PDD_ver04.1_LCL May 09 2013_v7

UNFCCC/CCNUCC

CDM – Executive Board

PROJECT DESIGN DOCUMENT FORM

FOR CDM PROJECT ACTIVITIES (F-CDM-PDD)

Version 04.1

PROJECT DESIGN DOCUMENT (PDD)

Title of the project activity Composting of Organic Content of Municipal

Solid Waste in Lahore

Version number of the PDD Version 7

Completion date of the PDD 09/05/2013

Project participant(s) Lahore Compost (Pvt) Limited

Danish Ministry of Climate, Energy and

Building/Danish Energy Agency

International Bank for Reconstruction and

Development (IBRD) as Trustee of the Danish

Carbon Fund

DONG Naturgas A/S

Maersk Olie og Gas AS

Nordjysk Elhandel A/S

Aalborg Portland A/S

Host Party(ies) Pakistan

Sectoral scope and selected methodology(ies) Sectoral scope

Project Activity: 13 – Waste Handling and

Disposal

Selected methodology(ies)

AM0025 version 11 titled “Avoided emissions

from organic waste through alternative waste

treatment processes”

“Tool for the Demonstration and Assessment of

Additionalilty” Version 5

“Tool to Determine Methane Emissions

Avoided from disposal of Waste at a Solid

Waste Disposal Site” Version 4

Estimated amount of annual average GHG

emission reductions

108,686 tCO2e

UNFCCC/CCNUCC


SECTION A. Description of project activity

A.1. Purpose and general description of project activity

>>

Rapid increase in population, high rate of migration to cities and introduction of disposable items, such

as plastic bags, bottles etc. have created serious environmental problems including inadequate solid and

liquid waste management, lack of safe water and minimal pollution control. Similar to other big cities of

Pakistan, Lahore is witnessing a rapid growth in its population due to rural urban migration from

surrounding areas and other parts of the country. The increase in population has exerted immense

pressure on the social and physical infrastructure of the city leading to various socio-economic and

environmental problems. Inadequate solid waste management has been one of the most visible and

pressing problems in the city leading towards unattractive environment, poor sanitation conditions,

pollution of water bodies, and general environmental degradation.

The Solid Waste Management Department (SWMD) of City District Government Lahore (CDGL) is the

sole authority responsible for the management of Solid Waste generated in the city. The responsibility of

the SWMD consists of the whole process of collection of waste to its satisfactory disposal. However, due

to high population growth and the lack of resources, the waste management has become a challenge for

CDGL. Accordingly, SWMD prioritized the need to address this issue including the possibility of private

sector participation through which waste can be managed and used in an economically beneficial manner.

This arrangement would address the need to dispose off solid waste in economically beneficial ways

without putting extra burden on the Lahore SWMD.

Lahore Compost (Pvt) Limited (LCL) has received the concession from the City District Government,

Lahore (CDGL) to process up to a 1,000 ton per day (TPD) of municipal solid waste (MSW). This will

be achieved in incremental phases over time until 1,000 tpd is achieved. Available statistics suggest that

around 1,900 tonnes of solid waste per days is generated in Aziz Bhatti Town, Ravi Town and Shalimar

Town every working day; out of which around 1,200 tonnes is collected and dumped at the Mahmood

Booti Open Dumping Site. All of this solid waste is available for processing and composting. Various

studies conducted in the past on the quality and composition of the solid waste suggests that the waste

delivered to the project company includes over 55% organic materials.

Composting, in scientifically designed plants, would improve the local environment by reducing health

hazards created by the present practice of dumping of waste in open dump sites and also sequester the

emission of methane generated in the process of anaerobic decomposition of bio-degradable matter. The

Project will also result in the production of compost, which will be used as a soil conditioner/ fertilizer

for improving the quality of soil in and around Lahore.

There are various forms of composting, e.g., aerobic windrow type, anaerobic trench type, in-vessel high

rate composting, vermi-composting etc. LCL has been operating and plans to extend capacity of an

aerobic windrow type composting technology. The capital investment in this composting plant is

primarily for the civil structures and equipment for material handling, turning and screening the

composting material at different stages. The composting technology is relatively simple but in absolute

terms the capital investment is still high. Additionally, the operation and maintenance cost including the

cost of debt servicing is fairly high compared to the low market price of compost. Therefore, additional

support is necessary to make the urban waste based compost plant viable and sustainable. It also requires

specific technical knowledge to manage the biological composting process, which was introduced for the

first time in Pakistan as a result of this project.

Due to a number of reasons, it is very difficult to make waste management projects commercially viable

in Pakistan. As in many other countries, available resources from the Government of Pakistan and

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revenue accrual in terms of municipal taxation are not adequate. In Pakistan, there is little experience

with the use of compost on a large scale and it is challenging to make commercially viable a composting

project such as the likes of Lahore Compost. The concept of commercial soil conditioner is still not

widely known amongst the farmers, the largest client/ user group. This coupled with the low levels of

certain plant nutrients on a per tonnage basis in comparison to the chemical fertilizers leads to a

relatively low market price of compost. CDM revenues could make a very positive impact in making

such projects sustainable and would also open up possibilities for private sector participation.

The LCL project is first of its kind under Public Private Partnership and is contributing towards

sustainable development of the municipality. The following are the environmental, economic and social

benefits of implementing the project in the area:

1. Environmental Benefit: The project would prevent uncontrolled GHG generation and emission

from waste that would have been disposed off at the open dumping site. Additionally it would reduce the

amount of waste going into the open dumping site thus increasing the lifespan of the waste dumping site.

2. Economical Benefits: Production of soil improver (compost) to battle soil degradation, boost the

farm crop production, thus promoting farmers’ income and contributing to economic sustainable

development of the region.

3. Social Benefits: Creation of around 80 jobs for locals and staff training to improve skills of the

local residents. The project would also promote sustainable development of Lahore Municipality by

improving the environment quality and demonstrate the commercialized practice of composting that

could assist Pakistan’s central and southern regions and other countries in meeting the objectives

regarding re-use of waste.

A.2. Location of project activity

A.2.1. Host Party(ies)

>>

Islamic Republic of Pakistan

A.2.2. Region/State/Province etc.

>>

Lahore City District, Punjab

A.2.3. City/Town/Community etc.

>>

Lahore City

A.2.4. Physical/Geographical location

>>

The composting plant is located within the boundaries of Lahore city. The site is adjacent to Mahmood

Booti MSW dumping site. The latitudes and longitudes of the project site are given below:

Latitude: 31.610o N

Longitude: 74.382o E

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The map below describes the exact location of the site:

A.3. Technologies and/or measures

>>

Aerobic windrow type composting is considered to be the most suitable technology. The project

involves the production of compost from the organic solid waste using European Technology from

Belgium. Further details about technology and the equipment supplier can be found on its website:

http://www.menart-technology.com/pagesen/start.html. This is a sophisticated method of composting

which complies with the EU regulations and is being used/introduced for the first time in Pakistan.

Given that it is the first introduction of this technology on a commercial basis to Pakistan, the project will

be implemented in incremental phases through learning by doing until 1,000 tpd are achieved. From a

baseline of zero, the first phase of the project activity is a pilot phase to learn about the machinery and

Project location

http://www.menart-technology.com/pagesen/start.html

UNFCCC/CCNUCC


the composting process, before the next incremental phase. This first pilot phase was initiated at 300 tpd,

from which the amount of waste being processed is being slowly increased in phases until 1,000 tpd are

finally reached.

In the aerobic windrow type composting, the incoming garbage is weighed, inspected and then subjected

to preliminary sorting of large non-compostable items followed by crushing to harmonize the input for

composting. Next is stacking in windrows (100-120 m long piles with a base width of about 4m and

height of 2m). These windrows are turned mechanically at consistent intervals. At the end of about 6

weeks of windrowing, the material is fairly stabilized and is ready for screening through a train of rotary

sieves having increasingly smaller openings. Additional equipment is also applied for removing small

stone and grit. Smaller pieces of plastics, glass, rags etc. are removed during this process. At each stage,

some rejects are screened out, which are either picked up by recyclers or more commonly, sent to an

open dumping site.

Compost is dark brown, free-flowing, rich in humus and has a faint musty odour. The humus content

makes it a healthy soil conditioner. Additionally, compost contains a small percentage of plant nutrients

– macro (nitrogen, phosphorus and potash) as well as micro. Finished compost is classified as a 100%

organic fertilizer containing primary nutrients as well as trace minerals, humus and humic acids, in a

slow release form. Compost improves soil porosity, drainage and aeration and moisture holding capacity

and reduces compaction. Compost can retain up to ten times its weight in water. In addition, compost

helps buffer soils against extreme chemical imbalances; aids in unlocking soil minerals; releases

nutrients over a wide time window; acts as a buffer against the absorption of chemicals and heavy metals;

promotes the development of healthy root zones; suppresses diseases associated with certain fungi; and

helps plants tolerate drought conditions.

Process flow diagram below further clarifies the processes involved and technology employed.

Collection & transportation

of Solid Waste by CDGL to

project site at weigh bridge

Sorting & crushing of

organic waste for composting

Residue removed from the

screening plant, re-use material

Organic Waste for

composting

Composting Aerators

Turning

Temp, Moisture & CO2

Monitoring

Compost & Post

Compost Processing /

Packing

Integrated

Quality

Control

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The Figure below shows the waste dumping site along with the existing composting facility for the pilot

phase and proposed expansion of windrow pad needed for the subsequent phases to reach 1,000 tpd of

processed waste.

A.4. Parties and project participants

Party involved

(host) indicates a host Party

Private and/or public

entity(ies) project participants

(as applicable)

Indicate if the Party involved

wishes to be considered as

project participant (Yes/No)

Pakistan (Host) Lahore Compost (Pvt) Limited No

Denmark Danish Ministry of Climate,

Energy and Building/Danish

Energy Agency ; International

Bank for Reconstruction and

Development (IBRD) as Trustee

of the Danish Carbon Fund ;

DONG Naturgas A/S ; Maersk

Olie og Gas AS ; Nordjysk

Elhandel A/S; Aalborg Portland

A/S

Yes

LCL, a group company of Saif Group, is a private limited company under the laws of Pakistan especially

set up to operate composting facilities in Pakistan. The company started developing the composting

Screening

& Bagging Waste

Sorting

Proposed

Expansion

of

Existing

Compost

Pad for

Phasing Up

Weigh

Bridge

Existing

Composting

Pad for Pilot

Phase

Project

Boundaries

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project back in 2001. The company has set up its first composting plant at Mahmood Booti under an

agreement with the City District Government Lahore (CDGL). The project has been setup on Build-

Operate-Transfer basis, whereby the project will be transferred to CDGL after a period of 25 years. This

is the first public-private project in Pakistan on such a large scale in the area of Municipal Solid Waste

(MSW) recycling.

SHL defines and reviews business and investment activities of the Saif Group and provides consultancy

and other related services to associated companies in addition to provide local support and other

representative services to leading transnational corporations. SHL is also the primary implementation

authority of the Saif Group for programs in Human Resource Development and Administrative Support.

SHL is tasked with:

Building networks with project partners and achieving shared objectives through the utilization of

synergies.

Managing network and alliance development.

Nurturing an enterprise culture throughout the organization.

Establishing the benchmark for recruitment and human resource development.

Project Implementation

LCL is responsible for the overall implementation of the composting project in Lahore. The project will

be implemented in incremental phases until 1,000 tpd is achieved.

A.5. Public funding of project activity

>>

The project has no recourse to public funds.

SECTION B. Application of selected approved baseline and monitoring methodology

B.1. Reference of methodology

>>

Approved baseline and monitoring methodology AM0025 version 11 titled “Avoided emissions from

organic waste through alternative waste treatment processes” has been applied. According to the

methodology AM0025, “Tool for the Demonstration and Assessment of Additionalilty” Version 5 and

“Tool to Determine Methane Emissions Avoided from disposal of Waste at a Solid Waste Disposal Site”

Version 4 for estimation of baseline emissions have been used.

B.2. Applicability of methodology

>>

The methodology AM0025 titled “Avoided emissions from organic waste through alternative waste

treatment processes” is applicable in this project. The project meets applicability criteria set out in the

methodology.

The methodology AM0025 is applicable under the following conditions:

The project Activity involves one or a combination of the following waste treatment options for the

fresh waste that in a given year would have been otherwise disposed of in a landfill:

(a) A composting process in aerobic conditions;

(b) Gasification to produce syngas and its use;

(c) Anaerobic digestion with biogas collection and flaring and/or its use;

(d) Mechanical/thermal treatment process to produce refuse-derived fuel (RDF)/ stabilized biomass

(SB) and its use;

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(e) Incineration of fresh waste for energy generation, electricity and/or heat.

The project uses composting process in aerobic conditions. Furthermore, for composting the following

condition must be also be complied with:

In case of composting, the produced compost is either used as soil conditioner or disposed of in

landfills.

Furthermore AM0025 is only applicable if the most plausible baseline scenario for the waste treatment

component is identified as either the disposal of waste in landfill without capture of landfill gas or the

disposal of the waste in landfill where the landfill gas is partially captured and subsequently flared.

Based upon the above-mentioned criteria, the methodology is applicable because of the following

reasons:

The project activity involves composting process in aerobic conditions for the fresh waste that would

be otherwise dumped of in a solid waste disposal site (open dumping).

The produced compost soil is used as a soil conditioner.

The proportions and characteristics of different types of organic waste proposed in the project

activity can be determined, in order to apply a multiphase landfill gas generation model to estimate

the quantity of landfill gas that would have been generated in the absence of the project activity.

The baseline scenario, as detailed and described under section B.4, is dumping of waste at Mahmood

Booti dumping site without capture of landfill gas.

There is no regulatory requirement regarding waste disposal in Pakistan. The baseline scenario would

remain unchanged with the waste being disposed off in a solid waste open dumping site. As a result

landfill gas generated would be released in the atmosphere.

Baseline emissions have been calculated as per instructions given under Baseline Emissions that project

participants should use the latest approved version of the “Tool to Determine Methane Emissions

Avoided from Dumping Waste at a Solid Waste Disposal Site.”

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B.3. Project boundary

Source GHGs Included? Justification/Explanation

Ba

seli

ne

scen

ari

o

Emissions

from

decompositio

n of waste at

the landfill

site

CO2 Excluded CO2 emissions from the decomposition of organic

waste are not accounted.

CH4 Included The major source of emissions in the baseline.

N2O Excluded N2O emissions are small compared to CH4

emissions. Exclusion of this gas is conservative.

Emissions

from the

electricity

consumption

CO2 Excluded No electricity consumption in baseline.

CH4 Excluded Excluded for simplification. This is conservative.

N2O Excluded Excluded for simplification. This is conservative.

Emissions

from thermal

energy

generation

CO2 Excluded No thermal energy generation in the baseline.

CH4 Excluded Excluded for simplification. This is conservative.

N2O Excluded Excluded for simplification. This is conservative.

Pro

ject

scen

ari

o

Onsite fossil

fuel

consumption

on due to the

project

activity

CO2 Included Fuel used by on-site vehicles

CH4 Excluded Excluded for simplification. This emission source

is assumed to be very small.

N2O Excluded Excluded for simplification. This emission source


Emissions

from onsite

electricity use

CO2 Included An emission source

CH4 Excluded Excluded for simplification. This emission source




Direct

emissions

from waste

treatment

processes

CO2 Excluded Not included by methodology – CO2 emissions

from the decomposition of organic waste are not

accounted.

CH4 Included The composting process may not be completed and

result in anaerobic conditions.

N2O Included An emission source of composting activity

Emissions

from waste

water

treatment

CO2 Excluded Not included by methodology – CO2 emissions

from the decomposition of organic waste are not

accounted.

CH4 Included Waste water is treated anaerobically and/or released

untreated



The project boundary is the composting site where the waste is brought in and treated.

B.4. Establishment and description of baseline scenario

>>

AM0025 version 11 requires a procedure of 4 steps for the selection of the most plausible baseline

scenario:

Step 1: identification of alternative scenarios.

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With the same purpose of waste treatment, there would be 4 alternatives to the proposed project.

Alternative 1: Organic waste composting identical to the proposed project but not undertaken as a CDM

project activity: Methane production would be avoided by breaking down organic matter through aerobic

processes. Composting activity includes processes of municipal waste classification, composting and

automation monitoring, which require high technology. It demands high initial capital investment and

operational & maintenance costs. Given that no market for compost currently exists, the sales of

generated compost faces marketing risks and the ROI (return on investment) cannot reach the minimum

hurdle rate expectations. The step 3 of the section will show that, considering the financial barriers and

market risks, composting without CDM support is not feasible.

Alternative 2: Waste incineration: Waste incineration is suitable for low humidity and high caloric value

wastes. A study was carried out on the municipal solid waste of Lahore metropolitan to ascertain whether

the waste of Lahore municipality is suitable for incineration or not. The study reviled no installation of

incinerator at any landfill site in Lahore due to higher moisture content varying from 50% to 70%, high

ash content ranging between 15% to 25% and volatile combustible content of only 15% to 20% in the

Lahore MSW (Source: LUDP / Solid Waste Disposal Plan 1991 and Environment Impact Assessment of

Mahmood Booti Municipal Solid Waste Dumping Site, Lahore by NESPAK in March 2004). This

NESPAK study was conducted under the orders of the Honourable Lahore high Court where the

residents challenged the project. Moreover installation of incinerators at landfill site would be an

expensive option, technically more challenging to operate and environmentally undesirable. Thus,

incineration at present is not a viable option for waste disposal in Lahore.

Alternative 3: Disposal of the waste on a landfill with electricity generation using the landfill gas

captured from the landfill site: Sanitary landfill or the controlled tipping involves the disposal of the

waste in the prepared trenches or cells. It is a biological process in which number of microorganism

generates different products. Vents are kept for the escape of gasses like Carbon Dioxide and Methane.

An extensive investment is required for landfill gas collection system for possible generation of

electricity. It is also technically not feasible1 as the conditions for installing a gas collection and

electricity generation system are not met due to the composition of waste, high humidity levels ranging

from 50% to 70% (low humidity levels are required), and high ash content ranging from 15% to 25% in

Lahore (as mentioned in alternative 2) which would require additional equipment that raises the cost

even more, as well as technical design know-how. High investment, technical challenges and lack of

capacity in the local market renders this option unfeasible at present.

Alternative 4: Disposal of Waste on a landfill with landfill gas capture and flaring system. Sanitary

landfill or the controlled tipping involves the disposal of the waste in the prepared trenches or cells.

Vents are kept for the escape of gases like methane and carbon dioxide. This system requires installation

of gas extraction and flaring system at project site. Implementation of this alternate requires extensive

investment2 but without any economic return. It is also technically not feasible as the quality of waste in

a developing country like Pakistan is not appropriate for this option combined with climatic conditions of

too much humidity (as explained in alternative 2) and volatile combustible content of only 15% to 20%

in Lahore which raises the moisture content of the waste above what is feasible for installing a gas

1 For sources please see the following: 1-World Bank “Solid Waste Management in Punjab Sector Policy Dialogue

Note”, April 21, 2008; 2-“The World Bank PPIAF – Punjab Solid Waste Management Reform” Study, March 28,

2008; and 3-Landfill Risk Matrix Intro by Mr. Charles Peterson, Senior Waste Management Specialist at the World

Bank.

2 Internal World Bank Policy Note titled “Non-Lending Technical Assistance Establishing Integrated Solid Waste

Management in the Large Cities of Pakistan Concept Note.”

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collection and flaring system (requires additional expensive equipment and sophisticated

design/operations knowledge that is not available in Pakistan). As a result, this alternate being capital

intense and technically challenging, makes it technically and financially unfeasible at present.

Alternative 5: Continuation of the current situation baseline scenario, where organic matter is

broken down through uncontrolled anaerobic processes, releasing all produced methane into the

atmosphere. There are no technical and investment barriers to this option. It is a feasible option but

with severe environmental consequences.

Stated alternatives 2, 3 and 4 are not acceptable to the investors owing to the technological and financial

reasons. Technical challenges given the climate and waste quality of Lahore, lack of capacity in the local

market, lack of technological know-how, unaffordable high costs exacerbated by additional

complications given the technical difficulties, render scenarios 2, 3 and 4 above mentioned unfeasible.

Therefore, the following steps were applied to analyze the Alternatives 1 and 5 in order to identify the

baseline scenario.

Sub-step 1b – Enforcement of applicable laws and regulations:

The most relevant parts of the legal framework for disposal of waste in Pakistan include:

The Pakistan Environmental Protection Ordinance, 1983

National Conservation Strategy (NCS), 1992;

National Environmental Quality Standards (NEQS), 1993; and

Pakistan Environmental Protection Act, 1997 (PEPA, 1997)

Punjab Solid Waste Management Guidelines, 2007

The Ministry of Environment deals with environment and wildlife issues at the federal level. Two

organizations, the Pakistan Environmental Protection Council (PEPC) and the Pak- EPA, are primarily

responsible for administering the provisions of the PEPA 1997. The provincial environmental protection

agencies (EPAs) are the provincial arms of the federal EPA, which is authorized to delegate powers to its

provincial counterparts.

There is no article enforcing landfill gas extraction, organic waste composting or what-so-ever in

Environmental Protection Law of the Islamic Republic of Pakistan. While the governing laws do not

regulate waste disposal practices, there is no prohibition against composting either. The SOPs of LCL

are in full compliance with the guidelines of Punjab Solid Waste Management Guidelines, 2007 and to

the best international practices of composting across the board.

Step 2: According to the methodology, Step 2 and/or Step 3 of the latest approved version of the “Tool

for demonstration and assessment of additionality” shall be used to assess which of these alternatives

should be excluded from further consideration (e.g. alternatives facing prohibitive barriers or those clearly

economically unattractive).

In Compliance with the guidance of the CDM EB after the request for review3 at registration of the project

activity, where the Board considered that the additionality of the project activity is established based on the

barrier analysis, step 3 of the latest version of the “Tool for demonstration and assessment of additionality”

has been followed. ,

Step 3: Barrier Analysis

3 CDM-EB-52, paragraph 44 (m); 12 February 2010, project 2778

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Sub-step 3a – Identify barriers that would prevent the implementation of type of the Proposed Project

activity:

Hereafter the relevant key factors are discussed. Each of the factors described below indicates how it

influences the baseline development for the composting project and the GHG emissions at project

activity level.

Key factor 1 -Technical barriers

Although the project is using the simplest form of commercial composting technology, the entire

technology of the aerobic composting process implemented in this project is European and considered

reliable; equipment has been imported from Menart in Belgium for this first of a kind project, as it is not

available in Pakistan. The project starting in 20054, is the first commercial attempt for using such

technology and equipment in Pakistan and there is no prior operational example in Pakistan on which the

management of LCL can rely for ensuring smooth operations of the facility5. As a result it faces a

number of technical barriers, such as the lack of technical know-how about the composting process and

running of a compost plant/machinery, and lack of availability of just-in-time after sales support on the

equipment6.

To some extent these barriers are expected to be overcome as the market for compost develops and LCL

learns through trial and error. Already LCL is working with local representatives of Menart, the

equipment suppliers, for locally developing the vendor network. It would not only reduce lead-time in

getting after sales service but would result in savings to the company.

Key factor 2 - Market & financial barriers

The Market and Financial Barrier stems from the machinery being very expensive to import without

adequate financial returns being generated to make it economically viable, which results in a very high

cost of investment7. This is further exacerbated by Pakistan’s country conditions of an inflationary

economy and high interest rates, combined with a continually depreciating currency8, which makes is

ever more expensive to pay back foreign currency denominated loans and pay for imported parts for

running and maintaining the imported machinery. At the same time, there is no established market for

compost to generate revenues from and it will take time to build a market for compost. Furthermore,

there are government subsidies and extensive farmer outreach programs for chemical fertilizer9,10

, which

make it even more difficult to compete in the market and build a market for compost.

The market barriers to the project include the difficulty in the promotion and sale of compost and

4 Project starting date is November 1, 2005 corresponding to the 1st payment made to Menart for plant and

machinery (refer to section C.1.1 of the PDD). 5 Evidenced by Dawn newspaper clipping titled “Work on Compost Plant Next Week” dated March 16th 2005.

6 Evidenced by the production records showing lower production than expected. Plant records have been provided to

DOE during validation site visit. 7 Please see Annex 3 for more details on the costs of investment.

8 Please refer to http://www.statpak.gov.pk/depts/fbs/statistics/yearly_inflation/yearly_inflation/html for details on

inflationary trends for Pakistan, which were cross-checked against the State Bank of Pakistan’s (is the country’s

Central Bank) data as a part of the Validation process. 9 Subsidies for chemical fertilisers have been provided in Pakistan from 1955 to present, please refer to Fertilizer

subsidy in Pakistan, 2008, Lt Gen. Munir Hafiez and Fauji Fertilizer Company Ltd., Paper compiled for the 2008

IFA Crossroads Asia-Pacific in Melbourne. 10

Subsidies are expected to continue, please refer to page 21 of Pakistan Economic Survey 2008-2009, available at

http://www.finance.gov.pk/admin/images/survey/chapters/02-Agriculture09.pdf and page 150 of Government

budget 2009-2010 available at http://www.finance.gov.pk/admin/images/budget/pink_book_detail_D.pdf

http://www.finance.gov.pk/admin/images/survey/chapters/02-Agriculture09.pdf

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financial barriers comprise high initial capital investment and substantial operation and maintenance cost

for the equipment11

.

The Proposed Project is the first commercial composting project for organic waste in the Punjab province

and in the country itself12

. In addition to the risk of the investment and high operational & maintenance

costs, there is also the risk of low market demand for the compost in the local market. It will take many

years to build market demand for compost and until this is done, the project cannot be profitable. Given

that the market for compost currently does not exist in the country, it is expected that the company will

experience low sales of compost in the early years13

, even under the best case scenario. It will take time

to build a market for compost, which is why the project needs carbon revenue to help survive the early

years. Without CDM revenue, the project proponent would face cash flow problems14

because of

difficulties to secure working capital at competitive rates from the local commercial banks, as they are

reluctant to fund such risky Greenfield projects. There is no way that this project would have been

undertaken without the expectation of carbon revenues15

. As it is, the time taken by the CDM process is

creating cashflow issues and the project needs the CDM revenue very badly to help it survive in the

meantime.

It is because of this lack of knowledge both from the project entity’s and buyer’s perspectives, that LCL

started a pilot operation in 200616

to learn how to use the composting machinery, break in the machinery,

figure out what the optimal operational set-up for equipment is, and learn how to manage the composting

process which can very easily go out of control. Thus, after official inauguration of the company, the first

pilot phase was to try and process upto 300 tpd and learn from this before the next stage of incremental

increase was implemented to eventually achieve the goal of 1,000 tpd. There is no possibility that 300 tpd

would be viable17

on its own with or without CDM revenue. Moreover, the World Bank Solid Waste

Management in Punjab Sector Dialogue Policy Note/Study (April 21, 2008), which was provided to the

DOE during Validation, also supports that such a size is not viable and recommends that anything under

600 tpd should not even be considered due to lack of financial viability, amongst other barriers.

As part of this pilot phase, a comprehensive Marketing Plan has been adopted to take the compost to the

market. LC has committed 10% of the sales revenue to implement its marketing plan. At the moment,

marketing remains an expensive cost for the project without adequate sales revenue coming in. The

marketing plan has placed emphasis on the extensive sales promotions to give a real understanding of the

benefits of using compost for agricultural activities. Such promotion has been in the form of

demonstration farms in key districts to educate farmers, strengthening of the dealer network, as well as

direct marketing to the farmers. It will take time to change farmer mindsets. Still, for LCL, the

investment cost, debt servicing, and revenue from compost sales is not enough to support 300 tpd only. It

is simply too small an amount to justify an investment of this size. The pilot phase of 300 tpd is not

business as usual practice as the whole facility would not exist without carbon finance. 300 tpd is not

economically viable on its own and the plant would be shut down at this level alone. The pilot project

has been running at a loss, which has increased the accumulated losses18

. Relative to the investment size

11

Please see Annex 3 for more details on the costs of investment. 12

Evidenced by Dawn newspaper clipping titled “Work on Compost Plant Next Week” dated March 16th 2005. 13

Evidenced by the sale records and Audited financial reports for 2005, 2006, 2007 provided to the DOE during the

validation site visit. 14

Cash flow problems and financial losses have been evidenced by the Audited financial reports for 2005, 2006 and

2007 made available to DOE. 15

Early consideration of CDM has been evidenced by: Board Minute meeting on July 13, 2004 and Feasibility

Study referring to CDM consideration, July 13, 2004, which were all provided to the DOE during Validation. 16

Official inauguration of company and start of operations on March 31, 2006 as documented in project timeline

provided to DOE. 17

Evidenced by the Audited financial reports for 2005, 2006 and 2007 made available to DOE. 18

Audited financial reports have been made available to the DOE during Validation.

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of the project, losses of this size are quite a significant percentage of the total investment, which the

project entity continues to absorb under deficit financing.

The lack of financial viability of the project without CDM revenue, high cost of investment and debt

servicing for imported machinery, lack of technical know-how and local capacity, lack of composting

technology in the country without the CDM project, common practice of open dumping of waste on

waste sites or by the side of the road, etc all prevent the implementation of the project activity without

CDM revenue. These barriers being significant enough to prevent project implementation are

documented in detail in all the World Bank waste management studies and official country policy

dialogue notes mentioned above.

Sub-step 3b – Show that the identified barriers would not prevent the implementation of at least one of

the alternatives (except the Proposed Project activity):

The above-identified barriers do not affect Alternative 5 (Continuation of the current situation). It faces

no barriers with respect to technology, market and finances. As mentioned above, the waste treatment in

Pakistan is generally operated by the local governments who have limited funds. For the investors, the

Alternatives 2, 3, and 4 are not acceptable because of the technical as well as commercial reasons.

Alternative 1 cannot be used as the baseline scenario without the CDM revenue. In comparison,

alternative 5, “continuing the current disposal of waste and allowing the emission of landfill gas” would

sustain as a viable alternative in the absence of the project and has been chosen as the baseline scenario.

B.5. Demonstration of additionality

>>

Additionality is determined using the latest version of the methodological tool “Tool for

demonstration and assessment of additionality” V5.

Step 1: Identification of Alternatives to the Project Activity Consistent with Current Laws and

Regulations

Sub-Step 1a – Define Alternatives to Project Activity:

Alternative 1: Organic waste composting identical to the proposed project but not undertaken as a CDM

project activity: Methane production would be avoided by breaking down organic matter through aerobic

processes. Composting activity includes processes of municipal waste classification, composting and

automation monitoring, which require high technology. It demands high initial capital investment and

operational & maintenance costs. The sales of generated compost faces marketing risks and the ROI

(return on investment) cannot reach the minimum hurdle rate expectations. The steps 2 and 3 of the

section will show that the project IRR without CDM revenue is only 15.15%, which is below the

required hurdle rate for Pakistan. Considering the financial barriers and market risks composting without

CDM support is not feasible.

Alternative 2: Waste incineration: Waste incineration is suitable for low humidity and high caloric value

wastes. A study was carried out on the municipal solid waste of Lahore metropolitan to ascertain whether

the waste of Lahore municipality is suitable for incineration or not. The study reviled no installation of

incinerator at any landfill site in Lahore due to higher moisture content varying from 50% to 70%, high

ash content ranging between 15% to 25% and volatile combustible content of only 15% to 20% in the

Lahore MSW (Source: LUDP / Solid Waste Disposal Plan 1991 and Environment Impact Assessment of

Mahmood Booti Municipal Solid Waste Dumping Site, Lahore by NESPAK in March 2004). This

NESPAK study was conducted under the orders of the Honourable Lahore high Court where the

residents challenged the project. Moreover installation of incinerators at landfill site would be an

UNFCCC/CCNUCC


expensive option, technically more challenging to operate and environmentally undesirable. Thus,

incineration at present is not a viable option for waste disposal in Lahore.

Alternative 3: Disposal of the waste on a landfill with electricity generation using the landfill gas

captured from the landfill site: Sanitary landfill or the controlled tipping involves the disposal of the

waste in the prepared trenches or cells. It is a biological process in which number of microorganism

generates different products. Vents are kept for the escape of gasses like Carbon Dioxide and Methane.

An extensive investment is required for landfill gas collection system for possible generation of

electricity. It is also technically not feasible19

as the conditions for installing a gas collection and

electricity generation system are not met due to the composition of waste and high humidity levels 20

(low humidity levels are required) and high ash content in Lahore which would require additional

equipment that raises the cost even more, as well as technical design know-how. High investment,

technical challenges and lack of capacity in the local market renders this option unfeasible at present.

Alternative 4: Disposal of Waste on a landfill with landfill gas capture and flaring system. Sanitary

landfill or the controlled tipping involves the disposal of the waste in the prepared trenches or cells.

Vents are kept for the escape of gases like methane and carbon dioxide. This system requires installation

of gas extraction and flaring system at project site. Implementation of this alternate requires extensive

investment21

but without any economic return. It is also technically not feasible as the quality of waste in

a developing country like Pakistan is not appropriate for this option combined with climatic conditions of

too much humidity in Lahore which raises the moisture content of the waste above what is feasible for

installing a gas collection and flaring system (requires additional expensive equipment and sophisticated

design/operations knowledge that is not available in Pakistan). As a result, this alternate being capital

intense and technically challenging, makes it technically and financially unfeasible at present.

Alternative 5: Continuation of the current situation baseline scenario, where organic matter is

broken down through uncontrolled anaerobic processes, releasing all produced methane into the

atmosphere. There are no technical and investment barriers to this option. It is a feasible option but

with severe environmental consequences.

Outcome of sub-step 1a

Stated alternatives 2, 3, and 4 are not acceptable to the investors owing to the technological and financial

reasons. Technical challenges given the climate and waste quality of Lahore, lack of capacity in the local

market, lack of technological know-how, unaffordable high costs further exacerbated by additional

complications given the technical difficulties, render scenarios 2, 3 and 4 mentioned above unfeasible.

Therefore, the following steps were applied to analyze the Alternatives 1 and 5 in order to identify the

baseline scenario.

Sub-step 1b – Consistency with mandatory laws and regulations:

The most relevant parts of the legal framework for disposal of waste in Pakistan include:

The Pakistan Environmental Protection Ordinance, 1983

National Conservation Strategy (NCS), 1992;

19

For sources please see the following: 1-World Bank “Solid Waste Management in Punjab Sector Policy Dialogue

Note”, April 21, 2008; 2-“The World Bank PPIAF – Punjab Solid Waste Management Reform” Study, March 28,

2008; and 3-Landfill Risk Matrix Intro by Mr. Charles Peterson, Senior Waste Management Specialist at the World

Bank. 20

LUDP / Solid Waste Disposal Plan 1991 and Environment Impact Assessment of Mahmood Booti Municipal

Solid Waste Dumping Site, Lahore by NESPAK in March 2004. Was provided to DOE during Validation. 21

Internal World Bank Policy Note titled “Non-Lending Technical Assistance Establishing Integrated Solid Waste

Management in the Large Cities of Pakistan Concept Note.”

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National Environmental Quality Standards (NEQS), 1993; and

Pakistan Environmental Protection Act, 1997 (PEPA, 1997)

Punjab Solid Waste Management Guidelines, 2007

The Ministry of Environment deals with environment and wildlife issues at the federal level. Two

organizations, the Pakistan Environmental Protection Council (PEPC) and the Pak- EPA, are primarily

responsible for administering the provisions of the PEPA 1997. The provincial environmental protection

agencies (EPAs) are the provincial arms of the federal EPA, which is authorized to delegate powers to its

provincial counterparts.

There is no article enforcing landfill gas extraction, organic waste composting or what-so-ever in

Environmental Protection Law of the Islamic Republic of Pakistan. While the governing laws do not

regulate waste disposal practices, there is no prohibition against composting either. The SOPs of LCL

are in full compliance with the guidelines of Punjab Solid Waste Management Guidelines, 2007 and to

the best international practices of composting across the board.

Outcome of sub-step 1b

Alternatives 1 and 5 are in compliance with regulatory requirements since there are no mandatory

applicable laws.

As mentioned in the previous section, in compliance with the guidance of the CDM EB after the request for

review22

at registration of the project activity, where the Board considered that the additionality of the project

activity is established based on the barrier analysis, step 3 of the latest version of the “Tool for demonstration

and assessment of additionality” has been followed.

According to the “Tool for demonstration and assessment of additionality” we are to “Proceed to Step 2

(Investment analysis) or Step 3 (Barrier analysis).

In Compliance with the guidance of the CDM EB after the request for review at Registration of the project

activity, where the Board considered that the additionality of the project activity is established based on the

barrier analysis, step 3 of the latest version of the “Tool for demonstration and assessment of additionality”has

been followed. ,

Step 3: Barrier Analysis

Without CDM revenue, the project proponent faces a number of technical barriers such as lack of

technical know-how, lack of availability of just-in-time after sales support on the equipment, compost

sales, etc.

Sub-step 3a – Identify barriers that would prevent the implementation of type of the Proposed Project

activity:

Hereafter the relevant key factors are discussed. Each of the factors described below indicates how it

influences the baseline development for the composting project and the GHG emissions at project

activity level.

Key factor 1 -Technical barriers

Although the project is using the simplest form of commercial composting technology, the entire

technology of the aerobic composting process implemented in this project is European and considered

22

CDM-EB-52, paragraph 44 (m); 12 February 2010, project 2778

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reliable; equipment has been imported from Menart in Belgium23

for this first of a kind project, as it is

not available in Pakistan The project, starting in November 200524

, is the first commercial attempt for

using such technology and equipment in Pakistan and there is no prior operational example in Pakistan

on which the management of LCL can rely for ensuring smooth operations of the facility25

. As a result it

faces a number of technical barriers, such as the lack of technical know-how and lack of availability of

just-in-time after sales support on the equipment26

.

To some extent some of these barriers are expected to be overcome as the market for compost develops

and through learning by doing. Already LCL is working with local representatives of Menart, the

equipment suppliers, for locally developing the vendor network. It would not only reduce lead time in

getting after sales service but would result in savings to the company.

Key factor 2 - Market & financial barriers

The Market and Financial Barrier stems from the machinery being very expensive to import without

adequate financial returns being generated to make it economically viable, which results in a very high

cost of investment27

. This is further exacerbated by Pakistan’s country conditions of an inflationary

economy28

and high interest rates, combined with a continually depreciating currency, which makes is

ever more expensive to pay back foreign currency denominated loans and pay for imported parts for

running and maintaining the imported machinery. Furthermore, Pakistan’s climate and waste composition

characteristics mean that additional cost must be incurred than what is normal to design a gas collection

and flaring system that is appropriate for the high humidity levels – driving the investment cost even

higher. At the same time, there is no established market for compost to generate revenues from and it will

take time to build a market for compost. Thus this prevents Alternative 1 from being the baseline

scenario.

The market barriers to the project includes the difficulty in the promotion and sale of compost and added

to this, there is also a financial barrier comprised of high initial capital investment and substantial

operation and maintenance cost for the equipment29

. Furthermore, there are government subsidies and

extensive farmer outreach programs for chemical fertilizer30,31

, which make it even more difficult to build

a market for compost.

The Proposed Project is the first commercial composting project for organic waste in the Punjab province

and in the country itself32

. In addition to the risk of the investment and high operational & maintenance

23

Menart Invoices for imported equipment have been provided as evidence at the time of validation. 24

Project starting date is November 1, 2005 corresponding to the 1st payment made to Menart for plant and

machinery (refer to section C.1.1 of the PDD). 25

Dawn newspaper clipping titled “Work on Compost Plant Next Week” dated March 16th 2005. 26

Evidenced by the production records showing lower production than expected. Plant records have been provided

to DOE during validation site visit. 27

Please see Annex 3 for more details on the costs of investment. 28

Please refer to http://www.statpak.gov.pk/depts/fbs/statistics/yearly_inflation/yearly_inflation/html for details on

inflationary trends for Pakistan, which were cross-checked against the State Bank of Pakistan’s (is the country’s

Central Bank) data. 29

Please see Annex 3 for more details on the costs of investment.. 30

Subsidies for chemical fertilisers have been provided in Pakistan from 1955 to present, please refer to Fertilizer

subsidy in Pakistan, 2008, Lt Gen. Munir Hafiez and Fauji Fertilizer Company Ltd., Paper compiled for the 2008

IFA Crossroads Asia-Pacific in Melbourne. 31

Subsidies are expected to continue, please refer to page 21 of Pakistan Economic Survey 2008-2009, available at

http://www.finance.gov.pk/admin/images/survey/chapters/02-Agriculture09.pdf and page 150 of Government

budget 2009-2010 available at http://www.finance.gov.pk/admin/images/budget/pink_book_detail_D.pdf 32

Evidenced by Dawn newspaper clipping titled “Work on Compost Plant Next Week” dated March 16th 2005.

http://www.finance.gov.pk/admin/images/survey/chapters/02-Agriculture09.pdf

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costs, there is also the risk of low market demand for the compost in the local market. It will take many

years to build market demand for compost and until this is done, the project cannot be profitable. Given

that no market for compost currently exists in the country, it is expected that the company will

experience low sales33

, of compost in the early years, even under the best case scenario. It will take time

to build a market for compost, which is why the project needs carbon revenue to help survive the early

years34

. Without CDM revenue, the project proponent would face cash flow35

problems because of

difficulties to secure working capital at competitive rates from the local commercial banks, as they are

reluctant to fund such risky Greenfield projects.

It is because of this lack of knowledge both from the project entity’s and buyer’s perspectives, that LCL

commenced pilot operations in 200636

to learn how to use the composting machinery, break in the

machinery, figure out what the optimal operational set-up for equipment is, and learn how to manage the

composting process which can easily go out of control. Thus, after official inauguration of the company,

the first pilot phase was to try and process up to 300 tpd and learn from this before the next stage of

incremental increase was implemented to eventually achieve the goal of 1,000 tpd. There is no possibility

that 300 tpd would be viable37

on its own with or without CDM revenue. Moreover, the World Bank

Solid Waste Management in Punjab Sector Dialogue Policy Note/Study (April 21, 2008) also supports

that such a size is not viable and recommends that anything under 600 tpd should not even be considered

due to lack of financial viability, amongst other barriers.

As part of this pilot phase, a comprehensive Marketing Plan has been adopted to take the compost to the

market. LC has committed 10% of the sales revenue to implement its marketing plan. At the moment,

marketing remains an expensive cost for the project without adequate sales revenue coming in. The

marketing plan has placed emphasis on the extensive sales promotions to give a real understanding of the

benefits of using compost for agricultural activities. Such promotion has been in the form of

demonstration farms in key districts, strengthening of the dealer network, as well as direct marketing to

the farmers. It will take time to change farmer mindsets. Still, for LCL, the investment cost, debt

servicing, and revenue from compost sales is not enough to support 300 tpd only. It is simply too small

an amount to justify an investment of this size. The pilot phase of 300 tpd is not business as usual

practice as the whole facility would not exist without the expectations of obtaining carbon finance. 300

tpd is not economically viable on its own and the plant would be shut down at this level alone. The pilot

project has been running at a loss, which has increased the accumulated losses38

. Relative to the

investment size of the project, losses of this size are quite a significant percentage of the total investment,

which the project entity continues to absorb under deficit financing.

The following evidence was presented to substantiate the barriers noted above. Both of the barriers are

documented in each one of the items listed below, as they point out what the current practices are in the

country, along with the lack of experience with the composting technology, and thus reinforces the

additional financial hurdles that need to be overcome by the project activity:

• World Bank Study on Waste Management Practices in Punjab that documents open dumping of

waste as the common practice and provides documentation of multiple financial, technical, and

33

Evidenced by the sale records and Audited financial reports for 2005, 2006, 2007 provided to the DOE during the

validation site visit. 34

Early consideration of CDM has been evidenced by: Board Minute meeting on July 13, 2004 and Feasibility

Study referring to CDM consideration, July 13, 2004. 35

Cash flow problems and financial losses have been evidenced by the Audited financial reports for 2005, 2006 and

2007 made available to DOE. 36

Official inauguration of company and start of operations on March 31, 2006 as documented in project timeline

provided to DOE. 37

Evidenced by the Audited financial reports for 2005, 2006 and 2007 made available to DOE. 38

Audited financial reports have been made available to the DOE during Validation.

UNFCCC/CCNUCC


policy barriers: World Bank “Solid Waste Management in Punjab Sector Policy Dialogue Note”,

April 21, 2008.

• Executive Summary of World Bank PPIAF Study on Punjab Solid Waste Management

Reform.(Pages IV, V, VI, VIII, & XXI),“The World Bank PPIAF – Punjab Solid Waste

Management Reform” Study, March 28, 2008.

• Photos of Mahmood Booti dumping site (without the CDM project the area reserved for the project

would also look like this and have open dumping of waste like the rest of the area) and other

examples of open dumping of waste common practice from Lahore and other cities in Pakistan.

• Dawn newspaper article titled “Work on Compost Plant Next Week” on March 16th 2005. It clearly

states that this project is the first of its kind that is bringing composting technology from Europe to

Pakistan for the first time.

• Municipal Solid Waste Management in Lahore City District, Pakistan article/study in Waste

Management magazine39

. It clearly documents open dumping of waste as common practice.

(“Introduction” & section 3.2.3 “Open Dumps”)

• World Bank policy note by Agnieska Grundzinska on “Solid Waste Management in Punjab Sector

Policy Dialogue Note” with government of Pakistan. This note clearly documents common practice

as well as all the barriers mentioned in the PDD, including the lack of financial viability. (Pages 1,

6, 15, & 27)

• Meeting with independent local consultant on Lahore Compost project and waste management

during validation site visit.

• Meetings with World Bank staff experts on waste management practices in Pakistan – Task Team

Leader who heads waste management strategy for World Bank’s Municipal Services Improvement

project for Pakistan and project Deal Manager during validation site visit.

• LUDP/Solid Waste Disposal Plan 1991 and Environment Impact Assessment of Mahmood Booti

Municipal Solid Waste Dumping Site, Lahore by NESPAK in March 2004.

• Internal World Bank Policy Note titled “Non-Lending Technical Assistance Establishing Integrated

Solid Waste Management in the Large Cities of Pakistan Concept Note.” It clearly establishes open

dump sites as the common practice for waste disposal and outlines barriers preventing better waste

management practices. (Page 1)

• Landfill Risk Matrix.doc and Landfill Risk Matrix Intro.doc by Charles Peterson. These World

Bank documents list the conditions necessary for landfill gas capture and flaring and the risks

associated with different parameters.

The lack of financial viability of the project without CDM revenue, high cost of investment and debt

servicing for imported machinery, lack of technical know-how and local capacity, lack of composting

technology in the country without the CDM project, common practice of open dumping of solid waste,

all prevent the implementation of the project activity without CDM revenue. These barriers being

significant enough to prevent project implementation is documented in detail in all the World Bank waste

management studies and official country policy dialogue notes mentioned above, in addition to outside

sources presented as a part of the Validation process.

Sub-step 3b – Show that the identified barriers would not prevent the implementation of at least one of

the alternatives (except the Proposed Project activity):

The above-identified barriers prevent all other Alternatives but do not affect Alternative 5 (Continuation

of the current situation). It faces no barriers with respect to technology, market and finances. As

39

Can be found at http://www.sciencedirect.com/science?_ob=ArticleURL&_udi=B6VFR-4VDSCVJ-

9&_user=1916569&_rdoc=1&_fmt=&_orig=search&_sort=d&_docanchor=&view=c&_searchStrId=1141037881

&_rerunOrigin=google&_acct=C000055300&_version=1&_urlVersion=0&_userid=1916569&md5=84b26cfc4a6

a06cb97f03e73a07f1c18. “Municipal Solid Waste Management in Lahore City District, Pakistan” article in Waste

Management magazine volume 29 issue 6 dated June 2009.

UNFCCC/CCNUCC


mentioned above, the local governments who have limited funds generally operate the waste treatment in

Pakistan. For the investors, the Alternatives 2, 3 and 4 are not acceptable because of the technical as well

as commercial reasons. The Alternative 1 cannot be used as the baseline scenario without obtaining any

CDM revenue. In comparison, alternative 5 “continuing the current disposal of waste and allowing the

emission of landfill gas” would sustain as a viable alternative in the absence of the project and has been

chosen as the baseline scenario.

In conclusion, according to the Tool for the demonstration and assessment of additionality, the baseline

and the proposed project are discussed in details in the section B.4. Among the five alternatives,

Alternatives 1 through 4 without CDM support can’t be used as the baseline scenario. In comparison,

Alternative 5 of continuing the current practice of waste disposal and allowing the emissions of landfill

gas is the baseline scenario.

Step 4: Common Practice Analysis

Sub-step 4a – Analyze Other Activities Similar to the Proposed Activity:

We are not aware of any project carrying out composting activity on a large commercial scale in the

country. At present composting practices in the country are restricted to low cost static composting

process (anaerobic process). Aerobic composting is capital-intensive project with high running costs. As

the market is not developed for the market, promoting compost is not easy. At present the sales of

compost throughout the country is not recorded and so it is difficult to estimate the market potential of

compost.

Sub-step 4b – Discuss Other Similar Options that are Occurring

To the best of knowledge there is no similar activity occurring in the country.

B.6. Emission reductions

B.6.1. Explanation of methodological choices

>>

The emission reduction caused by the proposed project are calculated according to the approved

methodology AM0025 version 11 “Avoided Emissions from Organic Waste through Alternative Waste

Treatment Processes” and Annex 10 of EB41 “Tool to determine Methane Emissions Avoided from

Disposal of Waste at a Solid Waste Disposal Site,” V4.

The emissions have been calculated according the followings steps:

1. Project Emissions PEy

The proposed project uses composting process to treat organic waste. Therefore, the project emissions in

year y are calculated using the following formula:

PEy = PEelec,y + PEfuel,on-site,y + PEc,y + PEa,y + PEg,y + PEr,y + PEi,y + PEw,y

Where:

PEy is the project emissions during the year y (tCO2e)

PEelec,y is the emissions from electricity consumption on-site in year y (tCO2e)

PEfuel,on-site,y is the emissions on-site due to fuel consumption on-site in year y (tCO2e)

PEc,y is the emissions during the composting process in year y (tCO2e)

PEa,y is the emissions during the anaerobic digestion process in year y (tCO2e). The project

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does not include the anaerobic digestion process, so PEa,y = 0

PEg,y is the emissions during the gasification process in year y (tCO2e). The project does not

include the gasification process, so PEg,y = 0

PEr,y is the emissions during the combustion of RDF/stabilized biomass in year y (tCO2e).

The project does not include the combustion of RDF/stabilized biomass, so PEr,y = 0

PEi,y is the emissions from waste incineration in year y (tCO2e). The project does not include

waste incineration, so PEi,y = 0

PEw,y is the emissions from waste water treatment in year y (tCO2e)

So the calculation equation of PEy is:

PEy = PEelec,y + PEfuel,on-site,y + PEc,y + PEw,y (1)

(i) Emissions from electricity use (PEelec,y)

PEelec,y = EGPJ,FF,y * CEFelec (2)

Where:

EGPJ,FF,y is the amount of electricity generated in an on-site fossil fuel fired power plant or

consumed from the grid as a result of the project activity, measured using an electricity

meter (MWh).

CEFelec is the carbon emissions factor for electricity generation in the project activity

(tCO2/MWh). Estimated values are used to ex-ante calculate the emission reduction.

The actual emission reduction will be replaced by the ex-post measured values.

Furthermore, the methodology states that in cases where the electricity is purchased from

the grid, the emission factor is to be calculated according to the Tool to Calculate

Emission Factor for an Electricity System Version 01.1. Accordingly, the emission factor

has been calculated using the “Tool to Calculate the Emission Factor for an Electricity

System”.

(Lahore Electric Supply Company Limited (LESCO)

(http://www.lesco.gov.pk/LESCO/default.asp) is a wholly owned subsidiary of the Water

& Power Development Authority (WAPDA) of the Government of Pakistan and is

responsible for distribution of electricity to all categories of consumers in the Lahore

area. LESCO issues monthly billing to the consumers and collects electricity charges.

The factor value used in the PDD has been taken from the monthly bills of LESCO for

LCL.)

(ii) Emissions from fuel use on-site (PEfuel,on-site,y)

The project uses fuel on-site for vehicles. Therefore, emissions from fuel use on-site are relevant.

PEfuel,on-site,y = Fcons,y * NCVfuel * EFfuel (3)

Where:

PEfuel,on-site,y is the CO2 emissions due to onsite fuel combustion in year y (tCO2e)

Fcons,y is the fuel consumption on site in year y (litres). Estimated values are used to ex-ante

calculate the emission reduction. The actual emission reduction will be replaced by the

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ex-post measured values.

NCVfuel is the net calorific value of the fuel (MJ/Kg). Net calorific value of 44.007 MJ/Kg has

been used. Calorific Value as per PCSIR report is being used here.

(LCL does not procure fuel directly from the fuel supplier. The reason for this is that the

quantity of fuel required by LCL is too small for the fuel supplier to send out a tanker

with fuel directly to LCL. Thus, LCL goes to market traders who trade smaller quantities

to procure its fuel needs. Therefore the calorific value of the fuel used at project has

been taken from the Lab Test Report of the fuel sample taken from site, which was

carried out by the government owned Pakistan Council of Scientific & Industrial

Research, the only recognized laboratory in Pakistan whose test reports are recognized

and accepted all across the country and abroad. The Lab is ISO 9001 certified).

EFfuel is the CO2 emission factor of the fuel (tCO2e). IPCC default value of 74,100 Kg/TJ has

been used.

(iii) Emissions from composting (PEc,y)

PEc,y = PEc,N2O,y + PEc,CH4,y (4)

Where:

PEc,N2O,y is the N2O emissions during the composting process in year y (tCO2e)

PEc,CH4,y is the emissions during the composting process due to methane production through

anaerobic conditions in year y (tCO2e)

N2O emissions (PEc,N2O,y)

PEc,N2O,y = Mcompost, y * EFc,N2O * GWPN2O (5)

Where

PEc,N2O,y is the N2O emissions during the composting process in year y (tCO2e)

Mcompost, y is the total quantity of compost produced in year y (tonnes/a). Estimated values are used

to ex-ante calculate the emission reduction. The actual emission reduction will be

replaced by the ex-post measured values.

EFc,N2O is the emission factor for N2O emissions from the composting process (tN2O/t Compost).

Approved value of 0.000043 tN2O/t compost has been used.

GWPN2O is the Global Warming Potential of nitrous oxide (tCO2/tN2O). Approved value of

Global Warming Potential (310 tCO2/tN2O) for N2O has been used.

CH4 emissions (PEc,CH4,y)

PEc,CH4,y = MBcompost, y * GWPCH4* Sa,y (6)

Where

PEc,CH4,y is the project methane emissions due to anaerobic conditions in the composting process

in year y (tCO2e).

MBcompost, y is the total quantity of methane produced in the solid waste dumping site in the

absence of the composing activity in year y (tCH4). According to AM0025 version 11

and Annex 10 of EB 41st meeting report “Tools to Determine Methane Emissions

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Avoided from Disposal of Waste at a Solid Waste Disposal Site” MBcompost, y is

calculated by multiplying MB y calculated from the Baseline Emissions estimated from

equation 8 by the fraction of waste diverted, from the dumping site, to the composting

activity (fc) relative to the total waste diverted from the landfill to all project activities

(composting).

GWPCH4 is the Global Warming Potential of methane (tCO2/tCH4). Approved Global warming

Potential of methane (21 tCO2/tCH4) has been used.

Sa,y is the number of samples per year with oxygen deficiency (SOD,y)divided by total number

of samples (Stotal,y) taken per year. It primarily indicates waste that degrades under

anaerobic conditions in the composting plant during the crediting period. Currently

limited data is available which is statistically not significant. An Ex ante value of 2%

has been applied in the PDD for Sa based on these measurements. Ex post this figure will

be replaced by the results of more actual on-site measurements.

(iv) Emissions from waste water treatment (PEw,y)

PEw,y ( or PECH4,w,y)= QCOD,y * PCOD,y * BO * MCFp * GWPCH4 (7)

Where:

PECH4,w,y is the project methane emissions from waste water treatment in year y (tCH4/y).

QCOD,y is the quantity (amount) of wastewater treated anaerobically or released untreated from

the project activity in year y (m3/yr). This is not relevant for this project as wastewater is

not treated anaerobically. There is a nominal amount of leachate, which is reused from

an aerated tank and sprayed back on the windrows to irrigate them. Thus, a value of zero

has been used.

PCOD,y is the Chemical Oxygen Demand (COD) of the waste water measured in tCOD/m3.

Since the leachate is reused from an aerated tank and sprayed back on the windrows to

irrigate them, a value of zero has been used.

BO is the maximum methane producing capacity (tCH4/t COD). Approved value of 0.265 kg

tCH4/ kg COD has been applied in this PDD.

MCFp is the methane correction factor (fraction). Approved IPCC default value of 0.8 has been

used. This is the value of anaerobic deep lagoon.



2. Baseline emissions

As per AM0025 baseline emissions are calculated using the following equation:

BEy = (MBy – MDreg,,y) + BEEN,y (8)

Where

BEy is the baseline emissions in year y (tCO2)

MBy is the methane produced in the landfill (in this case it is solid waste dumping site) in the

absence of the project in the year y

MDreg,,y is the methane that would be destroyed in the absence of project activity in year y. In

this case no methane is being destroyed, this would be 0.

BEEN,y is the baseline emissions from generation of energy displaced by project activity in year

y (tCO2). No energy generation is taking place, so this value is 0.

UNFCCC/CCNUCC


In cases where regulatory or contractual requirements do not specify MDreg,,y , an Adjustment Factor (AF)

has to be used to account for other relevant regulations and contractual obligations or to address safety or

odour concerns. However, as there are no other relevant regulations or contractual obligations especially

related to safety or odour concerns, AF will be 0.

Rate of Compliance

There are no regulations that mandate the use of one of the treatment options. Therefore, this is not

applicable.

Methane Calculations from the landfill in the absence of the Project Activity (MBy)

Methodology stipulates that the project participants should calculate the amount methane generated

according to the latest version of the approved “Tool to Determine Methane Emissions Avoided from

Disposal of Waste at a Solid Waste Disposal Site.” Consequently methane emissions have been

calculated according to EB 41st meeting report Annex 10 the methodological tool “Tool to Determine

Methane Emissions Avoided from Disposal of Waste at a Solid Waste Disposal Site” As per following

equation:

MBy = BECH4, SWDS,y (9)

This calculation is based upon first order decay (FOD) model.

BECH4, SWDS,y=φ*(1-f )*GWPCH4 *(1 – OX)*16/12* F*DOCf*MCF*∑∑Wj,x*DOCj*e-kj*(y-x)

*(1-e-kj

) (10)

Where

BECH4, SWDS,y is the methane emissions avoided during the year y from preventing waste disposal at

solid waste disposal site (SWDS) during the period from the start of the project activity

to the end of the year y (tCO2)

φ is the model correction factor to account for the uncertainties. Default value of 0.9 has

been used here

f is the fraction of the methane captured at SWDS and flared, combusted or used in

another manner. In the baseline scenario, waste is dumped without capture, destruction

or reuse of landfill gas. Therefore, f is 0.



OX is the oxidation factor (reflecting the amount of SWDS that is oxidized in the soil or

other material covering the waste.) Since the SWDS in the baseline scenario is solid

waste dumping site without any cover, OX in this case is 0.

F is the fraction of methane in SWDS gas (volume fraction). Approved default value of

0.5 has been used.

DOCf is the fraction of the degradable organic carbon. This value has been calculated using

from IPCC Guidelines for National Greenhouse Gas Inventories Reference Manual

Chapter 6 Equation 2. The value is 0.77

MCF is the methane correction factor. In this case we are using the approved value of 0.8 for

unmanaged solid waste disposal site (> 5 M deep)

DOCj is the fraction of the degradable organic carbon. Approved IPCC default values as per

Volume 5, Table 2.4 have been used

Wj,x is the amount of organic waste type j prevented from disposal in SWDS in each year x in

tons.

UNFCCC/CCNUCC


Kj is the decay rates for the waste type j. Approved IPCC default values as per Volume 5,

Table 3.3 has been used.

Where

Wj,x = Wx*∑ pn,j,x

z

Wj,x is the amount of organic waste type j prevented from disposal in SWDS in each year x in

tons.

Wx is the total amount of organic waste prevented from disposal in SWDS in each year x in

tons.

pn,j,x is the weight fraction of the waste type j in the sample n collected during the year x

z is the number of samples collected during the year x

Baseline Emissions from Generation of Energy Displaced by the Project Activity

The project does not generate electricity utilizing biogas / syngas collected / RDF / stabilized biomass /

combustion heat from incineration. Therefore, this is not applicable.

Baseline Emissions from Electricity and Heat Cogeneration that is Displaced by the Project

Activity

The project does not produce thermal energy utilizing biogas / syngas collected / RDF / stabilized

biomass / combustion heat from incineration. Therefore, this is not applicable.

3. Leakage

The project uses composting process to treat organic waste and is subject to certain types of leakage.

According to the methodology leakage emissions are estimated using the following equation:

Ly = Lt,y + Lr,y + Li,y + Ls,y (11)

Where:

Ly is the leakage emissions in year y (tCO2)

Lt,y is the leakage emissions from increased transport in year y (tCO2e)

Lr,y is the leakage emissions from the residual waste from anaerobic digester, the gasifier, the

processing/combustion of RDF/stabilised biomass or the compost in case it is disposed

of in the landfill in year y (tCO2e). As there is no anaerobic digester, gasifier or RDF

process installed at the project site. Similarly compost is not disposed off in the landfill

site. Therefore, the value is 0.

Li,y is the leakage emissions from the residual waste from MSW incinerator in year y

(tCO2e). Again, as there is no incinerator, this value is 0

Ls,y is the leakage emissions from end use of stabilized biomass. Again, as there is no

stabilized biomass, this value is 0

So the equation for Ly is

Ly = Lt,y (12)

Emissions from Transportation (Lt,y)

The emissions from the transportation (Lt,y) is calculated using the following equation:

Lt,y = ∑NOvehicles,i ,y * DTi,y * VFcons,i * NCVfuel,y * Dfuel * EFfuel (13)

UNFCCC/CCNUCC


Where:

NOvehicles,i ,y is the number of vehicles for transport with similar loading capacity

DTi,y is the average additional distance travelled by vehicle type i compare to baseline in year

y in km

VFcons,i is the vehicle fuel consumption in letters per kilometre for vehicle type i (l/km)

NCVfuel,y is the calorific value of the fuel (MJ/kg or other unit)

Dfuel is the fuel density (kg/l)

EFfuel is the emission factor for the fuel (tCO2e/MJ)

The land used for producing compost is adjacent to the solid waste dumping site; in fact project has been

constructed taking a small portion of land from Mahmood Booti waste dumping site. Hence there are no

additional transportation emissions from the collection area to the treatment facility.

The nearest end user for the compost produced is farms located about 6 km away from the project site.

4. Emission Reductions

Emission reductions are calculated using the following equation:

ERy = BEy – PEy – Ly (14)

Where:

ERy is the emission reductions in year y (tCO2e)

BEy is the emissions in the baseline scenario in year y (tCO2e)

PEy is the emissions in the project scenario in year y (tCO2e)

Ly is the leakage emissions in year y (tCO2e)

UNFCCC/CCNUCC


B.6.2. Data and parameters fixed ex ante

Data / Parameter CEFelec

Unit tCO2/MWh

Description Carbon emission factor for the production of electricity in the national

grid, which supplies electricity to the project activity.

Source of data Official utility documents. (Lahore Electric Supply Company Limited

(LESCO) (http://www.lesco.gov.pk/LESCO/default.asp) is a wholly

owned subsidiary of Water & Power Development Authority (WAPDA)

of the Government of Pakistan and is responsible for distribution of

electricity to all categories of consumers in the Lahore area. LESCO

issues monthly billing to the consumers and collects electricity charges.

The factor value used in the PDD has been taken from the monthly bills

of LESCO for LCL.)

Value(s) applied 0.48359

Choice of data

or

Measurement methods

and procedures

The CO2e emission factor has been calculated using the “Tool to

Calculate the Emission Factor for an Electricity System Version 01.1”.

Purpose of data Project Emissions

Additional comment -

Data / Parameter NCVfuel

Unit MJ/kg

Description the net calorific value of the fuel (MJ/Kg)

Source of data Calorific Value as per PCSIR report is being used here.

(LCL does not procure fuel directly from the fuel supplier. The reason for

this is that the quantity of fuel required by LCL is too small for the fuel

supplier to send out a tanker with fuel directly to LCL. Thus, LCL goes to

market traders who trade smaller quantities to procure its fuel needs.

Therefore the calorific value of the fuel used at project has been taken

from the Lab Test Report of the fuel sample taken from site, which was

carried out by the government owned Pakistan Council of Scientific &

Industrial Research, the only recognized laboratory in Pakistan whose test

reports are recognized and accepted all across the country and abroad.

The Lab is ISO 9001 certified).


Choice of data

or

Measurement methods

and procedures

Net Calorific Value as per PCSIR report. The report has been reproduced

with this report.

Purpose of data Project Emissions


Data / Parameter EFfuel

Unit tCO2e/TJ

UNFCCC/CCNUCC


Description is the CO2 emission factor of the fuel

Source of data 2006 IPCC Guidelines for National Greenhouse Gas Inventories


Choice of data

or

Measurement methods

and procedures

Emission factor can either be calculated or in cases where values are not

available, IPCC default values can be used. As local value for the CO2

emission factor is not available, IPCC default value has been used. The

value has been taken from 2006 IPCC guidelines Volume 2, Table 3.2.1

Purpose of data Project emissions


Data / Parameter EFc,N2O

Unit tN2O/t Compost

Description is the emission factor for N2O emissions from the composting process

Source of data Methodology approved value


Choice of data

or

Measurement methods

and procedures

Methodology approved value



Data / Parameter GWPN2O

Unit tCO2/tN2O

Description is the Global Warming Potential of nitrous oxide


Value(s) applied 310

Choice of data

or

Measurement methods

and procedures

IPCC default value



Data / Parameter GWPCH4

Unit tCO2/tN2O

Description is the Global Warming Potential of methane


Value(s) applied 21

Choice of data

or

Measurement methods

and procedures

IPCC default value

Purpose of data Baseline emissions

UNFCCC/CCNUCC



Data / Parameter BO

Unit kg tCH4/ kg COD

Description is the maximum methane producing capacity of COD

Source of data Methodology approved value


Choice of data

or

Measurement methods

and procedures

IPCC 2006 guidelines specifies the value for B0 as 0.25 kg CH4/kg COD.

Taking into account the uncertainty of this estimate, project participants

should use a value of 0.265 kg CH4/kg COD as a conservative

assumption for BO.



Data / Parameter MCF

Unit N/A

Description is the methane correction factor

Source of data 2006 IPCC Guidelines for National Greenhouse Gas Inventories (Volume

5, Table 6.3)

Value(s) applied 0.8 (default values obtained from table 6.3, chapter 6, Volume 5 from

IPCC 2006 guidelines since, the depth of the unmanaged solid waste

dumping site is more than 5 meters).

Choice of data

or

Measurement methods

and procedures

Methodology gives preference to local specific value should be used. In

the absence of local values, MCFp default values can be obtained from

table 6.3, chapter 6, Volume 5 from IPCC 2006 guidelines. Table

recommends using the following values for MCF:

• 1.0 for anaerobic managed solid waste disposal sites. These must

have controlled placement of waste (i.e., waste directed to specific

deposition areas, a degree of control of scavenging and a degree of

control of fires) and will include at least one of the following: (i) cover

material; (ii) mechanical compacting; or (iii) leveling of the waste.

• 0.5 for semi-aerobic managed solid waste disposal sites. These must

have controlled placement of waste and will include all of the following

structures for introducing air to waste layer: (i) permeable cover material;

(ii) leachate drainage system; (iii) regulating pondage; and (iv) gas

ventilation system.

• 0.8 for unmanaged solid waste disposal sites – deep and/or with high

water table. This comprises all SWDS not meeting the criteria of

managed SWDS and which have depths of greater than or equal to 5

meters and/or high water table at near ground level. Latter situation

corresponds to filling inland water, such as pond, river or wetland, by

waste.

• 0.4 for unmanaged-shallow solid waste disposal sites. This comprises

all SWDS not meeting the criteria of managed SWDS and which have

depths of less than 5 metres.



UNFCCC/CCNUCC


Data / Parameter OX

Unit %

Description is the oxidation factor (reflecting the amount of SWDS that is oxidized in

the soil or other material covering the waste)


Value(s) applied 0

Choice of data

or

Measurement methods

and procedures

The methodology recommends the following two ways of calculating the

value:

Conduct site visit of the solid waste disposal site to assess the type of

cover of the solid waste disposal site. Use 2006 IPCC Guidelines for

National Greenhouse Gas Inventories for the choice of value to be

applied

Use 0.1 for managed solid waste disposal sites that are covered with

oxidizing material such as soil or compost. Use 0 for other types of

solid waste disposal sites.

As the baseline scenario is unmanaged SWDS without cover, OX value in

this case is 0



Data / Parameter F

Unit -

Description is the fraction of methane in SWDS gas (volume fraction)



Choice of data

or

Measurement methods

and procedures

This factor reflects the fact that some degradable organic carbon does not

degrade, or degrades very slowly, under anaerobic conditions in the

SWDS. A default value of 0.5 is recommended by IPCC.

Purpose of data Baseline Emissions


Data / Parameter DOCf

Unit -

Description is the fraction of the degradable organic carbon

Source of data IPCC Guidelines for National Greenhouse Gas Inventories Reference

Manual Chapter 6 Equation 2


Choice of data

or

Measurement methods

and procedures

This value has been calculated on the basis of the following equation:

0.014T + 0.28 where T is the temperature

It has been assumed that the temperature in the anaerobic zone of SWDS

remains constant at about 35oC regardless of ambient temperature yields a

figure of 0.77 dissimilated DOC



UNFCCC/CCNUCC


Data / Parameter DOCj

Unit -

Description is the fraction of the degradable organic content (by weight) in waste type

j


5, Table 2.4)

Value(s) applied

Waste Type DOCj (%)

Paper/Cardboard 44%

Textile 30%

Food Waste 38%

Wood & Wood Products 50%

Garden Waste 49%

Choice of data

or

Measurement methods

and procedures

In Lahore the mean annual temperature (MAT) is 26OC and mean annual

precipitation (MAP) is 30%. Therefore, dry climatic conditions are

applicable and the values of DOCj have been given above.



Data / Parameter Kj

Unit -

Description Is the decay rates for the waste type j


5, Table 3.3)

Value(s) applied

Climate: Tropical

Waste Type

MAT >20oC

MAP < 1000 mm

Kj

Paper/Cardboard 0.045

Textile 0.045

Food Waste 0.085

Wood & Wood Products 0.025

Garden Waste 0.065

Choice of data

or

Measurement methods

and procedures

In Lahore the mean annual temperature (MAT) is 26OC and mean annual

precipitation (MAP) is 30%. Therefore, tropical and dry climatic

conditions are applicable and the values of Kj have been given above



B.6.3. Ex ante calculation of emission reductions

>>

As described in section B.6.1, the emission reductions are calculated according to the methodology

AM0025 and “Tool to determine methane emissions avoided from disposal of waste at a solid waste

UNFCCC/CCNUCC


disposal site” therein. The ex-ante calculation of emissions reductions is completed using the following

steps:

Step 1 Project Emissions

(i) Emissions from electricity use (PEelec,y)

As the project uses electricity the project emissions are relevant. The emissions have been calculated

using the following equation:

PEelec,y = EGPJ,FF,y * CEFelec

To calculate the emissions from the national grid of Pakistan, the “Tool to Calculate the Emission Factor

for an Electricity System Version 01.1” has been used. For calculation purposes, we used the power

generation data of power generation plants connected to the National Grid for the most recent three years

and worked out the Grid Emission Factor of 0.48359 to be used to calculate the project emissions from

use of electricity at the site.

Taking emissions during 2008 as an example:

PEelec,y = EGPJ,FF,y * CEFelec = 874.032 * 0.48359 = 423 tCO2/a

Data and results used in ex-ante calculation of PEelec,y are shown in Table B.6.3 – 1 below:

Table B.6.3 – 1

Parameter Year Value

MWhelec,y 2008

2009

2010 & onwards

874.0 MWh

943.2 MWh

943.2 MWh

CEFelec 0.48359

PEelec,y 2008

2009

2010 & onwards

423 tCO2e/annum

456 tCO2e/annum

456 tCO2e/annum

The emission factor is calculated using the: “Tool to Calculate the Emission Factor for an Electricity

System Version 01.1”. For this purposes, it is calculated as a combined margin (CM), consisting of the

simple average of the operating margin emission factor (OM) and the build margin emission factor (BM)

by utilizing an ex-ante 3 years data period.

EFy = WOM * EFOM,y + WBM * EFBM,y

The default weight of the WOM and WBM are 50% (i.e. WOM = WBM = 50%).

All margins are expressed in tCO2 / MWh.

The results show that the OM is 0.64314

The emission factor is calculated following the six steps provided by the “Tool to Calculate the Emission

Factor for an Electricity System Version 01.1”

UNFCCC/CCNUCC


STEP 1 – Identification of the Relevant Electric Power System

Pakistan comprises two distinct grids (a) the national grid; and (b) the Karachi Electricity Supply

Company (KESC) grid. Each grid has its own independent dispatch centre, generation and distribution

system. Though interconnected for occasional supply from the national grid to KESC, which ranges from

400-600 MW, there are no material interdependencies between the two grids. The generating plants for

each grid are clearly identifiable and data for each grid is available. By separating KESC generation the

emission factors for the national grid are broadly reduced, providing a correct and conservative estimate

of the impact on grid emission factor for the power projects connected on the national grid. The Lahore

Compost project only uses electricity from the national grid and not from KESC. Accordingly, data

relating to power generation plants connected with the national grid was collected and used to calculate

the grid emission factor.

STEP 2 – Selection of Method for Calculating Operating Margin Emission Factor

According to the tool, there are four options for calculation of OM:

a) Simple OM; or

b) Simple adjusted OM; or

c) Dispatch Data Analysis; or

d) Average OM.

The methodology of choice should be Dispatch Data Analysis, however as prescribed and allowed in the

tool, the Simple OM has been selected for the following reason:

i. The National Transmission & Dispatch Company (NTDC) of Pakistan operates the national

dispatch centre but detailed hourly dispatch data is not available for public disclosure;

ii. Low cost must run constitutes less than 50% of the total NTDC grid generation in average of the

five most recent years.

STEP 3 – Calculation of Operating Margin Emission Factor (EFOM,y )

The Simple OM emission factor (EFgrid,OMysimple,y) is calculated per option C from the tool as the

generation-weighted average emission per electricity unit (tCO2/MWh) of all generation sources serving

the system, not including low-operating cost and must-run power plants and on the total net electricity

generation of all power plants serving the system and the fuel types and total fuel consumption of the

project electricity system, as follows:

Where:

EFgrid,OMsimple,y Simple operating margin CO2 emission factor in year y (tCO2/MWh)

FCi,y Amount of fossil fuel type i consumed in the project electricity system in year y

NCVi,y is the net calorific value (energy content) of fossil fuel type i in year y

EFCO2,i,y is the CO2 emission factor of fossil fuel type i in year y

EGy Net electricity generated and delivered to the grid by all power sources serving the

system, not including low-cost / must-run power plants / units, in year y

i identifies all fossil fuel types combusted in power plant / unit m in year y

UNFCCC/CCNUCC


y Identifies the three most recent years for which data is available at the time of

submission of the CDM-PDD to the DOE for validation (ex ante option) in this case

2006-2008

The information has been utilized as follows:

The consolidated grid system generation and energy statistics (Pakistan Energy Yearbook) have been

available in Pakistan for several years and such reliable official data is available to compute the required

factors.

a) Grid system statistics have been analyzed for five years to provide evidence for under

50% of the system being must run-least cost generation and justify use of the Simple OM method;

b) Grid system statistics have been analyzed for the most recent three years to compute

the following:

i. Total generation and analysis by type by fuel used;

ii. Calorific values of the fuel based on official data, and emission factor of fossil fuel;

iii. Total heat value of fuel;

iv. Emissions factors of fossil fuel type and finally the simple operating margin CO2 emission

factor

Based on these the analysis and official information available for the Pakistan Power System for 2006,

2007 and 2008, the value for the Operating Margin Emissions Factor (OM) is 0.64314.

STEP 4 – Identification of the cohort of power units to be included in the build margin

The sample group m consists of the higher in terms of generation of:

(a) The five power plants that have been built most recently; or

(b) The power plant capacity additions in the electricity system that comprise 20% of the system

generation (MWh) and that have been built most recently.

To determine the sample group m, the five most recent additions to the system were compared with the

additions to the electricity system that comprise 20% of the system generation and that have been built

most recently. The comparison is as follows:

(a) The five power plants that have been built most recently contribute 13,074,630 MWh to the grid;

(b) The most recent published total electricity generation in 2008 was 85,189,510 MWh and 20% of

system generation comes to 17,037,902 MWh. Eight of the most recently built power plants contribute

17,140,310 MWh to the grid.

Thus (b) above was selected to calculate the Build Margin emission factor, where the sample m

comprises the eight most recently built power plants.

The tool prescribes that one of two following options may be selected with the proviso that once selected

it cannot be changed during the crediting period:

Option 1. For the first crediting period, calculate the build margin emission factor ex-ante based on the

most recent information available on units already built for sample group m at the time of CDM-PDD

submission to the DOE for validation. For the second crediting period, the build margin emission factor

should be updated based on the most recent information available on units already built at the time of

UNFCCC/CCNUCC


submission of the request for renewal of the crediting period to the DOE. For the third crediting period,

the build margin emission factor calculated for the second crediting period should be used. This option

does not require monitoring the emission factor during the crediting period.

Option 2. For the first crediting period, the build margin emission factor shall be updated annually, ex-

post, including those units built up to the year of registration of the project activity or, if information up

to the year of registration is not yet available, including those units built up to the latest year for which

information is available. For the second crediting period, the build margin emissions factor shall be

calculated ex-ante, as described in option 1 above. For the third crediting period, the build margin

emission factor calculated for the second crediting period should be used.

Option 1, EF BM, y ex ante, has been selected.

STEP 5 – Calculate the Build Margin Emission Factor (EFBM, y)

The build margin emissions factor is the generation-weighted average emission factor (tCO2/MWh) of all

power units m during the most recent year y for which power generation data is available, calculated as

follows:

Where:

EFgrid,BM,y is the Build margin CO2 emission factor in year y

EGm,y is the net quantity of electricity generated and delivered to the grid by power unit m in year

y

EFEL,m,y is the CO2 emission factor of power unit m in year y

m identifies the power units included in the build margin

y indicates the most recent historical year for which power generation data is available

The calculations show that the BM is 0.32404

It may be noted that the BM is effected by a large hydropower project, which took over 10 years to

complete but came on stream during the computation period.

STEP 6 – Calculate the Emission Factor (EFy)

The Grid Emission Factor is the weighted average of the OM emission factor (EFOM, y) and the BM

Emission Factor (EFBM, y).

The default weight of the WOM and WBM are 50% (i.e. WOM = WBM =50%) and EFOM,y and EFBM,y are

calculated in Steps 1 and 2 above and are expressed in tCO2/MWh.

It is proposed to use the default weights, as there appears little justification to use alternative weights

after a study of the (i) timing of project output; (b) predictability of project output; or (c) suppressed

demand.

Thus the default weights will be used will be WOM = 0.50 and WBM = 0.50

The baseline emissions factor EFy= WOM * EFOM,y + WBM * EFBM,y is determined as follows:

UNFCCC/CCNUCC


= (0.5 * 0.64314) + (0.5 * 0.32404) = 0.48359 tCO/ MWh.

(ii) Emissions from fuel use on-site (PEfuel,on-site,y)

PEfuel,on-site,y = Fcons,y * NCVfuel * EFfuel (3)


PEfuel,on-site,y = Fcons,y * NCVfuel * EFfuel = 89,966 * 44.007 * 74.1*1 x 10-6

= 293 tCO2e/annum

Estimated fuel consumption, net calorific value and emission factor of fuel are shown in Table B.6.3 – 2.

The actual fuel consumption will be measured according to the Monitoring Methodology for ex-post

emission reductions.

Table B.6.3 – 2


Fcons,y 2008

2009

2010 & onwards

89,966 Liters/year

224,915 Liters/year

224,915 Liters/year

NCVfuel 44.007 MJ/Kg

EFfuel 74.10 tCO2e/TJ

PEfuel,on-site,y 2008

2009

2010 & onwards

293 tCO2e/annum

733 tCO2e/annum

733 tCO2e/annum

(iii) Emissions from Composting (PEc,y)

(a) N2O emissions (PEc,N2O,y)

PEc,N2O,y = Mcompost, y * EFc,N2O * GWPN2O (5)

The estimated quantity of compost is shown in the Table B.6.3 – 3. The actual quantity of compost

(Mcompost, y) will be monitored according to the Monitoring Methodology for ex-post emission reduction

calculations.


PEc,N2O,y = Mcompost, y * EFc,N2O * GWPN2O = 18,876 * 0.000043 * 310 = 252 tCO2e/annum

Table B.6.3 – 3


Mcompost, y 2008

2009

2010 &

onwards

18,876 tCO2e/annum

52,500 tCO2e/annum

52,500 tCO2e/annum

EFc,N2O 0.000043

UNFCCC/CCNUCC



GWPN2O 310

PEfuel,on-site,y 2008

2009

2010

252 tCO2e/annum

700 tCO2e/annum

700 tCO2e/annum

(b) CH4 emissions (PEc,CH4,y)

PEc,CH4,y = Mcompost, y * GWPCH4* Sa,y (6)

Currently limited data is available. Ex ante value of 2% has been applied in PDD for Sa. Ex post this

figure will be replaced by the results of actual on-site measurements.

Ex ante calculations for the year 2008 as an example:

PEc,CH4,y = Mcompost, y * GWPCH4* Sa,y = 655 * 21 * 2% = 275 tCO2e/annum

The calculated results are shown in Table the Table B.6.3 – 4. Ex post this value will be replaced by the

results if actual on-site measurements.

Table B.6.3 – 4


Mcompost, y Calculated by

BE y = Mcompost, y * GWPCH4

Where BE y is calculated using

first order decay model

GWPCH4 21

Sa,y 2%

PEc,CH4,y 2008

2009

2010

2011

2012

2013

275 tCO2e/annum

1,020 tCO2e/annum

1,714 tCO2e/annum

2,358 tCO2e/annum

2,958 tCO2e/annum

3,516 tCO2e/annum

(Complete results are in Annex 3

The value of (PEc,y) is calculated as according to the equation (4) below:

PEc,y = PEc,N2O,y + PEc,CH4,y (4)

The results are shown is Table B.6.3 – 6.

(iv) Emissions from waste water treatment (PEw,y)

UNFCCC/CCNUCC


PEw,y ( or PECH4,w,y)= QCOD,y * PCOD,y * BO * MCFp * GWPCH4 (7)

The project does not involve wastewater treatment and no wastewater is released. Only a very nominal

amount of leachate is produced, which is collected and reused from an aerated tank, and sprayed back on

the windrows to irrigate them for required moisture levels. Therefore, the Ex ante value of QCOD,y 0 m3/yr

and PCOD,y value of 0 t COD/ m3 have been applied in this PDD.

Please note that MAT is 26oC AND MAP is 30% resulting in dry climatic conditions. Therefore, the

leachate is reused for irrigating windrows and is not released outside of the project.

Ex ante calculations for the year 2008 as an example:

PEw,y ( or PECH4,w,y) = QCOD,y * PCOD,y * BO * MCFp * GWPCH4

= 0 * 0 * 0.265 * 0.8 * 21 = 0 tCO2e/annum


results of actual on-site measurements.

Table B.6.3 – 5


QCOD,y 2008 & onwards 0 m3 per year

GWPCH4 21 tCO2/tCH4

PCOD, y 2008 & onwards 0 tCOD/m3 per year

BO 0.265 kg tCH4/ kg COD

MCFp 0.8

PEw,y

(or PECH4,w,y)

2008 & onwards 0 tCO2e/annum

Project emissions are calculated according to the equation (1) shown below:

PEy = PEelec,y + PEfuel,on-site,y + PEc,y + PEw,y (1)

The results ex ante project emissions for the first crediting period are shown in Table B.6.3 – 6

Table B.6.3 – 6: Ex Ante Project Emissions for the First Crediting

Period

Year PEelec,y PEfuel,on-site,y PEc,y PEw,y PEy

2008 423 292 527 0 1,242

2009 456 733 1,720 0 2,909

2010 456 733 2,414 0 3,603

2011 456 733 3,058 0 4,247

2012 456 733 3,658 0 4,847

UNFCCC/CCNUCC



2013 456 733 4,216 0 5,405

2014 456 733 4,735 0 5,924

Step 2 Baseline Emissions

The emissions in the baseline have been calculated using the following formula:

BECH4, SWDS,y=φ*(1-f )*GWPCH4 *(1 – OX)*16/12* F*DOCf*MCF*∑∑Wj,x*DOCj*e-kj*(y-x)

*(1-e-kj

)

According to the sections B.6.1 and B.6.2, the parameter values used are shown in Table B.6.3 – 7. The

quantity of ex-ante food waste, garden/park waste, paper, textile and wood/straw prevented from disposal

at the Mamood Booti SWDS is shown in Table B.6.3 – 8. The actual quantity of organic waste will be

measured according to the Monitoring Methodology for ex-post emission reductions.

Table B.6.3 – 7: Parameters Values used for the Baseline Emissions

Parameter

s

Paper Textiles Food Garden/Par

k

Wood/Straw

Φ 0.9 0.9 0.9 0.9 0.9

F 0 0 0 0 0

OX 0 0 0 0 0

F 0.5 0.5 0.5 0.5 0.5

DOCf 0.77 0.77 0.77 0.77 0.77

MCF 0.8 0.8 0.8 0.8 0.8

DOCj 44% 30% 38% 49% 50%

Kj 0.045 0.045 0.085 0.065 0.025

Table B.6.3 – 8: Quantities Prevented from Disposal and Baseline Emissions

during the First Crediting Period

Years Paper Textiles Food Garden/Par

k

Wood/Straw Emissions

2008 183 4,347 24,399 30,881 216 13,749

2009 473 11,203 62,884 79,591 556 51,024

2010 473 11,203 62,884 79,591 556 85,687

2011 473 11,203 62,884 79,591 556 117,923

2012 473 11,203 62,884 79,591 556 147,908

2013 473 11,203 62,884 79,591 556 175,801

2014 473 11,203 62,884 79,591 556 201,753

UNFCCC/CCNUCC


Years Paper Textiles Food Garden/Par

k

Wood/Straw Emissions

Total for

the First

Crediting

Period

3,019 71,567 401,700 508,430 3,552 793,845

Step 3 Leakage

The emissions from increased transportation have been treated as leakage. There is no anaerobic

digester, gasifier or RDF process installed at the project site. Nor is there stabilized biomass. The

leakage from transportation has been calculated using the following equation

Lt,y = ∑NOvehicles,i ,y * DTi,y * VFcons,i * NCVfuel,y * Dfuel * EFfuel (13)

The land used for producing compost is adjacent to the solid waste dumping site; in fact project has been

constructed taking a small portion of land from Mahmood Booti waste dumping site. Hence there are no

additional transportation emissions from the collection area to the treatment facility.

The plant is expected to sell within a radius of 70 Km. Ex post this figure will be replaced by the results

of actual on-site measurements for additional transportation emissions according to the Monitoring

Methodology for ex-post emission reduction calculations.

At present there is little information available on fuel consumption. The trucks with varying capacity

has different consumption rate. Ex ante 0.4 litres per kilometre has been used and ex-post will be

replaced with actual number.

Lt,y = ∑NOvehicles,i ,y * DTi,y * VFcons,i * NCVfuel,y * Dfuel * EFfuel

= 3,595 * 70 * 0.4 * 44.007 * 0.84 * 74.1*1x10-6

= 276 tCO2e/annum


results of actual on-site measurements according to the Monitoring Methodology.

Table B.6.3 – 9


NOvehicles,i ,y 2008

2009

2010 & onwards

3,595

10,000

10,000

DTi,y 2008

2009 & onwards

70 km

70 km

VFcons,i 0.4 liters per km

NCVfuel,y 44.007 MJ/Kg

Dfuel 0.84

EFfuel 74.1 tCO2e/TJ

UNFCCC/CCNUCC



Lt,y 2008

2009 & onwards

276 tCO2e/annum

767 tCO2e/annum

Step 4 Project Emission Reductions

The project emission reductions are calculated using the following equation:

ERy = BEy – PEy – Ly (12)

The results of the first crediting period are summarized in section B.6.4

B.6.4. Summary of ex ante estimates of emission reductions

Year

Baseline

emissions

(t CO2e)

Project

emissions

(t CO2e)

Leakage

(t CO2e)

Emission

reductions

(t CO2e)

2008 13,749 1,242 275 12,232

2009 51,025 2,909 766 47,350

2010 85,687 3,603 766 81,318

2011 117,924 4,247 766 112,911

2012 147,909 4,847 766 142,296

2013 175,802 5,405 766 169,631

2014 201,753 5,924 766 195,063

Total 793,849 28,177 4,871 760,801

Total number of

crediting years

7 years

Annual

average over the

crediting period

108,686 tCO2e

Please refer to Appendix 4 for detail information on the estimation of emission reduction

B.7. Monitoring plan

The Proposed project is monitored according to the approved methodology version 11 of AM0025

“Avoided Emissions from Organic Waste through Alternative Waste Treatment Processes.” As the

baseline has been calculated according to the EB 26 meeting report Annex 14 the methodological tool

“Tool to determine methane emissions avoided from disposal of waste at a solid waste disposal site,” a

few more parameters such as Wj,x and Kj should be monitored as well. The chart below summarizes the

implementation arrangement:

UNFCCC/CCNUCC


Please note that while there has been no change in the process itself as described in the PDD, Lahore

Compost (Pvt) Limited (LCL) has now bought its own weigh bridge which is located in the project

boundary area, to have as a backup of the City District Government, Lahore (CDGL)’s weigh bridge in

case CDGL weigh bridge is not functional, out of order for any reason, or with a delayed calibration.

Since LCL does not have control over CDGL’s weigh bridge, having its own weigh bridge as a backup

provides additional safety over accuracy of measurements since it can control the calibration schedule of

the LCL weigh bridge.

Organic

Waste Compost

KWh

Meter

Waste

Sorting

Electricity / Power for

Project Operations

Composting

Plant

Sampling

Weighing Weighing

Oxygen Content

LCL

Sponsors’ (SHL)

Funding

Bank Financing Land Allocated by

CDGL to LCL

Equipment Supplier

Composting Facility Construction Work

Compost Soil

Conditioner

Compost Users

Waste

Intake

LCL Weight

Bridge for

backup

CDGL

Weight

Bridge

UNFCCC/CCNUCC


B.7.1. Data and parameters to be monitored

(i) Project emission parameters are:

Data / Parameter EGPJ,FF,y

Unit MWh

Description Electricity consumption

Source of data Energy Meter


2009

2010 & onwards

874.0 MWh

943.2 MWh

943.2 MWh

Measurement methods

and procedures

Monthly meter reading by the Electricity Distribution Company (LESCO)

representative and billing to the company.

Monitoring frequency Continuous as explained below.

QA/QC procedures The energy meter is installed at the site by Lahore Electric Supply

Company (LESCO), also in charge of the meters calibration. The meter is

sealed and tempering with the meter is a criminal offence.

Purpose of data Project Emissions Calculations

Additional comment The electricity consumption is monitored by one calibrated energy meter.

The data is recorded monthly. The total electricity consumption is

accumulated yearly.

Data / Parameter Fcons,y

Unit Litres

Description Fuel consumption on-site during year y of the crediting period

Source of data Purchase invoices and metering


2009

2010 & onwards

89,966 Liters/year

224,915 Liters/year

224,915 Liters/year

Measurement methods

and procedures

Purchase invoices and store record for diesel fuel

Monitoring frequency A petrol meter is installed at site. Readings are recorded each time diesel

is taken out for consumption. Total consumption is then verified with the

fuel purchase invoices so ensure accountability for each and every litre

purchased by the company.

QA/QC procedures The fuel consumption can be verified with the paid fuel invoices.



UNFCCC/CCNUCC


Data / Parameter NCVfuel

Unit MJ/kg

Description The net calorific value of the fuel (MJ/Kg)

Source of data Fuel Supplier


Measurement methods

and procedures

N/A

Monitoring frequency Annually

QA/QC procedures Net Calorific Value as per PCSIR report.

Purpose of data Project Emission Calculations


Data / Parameter Mcompost, y

Unit Tonnes

Description Total quantity of compost produced

Source of data Plant records


2009

2010 & onwards

18,876

52,500

52,500

Measurement methods

and procedures

All compost produced from the composting plant is weighted on the LCL

electronically calibrated scales. Production data is recorded daily and

accumulated on a monthly and annual basis.

Monitoring frequency Annually as explained in the comments below

QA/QC procedures Compost produced can be crosschecked with sale invoices/receipts of

compost, invoices for free samples & bulk sales, and management

approvals for compost discarding as being not fit for market..

Calibration is carried out routinely on an annual basis. Calibration

certificate from ACME Scales can also be provided.



UNFCCC/CCNUCC


Data / Parameter Sa,y

Unit %

Description Share of the waste that degrades under anaerobic conditions, i.e., samples

with oxygen content of less than 10%

Source of data Company records obtained through oxygen sensor

Value(s) applied 2%

Measurement methods

and procedures

Sa,y is the number of samples per year with oxygen deficiency

(SOD,y)divided by total number of samples (Stotal,y) taken per year. The

oxygen content is measured by calibrated oxygen sensor. The total number

of samples should ensure 20% uncertainty at 95% confidence level. To

achieve this 25 samples per windrow will be taken weekly. The results are

aggregated monthly and then accumulated annually.

Monitoring frequency Weekly as explained above.

QA/QC procedures The oxygen sensors will be calibrated in accordance with stipulation of

instrument supplier.


Additional comment The 2% used in the PDD is based on actual data and measurements taken

until July 2008. Since then operational improvements have resulted in this

being reduced to 1.5%.

Data / Parameter SOD,y

Unit Number

Description Number of samples with oxygen deficiency

Source of data Company records obtained through oxygen sensor

Value(s) applied 66

Measurement methods

and procedures

The oxygen content is measured using a calibrated oxygen sensor. The

number of samples with oxygen content less than 10 percent is recorded.

The results are taken weekly and aggregated monthly and finally

accumulated annually.

Monitoring frequency Continuous as explained above

QA/QC procedures The oxygen sensors are calibrated in accordance with stipulation of the

instrument supplier.


Additional comment This is based on actual measurements taken so far.

UNFCCC/CCNUCC


Data / Parameter Stotal,y

Unit Number

Description Total number of samples taken per year for determination of oxygen

deficiency

Source of data Measurement on site with oxygen sensor

Value(s) applied 3,306

Measurement methods

and procedures

Field records of number of oxygen deficiency measurement samples taken.

Recorded in paper and electronic format. 25 samples/week per windrow

will be taken

Monitoring frequency Continuous as explained above.

QA/QC procedures The oxygen sensors are calibrated in accordance with the stipulations of

the instrument supplier. AM0025 requires that “Stotal should be chosen in a

manner that ensures estimation of Sa,y with 20% uncertainty at 95%

confidence level.


Additional comment For Ex ante estimation, Sa,y is normally assumed to be zero (no anaerobic

conditions), but we have based the value above on actual measurements

taken.

Data / Parameter fc

Unit Tonnes

Description Fraction of waste diverted, from the dumping site to the project.

Source of data Company records


2009 & onwards

107,864

300,000

Measurement methods

and procedures

Measured by the CDGL weighbridge

Monitoring frequency Continuous as explained below.

QA/QC procedures The CDGL weigh bridges are calibrated on an annual basis. In case the

CDGL weigh bridge is out of order for any reason or with a delayed

calibration, the LCL weigh bridge shall be used to measure the waste

intake. LCL weigh bridge is also calibrated on annual basis to ensure the

accuracy of the equipment. The calibration of both the CDGL and LCL

weigh bridges is carried out by an independent third party.



UNFCCC/CCNUCC


Data / Parameter Amount of Compost Produced

Unit Tonnes

Description The amount of compost produced from the composting process in tonnes

Source of data Company production and sale records, free samples dispatch record and

compost discarding record.


2009

2010 & onwards

18,876

52,500

52,500

Measurement methods

and procedures

Packed bags are weighed at the calibrated weighing scale installed with the

packing unit daily and aggregated weekly/annually. Compost sold in bulk

and compost discarded is weighted on the calibrated weighbridge installed

by the LCL. The weigh bridge is calibrated on an annual basis.


QA/QC procedures Quantities appearing on the sales / samples invoices are accumulated and

reconciled with stocks (opening and closing quantities at the specific date.)



(ii) Baseline emission parameters are:

UNFCCC/CCNUCC


Data / Parameter MBy

Unit tCH4

Description Methane produced in the landfill in the absence of the project activity in

year y

Source of data Calculated as per the “Tool to determine methane emissions avoided from

disposal of waste at a solid waste disposal site”

Value(s) applied Years

2008 655

2009 2,430

2010 4,080

2011 5,615

2012 7,043

2013 8,371

2014 9,607

Measurement methods

and procedures

As per the “Tool to determine methane emissions avoided from disposal of

waste at a solid waste disposal site”

Monitoring frequency As per the “Tool to determine methane emissions avoided from disposal of


QA/QC procedures As per the “Tool to determine methane emissions avoided from disposal of


Purpose of data Baseline Emissions Calculations using the “Tool to determine methane

emissions avoided from disposal of waste at a solid waste disposal site”.

Total waste intake has been aggregated to monthly and then annual

summary.


UNFCCC/CCNUCC


Data / Parameter Aj,x

Unit Tons / day

Description Total amount of organic waste type j prevented from disposal in SWDS

during each year in tons.

Source of data Weighbridge, City District Government records / project participants


2009 & onwards

107,864

300,000

Measurement methods

and procedures

All trucks entering the compost plant are weighed with a calibrated

weighbridge that belongs to the City District Government of Lahore,

CDGL.

Given the changes brought about by the installation of a new weighbridge

by the City District Government of Lahore (which are outside of the

project implementers control), the following illustrates the waste

measurement procedures at the site:

Before 01/06/2012: There was only one weighbridge i.e. weighbridge at

Mahmood Booti dumping site. Trucks were weighted at that

weighbridge.

Between 01/06/2012 to 23/09/2012: During this period a new

weighbridge was installed and calibrated at the entrance of the

composting site, hence both weighbridges were operational and used for

weighing MSW.

Between 23/09/2012 to 05/01/2013: The old weighbridge located at

Mahmood Booti dumping site ceased operations and only the

weighbridge at the main entrance of LCL was operational; therefore

trucks were weighted on this weighbridge.

After 05/01/2013: Construction of old weighbridge at Mahmood Booti

dumping site was completed, and both weighbridges are now

operational.

There is no change in procedure of CDGL reporting to LCL for MSW

intake from Mahmood Booti SWDS.

The data is collected on a daily basis and is aggregated monthly and then

on an annual basis.

The total amount of organic waste prevented from disposal is the amount

of organic waste processed at the composting plant. This amount is

determined by the difference between the gross weight of the truck and its

tare weight.

Data will be recorded on a daily basis and stored in electronic format.

Monitoring frequency Measured Continuously. All trucks entering the compost plant have been

weighed on a calibrated weighbridge. The data is collected on a daily basis

and is aggregated monthly and then on an annual basis.

UNFCCC/CCNUCC


QA/QC procedures The CDGL weigh bridges are calibrated on an annual basis.

Since the weigh bridge installed at the dumping site is under direct control

of City District Government of Lahore and LCL cannot exercise any right

to get it calibrated from any independent third party until last it managed to

get it done in December 2010. Therefore to ensure the accuracy of

weighing scale of CDGL, LCL takes an initiative to select waste trucks on

random basis and send them to an independent third party weighing scale

located outside the project boundaries. The results are then compared to

ensure data accuracy.

LCL bought its new weighbridge in February 2011 to have a backup of the

City District Government Lahore’s weigh bridge in case the CDGL weigh

bridge is not functional, out of order for any reason, or with a delayed

calibration. LCL weigh bridge is also calibrated on annual basis to ensure

the accuracy of the equipment. The calibration of both the CDGL and LCL

weigh bridges is carried out by an independent third party.

Purpose of data Baseline Emissions Calculations


Data / Parameter Pj,x

Unit Tonnes

Description Share of different types of organic waste input into the composting process

Source of data Sampling, sorting and weighing

Value(s) applied Type 2008 2009 & onwards

Paper Waste 183 473

Textile Waste 4,347 11,203

Garden /Park Waste 30,881 79,591

Food Waste 24,399 62,884

Wood/Straws Waste 216 556

Measurement methods

and procedures

N/A

Monitoring frequency One day in every month till 31/12/2008, after that one-day quarterly e.g.

March, June, September and December.

QA/QC procedures N/A



UNFCCC/CCNUCC


Data / Parameter Z

Unit Number

Description Total number of samples collected in year x


Value(s) applied Sample of about 10-15 Kg of waste should be taken randomly form each

sample truckload.

Measurement methods

and procedures

N/A

Monitoring frequency One day in every month till 31/12/2008, after that one day quarterly e.g.

March, June, September, December

QA/QC procedures The trucks are randomly selected for sampling at LCL to ensure that the

waste quantity reported by different types is accurate.



(iii) Leakage emission parameters are:

Data / Parameter NO vehicles,i,y

Unit Number

Description Vehicles by carrying capacity per year

Source of data Company as well as excise and sales taxation records


2009 & onwards

3,595

10,000

Measurement methods

and procedures

N/A

Monitoring frequency Continuous and aggregated annually. As stipulated in Sales Tax Act, every

sale has to be recorded in the prescribed format and relevant

documentation must be onboard vehicles at all time. The record in the

prescribed format includes type of truck used as well as truck carrying

capacity; Sales tax has to be paid before compost produced can leave the

project site under sales. Failure to do so is a punishable offence.

Number of vehicles by carrying capacity can be accumulated annually

using Sales Tax record maintained by the company as well as by the Sales

Tax Department

QA/QC procedures Number of vehicles used can be crosschecked with compost produced, sold

and inventory records.

Purpose of data Leakages Emissions Calculations


UNFCCC/CCNUCC


Data / Parameter DTi,y

Unit Km

Description Average additional distance travelled by different types of vehicles type

“i” compared to the baseline in year “y”


Value(s) applied 70

Measurement methods

and procedures

The project proponent has established dealer and customer network whose

distance from the plant warehouse can be accurately estimated. Compost

is supplied to these dealer networks

Monitoring frequency Annually.

QA/QC procedures Can be checked through transport company and dealer delivery receipts.

Purpose of data Leakages Emission Calculations


Data / Parameter VFcons,i

Unit Litres per Km

Description Vehicle fuel consumption in litres per kilometre for vehicle type i

Source of data Company records based on the information provided by the transportation

companies


Measurement methods

and procedures

N/A


QA/QC procedures Vehicle type with laden weight and destination of compost shall be

recorded for every vehicle leaving project site.



Data / Parameter Dfuel

Unit Kg/l

Description Density of fuel

Source of data Fuel supplier letter


Measurement methods

and procedures

N/A


QA/QC procedures Lab Test Report of the fuel sample, which was carried out by the

government owned Pakistan Council of Scientific & Industrial Research,

the only recognized laboratory in Pakistan whose test reports are

recognized and accepted all across the country and abroad.



Monitoring Equipment Positioning:

UNFCCC/CCNUCC


B.7.2. Sampling plan

>>

I: Sampling plan for waste-composition

In accordance with the “Tool to determine methane emissions avoided from dumping waste at a solid

waste disposal site” the waste composition is measured at least quarterly. The purpose of these

measurements is to determine the fraction of each waste stream within the total waste input going to the

composting facility. In accordance with the tool the following waste-streams are to be distinguished:

Wood and wood products

Pulp, paper and cardboard (other than sludge)

Food, food waste, beverages and tobacco (other than sludge);

Textiles

Garden yard, and park waste

Inorganic: Glass, plastic, metal & other inert waste

To ensure that different categories are interpreted similar each quarter, Lahore Compost shall prepare an

instruction-book. The instruction book will contain pictures and descriptions what’s included in each

waste-category. These instructions will be the guidance during the quarterly determination work.

Sampling should be done on about twenty incoming vehicles to the project site in one day every month

till 31/12/2008, and after that one day every quarter e.g. Marc, June, September, and December. The

sample should be taken randomly form a truckload, about 10-15 Kg of waste may be sampled from each

sample truck. To ensure random selection every 7th incoming truck should be selected for sampling. Data

should be clearly recorded in an electronic format.

II: Sampling Plan for determination of Oxygen Deficiency

Laboratory

Weighbridge

Fuel Pump

Electricity

Meter

UNFCCC/CCNUCC


The sampling plan to determine pockets of anaerobic conditions within windrows is based upon the

statistical methods used by Project 1087 Composting of Organic Waste in Wuzhou (China) and Project

0169 Composting of Organic Waste in Dhaka (Bangladesh). The equation used in both projects is

reproduced below and has been used to estimate the number of samples in this project as well.

n = tp

2 * p * (1 – p)*N

tp2 * p * (1 – p) + (N – 1) * y

2

Where:

n = Sample Size

tp = 1.96 for 95% Confidence Interval

N = Population Size

p = for the true proportion which as a conservative is set as 0.5

y = Sampling error

Here the actual population is countless air molecules in windrows and hence the sample size is extremely

large. It can be calculated that for y (sampling error of 20%), the sample size should be 25 samples per

day. With 5 working days a week and minimum of 5 windrows, this correspond to 25 samples per week

per windrow.

The oxygen measurements are to be taken evenly spread out over the windrows and would use the

following ways:

Oxygen will be measure at the top as well at the bottom layer at the same location. Hence two

samples in vertical alignment will be taken. Windrows high is assumed to be 2 meters

The width of the grid fits width of the windrows which is assumed to 50 meters in this case

Within the grid, the measurement will be taken randomly

III: Moisture Content of Windrows

The moisture content of samples of composting materials from each windrow shall be assessed by:

grasping and clenching the sample in a gloved hand for approximately ten seconds, then opening and

assessing moisture content using table 1 below.

Table Annex 4.5: Moisture assessment index

Index No Sample moisture behaviour Interpretation

1 Water seeps out Too wet

2 More than one droplet appears Too wet

3 One droplet appears OK

4 Compost particles remain packed together and no

droplets appear

OK

5 Compost particles fall away from each other Too dry

The source(s) of any water sprayed onto input materials, windrows being formed or formed windrows

shall be determined in the operations manual.

The following shall be recorded on an electronic monitoring sheet.

UNFCCC/CCNUCC


Evaluations of moisture content and date carried out;

Date and approximate amount of any water added; and

Source of any water e.g. leachate reuse.

Frequency: Weekly for each windrow

B.7.3. Other elements of monitoring plan

>>

Please refer to Annex 4.

SECTION C. Duration and crediting period

C.1. Duration of project activity

C.1.1. Start date of project activity

>>

November 1, 2005

C.1.2. Expected operational lifetime of project activity

>>

28 Years

C.2. Crediting period of project activity

C.2.1. Type of crediting period

>>

Renewable crediting period

C.2.2. Start date of crediting period

>>

June 30, 2009 or the date after project registration

C.2.3. Length of crediting period

Seven years

SECTION D. Environmental impacts

D.1. Analysis of environmental impacts

>>

Environment & Social Impact Assessment prepared and Environment & Social Monitoring Plan has been

adopted by the LCL.

An Environmental & Social Impact Study has been carried out to assess the possible environmental and

social impact of the project. Green Technology Environmental Corporation undertook the Environmental

and Social Assessment (ESA) study to scrutinize possible environmental and social impacts and develop

an Environmental Management Plan aiming at offsetting the identified adverse environmental and social

impacts.

Lahore Compost (Pvt) Limited (LCL), part of Saif Group of Companies, is operating a composting plant

under the pilot phase utilizing organic component of the municipal solid waste collected and transported

to Mahmood Booti open dumping site, Bund Road, Lahore. The facility has been developed under the

concession awarded by the City District Government Lahore (CDGL) on a bid basis. LCL applied for

this bid concession on the expectation of having carbon revenue from the CDM composting project to

make it financially viable. It would not have bid for the concession without the CDM part of the project.

UNFCCC/CCNUCC


Under the concession awarded to it, LCL was required to build, own, operate and transfer the entire

operation and compost fertilizer after 28 years from the date of award of such mandate, back to CDGL.

In April 2006, company inaugurated the pilot production facility installed by Menart Compost Company

Belgium to process municipal solid waste. The pilot phase began by initially processing 300 tpd from

which the amount of waste processed will be increased in phases until the project activity goal of 1,000

tpd is reached. This entire composting project and processing of 1,000 tpd in contrast to the baseline of

no composting being done, is only made possible with the help of CDM revenue.

Plant Description

Project Location

The CDG Lahore allocated the LCL plant site within the premises of the Mahmood Booti open dumping

site, where the plant commenced pilot operations in April 2006, based on which the amount of waste

processed will be slowly increased until 1,000 tpd are reached. The LCL plant facilities include a

concrete platform, processing and storage shade, an office building, and utilities. The infrastructure

facilities at the site in terms of accessibility and electrical power supply are adequate. There is no human

habitation within the LC site or its close proximity, thus the issue of population displacement or

resettlement does not exist.

Project Description

LCL is a composting facility to process up to 1000 tpd of waste to produce compost fertilizer. From pilot

production, LCL is phasing up the facility in phases until processing of 1,000tpd of MSW is achieved.

The plant includes a tube-well with overhead storage tank (10,000 gallons), a 28,000 m2 concrete

platform, leachate basins and drains at strategic locations along the concrete platform, internal access

roads, administration and other buildings. The CDG operates a weighbridge (75 tons) at the entrance of

the Mahmood Booti open dumping site that is also used for weighing the waste intake of the Lahore

compost.

Equipment

The equipment process includes shredding of the moistened waste and creating windrows of compost 2 x

4 x 120m, turning of the windrows for aeration and sieving of the compost to control the particle size.

The plant equipment consists of shredders, turners, screens with meshes 50/50 mm, conveyor belts,

stitching, bagging unit and spare parts, wheeled loaders, diesel generating set, tractors, trolleys, water

basin, buildings, weighbridge and sprinkler system.

Staff

The working day of the compost plant consists of 2 8 hour shifts x 300 days per year. The staff for plant

operation consists of Plant manager, engineers, supervisors, and workers including administrative and

other staff.

D.2. Environmental impact assessment

>>

Environmental Impact Assessment and Mitigations

The phasing up of the composting facility will be fully implemented within the existing project and

stakeholders’ boundaries, thus having no additional significant environmental and social impact.

UNFCCC/CCNUCC


The ESA study conducted for the phasing up of LCL in 2008 assess the potential impact of phasing up of

composting, define criteria for determining significance and magnitude of the potential impacts, identify

mitigation measures, evaluate the residual impact, and identify monitoring requirements.

Impacts associated with the Construction of Plant

Dust Emissions

As the main facility had already been completed in 2006, current phasing up would only involve the

construction of composting pad. The environmental issue related to dust emission for this phasing up of

the existing facility would not be significant to the people living in the area over 100 meters to the

project site. However, to reduce the even insignificant dust emissions, water sprinkling will be carried

out.

Vehicle and Equipment Exhaust

Combustion exhaust from the vehicles and possible construction of phasing up in the existing facility

may insignificantly affect the ambient air quality of the project area. However, to mitigate this impact, all

vehicles, generators and other equipment will be properly tuned and maintained in good working

condition in order to minimize emission of pollutants.

Soil Contamination

Spills during refueling, discharges during vehicle and equipment maintenance, traffic accidents and

leakages from equipment and vehicles often result in the contamination of soil and potentially that of

surface water bodies at the construction site. Spill prevention trays will be provided and used at refueling

locations. On-site maintenance of vehicles and equipment will avoid such impacts as far as possible. In

case of on-site maintenance, tarpaulin or other impermeable material will be spread on the ground to

prevent contamination of soil. Regular inspections will be conducted to detect leakages in vehicles and

equipment. Fuels, lubricants, and chemicals will be stored in covered bounded areas. Appropriate

arrangements, including shovels, plastic bags and absorbent materials, will be available near fuel and oil

storage areas.

Impacts Associated With Plant Operations

The major potential environmental impacts associated with the operations of the facility which were

found to be significant are discussed below with a summary of their conclusions.

Emissions

The emissions from the plant during the composting process can potentially affect the ambient air

quality. However, adherence to SOPs would largely prevent any significant emission of hazardous gases.

The ambient air quality will be periodically monitored in the vicinity of the plant to ensure that the

concentration levels of the gases are within the permissible limits.

Emissions associated with the plant operations are negligible and their incremental effect on the local

environment is marginal. However, to keep this impact minimal, all vehicles, generators and other

equipment will be properly tuned and maintained in good working condition in order to minimize

emission of pollutants.

Effluents

UNFCCC/CCNUCC


The discharge of increased and untreated liquid effluent can impact the soil as well as the water

resources and consequently humans. Presently, LCL accumulates the leachate in a pond and re-uses by

sprinkling it back on the windrows. Virtually, there is no leachate, which could contaminate the soil.

Secondly, the composting pad is adequately concreted to ensure that there is no seepage of effluent into

the ground. Lastly, the drains carrying the effluent have all been properly concreted to prevent any

seepage into the ground. Periodic monitoring will include the discharge rate of overall wastewater,

chemical analysis of different wastewater streams and groundwater sampling to ensure no seepage into

the ground is occurring.

Odour

The existing LCL site falls within the boundaries of LCL and adjacent to the open dumping site. The

waste in the piling area as well as the waste undergoing the process of composting produces insignificant

additional odour. Although, there is no living community in the project boundaries still, deodorizing

chemicals should be sprayed to counter the odour and reduce its unpleasant effect. Periodic monitoring

should also be carried out at various distances around the site to ensure no odour is smelt by the

inhabitants of the surrounding communities.

Insects (Disease Vectors)

The waste in the piling area as well as the waste undergoing the process of composting attracts a lot of

different insects such as flies, mosquitoes and wasps which act as disease vectors and spread infections

amongst the inhabitants of the surrounding communities along with having a negative impact on crops. It

should be ensured that spraying of chemicals can be employed to kill the insects and reduce their threat

as a nuisance to the surrounding communities as well as to their agricultural activities. Periodic

monitoring should be carried out to ensure the insects are not adversely affecting the surrounding

communities and their agricultural activities as well as to ensure. Regular spraying of chemicals needs to

be ensured as well in order to kill the insects.

Standard Operating Procedures

LC has already developed and adopted Standard Operating Procedures to operate the facility in lines with

the guidelines available in the local legislations as well as applicable under best international practices

for composting across the board. Accordingly, LCL is committed to implement these SOPs for extended

composting facility.

Environnemental & Social Management Plan (ESMP)

LCL has already developed and adopted a comprehensive management plan to mitigate the

Environmental and Social Impacts due to the existing and expanded composting facility to the

stakeholders. SOPs and emission reduction monitoring plan clearly outlines the procedures for

environmental and social protection in full harmony with the local regulations and ESMP.

Conclusion

The phasing up of the composting facility that is being implemented within the existing project and

stakeholders’ boundaries has no additional significant environmental and social impact. If SOPs are

followed in the daily operations and ESMP is implemented as advised in the ESIA, future impact of this

proposed phasing up on the area’s natural and socioeconomic environment will be minimal.

LCL, as part of its core value, is committed to ensuring that the potential impacts of this phasing up in its

existing composting facility both on environment and socioeconomic climate are fully assessed. It will

UNFCCC/CCNUCC


govern the operations as per the ESMP.

SECTION E. Local stakeholder consultation

E.1. Solicitation of comments from local stakeholders

>>

The background information and anticipated development projects in the area were discussed with the

government officials, CDGL authorities and NGOs like WWF. One week of field and research work in

the village of Mahmood Booti, and surrounding communities, farmers and government offices were

carried out to collect required information. A semi-structured questionnaire was formulated in order to

collect essential socio-economic data from the community and their possible apprehensions regarding the

project. Focused interviews were conducted for gender and social impact assessment.

E.2. Summary of comments received

>>

Stakeholders were engaged to get their opinion on the possible environmental and social impact of the

phasing up of the composting plant and its impact on the development of the local community. As the

phasing up of the project lies within the existing boundaries of the Lahore Compost, trans-boundary

environmental impacts as anticipated by the nearby communities are negligible. However, local

community anticipated possible job openings at the plant site that may contribute to their economic uplift

and provide stable means of earning to the eligible local residents.

E.3. Report on consideration of comments received

>>

All comments received from the stakeholders have been positive. There is no requirement to modify the

phasing up scheme of design and operations of the composting facility. Further LCL is committed to

communicate and resolve the environmental and social impacts, if any, on the stakeholders.

SECTION F. Approval and authorization

>>

Date of Completion of the application of the baseline study and monitoring methodology: 12/06/2009

Name of Entity: Naveed A. Malik with the help of the World Bank Carbon Finance Unit.

Address:

(Naveed Malik) 3rd

Floor, Kulsum Plaza, Saif Group, Blue Area Islamabad

(Carbon Finance Unit at World Bank, 1818 H St NW, Washington DC 20433, USA)

Phone:

(Naveed Malik) +92 300 850 6935

Fax: +92 51 220 1110

E-mail: [email protected]

- - - - -

mailto:[email protected]

UNFCCC/CCNUCC


Appendix 1: Contact information of project participants

Organization name Lahore Compost (Pvt) Limited

Street/P.O. Box MAHMOOD BOOTI, Ring Road

Building

City Lahore

State/Region Punjab Province

Postcode

Country Pakistan

Telephone +92 42 3688 5442/ +92 51 2829 415

Fax +92 51 2277 843/ +92 51 2873 606

E-mail [email protected]

Website www.lahorecompost.com

Contact person Ms. Hoor Yousafzai

Title Chief Executive Officer

Salutation Ms.

Last name Yousafzai

Middle name

First name Hoor

Department CEO

Mobile +92 300 500 2356

Direct fax +92 51 227 4933

Direct tel. +92 51 227 3411

Personal e-mail


http://www.lahorecompost.com/

UNFCCC/CCNUCC


Organization name International Bank for Reconstruction and Development as Trustee of the

Danish Carbon Fund

Street/P.O. Box 1818 H street NW

Building MC

City Washington

State/Region DC

Postcode 20433

Country USA

Telephone 1202 473 9189

Fax 1202 522 7432


Website www.carbonfinance.org

Contact person Ms. Joelle Chassard

Title Manager, Carbon Finance Unit

Salutation Ms.

Last name Chassard

Middle name

First name Joelle

Department CPFCF

Mobile

Direct fax 202-522-7432

Direct tel. 202-458-1873

Personal e-mail [email protected]


http://www.carbonfinance.org/


UNFCCC/CCNUCC


Organization name Danish Ministry of Climate, Energy and Building

Street/P.O. Box Amaliegade 44

Building

City Copenhagen K

State/Region

Postcode DK-1256

Country Denmark

Telephone +45-3392-6703

Fax +45-33-11-4743


Website

Contact person

Title

Salutation Mr.

Last name Schmidt

Middle name

First name Frederik

Department Danish Energy Agency

Mobile

Direct fax +45-33-11-4743

Direct tel. +45-3392-6703

Personal e-mail [email protected]

UNFCCC/CCNUCC


Appendix 2: Affirmation regarding public funding

No Public funding from Annex I countries is involved in this project.

UNFCCC/CCNUCC


Appendix 3: Applicability of selected methodology

The methodology AM0025 titled “Avoided emissions from organic waste through alternative waste

treatment processes” is applicable in this project. The project meets applicability criteria set out in the

methodology.

The methodology AM0025 is applicable under the following conditions:

The project Activity involves one or a combination of the following waste treatment options for the

fresh waste that in a given year would have been otherwise disposed of in a landfill:

(f) A composting process in aerobic conditions;

(g) Gasification to produce syngas and its use;

(h) Anaerobic digestion with biogas collection and flaring and/or its use;

(i) Mechanical/thermal treatment process to produce refuse-derived fuel (RDF)/ stabilized biomass

(SB) and its use;

(j) Incineration of fresh waste for energy generation, electricity and/or heat.

The project uses composting process in aerobic conditions. Furthermore, for composting the following

condition must be also be complied with:

In case of composting, the produced compost is either used as soil conditioner or disposed of in

landfills.

Furthermore AM0025 is only applicable if the most plausible baseline scenario for the waste treatment

component is identified as either the disposal of waste in landfill without capture of landfill gas or the

disposal of the waste in landfill where the landfill gas is partially captured and subsequently flared.

Based upon the above-mentioned criteria, the methodology is applicable because of the following

reasons:

The project activity involves composting process in aerobic conditions for the fresh waste that would

be otherwise dumped of in a solid waste disposal site (open dumping).

The produced compost soil is used as a soil conditioner.

The proportions and characteristics of different types of organic waste proposed in the project

activity can be determined, in order to apply a multiphase landfill gas generation model to estimate

the quantity of landfill gas that would have been generated in the absence of the project activity.

The baseline scenario, as detailed and described under section B.4, is dumping of waste at Mahmood

Booti dumping site without capture of landfill gas.

There is no regulatory requirement regarding waste disposal in Pakistan. The baseline scenario would

remain unchanged with the waste being disposed off in a solid waste open dumping site. As a result

landfill gas generated would be released in the atmosphere.

Baseline emissions have been calculated as per instructions given under Baseline Emissions that project

participants should use the latest approved version of the “Tool to Determine Methane Emissions

Avoided from Dumping Waste at a Solid Waste Disposal Site.”

UNFCCC/CCNUCC


Appendix 4: Further background information on ex ante calculation of emission reductions

BASELINE INFORMATION

Table Appendix 4 – 1: Ex Ante Project Emissions


2008 423 292 527 0 1,242

2009 456 733 1,720 0 2,909

2010 456 733 2,414 0 3,603

2011 456 733 3,058 0 4,247

2012 456 733 3,658 0 4,847

2013 456 733 4,216 0 5,405

2014 456 733 4,735 0 5,924

2015 456 733 5,218 0 6,407

2016 456 733 5,667 0 6,856

2017 456 733 6,086 0 7,275

2018 456 733 6,475 0 7,664

2019 456 733 6,837 0 8,026

2020 456 733 7,175 0 8,364

2021 456 733 7,489 0 8,678

2022 456 733 7,782 0 8,971

2023 456 733 8,055 0 9,244

2024 456 733 8,309 0 9,498

2025 456 733 8,454 0 9,643

2026 456 733 8,766 0 9,955

UNFCCC/CCNUCC


Table Appendix 4 – 2: Ex Ante Project Emission Reductions

Years Estimation of

Project

Activity

Emissions

tCO2e

Estimation of

Baseline

Emissions

tCO2e

Estimation

of leakage

tCO2e

Estimation of

Overall

Emission

Reductions

tCO2e

2008 1,242 13,749 275 12,232

2009 2,909 51,025 766 47,350

2010 3,603 85,687 766 81,318

2011 4,247 117,924 766 112,911

2012 4,847 147,909 766 142,296

2013 5,405 175,802 766 169,631

2014 5,924 201,753 766 195,063

2015 6,407 225,900 766 218,727

2016 6,856 248,373 766 240,751

2017 7,275 269,288 766 261,247

2018 7,664 288,758 766 280,328

2019 8,026 306,883 766 298,091

2020 8,364 323,760 766 314,630

2021 8,678 339,475 766 330,031

2022 8,971 354,112 766 344,375

2023 9,244 367,746 766 357,736

2024 9,498 380,446 766 370,182

2025 9,643 392,280 766 381,871

2026 9,955 403,306 766 392,585

Total 128,758 4,694,176 14,063 4,551,355

UNFCCC/CCNUCC


BASELINE INFORMATION - RELATED TO COSTS40

Supplemental Analysis

The following information was provided to the validator at the time of validation, and is now used as

supplemental baseline information after the EB guidance from EB52

Table Appendix 4 – 3: Costs of the Project with and without carbon finance and sensitivity analysis

This annex presents analyses based on project costs.

On the assumption of year 2005

Values

Total Investment (US$) 5,524,275

Operational Lifetime (Year) 28

Annual Average Price of Compost (PKR/ton Compost) 80.40

Running costs (US$/Year) 2,272,071

Income Tax 35%

Organic Waste Quantity of Composting Process (t/day) 1,000

Project IRR (without Carbon Finance) 15.15%

Project IRR (with Carbon Finance) 21.20%

Assumed price US$ 11/ ton of CO2e,

The source of the relevant data is as follows:

Total investment has been taken from actual audited financial records as well as quotations available

at that time from different vendors, and plant & machinery suppliers;

Running cost is based on management estimates;

Rate of Income Tax has been taken from Pakistan Income Tax Ordinance, 2001;

6 months Kibor Rate.xls is the file that used KIBOR data for input into WACC;

http://www.sbp.gov.pk/ecodata/kibor_index.asp. Provides historical rate of KIBOR from website of

Central Bank of Pakistan;

http://www/brecorder.com/index.php?adate=2007-12-01&stocks=index&b1=+Go+. Karachi Stock

Exchange Data used for IRR determination from The Business Recorder newspaper;

http://www.sbp.gov.pk/publications/prudential/index.htm. Debt and equity ratio of 70:30 from the

Prudential Regulation for Corporate/Commercial Banking of The State Bank of Pakistan which can

be found on page no. 13 (Regulation R-5) of the document available at this website;

http://www.sbp.org.pk/press/2004/jan-21-04.pdf. Press release from State Bank of Pakistan regarding

mandatory use of KIBOR plus a spread for commercial transactions and lending;

http://www.sbp.org.pk/bsd/10YearStrategyPaper.pdf. State Bank of Pakistan “Pakistan 10 Year

Strategy Paper for the Banking Sector Reforms” which documents mandatory use of KIBOR as a

benchmark plus a risk spread over it to compensate for risk;

http://www.dawn.com/2009/01/26/ebr13.htm. “Launch of KIBOR Futures” article in Dawn

newspaper dated January 26, 2009;

40

All data and sources of data have been provided to the DOE at Validation.

http://www/brecorder.com/index.php?adate=2007-12-01&stocks=index&b1=+Go

UNFCCC/CCNUCC


http://www.ppib.gov.pk/tarrif_final.pdf. Guidelines for Determination of Tariffs for IPPs” at website

of the government’s Private Power and Infrastructure Board. This shows a mandatory spread of 3%

over KIBOR being required for a highly regulated industry like the power sector;

http://www.nepra.org.pk/det_gen_ipps.htm. National Electric Power Regulatory Authority (NEPRA)

of Islamic Republic of Pakistan website showing example of Orient Power and Sapphire Power

companies using a spread of 3% over KIBOR for IPPs.

CDM Impact

The project is not expected to be commercial viable without CDM revenues. The project proponents are

expected to sell emission reduction credits at US$ 11 to generate additional revenue, which would take

IRR from 15.15% to 21.20%. The table below summarizes this in tabular format.

Ratios Without CDM With CDM

Project IRR (%) 15.15% 21.20%

The impact of CDM revenue includes:

CDM revenue would improve financial viability of the project by improving liquidity position of

the company;

Provide assistance in overcoming investment and technological barriers resulting in smooth

operations of the plant; and

Successful operations acting as an incentive for others to explore similar opportunities.

Without the CDM revenue, the project sponsors would not have undertaken the project. It is the

combination of 1,000TPD of waste intake plus the CDM revenue that makes the project viable.

As mentioned under section B.4 Sub-step 1b and above in this section, there is no legislation enforcing

composting of organic waste. The approach is to continue dumping municipal solid waste at waste

dumping sites. As a result landfill gas emitted from these dumping sites will be released directly into the

atmosphere, thereby increase GHG emissions. Hence the current situation is the baseline.

No commercial composting project has been launched in the country. The initial barriers to entry into

this market are enough to stop entrepreneurs from venturing into this sector. Compost market in Pakistan

is not a lucrative business and incentives are not enough to overcome risks mentioned above such as lack

of developed market, technical barriers hindering smooth operations, etc. As a result, the project is not

expected to be viable without additional cash inflow in the form of CDM revenue.

The proposed composting project would divert waste from being disposed off at Mahmood Booti Solid

Waste Disposal Site to Lahore Compost plant site. This results in aerobic conversion of organic waste

into compost resulting in methane emission reductions. This prevented methane emission from dumping

site which otherwise would have occurred is being claimed as emission reductions (ERs).

Sensitivity Analysis

A sensitivity analysis was conducted by altering the following parameters:

Total investment

Composting sales revenue

UNFCCC/CCNUCC


Running costs (Operational and Maintenance costs)

These parameters were selected based on the likelihood to fluctuate most over time. Financial analyses

were performed by altering each of these parameters by 5% interval from -10% to +10%, and assessing

the impact on the project IRR. Table A.4-3 summarizes these findings:

Table A.4-4: Sensitivity analysis of project IRR (without carbon finance)

-10% -5% 0% 5% 10%

Total Investment 16.56% 15.83% 15.15% 14.51% 13.92%

Composting Sales Revenue 11.79%

13.52% 15.15% 16.70% 18.18%

Running Costs 17.20% 16.18%

15.15% 14.09% 13.02%

Though the range of parameters used for sensitivity analysis between a range of -10% and +10% at 5%

intervals are reasonable to analyze the project as per standard market practices, however, a further

analysis in this regard was done to see that at which level of each of the above three parameters, the

project would meet the threshold benchmark rate of return that LCL is assuming, based on the below

rationale

In Pakistan, there is no generally acceptable benchmark rate of project IRR for this type of project. The

average returns from the stock market and private equity funds are higher, ranging between 15% and

30%. Given the current economic climate and cost of borrowing prevailing in the country, we took a

project IRR of 20% as a benchmark rate of return for this Project, which is very conservative. All of this

data is available from public sources and was submitted during the Validation process.41

41

6 months Kibor Rate.xls is the file that used KIBOR data to come up with benchmark for cost of debt used for WACC;

http://www.sbp.gov.pk/ecodata/kibor_index.asp. Provides historical rate of KIBOR from website of Central Bank of Pakistan; http://www/brecorder.com/index.php?adate=2007-12-01&stocks=index&b1=+Go+). Karachi Stock Exchange Data used for IRR determination from The Business Recorder newspaper; http://www.sbp.gov.pk/publications/prudential/index.htm. Debt and equity ratio of 70:30 from the Prudential Regulation for Corporate/Commercial Banking of The State Bank of Pakistan which can be found on page no. 13 (Regulation R-5) of the document available at this website; http://www.sbp.org.pk/press/2004/jan-21-04.pdf. Press release from State Bank of Pakistan regarding mandatory use of KIBOR plus a spread for commercial transactions and lending; http://www.sbp.org.pk/bsd/10YearStrategyPaper.pdf. State Bank of Pakistan “Pakistan 10 Year Strategy Paper for the Banking Sector Reforms” which documents mandatory use of KIBOR as a benchmark plus a risk spread over it to compensate for risk; http://www.dawn.com/2009/01/26/ebr13.htm. “Launch of KIBOR Futures” article in Dawn newspaper dated January 26, 2009; http://www.nepra.org.pk/det_gen_ipps.htm. National Electric Power Regulatory Authority (NEPRA) of Islamic Republic of Pakistan website showing example of Orient Power and Sapphire Power companies using a spread of 3% over KIBOR for IPPs; Audited financial report for LCL 2005;

UNFCCC/CCNUCC


The analysis showed that if the needed benchmark rate of return/hurdle rate was 20%, this could only be

reached if there was a 29.10% reduction in Total Investments or 24.10% reduction in Running Cost or

16.38% increase in Composting Sales Revenue. It is not possible to reduce the Total Investments by

29.10% as the machinery has already been imported from Europe and paid for in Euros. It is not possible

to decrease the Running Cost by 24.10%, especially where the project is the only of its kind in the

country with no allied / support industry available and most of the cost items like parts have to be

imported, while the Pakistan rupee keeps on depreciating, making imports more and more expensive to

buy. Moreover, reduction in Running Costs under an inflationary economy like Pakistan’s is not possible.

Furthermore, no compost market currently exists in the country and it is expected that the company will

experience low sales of compost in early years as it will take time to build a market for compost, which is

why the project needs carbon revenue to help survive the early years. Accordingly, it is not realistic to

expect Compost Sales Revenue to increase by 16.38% and is not expected to do so.

In conclusion, the project IRR remains low even in the case where these parameters change in favour of

the Project, and are still too low for a risky enterprise such as the construction and operation of a

composting plant as a first of its kind project.

Scanned copy of Menart invoice for cost of plant and machinery; http://www.lesco.gov.pk/LESCO/default.asp. Set tariffs of electricity distribution companies; http://www.statpak.gov.pk/depts/fbs/statistics/yearly_inflation/yearly_inflation/html. Inflationary trends used for cost escalation estimates were cross-checked against the State Bank of Pakistan’s (is the country’s Central Bank) data; Audited financial report 2006; Audited financial report 2007.

UNFCCC/CCNUCC


Appendix 5: Further background information on monitoring plan

MONITORING INFORMATION – First Revision

MONITORING PLAN FOR ER VERIFICATION OF LAHORE COMPOST (PVT) LIMITED

This is the first revision / update of the Monitoring Plan (Revised MP) prepared for and adopted by the

composting plant of the Lahore Compost Ltd. (LCL) in the context of the planned carbon finance CDM

project. The Revised MP defines standards against which the performance in terms of the project’s

Emission Reductions (ERs) will be monitored and verified, in conformance with all relevant

requirements of the CDM of the Kyoto Protocol. This MP will become an integral part of the Lahore

Compost Standard Operation Procedure 2011

I. Use of the Monitoring Plan by the Operator

This Revised MP identifies and updates key performance indicators of the project and sets out the

procedures for metering, monitoring, calculating and verifying the ERs generated by the project.

Adherence to the instructions in the Revised MP is necessary for the operator of the LCL composting

plant to successfully measure and track the impact of the project on the environment and prepare all data

required for the periodic audit and verification process that must be undertaken to confirm the

achievement of the corresponding ERs. The Revised MP is thus the basis for the production of ERs and

accreditation of the ERs within the CDM and will be subject to verification procedures.

The Revised MP can further be updated and adjusted to meet operational requirements. The verifying

Designated Operational Entity (DOE) approves such modifications during the process of initial or

periodic verification. In particular, any shifts in the baseline scenario may lead to such amendments,

which may be mandated by the verifier. Amendments may also be necessary as a consequence of new

circumstances that affect the ability to monitor ERs as described here or to accommodate new or

modified CDM rules.

II. Organizational, Operational, and Monitoring Obligations

Monitoring the project’s performance in terms of ERs achievement requires Lahore Compost to first

ensure adherence to the standard operational procedures, and second to fulfil operational data collection

and processing obligations. Lahore Compost has the primary obligation to calculate the project ERs

based on the most recent available information. In addition LCL should establish an organizational

structure in which the roles and responsibilities of monitoring personnel are identified and an ERCP

quality control procedure provided with this Revised MP.

The general manager of the LCL plant will be ex-offiso the ERCP Manager. He/She is responsible for

performing the ERCP and will work under the guidance and control of a “MP Steering Committee”

comprised of CEO (Chief Executive Officer), COO (Chief Operating Officer), DGM (Deputy General

Manager) Production and Manager Accounts, LCL. Any future queries should be directed to the current

CEO, Ms. Hoor Yousafzai, who has replaced the previous CEO listed in the PDD. Her contact

information is as follows: Ms. Hoor Yousafzai, CEO and Director Lahore Compost Pvt Ltd, Saif Group

of Companies, Kulsum Plaza, 2020 Blue Area, Islamabad, Pakistan. Mobile: +92-300-5002-356. Email:

[email protected]

III. Data Gathering and Recording

UNFCCC/CCNUCC


Data required for the Revised MP should largely come from either calibrated meters of LCL or third

party (e.g. electricity company). Where calibrated meters cannot be used (e.g. the sampling of waste in

order to determine the actual waste-composition), the ERCP Manager should follow standardized

measuring and sampling procedures explained in this plan, to ensure that the verifying DOE can easily

verify measurements and procedures.

Lahore compost bears the responsibility to maintain and record data and related parameters required to

calculate ERs. Some uncertainties may lead to a deviation between monitored and verified ERs though,

especially due to errors in the data monitoring and processing system. However, LCL under the guidance

of ERCP manager should ensure to minimize such errors and expect verification audits to uncover any

unnoticed errors. The table below details the data and related parameters to be monitored and recorded

by LCL in an electronic format (Excel sheets) and made available to the verifier on request.

Parameter

/ Data

Description Units Source Monitoring

Frequency

Comments / Instructions

EGPJ,FF,y Electricity

Consumed

MWh Electric

Meter

Monthly LESCO Electric Company

Fcons,y Fuel Consumed on

site

Litre Lahore

Compost

Monthly Fuel Issue Notes / LCL

Accounting Department

Mcompost, y Compost Produced Ton LCL Weigh

Bridge +

Packing Plant

Weighing

Scale

Daily Production to be recorded

on daily basis and

consolidated monthly

Intake Waste supplied to

the compost plant

Ton CDGL Weigh

Bridges &

LCL weigh

bridge as a

backup in

case CDGL

weigh bridge

is not

functional or

not calibrated

Daily Intake to be recorded on

daily basis and


Green

Intake

Purely organic

waste purchased by

the compost plant

Ton LCL Weigh

Bridge

Daily Intake to be recorded on

daily basis and


Sampling Sampling of

incoming waste to

determine

percentage of each

type of waste

stream

Percentage

by weight

of each

waste type

Lahore

Compost

One day in

every month till

Dec 31, 2008,

after that one

day quarterly

e.g. March,

June,

September,

December.

Truckloads incoming to

the project site in the test

day should be tested.

Sample of about 10-15 Kg

of waste should be taken

randomly form each

sample truckload. To

ensure random selection

every 7th incoming truck

should be selected for

sampling till the last

truckload entering the

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Parameter

/ Data

Description Units Source Monitoring

Frequency

Comments / Instructions

project. The minimum

sampling size has been

determined to be twenty

trucks.

Stotal,y Total number of

oxygen tests

conducted

Number Oxygen

measurement

device

Daily A standardized mobile gas

detection instrument

should be used for

measurement. Oxygen

should be measured both

at the top and the bottom

layer of the piles, hence 2

samples in vertical

alignment. A total of 25

samples/week should be

taken on a single windrow

SOD,y

Number of samples

with oxygen

deficiency (oxygen

content below

10%)

Number Oxygen

measurement

device

Daily SOD testing is part of and

a side result of the Stotal,y

procedure

pH Acidity of the

compost stack

Measuring

Device

Weekly Test performed on each

windrow

Moisture Moisture level in

the compost stack

Weekly Test performed on each

windrow. Refer to annex II

for details

DTi,y Average additional

distance travelled

by transport

vehicles of same

type as compared

to the baseline

Km Lahore

Compost

Monthly Monthly data to be

consolidated for the whole

year from sales and

logistics records

IV: ERCP Manager’s Responsibilities:

As part of the Saif Group Corporate Policy & procedures, all its companies are internally audited by an

external auditor annually. The auditors have also done an internal audit of LCL as a part of this process

and the audit report is submitted to the LCL Board. In addition to this, the ERCP (ERs Calculation

Procedure) Manager should also oversee the operation of the plant and should periodically carry out

internal audits, when required with external assistance, to assure that project activities are in compliance

with the standard operation procedure and with monitoring requirements. The main responsibilities of the

ERCP manager are to ensure the following:

Data handling: maintaining an adequate system for collecting, recording and storing data as

determined in the Monitoring Plan, checking data quality, collection and record keeping procedures

regularly;

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Reporting: preparing periodic reports that include emission reductions generated, observations

regarding Monitoring plan procedures;

Training: assuring personnel training regarding the performance of the project activities and the

Monitoring plan;

Quality control and quality assurance: complying with quality control and quality assurance

procedures to facilitate periodical audits and verification.

The Lahore Compost has adopted a standard operation procedure that also includes procedures for

training, capacity building, proper handling and maintenance of equipment, emergency plans, and work

conditions and security.

V. Quality control and quality assurance procedures

Regarding quality control and assurance procedures to be undertaken for the monitored data, the

practices to be implemented in the context of project activity are as follows:

Monitoring records:

Readings of all field meters will be registered in either electronic form or on paper worksheets. All other

data collected will also be entered in electronic worksheets and stored. Periodic controls of the field

monitoring records will be carried out to check any deviation from the estimated CERs and according the

Operational Manual for correction or future references.

Periodic reports to evaluate performance and assist with performance management should be prepared

with recommendations to improve the systems or procedures.

Equipment calibration and maintenance:

All meters and other sensors will be subject to regular maintenance and testing regime according to the

technical specifications from the manufacturers to ensure accuracy and good performance.

Calibration of equipment will be performed periodically according to technical specifications and in

agreement with recommendations given by suppliers and/or institutes.

Corrective actions:

Actions to handle and correct deviations from the Revised Monitoring Plan and Operational Manual

procedures will be implemented as these deviations are observed either by the operator or during internal

audits. If necessary, technical meetings between the operator, the developer and the project participant

the project will be held in order to define the corrective actions to be undertaken.

Training:

The operator personnel will be trained in equipment operation, data recording, reports writing, and

operation, maintenance and emergency procedures in compliance with the Operational Manual.

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Appendix 6: Summary of post registration changes

I. Corrections

>>

The sample size for determination of oxygen deficiency was corrected in accordance with the registered

PDD. The sample size was corrected from 25 per day per windrow to 25 per week per windrow, given

that 5 working days a week and minimum of 5 windrows. This correction is in compliance with the

original sampling plan stated at the time of registration.

II. Permanent changes from registered monitoring plan or applied methodology

>>

A revision to the monitoring plan was requested during 1st verification (1

st Monitoring Period, from

05/04/2010 to 31/12/2010) and was approved on 18/04/2012.

The revision of the monitoring plan included the following four changes:

1) In the registered PDD, the quantity of waste entering the composting plant (Aj,x fc) is monitored

by a weighbridge owned by the CDGL. In order to have better control of this measurement, the

project participant LCL has bought and installed another weighbridge to be used as backup in

case of malfunction or delayed calibration of the main weighbridge.

2) The calibration of interval of the weighbridge scale used for monitoring the amount of Compost

Produced and Mcompost, y is revised from bi-annually to annually in the revised monitoring plan.

The QA/QC procedures for the parameters amount of compost produced and Mcompost, y have also

been further elaborated to better describe how the measured data is cross-checked by sales

invoices.

3) One electricity meter is used for monitoring of EGPJ,FF,y instead of 4 mentioned in the registered

PDD. The 4 meters initially mentioned in the PDD could be identified as follows:

a) LCL old meter (serial no 084862) which was installed in January 2006 and damaged in

May 2009; the meter is still there although not functional.

b) LCL new meter (serial no 5438), replacing meter a).

c) CDGL meter.

d) Private domestic meter of local resident, as the land was cultivated by local resident

before the project was installed.

All 4 meters are visible at site, however it was verified by DNV during site visit that only meter

b) is actually used by LCL for monitoring the electricity consumption. Meter c) and d) are owned

by others, which was confirmed by copies of invoices.

4) The parameter EFfuel is removed from the list of ex-post monitored parameter. In the registered

PDD the parameter EFfuel has been mentioned by mistake in both sections (ex-ante and ex-post).

However in both sections it has been explained as an ex-ante parameter sourced from the 2006

IPCC Guidelines for National Greenhouse Gas Inventories.

Additional revisions to the monitoring plan were conducted due to changes on the operations of the

weighbridges by the City District Government of Lahore, which are outside of the project implementer’s

control, and do not require prior approval of the board. The revision includes a clarification on the

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measurement operations of the weighbridges during this monitoring period for parameter Aj,x, as

follows:

All trucks entering the compost plant are weighed with a calibrated weighbridge that belongs to the City

District Government of Lahore, CDGL.

Given the changes brought about by the installation of a new weighbridge by the City District

Government of Lahore (which are outside of the project implementers control), the following illustrates

the waste measurement procedures at the site:

Before 01/06/2012: There was only one weighbridge i.e. weighbridge at Mahmood Booti dumping site.

Trucks were weighted at that weighbridge.

Between 01/06/2012 to 23/09/2012: During this period a new weighbridge was installed and

calibrated at the entrance of the composting site, hence both weighbridges were operational and used

for weighing MSW.

Between 23/09/2012 to 05/01/2013: The old weighbridge located at Mahmood Booti dumping site

ceased operations and only the weighbridge at the main entrance of LCL was operational; therefore

trucks were weighted on this weighbridge.

After 05/01/2013: Construction of old weighbridge at Mahmood Booti dumping site was completed,

and both weighbridges are now operational.

There is no change in procedure of CDGL reporting to LCL for MSW intake from Mahmood Booti

SWDS.

- - - - -

History of the document

Version Date Nature of revision

04.1 11 April 2012 Editorial revision to change version 02 line in history box from Annex 06 to Annex 06b.

04.0 EB 66 13 March 2012

Revision required to ensure consistency with the “Guidelines for completing the project design document form for CDM project activities” (EB 66, Annex 8).

03 EB 25, Annex 15 26 July 2006

02 EB 14, Annex 06b 14 June 2004

01 EB 05, Paragraph 12 03 August 2002

Initial adoption.

Decision Class: Regulatory

Document Type: Form

Business Function: Registration

PDD_ver04.1_LCL May 09 2013_v7

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