version1.015/02/2011 Siam Cement Biomass Project - Project Profile

Siam Cement Biomass ProjectProject Profile

Siam Cement Biomass ProjectVerified Carbon Standard – Thailand

version1.015/02/2011 Siam Cement Biomass Project - Project Profile

1.0 Project Summary

1.1 Project Snapshot

2.0 Project Benefits

2.1 Key Achievements

3.0 Background

4.0 Technical Details

5.0 How the project meets Climate Friendly’s principles

Contents

version1.015/02/2011 Siam Cement Biomass Project - Project Profile

1.0 Project Summary

The Siam Cement Biomass Project involves the modification

of five cement manufacturing plants in Thailand to enable them

to use renewable biomass fuel in place of fossil fuels, leading

to substantial greenhouse gas emission reductions as well as

significant environmental and socio-economic benefits.

The cement plants previously burned a mix of fossil fuels in their

kilns, including coal, lignite (brown coal), pet-coke, and heavy

fuel oil. With the implementation of the project these have been

largely replaced by renewable biomass from a variety of sources

– primarily rice husks but also wood-processing residues and

other agricultural waste such as palm trunks, palm fibre and

palm nut shells.

At each of the project sites an elaborate system for the collection,

storage, preparation and processing of biomass fuels has been

introduced in order to facilitate the switch from fossil fuels.

Supply chains have been established for the sourcing of waste

biomass from nearby areas. These vary across the different sites

according to the type of available biomass and crop patterns in

the region. Prior to the implementation of the project, rice husk

was typically burnt in open fields, which is common practice

for rice husk waste in developing countries. Other agricultural

wastes were left in the fields to decay.

Substantial technical adaptations have also been made to the

cement production plants in order to enable the combustion of

the alternative types of fuel.

The costs of modifying the existing plant and establishing

the new supply chains were substantial, and there were also

significant technology risks and technical know-how barriers as

the Siam Cement Group was the first company in Thailand to

adopt the new technology. The additional revenue from the sale

of carbon credits provided the necessary incentive to justify this

investment. Without the carbon revenue the project would not

have gone ahead.

1.1 Project Snapshot

Name: Siam Cement Biomass Project

Location:Saraburi, Lampang, and Nakon Si Thammarat Provinces, Thailand

Coordinates:

14°36’33.59”N / 100°59’46.88”E; 14°34’10.00”N / 100°45’56.10”E; 14°45’08.56”N / 100°47’15.21”E;18°33’22.66”N / 99°34’23.08”E;08°06’01.20”N / 99°41’02.50”E

Type: Biomass

Standard:Verified Carbon Standard (VCS 2007.1)

Volume: c.600,000 VERs/yr

Project Operator: SCG Cement Co., Ltd.

version1.015/02/2011 Siam Cement Biomass Project - Project Profile

2.0 Project Benefits

Environmental – The five plants now use renewable biomass in

place of fossil fuels for the majority of their energy requirements.

The Verification Reports show that the project has reduced CO2

emissions by around 90% since it began. The carbon offsets

generated from this project are calculated in accordance with

the approved VCS methodology by quantifying the volume of

greenhouse gas emissions that would otherwise have been

released from burning fossil fuels. Furthermore, replacing fossil

fuels with biomass reduces local air pollution as well as reducing

the upstream environmental impacts associated with fossil fuel

extraction and processing. The project has also funded the

construction of over 6,500 check dams for upstream forest

conservation.

Socio-Economic – The project has created supply chains

and manufacturing processes for renewable biomass fuels,

increasing their availability for local use. This has led to local job-

creation as well as generating supplementary income for farmers

from what used to be waste products. The project has also

funded and implemented a range of social programs such as

school scholarships and projects supporting the development of

small-scale local industries.

2.1 Key Achievements

R Reduces GHG emissions

R Facilitates new clean technology uptake

R Reduces environmental impacts of fossil fuel extraction and processing

R Develops rural biomass markets and supply chains

R Creates local employment

R Provides local farmers with supplementary income streams

R Funds additional social and environmental initiatives

version1.015/02/2011 Siam Cement Biomass Project - Project Profile

3.0 Background

Of the five project sites, three are located in Saraburi province

approximately 120km north of Bangkok, one is in Lampang

province 600 km north of Bangkok and the other is in Nakon

Si Thammarat province 835km south of Bangkok.

An emerging economy, Thailand depends heavily on the

agricultural sector. While only accounting for less than 10% of

GDP, agriculture employs close to 50% of the population. The

country’s most important crop is undoubtedly rice, Thailand

being the number one exporter of rice in the world. Rice husk

currently presents a waste disposal problem in many places,

is generally left to decay leading to methane emissions with

high global warming impact, and can also lead to localised

respiratory problems due to its low density. Using the waste

rice husk avoids these problems whilst creating a valuable

source of energy and income.

Thailand relies heavily on the burning of fossil fuels (above

90% of the energy mix) to supply electricity to its population

and industries. Cement production is a highly emission-

intensive activity, estimated to represent around 5% of total

global man-made CO2 emissions. In developing countries the

production process is often particularly inefficient. The use of

renewable fuels can make a valuable contribution to reducing

these emissions.

version1.015/02/2011 Siam Cement Biomass Project - Project Profile

4.0 Technical Details

At each of the project sites an elaborate system for the

collection, storage, preparation and processing of the

biomass fuels has been created, varying from site to site

depending on the types of biomass used. Modifications

which needed to be made to the existing plant include:

• Systems for shredding or chipping the fuel material (in

the case of wood-waste)

• Systems for drying the biomass - critical for fuels which

are typically delivered with a high moisture content.

In one of the project sites a new drying system was

developed, combining mechanical fluidized bed dryer

technology and flash dryer technology into a new hybrid

dryer, which is both more efficient and more versatile in

terms of accommodating diverse fuels

• Systems for filtering out impurities – e.g. using a

vibrating screen to remove soil and rocks

• Systems for reducing dust from the rice husk, which can

cause both technical and health problems

• Systems for mixing and feeding the new fuels into the

cement kilns

• Systems for improved process and quality control to

accommodate the less homogenous fuel sources

The use of biomass residue in cement kilns was new and no

cement plant in Thailand had introduced the system before

the successful development of the knowledge, technology

and system by Siam Cement Group (SCG) for this project.

version1.015/02/2011 Siam Cement Biomass Project - Project Profile

5.0 How the project meets Climate Friendly’s principles

Climate Friendly only invests in projects that:

Principles How this project meets these criteria

Address the root cause of climate change P Biomass fuel is neutral in terms of GHG emissions, and replaces fossil-fuel based energy

Are permanent P Emissions reductions cannot be reversed

Are additional P Carbon finance required to overcome technical and financial barriers

Are verifiable P Independently verified by Bureau Veritas Certification Holding SAS

Are project based P Not allowance-based under compliance requirements

Contribute to sustainable development P Reduces pollution, creates employment, builds renewable energy markets and supply chains, facilitates technology transfer

Are synchronous P Emissions reductions have already occurred

Are exclusive P Robust assurance process ensures no double counting