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How to define small-scale landfill gas projects?
World Bank, Carbon Finance Business Unit
Sandra Greiner
Discussion Paper
Abstract: While the first-best criterion to distinguish between small and regular size landfill gas
projects may be the disposal capacity of the landfill, this criterion is unrelated to the definition of
small-scale projects as it appears in the Marrakech Accords and in Appendix B of the simplified
modalities and procedures for small-scale CDM project activities. There, small-scale landfill gas
projects are defined as measures which both reduce anthropogenic emissions by sources and
directly emit less than 15 kilotonnes of CO2e annually. The paper identifies and examines three
generic interpretations of what could be considered the direct project emissions from landfill gas
projects. The one deemed most suitable is to define direct project emissions as those emissions
which are caused by and directly attributable to the project activity (Interpretation 2, variant 1 of
this paper). This includes CO2 resulting from the combustion of methane as well as the emissions
associated with the installation and operation of the recovery equipment. This interpretation of
direct project emissions is favored not only because it follows an inherent logic but also because
it makes a meaningful distinction between small and regular scale projects. With regard to the
definition of annual project emissions, the paper concludes that this should be interpreted as
average annual emissions over the crediting period and that the assessment should take place
upfront and be confirmed by the validator.
While the definition of other project activities such as renewable energy is clear and
straightforward, what is to be considered a small-scale landfill gas project (LFG) is not
equally intuitive and has spurred a number of different interpretations. The following
note makes an attempt to structure this discussion and analyzes the pros and cons of each
definition.
Among the categories of small-scale project activities for which baseline and monitoring
methodologies have been pre-approved by the Executive Board of the Clean
Development Mechanism (CDM EB)1 the one which is applicable to LFG projects is
category III.D: Methane recovery. In order to qualify as small-scale, LFG projects have
to meet the definition contained in this category.
1
See Appendix B of the simplified modalities and procedures for small-scale CDM project activities:
“Indicative Simplified Baseline and Monitoring Methodologies for Selected Small-Scale CDM Project
Activity Categories”, available at http://unfccc.int.cdm/ssc.htm
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III.D. Methane recovery
Technology/measure
83.
84.
This project category comprises methane recovery from coalmines, agroindustries, landfill, wastewater treatment facilities and other sources.
Measures shall both reduce anthropogenic emissions by sources and
directly emit less than 15 kilotonnes of carbon dioxide equivalent
annually.
CO2 emissions from combustion of non-biogenic methane shall be accounted
for in the project activity
In cases, in which the captured landfill gas is not simply flared but used to produce
electricity, the project also has to meet the threshold criterion for renewable energy of a
maximum of 15 MW installed capacity. Since this criterion is easily met by most LFG
projects and its interpretation straightforward, this note concentrates on what is to be
termed small-scale methane recovery.
It should be noted that the definition used in category III.D. Methane recovery is not
original to this category but follows the generic definition of small-scale projects type iii
in the Marrakech Accords: “Other project activities that both reduce anthropogenic
emissions by sources and directly emit less than 15 kilotonnes of carbon dioxide
equivalent annually” (para 6.c.iii). Given the arbitrary language used in this paragraph,
the CDM EB later clarified that the CO2e emissions resulting from a small-scale project
have to stay below 15,000 tons annually.
The question thus becomes:
- How are “direct project emissions” to be defined in the context of LFG projects?
- What does “annually” mean?
The following paragraphs discuss a set of possible interpretations and analyze their
consequential effects if being adopted by the CDM EB.
1. Project emissions of LFG projects
After the implementation of a LFG project, greenhouse gases (mostly CO2 and methane)
continue to be emitted from the landfill site. In fact, the credited emission reductions
from LFG result in the conversion of a more powerful greenhouse gas (methane) into a
less powerful one (CO2). The most important sources of greenhouse gas emissions are
depicted in the figure below.
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CO2 (A)
CH4 (B)
CH4 (D)
CO2 (E)
CO2 (C)
CO2 (F)
CH4 (G)
Emissions from the site after project implementation include:
A) CO2 emissions from flare: in the process of burning landfill gas, CO2 is released
into the atmosphere. Landfill gas consists of approximately 50% CO2 and 50%
methane. Thus, the emitted CO2 stems from the following sources:
- Converted methane
- CO2 contained in landfill gas which remains unchanged in the burning
process.
B) CH4 emissions from flare: the flare efficiency is generally in the order of 9799.5%, meaning that a small portion of methane escapes into the atmosphere noncombusted
C) CO2 emissions from the site: Due to technical and commercial restrictions, it is
generally not feasible to collect all the gas produced in the landfill but the
recollection system is usually limited to a 70-85% efficiency. Thus, the landfill
continues to emit CO2 produced from aerobic decomposition of organic material
D) CH4 emissions from the site: For the same reason, the landfill continues to emit
CH4 produced from anaerobic decomposition of organic material
E) CO2 emissions associated with the operation of the landfill site (transport of
waste, consumption of electricity)
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F) CO2 emissions outside the borders of the landfill due to subsoil migration of
landfill gas
G) CH4 emissions outside the borders of the landfill due to subsoil migration of
landfill gas
H) CO2 emissions from electricity generation (similar to A)
I) CH4 emissions from electricity generation (similar to B, minimal!)
Given this multitude of emission sources after project implementation, the question of
what should be considered as direct project emissions is not easily determined. Three
generic interpretations as well as one interpretation outside the Marrakech Accords’
framework seem to emerge.
1. Interpretation: “All of the above”
This interpretation is based on the rationale that project emissions are those occurring
within the project boundary. If the project boundary is defined as the physical delineation
of the landfill site, all sources of greenhouse gases need to be taken into account
(excluding, however, emissions outside the landfill site due to subsoil migration of
landfill gas, [F] and [G]).
Pros:
-
The concept of project emissions as emissions inside the geographic project
boundary is straightforward.
Cons:
- virtually no project is likely to meet the threshold criteria and to be categorized as
a small-scale project .
- complex data requirements and data uncertainty. Methane and CO2 emitted from
the site outside the collection system can only be estimated with great difficulty
and measurement uncertainty.
2. Interpretation: “Direct emissions from flares and engines”
The starting point of this interpretation is not the physical boundary of the landfill but one
of causality. Only those emissions which are the result of and directly attributable to the
project activity should be counted as project emissions. All emissions which are
unaffected by the activity should however be disregarded, most importantly the noncaptured CO2 and methane emissions. The “Glossary of terms used in the CDM PDD”
adopted at the 7th meeting of the CDM EB seems to support a more abstract concept of
the project boundary: “The project boundary shall encompass all anthropogenic
emissions by sources of greenhouse gases (GHG) under the control of the project
participants that are significant and reasonably attributable to the CDM project activity.”
It can be argued that the portion of methane and CO2 left non-captured is neither
attributable to the CDM project activity nor under the control of the project participants
given that it is technically and economically unfeasible to fully capture all landfill gas
generated by the site.
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Variant 1
In the strict logic of the concept, only the CO2 emissions from the flares/engines which
result from the conversion of methane into CO2 are to be counted as these are the only
ones undergoing a transformation in the process, thus being the only emissions under the
control of the project participants and directly attributable to the project activity. In
addition, emissions associated with the installation and operation of the equipment have
to be taken into account.
Variant 2
In a more physical interpretation, all emissions released from the flares/engines should be
counted (CO2 from methane conversion, CO2 initially contained in LFG, non-combusted
methane). This variant is theoretically unsatisfactory as it is based on both a physical and
an abstract rationale.
Pros:
- Consistency with other small-scale definitions: Quantity of emission reductions
which can be earned from LFG projects meeting this definition are in a similar
range as quantity of emission reductions from other small-scale categories, e.g.
renewable energy projects2 (more so variant 2)
- The interpretation singles out landfill sites which would also be considered small
in engineering terms, if measured by the more common standard of waste disposal
capacity. Landfills which comply with this definition have a waste disposal
capacity of roughly 1.7 Mio. tons and a potential for electricity generation of 1-2
MW. 3
Cons:
- For some project developers, this interpretation may lead to an incentive to install
a less efficient recovery system and capture less methane than technically
feasible. By reducing the amount of methane captured and converted into CO2,
the project’s emissions can be reduced in order to fit it under the definition of
small-scale. This is certainly not in the interest of the UNFCCC and its overall
goal to mitigate climate change. However, the effect can be considered small as
2
Following variant 1, the amount of 15,000 tCO2e annual project emissions imply yearly emission
reductions in the order of 115,000 tCO2e. Given the chemical reaction which transforms one molecule of
CH4 into exactly one molecule of CO2 and the molecular weights of CH4 (16) and CO2 (44), one ton of CO2
emissions from the project is the result of 16/44 tons of combusted methane. 15,000 tons of CO2 thus
represent 5455 tons of combusted methane which yields 114,555 tons of emission reductions if multiplied
by the GWP of methane. Projects qualifying for small-scale under variant 2 would yield approximately
57,500 tons of annual emission reductions, assuming an equal share of methane and CO2 in landfill gas. For
comparison: a grid-connected hydropower plant of 15 MW installed in a fairly average emission intensive
country yields approximately 55,000 tons of annual emission reductions (at 60% load factor and assuming
a 0.7 tCO2/MWh grid emission factor)
3
The more lenient variant 1 definition allows to combust 5455 tons of methane annually (see footnote 2).
Assuming an efficiency level of the recovery system of 75%, the landfill could produce up to around 7300
tons of methane per year. In a ballpark estimate, this amount would be produced in a landfill of
approximately 1.7 Mio. tons of waste in place, given that 1 Mio. tons of waste typically produce 600/700
m3 CH4/hour (using a conversion factor of 0.000714 ton /m3 CH4).
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-
-
only project developers whose projects are marginally above the defined threshold
are likely to reduce the amount of LFG captured in order to benefit from smallscale procedures since they are at the same time reducing the amount of carbon
revenue.
Landfills which generate an amount of gas compatible with this definition are at
the very low end of commercial attractiveness. Given that commercial interest to
engage in landfill gas recovery normally requires at least 1 Mio. tons of waste,
this definition proves rather restrictive.
The interpretation is not consistent with the geographic boundary definition used
in other projects.
3. Interpretation: “Direct emissions from flares and engines not counting lifecycle neutral
CO2”
All CO2 and methane emissions from landfills are the result of either aerobic or anaerobic
decomposition of organic material. One can argue that all CO2 that is emitted from the
flares or engines (CO2 originally contained in landfill gas and converted methane) has
initially been sequestered in biomass from the atmosphere and is being released again at
the end of the biological cycle. CO2 in the natural cycle of life and decay should be
considered neutral to the atmosphere.4
Applying variant 1 above, in which case only gases undergoing a transformation have to
be taken into account, this interpretation would lead to zero project emissions for all LFG
projects. If applying variant 2, traces of methane that leave the flares or engines noncombusted would be counted as project emissions. Similar to the discussion above,
variant 2 is conceptually unsatisfactory as it is based on a mixture of physical and
abstract arguments.
Pros:
- Consistency with approved methodologies for LFG projects where CO2 emissions
from the conversion of methane are considered neutral and are not deducted from
the amount of emission reductions.
- Consistency with para 84. of category III.D: Methane recovery according to
which CO2 emissions from combustion of non-biogenic methane shall be
accounted for in the project activity. Inverting the requirement, CO2 emissions
arising from the combustion of biogenic methane do not have to be taken into
account.
- Comparability of the investment: The upper bound of projects would be given by
the size of the installed capacity for electricity generation which is not to exceed
15 MW. A landfill-gas-to-electricity project of 15 MW requires an approximate
investment of US$ 18 Mio. which is comparable to investments required for
4
This is however only true for CO2 emissions originating from the decay of organic material. CO2
emissions due to transport or operation of the landfill (E) as well as decaying plastics cannot be considered
climate neutral. Their proportion of the overall landfill emissions is however minor and they are likely not
to exceed 15,000 tons per year.
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projects of equal size in hydro (US$ 15-25 Mio), wind (US$ 15 Mio.) and
biomass (US$ 15-22 Mio.).
Cons:
- Virtually all projects qualify as small-scale
4. Other definitions “outside the box”
Given the very arbitrary nature of the above interpretations and their greatly diverging
implications, one may also approach the definition of small-scale LFG projects from a
different angle and ask what kind of definition may be meaningful. Acknowledging the
fact that the generic definition of type iii projects set forth in the Marrakech Accords
contributes little to a clear and well-reasoned categorization of small-scale LFG projects,
another option is to go back to the original intention of the Parties: to promote projects
which due to their size attract little commercial interest but are considered desirable for
reasons of equity and sustainable development.
The main factors to determine commercial attractiveness of an LFG project are the
characteristics of the landfill, in particular its depth and the amount of waste deposited in
the site. A reasonable threshold may lie in the order of 5-10 Mio. tons of waste put in
place at closure of the landfill, below which investments in LFG projects are feasible but
not particularly attractive. In a rule of thumb estimate, a landfill of 10 Mio. tons generates
sufficient gas to sustain generators of 5-6 MW.
Pros
-
A technical definition of this kind is better suited to reflect the real line between
commercially attractive and non-attractive projects
The size of the landfill is directly related to the size of the investment and the
amount of emission reductions which can be earned
Cons
- The approach bears no relation to the definition of small-scale projects of the
Marrakech Accords which may pose legal problems
2. What are annual emissions?
By simply referring to annual emissions, it is unclear how to categorize projects whose
emissions may vary over time. Emissions from landfills typically follow a parabolic
curve and are not constant over time. The question thus arises whether projects are
allowed to emit 15,000 on average over the crediting period or whether this is the
maximum they may emit in any given year. There appears to be no reason to discriminate
against projects with an unequal distribution of emissions so that the first of the two
interpretations seems to be appropriate.
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Secondly, it is not specified at which point in time the assessment of project emissions
should be made and whether the initial estimate of the project being small-scale needs to
be verified after project implementation. If so, projects would have to be reclassified as
regular scale projects in case the upfront estimate proves to be incorrect and the project
actually emits more than 15,000 tons of CO2e annually. In practical terms, this
interpretation has not much to recommend itself and would add to the uncertainties and
transaction costs related to the CDM. It would mean that projects surpassing the threshold
amount would have to be revalidated according to the regular scale procedures, possibly
adopting a new baseline and monitoring methodology and reversing the calculation of
emission reductions. In case annual emissions is interpreted as average annual emissions
over the crediting period, non-compliance with the threshold criteria could only be
established at the end of the crediting period in which case it is too late to change the
baseline and monitoring methodology retroactively. The only practical approach thus is
to leave the assessment of compliance with the small-scale definition to the scrutiny of
the validator who will make a judgment based on his or her best knowledge on the
expected amount of project emissions, which have to be estimated in a conservative and
transparent manner. Actual project emissions can however be considered at the time of
renewal of the crediting period.
3. Conclusions
From the four interpretations of small-scale LFG projects previously presented, the first
one (“all of the above”) should be discarded as it would practically reduce the number of
eligible projects to zero and would entail large measurement uncertainties. Likewise,
variants 2 of the second and third interpretation (“direct emissions from flares and
engines including CO2 originally contained in landfill gas”) should not be adopted as they
do not build on a theoretically stringent argument.
Among the remaining interpretations, the most lenient approach is given by interpretation
3 (“Direct emissions from flares and engines not counting lifecycle neutral CO2) which
allows to include flaring projects of all sizes and electricity generation projects of up to
15 MW.5 This interpretation basically does not set any eligibility limitations and would
allow projects to qualify as small-scale which may earn well beyond 10 Mio. tons of
emission reductions over the crediting period.
The ideal approach to distinguish between commercially attractive CDM projects and
those which may need an additional push and should benefit from small-scale procedures
may be the definition of threshold size of the landfill. This has been suggested by the
fourth interpretation (“outside the box definitions”). However, this interpretation is
unrelated to the definition of type iii small-scale projects in the Marrakech Accords and
its adaptation to methane recovery projects done by the CDM EB. Under the prevailing
circumstances, the second interpretation (“direct emissions from flares and engines)
5
However, one option to limit the size of flaring projects under this definition would be to calculate the
amount of LFG necessary to operate gas engines of 15 MW. This amount would then define the threshold
for cases in which no electricity is generated but all of the collected gas is flared.
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seems to offer the best combination of stringency of the interpretation and acceptable
project size, with a corresponding landfill size of approximately 1.7 Mio. tons of waste
put in place.
With regard to the definition of annual project emissions, the paper concluded that this
should be interpreted as average annual emissions over the crediting period and that the
assessment should take place upfront and be confirmed by the validator. An ex post
verification of actual project emissions in connection with a potential reclassification as
regular scale project appears practically unfeasible.
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