CDM A/R Project - A ITC case study j y

CDM A/R Project - A ITC case studyj yBy

Dr. H D KulkarniVice President (Plantation)

ITC Ltd Paperboards & Specialty Papers DivisionUnit: Bhadrachalam, Sarapaka (A.P.) India

Presentation atSouth Asian Media Briefing Workshop on Climate Change

Centre for Science & Environment’sNew Delhi17.11.2012

Institutional Mechanism & AgreementsProject PDD hosted on UNFCCC web site DEC 2005

Validation over (Took nearly 3 years)

There is a written agreement1 B t th F d th MS 2 B t MS d ITC Ltd1. Between the Farmers and the MS 2. Between MS and ITC Ltd

Tribal Farmers undertake the plantation and its maintenance in their own lands.

Sangha’s (Mandal Samakhyas - MS) would oversee the project activityimplementation in their region, which includes awareness / training /resource provision and distribution.

ITC would provide sapling / financial resources.

ITC l th CDM j t l d i t i l f CDMITC also manages the CDM project cycle and assists in accrual of CDMbenefits.

‘MS’ will take up the task of applying for and obliging the CERs to farmers.p pp y g g gProject PDD hosted on UNFCCC web site DEC 2005


CARS and CLS more than 100

Project is Registered on 5 – 06 – 2009

Verification Ongoing

Mandal wise, year wise Eucalyptus Plantations in Khammam District, Andhra Pradesh

Sl.No

Name of the Year of Plantation Establishment

Mandal (All figures in ha)

2001 2002 2003 2004 2005 Total

1 Aswapuram 12.14 5.86 14.56 32.56

2 Aswaraopeta 52.13 295.45 25.6 138.42 511.59

3 Bhadrachalam 64.61 118.43 140.97 188.3 32.84 545.15

4 Burgampahad 54.15 74.55 50.3 4.28 15.2 198.47

5 Chandrugonda 12.916 41.63 4.64 59.18

6 Dammapeta 144.8 124.12 111.76 47 148.34 576.02

7 D d 28 55 28 557 Dummugudem 28.55 28.55

8 Kothagudem 40.31 57.45 30.08 127.84

9 Kukunuru 82.99 75.8 158.79

10 Kunavaram 74 22 74 2210 Kunavaram 74.22 74.22

11 Mulakalapally 113.88 231.54 126.54 58.95 530.91

12 Paloncha 65.43 16.09 86.17 40.23 5.68 213.59

13 V R Puram 10.8 10.8

14 Velerupadu 2.52 2.52

Total: 369.29 556.65 971.33 562.42 610.5 3070.19

Number of Land holdings in the project site

Sl. No. Name of the Mandal No of Farmers No of Villages Area (ha)

1 Aswapuram 41 7 32.56

2 Aswaraopeta 517 25 511.59

3 Bhadrachalam 641 31 545.15

4 Burgampahad 282 16 198.47

5 Chandrugonda 83 5 59.18

6 Dammapeta 613 34 576.02

7 Dummugudem 33 3 28.55

8 Kothagudem 141 9 127.84

9 Kukunuru 161 11 158.79

10 Kunavaram 80 9 74.22

11 Mulakalapally 488 23 530.91

12 Paloncha 301 16 213.59

13 V R Puram 12 2 10.8

14 Velerapadu 5 2 2.52

Total: 3398 193 3070.19

Land use pattern in Khammam Dist (A.P.) - Area in Ha.

Sl.No. Category 1999-2000 2000-2001

2001-2002

2002-2003

2003-2004

2004-2005

1 Forests 743793 743793 743793 743793 743792 743798

2Barren and Un cultivable

lands 90381 90381 90381 90381 90384 90127

3Land put to non-

agricultural use 123527 124967 124967 124967 124864 1246653 agricultural use 123527 124967 124967 124967 124864 124665

4 Cultivable waste 21081 21081 21081 21081 21081 20645

5Permanent Pastures and

other grazing lands 38936 38936 38936 38936 38913 38843g g

6

Land under miscellaneous tree crops and groves

not included in net area sown 18832 18832 18832 18832 18834 188336 area sown. 18832 18832 18832 18832 18834 18833

7 Current fallows 74505 74482 107495 158186 91556 75414

8 Other fallow lands 22567 21850 28662 31069 30003 31028

9 44 313 446613 406 88 3 3692 421 09 43 829 Net area sown 447313 446613 406788 353692 421509 437582

10 Total geographical area 1580935 1580935 1580935 1580935 1580935 1580935

A BARREN LAND FOR CARBON SINK

Developed LandDeveloped LandDeveloped LandDeveloped Land

Clonal Technology

CLONAL PROPAGATION

EUCALYPTUS ROOTING OF CUTTINGS

Clonal plants in open nursery

Beneficiaries Participating in Planting ActivitiesBeneficiaries Participating in Planting Activities

Alignment Pitting & plantingAlignment Pitting & planting

A ti t it t t t •Anti termite treatment

•Fertiliser application•Fertiliser application

2 Months old Clonal Eucalyptus Plantation

Climate change - CDMClimate change CDM• Climate change is one of the most important globalg p g

environmental issues likely to impact planet earth and itssocio-economic systems

• Every 20C rise in temperature due to GHGs would resultin 3 % dip in global GDP

• In case of India, for every 20C rise in temperature wouldresult in 5 % drop in GDP

• To combat Climate Change and its adverse effects, CDMmechanism came into existence under Kyoto Protocol

CDM scenario (Data 10-7-2012)

1 R i t d CDM P j t

Project PDD hosted on UNFCCC web site DEC 2005

1. Registered CDM Projects Global = 4312 (2150 million CERs)

(2150,000,000 CERs)Validation over (Took nearly 3 years)

Project PDD hosted on UNFCCC web site DEC 2005


India = 855 (20%)2. Scopes = 153. Scope 14 – A/R



Verification – Ongoing

3. Scope 14 A/RGlobal = 39 (0.90 %)India = 7

4 S 15 A i ltExpected Issuance Of CERs by UNFCCC – Aug 2010


4. Scope 15 – AgricultureGlobal = 152 (3.52 %)India = 11


Verification – Ongoing

Expected Issuance Of CERs by UNFCCC – Aug 2010

5. CERs Issued = 959 million tonne (959765823 CERs)6. Approved Methodologies by Scope = 234

Scope 1 to 13 = 208Scope 1 to 13 208Scope 14 A/R = 20 (8.54 %)Scope 15 – Agriculture = 6 (2.56 %)

A/R Projects• A/R Projects under CDM were adopted in the Marrakech Accord• A/R Projects under CDM were adopted in the Marrakech Accord

(MA) in CoP-7 held in 2001 under Chapter LULUCF.

• IPCC in 2000 came out with a special report on LULUCF andcleared A/R projects and not deforestation.

• For the first commitment period only 1% (or 20%) addition orsubtraction to base year emission of that party is allowed by A/RProjects while 4% for other source (like industry etc)Projects while 4% for other source (like industry etc).

• It is estimated that the total global technical potential for afforestation and reforestation activities for 1995 to 2050 period is 1.1 to 1.6 GtC/yr.

• Tropics will have 70% of the above potential.

A/R Projects• CDM Definition of forests under LULUCF

– Forest is the minimum area of land of 0.5 to 1.0 hectare with a tree cover of th 10 30% ith t ith t ti l t h i i h i ht fmore than 10 - 30% with trees with potential to reach a minimum height of

2 to 5 m at maturity.

• Host country has to adopt single minimum value and report to CDM EB (para• Host country has to adopt single minimum value and report to CDM EB (para8 and 17/CP7).

• Afforestation: It is direct human induced conversion of land that has not been• Afforestation: It is direct human induced conversion of land that has not beenforested for a period of at least 50 years to forested land through planting.

• Reforestation: It is the direct human induced conversion of non-forested land toReforestation: It is the direct human induced conversion of non forested land tobe forested land through planting on land that was forested but that has beenconverted to non-forested land. For the first commitment period, reforestationactivity will be limited to reforestation occurring on those lands that did not

t i f t 31 12 1989contain forests on 31.12.1989.

What type of A/R Projects are eligible

• Establishment of wood lots on communal lands, reforestation of marginal areaswith native species in existing forest fragments.

• New large scale industrial plantations.

• Biomass plantations for energy production.

S ll l l i b l d• Small scale plantations by land owners.

• Introduction of trees into existing agricultural systems (agroforestry).

• Rehabilitation of degraded areas through tree planting or assisted naturalregeneration.g

What type of A/R Projects are eligible

• Legal status of land prior to 1990 to be clear.g p

• Use of invasive species to be restricted and indigenous species promoted.

• Define project boundary explicitly.

• Small scale project - removal of less than 8 kilo tonnes of CO2 per year (175 haarea produces 4375 MT of wood/yr, converting to 2188 MT of carbon) and aredeveloped by low income communities / individuals.

• Bundling of small scale into large scale projects allowed.

ITC PSPD – 8 Registered CDM Projects

PROJECTS Registration # Annual CERs Reg. PDD

CERs issued by UNFCCC

BCM; BHRS 0677 22,587 60,750

BCM; EVAPORATOR 0679 52,247 1,72,531

BCM; ENCON 0806 21,505 84,934

BCM; SRB3 0890 43,161 NIL

TRIBENI; ENCON 0745 8,195 16,096

TRIBENI; TURBINE 0821 3,950 16,689

BCM; FORESTRY 2242 57,792 NIL

BCM: GREEN BOILER 3890 74,650 NIL

3,51,000

ITC’s Plantation Progress - 125,000 ha

ITC’s Social & Farm Forestry Initiative

The 125,000 ha plantations over a period of 20 years haveEconomic value

• Created an estimated wood asset value of INR 30 billion(for 3 cycles INR 90 billion) over a period of 12 yearsSocial value

Provided 56 million person days of employment mostly to tribals andmarginal farmersEnvironment valueEnvironment value

• Carbon sequester potential of 15 million tonnes reducing 54.9 milliontonnes of CO2 in a period of 12 years

Augmenting Green CoverAugmenting Green CoverTop Soil RetentionWater Recharge

A Competitive Source of Pulp-wood for ITC’s Paper mill

Carbon Sequestration

ITC Plantation – FSC Certified

FSC‐FM certification is issued to ITC PSPD forissued to ITC PSPD for 8028 ha of plantations as a group manager of more h 9000 fthan 9000+ farmers

ITC Social Forestry ProjectSalient featuresSalient features

1. Title: “Reforestation of severely degraded landmass in Khammam District of Andhra Pradesh, India ,under ITC Social Forestry Project”

2. Project No: 22413 M h d l ARAM 0001 i 53. Methodology : ARAM 0001 version 54. Carbon sink project on 3070.19 ha5. Spread over 14 mandals, 193 villages in p g

Khammam district of Andhra Pradesh6. Beneficiaries = 3398.7. Species = Eucalyptus7. Species Eucalyptus8. project participants = Mandal Samyakhya and

Farmers with ITC9 Land Eligibility = NRSA GPS demarcation of9. Land Eligibility = NRSA, GPS demarcation of

plots

Salient featuresSalient features

10. Operational Lifetime of the project = 3210. Operational Lifetime of the project 32 years

11 Crediting period = 30 years11. Crediting period 30 years12. Rapid Environmental Assessment13 Case study Baseline AGB BGB = IISC Bangalore13. Case study Baseline, AGB, BGB = IISC, Bangalore14. Sample plots, Growth data CAI & MAI15 O ti l M l15. Operational Manual16. Monitoring Plan17 T i i l17. Training manual

PROPERLY FENCED EUCA PLANTATION BY BENEFICIARY

Carbon sink Plantation

PLANTATION BEFORE HARVEST IN PALAMADUGUPALAMADUGU

ADDITIONAL INCOME TO BENEFICIARIES BY HARVESTING THEIR OWN PLANTATION IN LEAN SEASON

Wood loading to Truck in Field

BENEFICIARIES OF PALAMADUGU

CDM Training - Mandal Samakhyas

Training programme for MS & Govt. officials

Biodiversity - Aware colony conservation plot, Bhadrachalam

Total area= 3.74 Ha

No. of plant spp.= 32No. of endemic l 1

Funding for preservation by ITCplant spp.=1 by ITC

No. of animal spp. SpottedB fli 9 R il 5Butterflies = 9 , Reptiles = 5Birds = 12 Mammals = 4

Carbon Pool for Baseline

• Carbon pools are AGB, BGB & SOC.

• The features of the project area are:

L d t d f t i 1990 d ith•Lands are not under forests since 1990 and are eithercrop or fallow lands.

•The project area has fallow land.

•Thus the current land use is fallow landThus the current land use is fallow land.

Project Activity1 yr old plantation 4yr old plantation

CARBON FARMS

Growth Rate

40

50

60

CAI and MAI for Clone No 7

0

10

2030

1 2 3 4 5 6 7

A g e i n y e a r s

CAI MAI

C Stock Change under Project Scenario

• The carbon stock at every 4 years (ITC IISC study).

65

70 Baseline Project

50

55

60

65

stoc

k (tC

/ha)

40

45

50

2006

2009

2012

2015

2018

2021

2024

2027

2030

2033

C s

2006 2011 2016 2021 2026 2031 2035Baseline 45.33 45.33 45.33 45.33 45.33 45.33 45.33

200

200

201

201

201

202

202

202

203

203

Project* 42.93 61.83 64.04 65.43 65.02 61.30 61.30C Increment -2.40 16.50 18.71 20.10 19.69 15.98 15.98

*The C-stock is estimated after deducting emissions from; biomass burning after harvest and fertilizer application

Project Activity & C - Stock Change

• The life time of the project is considered 30 years (2001 - 2031).

500 000

600,000

400,000

500,000

Pool

(tC

)

200,000

300,000

Car

bon

P

0

100,000

2006 2011 2016 2021 2026 2031 20352006 2011 2016 2021 2026 2031 2035

Baseline Mitigation

Estimated amount of GHG removals by sinks over the crediting period

Ann al estimation of net anthropogenic Ann al estimation of net anthropogenic

Year

Annual estimation of net anthropogenic

Year

Annual estimation of net anthropogenic

GHG removals by sinks in tonnes of CO2 e GHG removals by sinks in tonnes of CO2 e

2001 – 02 2149 2016 – 17 857478

2002 – 03 10932 2017 – 18 9224952002 03 10932 2017 18 922495

2003 – 04 36811 2018 – 19 982633

2004 – 05 85962 2019 – 20 1036002

2005 – 06 151556 2020 – 21 1100206

2006 07 223938 2021 22 11758552006 – 07 223938 2021 – 22 1175855

2007 – 08 288900 2022 – 23 1237605

2008 – 09 349088 2023 – 24 1300960

2009 – 10 402533 2024 – 25 1351172

2010 – 11 466698 2025 – 26 1418614

2011 – 12 542291 2026 – 27 1490995

2012 – 13 604087 2027 – 28 1555956

2013 – 14 667507 2028 – 29 1616144

2014 – 15 717675 2029 – 30 1669588

2015 – 16 785051 2030 – 31 1733753

Total estimated net anthropogenic GHG removals by sinks (tonnes of CO2 e) 1733753

Total number of crediting years 30

Annual average over the crediting period of estimated net anthropogenic GHG removals by sinks (tonnes of CO2e) 57792

Cost Benefits

• The benefit cost ratio under baseline is 1 42 while under projectThe benefit cost ratio under baseline is 1.42 while under projectscenario it is 2.18. Thus, there is large financial incentives for thefarmer to take up afforestation (ITC - IISC study).

Baseline scenario Project scenarioPV of cost (Rs/ha) 13,364 4,855PV of benefit (Rs/ha) 19,041 10,566PV of benefit (Rs/ha/yr) 5,677 8,011B fit t ti 1 42 2 18Benefit cost ratio 1.42 2.18

Expected Benefit to Farmers

PeriodPlanting

YearArea in Ha

Total Wood (MT)

8 2001 369 29 369298 2001 369.29 369297 2002 556.65 48706.8756 2003 971.33 72849.755 2004 562.42 35151.254 2005 610.5 28121

Total 3070.19 221757.9

C ifi d E i i R d i (C E R ) 486647 67 (4 86 L C E R )C ertified Emis s ion R eductions (C E R ) 486647.67 (4.86 Lac C E R )

Value at $4 per C E R 1946590.69 (19.46 Lac $)Value in INR @Rs .50/$ 97329534.47 (973.29 Lac R s )@ /$ ( )

CER Value per Ha Per Year of Plantation Rs. 7925.37 US $ 176.12CER Value per Tonne of Wood per Cycle Rs 634 03 US $ 14 09CER Value per Tonne of Wood per Cycle Rs. 634.03 US $ 14.09CER Value per Tonne of Wood per Year Rs. 158.51 US $ 3.52

Present Status of ITC CDM Forestry Projecty j

P j t PDD h t d UNFCCC b it DEC 2005Project PDD hosted on UNFCCC web site DEC 2005

Validation over (Took nearly 3 years 2005 to 2008)Validation over (Took nearly 3 years 2005 to 2008)

Project Registered on 5 – 06 – 2009 j g

Verification – over 2010

Hosting for issuance of CERs on UNFCCC site – 2010 - 2011

Expected Issuance Of CERs by UNFCCC – 15th Dec 2012

Opportunities Global Forest by 2050

S th A i t i l l th i i f t 2050Community Managed Forests (Production) 1.2 bn ha (40%)

(Timber Production = 0.5 bn m3)

South Asian countries also can plan the vision on forestry 2050

Protected Forests IUCN – IV 1.2 bn ha (40%) ( )

40 %40 %

3 %17 %

Plantation Forests 100 mn ha (3%)Timber Production = 1 25 bn m3

Managed Secondary Forests 50 mn ha (17%)Timber production = 1 25 bn m3 Timber Production = 1.25 bn m3Timber production = 1.25 bn m3

The global forest vision 2050 (WWF and World Bank)

A/R CDM projectsp j

Afforestation and Reforestation (A/R) Projects:C - sequestration project is a win-win-situation from the

point of view of climate change

It is estimated that if 30 Mn ha of degraded forest lands inIndia, if afforestated will mitigate 3.32 GT carbon in, g Gnext 50 years (@5.5 tonnes/ha/yr productivity)

It means annual carbon reduction of 0.072 GT

C - sequestration projects help reduce C02 foot print ofindustryindustry

Conventional Farm Forestry vs Agro forestryWood and food security

Spacing = 3 X 1.5 m

Plants / ha = 2222Spacing = 1 x 1.5 x 8.5 m

Plants / ha = 2000Plants / ha 2000

Farm Forestry Agro Forestry

Issues & opportunitiesEU ETS – Restriction of purchase of T/ L CERsPrice of Forestry CERs / VERs very LowNo buyers of the projectIndia will reduce emission intensity of its GDP by 20 – 25% by 2020 inIndia will reduce emission intensity of its GDP by 20 25% by 2020 in comparison to 2005 level through climate mitigation actionGreen India Mission – enhance C sink in sustainably managed forest by 2020 through A/R, REDD etc mechanism of 20 mn ha in 10 yrs. C-sequestration of 43 mn t CO2 /yr . Financial resources Rs 44,0000 crC sequestration of 43 mn t CO2 /yr . Financial resources Rs 44,0000 crPAT schemes

•Become Carbon positive •Reduce / minimize leakages for project activity• PermanencePermanence •Adoption of Energy efficient technologies in forestry schemes• Adoption of Non conventional tech (solar, Wind ..)• Adoption of forestry programs for reclamation, reforestation, afforestation, rehabilitation and conservation

Thank you

Carbon Farm on Degraded area

CDM A/R Project - A ITC case study j y

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