivity analysis with altered credit unit prices and other computational elements was also conducted.
Introduction of Japanese TechnologyIn Angola, no afforestation operation has been implemented since the start of the civil war; therefore, there is no adequate technology for afforestation operations. For this reason, transferring Japan's afforestation-related techniques, such as nursery management, method of planting, weeding, pruning, thinning, close planting-thinning combination, leaf area index control, and seed collection from superior plants will help formulate a policy for promotion of afforestation by the host country's government. Angola has no established information system for land utilization due to a long civil war. For this reason, land utilization surveys based on Japan's unique satellite image analysis and technical transfer technology to Angola are expected to be highly beneficial for the country. In particular, Japan's high-resolution satellite technology can be broadly utilized by making the best use of ALOS satellite images.
(i.e. Improvement of Local Environmental Problems)
<REDD+ project>
A survey was conducted to evaluate associated co-benefits: water resources conservation (watershed conservation function), biodiversity conservation, and economic effects on the local community. Regarding regional economic effects, the project is expected to produce 100 new jobs, creating an income source of about one million US dollars.

<Cement plant biomass fuel chip substitution project>
Air quality improving effects (reduction in sulfur oxides and nitrogen oxides) are expected from partial substitution of combusted heavy oil as fuel for the clinker burning process with wood chips in the cement plant.
Contribution to Sustainable Development in Host CountryAlthough Angola has been enjoying dramatic economic development since the end of the civil war, major economic disparities still exist; 57% of urban inhabitants and 94.3% of those living elsewhere reportedly live in poverty and do not receive adequate education. In the area covered by the project, joblessness and low education levels are recognized as two major social problems currently prevalent in the local community; 95% of the inhabitants are unemployed and are engaged in subsistence agriculture, with no options available for them to escape from poverty. The afforestation project and the REDD+ project lead to direct and indirect growth of household incomes, and therefore offer educational opportunities for many children and, from a long-term standpoint, opportunities for occupational choice.

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