CDM projects in CHILE: Investigation of potential of biogas production from waste as a CDM project
July 2010

Prepared: June 2010
Prepared by: Asesorías Profesionales P. Lehuedé Ltda (APLE), Chile

Abstract

The Clean Development Mechanism is the flexible mechanism of the Kyoto protocol that enables offsetting of emissions through climate friendly projects in developing countries. A number of implemented CDM project activities include biogas production. Chilean consulting firm APLE (Asesorías Profesionals P. Lehuedé Ltda) is today in the process of developing two CDM projects related to biogas production from waste.

Using the two APLE projects as examples, the thesis investigates if biogas production from waste as a CDM project is an interesting business idea, what environmental problems in Chile the biogas projects can solve, if the studied projects contribute to technology transfer and if the studied projects can be characterized as additional. The first part of the work was a field study in Chile where information of the APLE projects was collected. Calculations of emission reductions were then made with the help of UNFCCC approved methodologies. The field study was complemented with literature studies.

Biogas projects can come with large emission reductions if the organic waste without the project would have been left to decay anaerobically emitting methane to the atmosphere. Using the biogas for production of heat and/or electricity will further increase the emission reductions. In the first studied project organic waste from a factory producing broiler meat will be digested for biogas production. The biogas will be used for production of electricity and heat which is consumed in the factory. The emission reductions are relatively small in this project since only part of the waste decomposes anaerobically in the baseline scenario. In the second project organic compounds in industrial wastewater is digested for biogas production. The wastewater originates inter alia from salmon farming. The biogas is used for electricity production. This project comes with large emission reductions since all wastewater is treated in anaerobic lagoons emitting methane in the baseline scenario.

Both projects are profitable. In the second project, but not in the first, carbon finance is essential for the profitability of the project. However, due to technical barriers both projects can be seen as additional. The projects have several positive environmental impacts such as reduced eutrophication, increased land-use efficiency and reduced risk of groundwater contamination from landfill leachate. The second project will also significantly improve the sanitary conditions in the salmon farming industry. Controlled anaerobic digestion is a new technology in Chile and both projects will contribute to technology transfer.

View the full report (943 Kb PDF)