Analysis and evaluation of CDM prospects for coal bed methane (CBM) projects in India __________________

Deliverable 4 Review of approved and proposed CDM methodologies for the coal mining sector March 2006

Supported By British High Commission New Delhi

ITP/0911

March 2006

Review of approved and proposed CDM methodologies for the coal mining sector Deliverable 4 Version 1.0

Client
Client contract No.: IT Power reference: GOF Climate Change & Energy 0911

Report 4 March 2006

Contractor: IT Power Grove House, Lutyens Close, Chineham, RG24 8AG, United Kingdom. Tel. +44 1256 392700 Fax. +44 1256 392701 E-mail: itpower@itpower.co.uk http://www.itpower.co.uk

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ITP/0911

ii

However. The authors and the project developer are aiming to work together with GOI to define criteria to VCBM project in India that are acceptable under the CDM. VCBM programmes often include supplies to households in nearby towns. The case study which forms part of this project (deliverable 5) is likely to propose a new methodology or extension of the applicability criteria as required. A number of methodologies have also been proposed for fuel switching activities. VCBM blocks are generally located in or near coal mining areas where coal is readily and cheaply available. All current VCBM blocks are located in areas where no mining is planned in the foreseeable future. One consolidated methodology for CMM/CBM has been approved. the current applicability of both the coal mining and the fuel switching methodologies are quite narrow and have not yet been widely used. no approved methodology exist that would be applicable the proposed VCBM projects in India. Two methodologies for industrial fuel switching have been approved. the coal deposits from which VCBM would be recovered are considered unminable with current know-how and under current economic circumstances. will need to be proposed. as well as the development of the method of supply of the gas (such as construction of gas pipelines). In addition two methodologies for small-scale projects are also applicable to coal mining and/or fuel switching. through the Directorate General of Hydrocarbons. covering the GOI planning period of 35 years. despite leading to emission reductions if fuel switching takes place. Such a potential new VCBM project methodology should focus on the fuel switching element as VCBM is likely to displace coal use in industry and households in the local areas. VCBM projects in India are considered to lead to fuel switching. it is difficult to judge whether such extension would be approved. Therefore. are located in coal deposits which are not currently open for exploitation. such as VCBM. and may pave the way to increased use of natural gas throughout the country. as the project would exceed to size limit for small-scale projects.March 2006 Review of approved and proposed CDM methodologies for the coal mining sector Deliverable 4 Version 1. VCBM would not be released but would remain locked in the coal deposits. It is active GOI policy to encourage the use of more environmentally friendly fuels.0 EXECUTIVE SUMMARY A number of methodologies have been proposed which are applicable to the coal mining sector. Under normal circumstances. The GOI encourages VCBM projects to register under the CDM to make it possible to obtain additional finance for clean development. to be reducing methane emissions. fuel switching in industry and the power sector. VCBM projects therefore do not claim. However. in order to aid VCBM project to receive CDM registration (and thus additional financing) it is recommended that the following issues are clarified: • Virgin Coal Bed Methane resources that are offered for exploration and exploitation by the GOI. It is likely that a new methodology. It may be possible for some of the applicability criteria of the current methodologies to be extended. Encouraging VCBM exploration is part of India’s sustainable development policy. under normal circumstances. specific to VCBM projects. Indeed. However. • • • • ITP/0911 iii . Recommendations It is not possible to guarantee that VCBM project will ever be accepted under the CDM.

............ 9 Conclusions ............6 4 4..................... 8 Large-scale projects: ACM0008.............................................................................................. 8 Small-scale projects: AMS-III..................................................... 12 Proposed methodologies for the coal mining sector ........................................................... 12 Annex 1: Project Documentation ...................................... 6 NM0094: improving methane quality for utilisation.................5 3.. 1 2.........................................................1 3........... 3 NM0066: CMM power generation at an active coal mine..3 2.....................................................................................................................2 mine 3................................................................................................ 4 NM0075: CMM utilisation and maximum destruction at a working coal 5 NM0093: combining CMM and CBM sources................................................................1 4............................2 4.........................0 TABLE OF CONTENTS 1 2 Introduction ..................................................................... 7 Conclusions ..............................................................................................................D ...................... 14 ITP/0911 iv ............... 1 Background to the project.........4 3............ 3 Approved methodologies.......... 2 Beneficiaries and target audience ..............1 2................................................................................. 2 Project team.......March 2006 Review of approved and proposed CDM methodologies for the coal mining sector Deliverable 4 Version 1... 1 Components .......................4 3 3...... 8 Conclusions and recommendations ......................3 3... 7 NM0102: maximising power generation..................2 2............... 10 Recommendations .......3 5 5............................................................................................................................................1 Objectives of the project .......................................

The project is the first attempt to address CDM issues in the CBM sector in India. Chapter 4 looks at the approved methodologies for coal mining. and (iv) build institutional capacity in this sector. This forth report assesses the proposed and already-approved CDM methodologies for projects in the coal mining sector. If recovered effectively. The potential for enhanced utilisation of CBM and maximisation of emission reductions from utilisation schemes is very large. Utilisation of coal bed methane would introduce a clean energy source and reduce local pollution and emissions of greenhouse gases. However. (ii) reduce global greenhouse gas emissions.1 Objectives of the project This project has a number of inter-related objectives.co. The benefits for the global environment from reduced emissions can be substantial. All of these methodologies are based on projects in China. 2. where the project partners have been carrying out a number of CDM-focused CBM project over the last few years. A number of CDM methodologies for coal mine methane and coal bed methane have been submitted to the CDM Executive Board. A number of CBM blocks have been awarded already to industry.2 It will also strengthen the GOI’s efforts to promote clean energy options. reducing emissions of pollutants and providing a clean and local energy source to rural communities. before drawing conclusions in Chapter 5. CBM projects are often capital intensive projects and are likely to need additional support from mechanism such as the CDM.0 1 INTRODUCTION This report is the forth deliverable of the GOF-funded project “Analysis and evaluation of CDM prospects of CBM projects in India”. One methodology has been approved and will be described in detail in report 4.March 2006 Review of approved and proposed CDM methodologies for the coal mining sector Deliverable 4 Version 1. In addition. coal bed methane (CBM) gas associated with coal reserves and emitted during coal mining could be a significant potential source of energy in coal-rich but often economically poor regions. This project will be a major impetus to ongoing private sector involvement and international co-operation in the CBM sector in India. The project specific objectives are to (i) enhance the utilisation of CBM as a local energy source in India. The key objectives for the GOF Climate Change and Energy Programme. 2 BACKGROUND TO THE PROJECT India is third largest producer of coal in the world. are (i) the international response to climate change under the UN Framework Convention on Climate Change and (ii) promoting greater uptake of renewable energy and more efficient use of energy to help address climate change and enhance energy security. The benefits in terms of local environment and economy can be similarly large. The Government of India (GOI) has recognised the potential of CBM to increase sources of domestic energy supply and as an environmental friendly fuel. and production from the first few wells has started. through which the project is funded. GOI.in/cmpdi/CBM. (iii) increase the understanding of the issues surrounding CBM and CDM. 1 2 See http://www. UNDP and GEF have initiated a coal bed methane recovery & commercial utilisation project1 to encourage further uptake of CBM in India. The report describes briefly the various proposed methodologies in Chapter 3.cmpdi. ITP/0911 1 .htm.

GOI). Review of approved and proposed CDM methodologies for CBM projects in India. Project concept notes (PCN) from CBM projects for possible investors and buyers of carbon credits from UK. As the project looks to the CDM to stimulate CBM utilisation. including local or regional government. foreign investors and buyers of emission reductions are also considered to be stakeholders. including the CBM India website: www. Case study. includes the relevant departments of GOI. Key deliverables are: • • • • • • • • Report on the CDM potential of CBM projects in India. These prospective projects will be submitted to UK Climate Change Project Office for consideration. as well as CDM developers.cbmindia.cbmindia. Stakeholder workshop. including government. After the workshop. developers will be invited to contribute “project concept notes” or information to the project team for CBM projects for possible investors and buyers for purchase of carbon credits from UK. 2. additionality and costs involved in Coal Bed Methane projects. Ministry of Coal and Mines (GOI). The target audience for this project.March 2006 Review of approved and proposed CDM methodologies for the coal mining sector Deliverable 4 Version 1.org website.2 Components The project will deliver a number of short reports. One project will be described in detail and act as a case study.3 Beneficiaries and target audience The project aims to enhance the understanding and build capacity in order to increase the utilisation of the Indian CBM resource.org. industry and financiers. and aims to prepare a number of “project concept notes” as a first step towards implementing a CDM project in this sector. Report on the baseline. Computer-based pre-feasibility analysis model for analysing the attractiveness of Coal Bed Methane CDM projects. 2. A computer-based prefeasibility model will be developed which will allow prospective project developers to assess the feasibility of their project and the CDM potential. Key stakeholders are: • • Directorate General of Hydrocarbons (Under Ministry of Petroleum & Natural Gas. Dissemination through the www. Findings from the project are being disseminated widely through various channels. presenting a solid background to CBM and CDM that can be used to build capacity in the sector in India. The project team invites local NGOs to get involved and help increase the sustainable development benefits of these CBM projects. ITP/0911 2 . industry and financiers.0 The project looks specifically at the role that CDM finance can play. and addressing acceptability and additionality of such projects in India. therefore. A workshop will be organised for all stakeholders.

2. and is part of the global IT Power Group of companies. Carbon investors in the UK and elsewhere. IT Power India was founded 10 years ago. ITP/0911 3 . 2. land use planning. China and Russia. Wardell Armstrong provided the technical knowledge to deliver high quality utilisation schemes and improve operational safety at the mines. 3 PROPOSED METHODOLOGIES FOR THE COAL MINING SECTOR A number of CDM methodologies have been proposed for projects in the coal mining sector.4.4.1 IT Power IT Power is a leading global sustainable energy consultancy company specialising in all aspects of sustainable energy and emission reduction projects. CBM project developers in India (and elsewhere). renewable energy and environmental policies and has already carried out projects in over 30 countries throughout Asia and Africa. China and worldwide.3 IT Power India IT Power India is a renewable energy and environmental management consultancy company. IT Power has completed over 900 projects in some 100 countries.March 2006 Review of approved and proposed CDM methodologies for the coal mining sector Deliverable 4 Version 1. Ministry of Power (GOI).2 Wardell Armstrong Wardell Armstrong is a major environmental and engineering consultancy. IT Power led the development of the proposed new CDM methodology NM0075. IT Power’s engineering. economic.4 Project team IT Power and Wardell Armstrong have formed a strong partnership over the last few years working on emission reduction projects and CDM methodologies in the coal mining sectors of in particular India. landscape and renewable energy/sustainable development. minerals and geology base has also been extended into ground and civil engineering. which has formed the basis of the combined methodology that was approved by the CDM Executive Board. commercial and environmental specialists are developing Clean Development Mechanism (CDM) projects and other renewable energy projects world-wide. AMM and CBM projects in the UK. Each of these five proposals is discussed briefly below. Over the last fifty years. Ministry of Non-Conventional Energy Sources (GOI). its original mining. CBM capture and utilisation technology providers. The company’s work ranges from technology development to project finance and energy and environmental policy advice. However. the Methodologies Panel 3 MOEF also hosts the Indian Designated National Authority for the CDM. waste management. health and safety. 2.0 • • • • • • Ministry of Environment and Forests (GOI)3. In the last 25 years. environmental sciences. With more than a century of experience in the coal mining sector and it has been instrumental in the implementation of CMM. The company has been looking at sustainable development.4. 2. financial.

unfccc. The draft project design document (PDD) introduces the many barriers to CMM utilisation and power generation that is limiting CMM utilisation project development in China. 3. Determining the amount of methane that would be emitted in the baseline. 4. 2. An appropriate emissions factor is calculated to estimate the emission reductions associated with the electricity generated. taking into account uncertainty and volatility. Hegang Mining Bureau has been struggling for many years to find an affordable way of improving its methane utilisation without much success and is typical of many mines located in areas of industrial decay. Table 1 Proposed methodologies Round Number 8 8 9 9 9 Title Applicability CMM CMM CMM/CBM CMM CMM Country China China China China China NM0066 Coalmine methane utilisation project at Nanshan mine NM0075 Pansan coal mine methane utilisation and destruction NM0093 Fuxin coal mine methane (CMM)/coal bed methane (CBM) utilisation project NM0094 Huainan Panyi and Xieqiao coal mine methane utilisation project NM0102 Jincheng coal mine methane power generation project Source: www. which is described in more details in Chapter 4. particularly in North-East China. Determining the appropriate CO2 emissions factor for electricity supplied to the grid. Determining that the project is different than business as usual.March 2006 Review of approved and proposed CDM methodologies for the coal mining sector Deliverable 4 Version 1. It applies to projects that use CMM to produce electricity at a mine where CMM is already extracted and partially used for thermal energy production. The proposed methodology includes a correction in case any CMM used for power generation is diverted from the thermal energy uses. 3. ITP/0911 4 .1 NM0066: CMM power generation at an active coal mine This baseline methodology uses existing actual or historic emissions as a baseline.0 decided to combine the various proposals and approve only one combined methodology. The methodology applies to the CMM over and above that used for thermal energy purposes. The methodology consists of four steps: 1.int. Determining that no comparable emission reduction activities will occur under business as usual. Without power generation. the methane would be vented to the atmosphere.

A further 5 questions will explore the additionality of the project activity. The first part of this methodology calculates the CMM releases and emissions without the project activity. ITP/0911 5 . Legal requirements for utilisation and destruction of CMM. electricity/thermal energy). and CO2 emissions from utilisation and/or destruction need to be taken into account. Step 1: Confirmation of applicability and additionality test A series of 5 questions will confirm whether this methodology is applicable to the project activity. where the baseline is the partial or total atmospheric release of the gas and the project activities include situations such as: • • The captured gas is destroyed through flaring. The methodology applies to CMM utilisation and destruction project activities at a working coal mine. For safety reasons in gassy underground mines. Please note that CMM is not of biological origin. safe flaring designs for CMM have now been demonstrated in some highly industrialised countries. Barriers and common practice. This methodology is applied to CMM utilisation and destruction projects in the following three steps. The gas flow into a mine district depends on the gas content. including: • • • Step 2: Description of the baseline The baseline is the atmospheric release of the CMM gas.g.March 2006 Review of approved and proposed CDM methodologies for the coal mining sector Deliverable 4 Version 1. where emission reductions are claimed. for example to comply with regulations or contractual requirements. CDM project activities using flaring will assist in transferring this technology to developing countries where flaring could make a rapid. unlike landfill gas. cost effective and significant reduction to greenhouse gas emissions from gassy coal mines.g.2 NM0075: CMM utilisation and maximum destruction at a working coal mine Coal mining releases gas from any coal seams disturbed by the mining activity. electricity/thermal energy/gas supply). once at the surface the gas is vented to the atmosphere. and the energy production can thus be considered to be from a zero-emission source. and/or The captured gas is destroyed through utilisation to produce energy (e. Economically attractive actions. as the most economically attractive course of action without the CDM. a proportion of the gas is captured and piped to the surface. the length of time the district has been working and the rate of coal extraction.0 3. The baseline includes the consideration that some of the methane drained may be captured and utilised or destroyed. However. Typically. emission reductions may or may not be claimed for displacing or avoiding energy from other sources. The second part of the baseline with respect to CMM utilisation for energy production (e. number and thickness of coal seams (and any other gas bearing strata). Until recently no coal mines anywhere in the world were flaring drained gas. the proximity of the seams to the workings. follows an appropriate approved methodology. Please note that any CO2 emissions (from the combustion of CMM) have already been taken into account under the first part of the baseline.

times the global warming potential (GWP) of methane. Without flaring. Additionally. The use or flaring of CMM is not specifically prohibited or mandatory in any of the coal mining countries insofar as the legislation is known. The methodology proposes to allow claiming emission reductions for fuel switching to CBM only as long as the area is not mined. The project also includes a comprehensive package of safety training and technical assistance. Liaoning.March 2006 Review of approved and proposed CDM methodologies for the coal mining sector Deliverable 4 Version 1. CERs can be added for methane destruction when workings subsequently come within the ‘zones of influence’ of the VCBM extraction wells. and any emissions from energy inputs and losses in the CMM supply grid. 4 This concept of ‘zone of influence’ around a surface pre drainage (virgin CBM) well was introduced in NM0093 as an applicability condition to ensure that only gas that would at some time be released by mining is credited to the project.0 Step 3: Determination of the emission reductions The greenhouse gas emission reduction achieved by the project activity during a given year is the difference between the mass of methane actually destroyed/combusted during the year and the mass of methane destroyed/combusted in the baseline. subject to purity. power generator and monitoring system are taken into account in the calculations above. NM0093 is a versatile methodology including surface gas drainage which is not covered by the other methodologies and potentially leading to high gas capture and utilisation. for methane utilisation and destruction project activities at working coal mines where both coal mine methane and coal bed methane is used and/or destroyed. this methodology adds the applicability to extraction of gas from virgin seams (VCBM). the project proponent may claim emissions reductions from electricity. However. CBM is drained from the surface within the coal mining concession area ahead of mining. Usable gas quantities will be increased by blending low and high purity gas flows. large and sustainable reductions in CMM emissions will not be achieved.3 NM0093: combining CMM and CBM sources The baseline and monitoring methodology developed for Fuxin mine. but surplus or unusable gas. However. so emission reduction may be claimed at the moment of mining. ITP/0911 6 . Flaring of surplus CMM is being practised safely and successfully at a number of UK coal mines. then the methane would have escaped (in the ventilation air) or would have been drained (as CMM). The total reductions need to be corrected for any emissions from internal energy use of the project. and corrected for the resulting CO2 emissions from the methane destruction. Once the area where VCBM has been extracted is also mined. Flaring issues It is impracticable to use all of the gas at most mine sites and the methane concentration of some gas is too low for utilisation to be feasible. More complex approaches are not justified as they would introduce additional uncertainties.4 The proposed project at Fuxin includes methane utilisation and destruction by industrial and household thermal use. This proposed methodology adopts the Pansan methodology (NM0075) as the basis for the methane utilisation and destruction of CMM. CMM is drained from within the mine. and gas supply. will be flared to maximise destruction and minimise the projects greenhouse gas emissions. thermal energy. and results are measurement-based. 3. NM0075 and NM0093 specifically advocate flaring to maximise methane destruction. Assumptions made on the threedimensional geometry are technically supportable and reasonably conservative. power generation and also through gas compression for transport for thermal use elsewhere.

Total reductions achieved are estimated to be about 2 million tonnes of carbon dioxide equivalent (tCO2e) per year. As extracted flow increases. the project risk is high as it depends heavily on the effectiveness and sustainability of the proposed improvement measures that have yet to be demonstrated. 3. Additional gas will be extracted from sealed goafs within the mine as required to try and satisfy the generators – these goafs will eventually need to be drained in any event for safety reasons. It is assumed that gas supply can be reduced safely to minimise emissions in the event of over-supply of gas or stoppage of the generators. promoted by the World Bank and the Asian Development Bank over the last few years. However. this is not the most economically viable option and therefore arguably not consistent with sustainability. However. it proposes to improve gas quality and thereby increase the potential for utilisation by enriching the drained gas. It is proposed that at Sihe mine ca. However.0 However. especially during rapid barometric pressure drops. ITP/0911 7 . if necessary. the proposed methodology is more complex. Additionally. In order to maximise utilisation of CMM. improving and enhancing gas drainage by strengthening underground capture performance and introducing surface goaf wells. co-generation and thermal use in boilers.4 NM0094: improving methane quality for utilisation This new methodology proposes a two-stage approach. start utilisation of the gas for power generation. and the proposed increases in methane capture would benefit both the CDM project and mine safety. Thus. abandoned goaf areas cannot be sealed totally and any gas drained from the goaf will contain air drawn in by the extraction process. this may not be possible for safety reasons in later years. While improvements and enhancements to gas drainage activities are outside the project boundary the project would address the issue through technical assistance. This may be achieved through reducing extraction from sealed goafs. As part of this second stage. While desirable to maximise destruction of methane. The more aggressive gas extraction proposed will enable more of the methane that would otherwise have been emitted to the atmosphere to be utilised.March 2006 Review of approved and proposed CDM methodologies for the coal mining sector Deliverable 4 Version 1. The methodology also recognises explicitly the problems of low quality drained gas which is evident at many coal mines in China (although solutions will be site specific). 3. to prevent methane pollution of the ventilation air. Due to the unique scale of this project. the methodology prescribes an over-capacity of generating equipment to be installed. the flow of additional gas that can be recovered will be constrained. the effectiveness of VCBM wells when converted to goaf wells has yet to be demonstrated but the risk is limited as can revert to conventional underground post drainage. 120 MWe will be installed. The drained gas will generally be of high purity because most comes from pre-drainage in advance of mining so there should be minimal dilution with ventilation air provided boreholes are sealed properly.5 NM0102: maximising power generation The Jincheng project is of a different order of magnitude to the other four proposed projects. The secondly. any gas capture and drainage improvements driven by gas utilisation requirements rather than by coal production and safety may not be sustainable. through combining drainage from two separate mine workings (Panyi and Xieqiao mines). First. gas quality will decrease.

For example. the Methodologies Panel decided to propose one single combined methodology. NM0075 proposed a flaring option to ensure maximum methane destruction.6 Conclusions With a number of new proposed methodologies applicable to methane emissions from the coal mining sector being submitted at the same time. the methodology is less transparent than all the others and lacks a link between mining activity and claimed CERs. However. While there are technical uncertainties associated with these projects.March 2006 Review of approved and proposed CDM methodologies for the coal mining sector Deliverable 4 Version 1. the Excecutive Board finally approved the Methodologies Panel’s combined methodology for CMM and CBM.0 Additionally. not the baseline. equivalent to venting about 1 million cubic meters of pure methane per year. NM0102 on the other hand sought to maximise methane destruction by installing an over-capacity power generation. NM0093 built on NM0075 and introduced a methodology to address extraction of gas from surface wells ahead of mining. The size limit given is only 15 kilotonnes of carbon dioxide equivalent (CO2e) per year. It needs to be proven annually that emissions have not exceeded this limit. ITP/0911 8 .1 Small-scale projects: AMS-III. The full text of the methodology is given below. as they are from non-biogenic origin. In contrast. However. with energy use a priority where feasible. More than a year after the first two of these methodologies were submitted. NM0066 included venting of the potent greenhouse gas methane for the purpose of minimising competition for gas between existing domestic use and proposed power generation. this limit applies to the emissions of the project activity. NM0102 will not necessarily be applicable elsewhere as the Jincheng project scale is uniquely large and the strategy for maximising methane destruction is costly and will not be widely replicable. one for smallscale projects. and one for larger-scale projects. and the conversion of some of these wells to post drainage goaf wells. which is not maximising sustainable economic development. 3. The proposed CMM methodologies introduced a range of concepts and ideas. 4 APPROVED METHODOLOGIES Currently two approved methodologies exist for coal mine gas in the CDM. successfully resolution will benefit mine safety as well as facilitate greater emission reductions than previously envisaged. 4. This is described in detail in the next Chapter.D The small-scale methodology for methane recovery is applicable for coalmines and ‘other sources’. It shows that the CO2 emissions from combustion must be accounted for. NM0094 dismissed flaring as an option. some were not widely applicable and had elements inconsistent with the aims of the Framework Convention on Climate Change (FCCC) or inconsistencies with eachother. including non-combusted methane.

10.D is thus not applicable to Indian VCBM projects. shall be monitored. as the methane would not be released without the implementation of the project. The amount of methane recovered and used as fuel or combusted shall be monitored. geographical site of the methane recovery facility. Measures shall both reduce anthropogenic emissions by sources and directly emit less than 15 kilotonnes of carbon dioxide equivalent annually. agro-industries. 4. The emission baseline is the amount of methane that would be emitted to the atmosphere during the crediting period in the absence of the project activity. This project category comprises methane recovery from coalmines. waste water treatment and agro-industries projects: If the recovered methane is used for heat or electricity generation it can apply to the corresponding category of type I project activities. In these cases project participants may submit one single project design document for all of the components of the project activity.0 Box 1 Full text of AMS-III. ITP/0911 9 . In the case of VCBM projects. wastewater treatment facilities and other sources. 9. In the case of landfill gas. multiplied by the efficiency of the flaring process. using flow meters and analysing the methane content of the combusted gases either online. waste gas. landfills. 2. The project boundary is the physical. CO2 emissions from combustion of non-biogenic methane shall be accounted for in the project activity. No leakage calculation is required. Monitoring 8.D III. and more frequently if the results show significant deviations from previous values. the baseline is described as the amount of methane that would be emitted to the atmosphere during the crediting period in the absence of the project activity.March 2006 Review of approved and proposed CDM methodologies for the coal mining sector Deliverable 4 Version 1. 6. D. The flare efficiency. or with samples taken at least quarterly. Methane recovery Technology/measure 1. Methodology AMS-III. Baseline 4. However. Flow meters. sampling devices and gas analysers shall be subject to regular maintenance.2 Large-scale projects: ACM0008 While the small-scale methodology is extremely simple. the baseline emissions therefore would be zero. 5. testing and calibration to ensure accuracy. Boundary 3. Regular maintenance should ensure optimal operation of flares. the full-scale methodology is complex and took the Methodologies Panel more than a year to approve. Leakage 7. defined as the fraction of time in which the gas is combusted in the flare. The baseline shall cover only the capture and flaring that would not have happened in the absence of the project activity.

without an approval for deviation.” These areas are generally within or near coal mining areas. a new methodology will need to be proposed. Capture methane from abandoned/decommissioned coalmines. 5 “All the CBM or CMM captured by the project should either be used or destroyed. which had already been used as the basis for NM0093 as well. no general fuel switch methodology has yet been approved which may be applicable to CBM either. the size limit of the methodology would reduce the potential for VCBM projects. The approved methodology.5 And it uses the approach for VCBM as proposed under NM0093. It uses many of the formulae and calculations from NM0075.3 Conclusions As neither of the approved methodologies would be applicable to the Indian situation.g. an extension to VCBM as a fuel would need to be specifically requested and approved. Capture/use of virgin coal-bed methane. will not be applicable to the Indian situation for VCBM.0 The consolidated methodology takes information and ideas from each of the methodologies. Use CO2 or any other fluid/gas to enhance CBM drainage before mining takes place. Explicitly excluding natural gas derived from LNG and CNG. therefore. methane of high quality extracted from coal seams independently of any mining activities. although the CDM Executive Board (EB) is more cautious about this source of gas and only allows claiming of reductions.6 However. Alternatively. It discusses existing use of gas as proposed in NM0066 in detail and only referred to briefly in some other proposals. However. ACM0008 also embraces the concept of maximum destruction. The approved methodology AM0008 allows “industrial fuel switching from coal and petroleum fuels to natural gas with extension of capacity and lifetime of the facility”. only when the area is mined. The approved methodology also allows all drainage technologies proposed by the 5 projects. An extension to VCBM as a fuel therefore would need to be specifically requested. the small scale methodology does not specify the fuels and therefore in principle allows CBM. However. The approved consolidated methodology ACM0009 similarly allows for fuel switching to natural gas without extension of the capacity or lifetime of the project. Coal therefore is readily and cheaply available to consumers. including those from fuel switching. Indeed. households and potentially transport in the local areas. However. VCBM is likely to displace coal use in industry. the areas identified for VCBM are generally where coal is too deep for mining with current technology and know-how. e. and cannot be vented. 6 ITP/0911 10 . 4. the methodology does not apply to project activities with any of the following features: • • • • Operate in open cast mines. as described above. Such methodology would need to focus on the fuel switching element of VCBM projects. VCBM concessions have been given for areas where no coal mining activity is planned within the 2035 planning horizon used by the GOI.March 2006 Review of approved and proposed CDM methodologies for the coal mining sector Deliverable 4 Version 1. while ACM0008 applies to both new and existing mining activities.

D or II. gas use and heat output by a district heating plant. coal use and heat output by a district heating plant. The case study which forms part of this project (deliverable 5) is likely to propose a new methodology or extension of the applicability criteria as required. # The necessary data are probably readily available. Measures shall both reduce anthropogenic emissions by sources and directly emit less than 15 kilotonnes of carbon dioxide equivalent annually. gas use and electricity generated by a generating unit.# 77. Fuel switching may change efficiency as well. Monitoring shall involve: (a) Monitoring of the fuel use and output for an appropriate period (e. liquid fuel oil use and electricity generated by a generating unit (records of fuel used and output can be used in lieu of actual monitoring). Boundary 2.E. simplified baselines for switching of fossil fuels for new applications. the emission coefficient shall be based on test results for periodic samples of the coal purchased if such tests are part of the normal practice for coal purchases. but records of fuel use may be used) prior to the fuel switch being implemented . it falls into this category. Monitoring 5. The project boundary is the physical. in accordance with paragraphs 7 and 8 of the simplified modalities and procedures for small-scale CDM project activities. residential. The emission baseline is the current emissions of the facility expressed as emissions per unit of output (e.g. commercial.. institutional or electricity generation applications. Baseline 3. geographical site where the fuel combustion affected by the fuel-switching measure occurs.g. Notes: * This does not preclude project participants from proposing. Switching fossil fuels Technology/Measure 1. No leakage calculation is required. B. (b) Monitoring fuel use and output after the fuel switch has been implemented . As part of the process. kg CO2e/kWh).0 Box 2 Full text of AMS-III. the project activity falls in category II.March 2006 Review of approved and proposed CDM methodologies for the coal mining sector Deliverable 4 Version 1. In the case of coal. the authors and the case study project developer are aiming to work together with GOI to define criteria to VCBM project in India that are acceptable under the ITP/0911 11 . If the project activity primarily aims at reducing emissions through fuel switching.g. If fuel switching is part of a project activity focussed primarily on energy efficiency. Emission coefficients for the fuel used by the generating unit before and after the fuel switch are also needed..e. but may need to be organized into appropriate records and be supported by receipts for fuel purchases. This category comprises fossil fuel switching in existing* industrial.e. a few years.B III. Leakage 4. IPCC default values for emission coefficients may be used.g. as the project would exceed to size limit for small-scale projects.

it is difficult to judge whether such extension would be approved. will need to be proposed. However. Such a potential new VCBM project methodology should focus on the fuel switching element. it is likely that a new methodology.1 Recommendations “Methane to markets”. As part of the process. Indeed. In some cases VCBM may also be used for transport fuel. An extension of the applicability criteria of the current methodologies may present the possibility of applying for CDM registration for some specific VCBM projects.0 CDM. or parts of VCBM programmes. the gas may be supplied to industry where a fuel switching project (coal to VCBM) may be approved. as well as the development of the method of supply of the gas (such as construction of gas pipelines). However. are located in coal deposits which are not currently open for exploitation. as none of the related methodologies has been widely used yet. the authors and the case study project developer are aiming to work together with GOI to define criteria to VCBM project in India that are acceptable under the CDM. it is not possible to guarantee that VCBM project will ever be accepted under the CDM. VCBM programmes often include supplies to households in nearby towns. as the project would exceed to size limit for small-scale projects.March 2006 Review of approved and proposed CDM methodologies for the coal mining sector Deliverable 4 Version 1. For example. despite leading to emission reductions if fuel switching takes place. Therefore. in order to extend CDM registration to a whole portfolio of work related to VCBM projects it is likely that a new methodology needs to be proposed. specific to VCBM projects. It may be possible for some of the applicability criteria of the current methodologies that are related – on emissions from coal mining or fuel switching – to be extended. is encouraging VCBM projects as a way of increasing methane utilisation worldwide. fuel switching in industry and the power sector. Indian VCBM project should fit within the CDM framework given the GOI’s emphasis on the exploitation of VCBM resources as part of its sustainable development policy – India has a very limited domestic resource of natural gas – leading to emission reductions and increasing access for its rural population to clean energy sources. In order to aid the request from some VCBM project to receive CDM registration (and thus additional financing) it is recommended that the following issues are clarified: • Virgin Coal Bed Methane resources that are offered for exploration and exploitation by the GOI. 5 CONCLUSIONS AND RECOMMENDATIONS No approved methodology exist that would be applicable the proposed VCBM projects in India. Indian VCBM project should fit within the CDM framework given the GOI’s emphasis on the exploitation of VCBM resources as part of its sustainable development policy – India has a very limited domestic resource of natural gas – leading to emission reductions and increasing access for its rural population to clean energy sources. Indeed. or where power generation from VCBM displaces coal-fired power on the grid. 5. through the Directorate General of Hydrocarbons. a multilateral partnership. covering the GOI planning ITP/0911 12 . However. the current applicability of both the coal mining and the fuel switching methodologies are quite narrow. In addition. The case study which forms part of this project (deliverable 5) is likely to propose a new methodology or extension of the applicability criteria as required. VCBM is likely to displace coal use in industry and households in the local areas. All current VCBM blocks are located in areas where no mining is planned in the foreseeable future.

too deep and too difficult for current know-how and economic circumstances. to be reducing methane emissions.0 period of 35 years. Indeed. the coal deposits from which VCBM would be recovered are considered unminable. The GOI encourages VCBM projects to register under the CDM to make it possible to obtain additional finance for clean development. • VCBM projects in India are considered to lead to fuel switching. such as VCBM. It is active GOI policy to encourage the use of more environmentally friendly fuels. Encouraging VCBM exploration is part of India’s sustainable development policy. India is relatively rich in coal deposits. and may pave the way to increased use of natural gas throughout the country. under normal circumstances. Under normal circumstances. VCBM would not be released but would remain locked in the coal deposits. However. • • • ITP/0911 13 . India has little domestic natural gas resources and it would not otherwise be possible in these regions to switch to less carbon intensive fossil fuels without increasing imports of these fuels. VCBM projects therefore do not claim.March 2006 Review of approved and proposed CDM methodologies for the coal mining sector Deliverable 4 Version 1. many of which contain valuable CBM resources. VCBM blocks are generally located in or near coal mining areas where coal is readily and cheaply available.

1 Duration of the project activity • Starting date of the project activity • Expected operational lifetime of the project activity Choice of the crediting period and related information • Renewable crediting period • Fixed crediting period B.3 A.1 A.5 C.2 ITP/0911 14 .2 A.1 Title and reference of the approved baseline methodology applied to the project activity • Justification of the choice of the methodology and why it is applicable to the project activity Description of how the methodology is applied in the context of the project activity Description of how the anthropogenic emissions of GHG by sources are reduced below those that would have occurred in the absence of the registered CDM project activity Description of how the definition of the project boundary related to the baseline methodology selected is applied to the project activity Details of baseline information.3 B. taking into account national and/or sectoral policies and circumstances • Public funding of the project activity Application of a baseline methodology B. including why the emission reductions would not occur in the absence of the proposed project activity.0 ANNEX 1: PROJECT DOCUMENTATION A brief outline of the chapter headings of the documentation which is required for Clean Development Mechanism projects is given below. The CDM Project Design Document (version 2) consists of the following sections: General description of project activity A.4 Title of the project activity Description of the project activity Project participants Technical description of the project activity • Location of the project activity • Category(ies) of project activity • Technology to be employed by the project activity • Brief explanation of how the anthropogenic emissions of anthropogenic greenhouse gas (GHGs) by sources are to be reduced by the proposed CDM project activity. including the date of completion of the baseline study and the name of person (s)/entity (ies) determining the baseline Duration of the project activity / Crediting period C.2 B.4 B.March 2006 Review of approved and proposed CDM methodologies for the coal mining sector Deliverable 4 Version 1.

5 ITP/0911 15 .March 2006 Review of approved and proposed CDM methodologies for the coal mining sector Deliverable 4 Version 1.4 E.4 and E.2 Name and reference of approved monitoring methodology applied to the project activity Justification of the choice of the methodology and why it is applicable to the project activity • Option 1:Monitoring of the emissions in the project scenario and the baseline scenario • Option 2: Direct monitoring of emission reductions from the project activity (values should be consistent with those in section E) • Treatment of leakage in the monitoring plan • Description of formulae used to estimate emission reductions for the project activity (for each gas. source.5 E.3 representing the emission reductions of the project activity: Table providing values obtained when applying formulae above: Environmental impacts F.3 D.6 Estimate of GHG emissions by sources: Estimated leakage The sum of E.2 Documentation on the analysis of the environmental impacts.2 E. emissions units of CO2e) Quality control (QC) and quality assurance (QA) procedures are being undertaken for data monitored Please describe the operational and management structure that the project operator will implement in order to monitor emission reductions and any leakage effects.2 representing the project activity emissions: Estimated anthropogenic emissions by sources of greenhouse gases of the baseline: Difference between E. formulae/algorithm.1 E. including transboundary impacts: If environmental impacts are considered significant by the project participants or the host Party.1 F.4 D.1 and E.3 E.0 Application of a monitoring methodology and plan D.2 Brief description how comments by local stakeholders have been invited and compiled: Summary of the comments received: D.1 D.1 G. generated by the project activity Name of person/entity determining the monitoring methodology Estimation of GHG emissions by sources E. please provide conclusions and all references to support documentation of an environmental impact assessment undertaken in accordance with the procedures as required by the host Party: Stakeholders’ comments G.

0 G.March 2006 Review of approved and proposed CDM methodologies for the coal mining sector Deliverable 4 Version 1.3 Report on how due account was taken of any comments received: Annexes • • • • Contact information on participants in the project activity Information regarding public funding Baseline information Monitoring plan ITP/0911 16 .

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