SUSTAINABLE CHARCOAL +INITIATIVE

Business + social value case, Executive Summary and the way forward

May 2011

Green Cross Ghana is a national non-profit organization affiliated to Green Cross International, an NGO founded by Mikhaïl Gorbatchev, the former President of the Republic of Russia. The mission of Green Cross Ghana (GCG) is to help ensure a just, sustainable and secure future for all by fostering a value shift and cultivating a new sense of global interdependence and shared responsibility in humanity's relationship with nature.

In operation since 3 years and counting a 7-staff member, we have successfully ventured into the Clean Water sector. Our flagship program, ‘’ Smart Water for Green Schools’’ supports the installation of boreholes, rainwater harvesting systems and ecological latrines in rural communities throughout Ghana.

Green Cross Ghana has recently established a Clean Tech & Waste Management practice, the present originator of this initiative.

ABOUT GREEN CROSS GHANA

● Wood harvesting and charcoal production are some of the key forces driving deforestation in Sub-Saharan Africa. Between 1990 and 2005, total wood removal increased by 83% and 235% in Ghana and Rwanda, respectively.

● Traditional carbonization methods such as the earth mound kilns are in widespread adoption in Africa and are inefficient, resulting into significant wood loss and the release of significant amount of methane and other fine particulate. The output wood-to-charcoal stands between 8 to 15%.

● More people in Africa will use charcoal produced in an unsustainable fashion. Consumption drivers in urban cities and peri-urban areas include rapid urbanisation, increasing poverty and high population growth rates.

THE PROBLEM

2000 2030

China 706 645

India 585 632

Other Asia 420 456

Latin America 96 72

Sub-Saharan Africa 583 996

Number of People using Traditional Biomass (in millions)

● Africa is endowed with abundant biomass resources aside the clear-cut wood species used to make charcoal. The low rate of exploitation of woody biomass and selected agro-residues can be dramatically upped as a sustainable source of supply for charcoal.

● Initiatives such as providing clean cook stoves have mainly targeted the customer side. By providing carbon-friendly infrastructure to charcoal producers, we are offering a powerful complementary approach.

THE OPPORTUNITY

“We believe the Charcoal Industry is an overlooked actor

in the climate change challenge which can contribute

significant emission reductions.”

Our aim is to introduce a number of clean technologies (highly efficient retort kilns, cargo bicycles) offered under an innovative market-based infrastructure model to serve charcoal makers or for self-exploitation.

Nicknamed the “community-operated sustainable+ charcoal making facility”, this is a rural community plot that hosts within its premises, a sufficient number of retort kilns and cargo bicycles proportionate to the amount of biomass available.

Sustainable+ Charcoal is charcoal: ▪ Produced with minimum environmental impact▪ Which enhances the livelihoods of rural and urban poor as value chain participants▪ Should aim to achieve at least 30% efficiency converting wood or biomass to charcoal

THE SOLUTION

CARGO BIKES + EFFICIENT KILNS + BUSINESS ACUMEN =

A TRANSFORMATIVE SOCIAL-BUSINESS MODEL FOR THE CHARCOAL INDUSTRY

THE SOLUTION

+ ++

A cargo bicycle/tricycle is a human-powered vehicle designed and constructed specifically for transporting large loads (up to 2 tons in some cases)

▪Short/long term renting to charcoal producers and biomass owners – OR – 3rd party bicycle collection by facility operators

▪Low-cost bikes achieved with the use of cheaper and durable locally-sourced materials such as Bamboo

▪Minimum maintenance with the introduction of chain free bikes

▪In some cases dictated by terrain conditions or financial sense, carts or pedal-powered mini skidders will be alternatives

▪Future options are to use the bicycle or biogas-powered trailer motorbikes to transport mobile steel kilns on the biomass site (reverse transportation)

CARGO BIKE

Green Cross Ghana is currently leading a collaborative effort for the local manufacturing of adapted cargo bicycles.

A technology comparison analysis led to the choice of the Adam Retort as a suitable option

▪ Yield - Wood-to-charcoal performance of 30-35% on wet weight basis instead of 15% for the traditional method.

▪ Pollution - 75% reduction in emissions of carbon monoxide and methane as they are burned in the kiln

▪ Cycle - The cycle takes 30 h (10h carbonization, 20h cooling) instead of a week

▪ Simplicity - The kiln use materials such as lime, cement, bricks and steel plate. Bricks can be made from red laterite soil widely available in rural areas and stabilized with 5% cement which has proven effective. In operation required neither electricity nor special tools. A water source is optional but preferred.

▪ Productivity - Loading of wood chamber: about 3,5 m3 for a retort or 7m3 for a double retort. A 3,5 m3 kiln loaded with 1 to 1.1 tons wet weight of wood can produce 300-350 kg of charcoal (1,000 kg/week in 3 loads and an output of 50 tons/year)

RETORT

▪ Savings - preheated from waste biomass (branches, bark, ...) in reduced amount because the methane is recovered for the heating process. Heat losses are minimized by the construction and insulation.

▪ Quality - Complete carbonization. Avoids contact with sand or earth.

▪ Investment - The cost of producing one unit of production is low and varies from 500 to 2,000 € depending on the cost of materials used, mainly bricks or blocks, steel, fireplaces.

▪Future options are to support the design of a mobile steel kiln

Green Cross Ghana is in the process of obtaining an exclusive licence for the manufacturing of Adam retorts in Ghana. We are currently leading a collaborative effort for the local manufacturing of those kilns.

▪ Green Cross Ghana will support the emergence of a for-profit company responsible for commercializing the charcoal

▪ For-profit company will reinvest a portion of its revenues in rural and urban clean energy projects

▪ Charcoal makers and urban sellers have an ownership stake (shareholders) in the company [at a later stage]

▪ Lead the creation of the Sustainable Charcoal Makers Alliance uniting similar companies or enterprises in Africa and the world. [at a later stage]

ACUMEN

EXPECTED CHANGES

Generalization of Earth mound kilns•Generalization of Improved

kilns

•Output wood-to-charcoal improved by 50% at least

•Recycling of methane

• Proprietary earth-mound kilns

• BOP participants are quasi-poor (charcoal makers, urban sellers)

•Community-operated kilns with increased

output and guaranteed buy-back

•BOP participants own company shares

•Rural income and Urban poor income

flourishing

Charcoal makers as sole beneficiaries

•Cargo Bikes

•Mobile steel kilns

•Reverse Transportation

•Previously dispersed Biomass now accessible

•Biomass owners as new beneficiaries who can avail

harvesting, collection, carbonization to guaranteed

buy-back end-to-end services

CURRENT SITUATION INNOVATIVE INTERVENTIONS OUTCOMES

IMPLEMENTATION MODEL: WITH CHARCOAL PRODUCERS

Biomass access negotiated by charcoal makers

Installation of “community-operated Sustainable

charcoal-making facilities” and reverse transportation

bringing steel kilns on biomass site. Use for a fee

Optional guaranteed purchase assurance by for-profit

company

Sales by an urban distribution network of women/men

retailers in main consumption cities (i.e. Accra, Kumasi,

Takoradi) and other channels

IMPLEMENTATION MODEL: SELF-EXPLOITATION

Long-term contracting with Biomass owners for access

Installation of community-operated Sustainable

charcoal-making facilities” comprised of concrete kilns on

biomass site. Rural people employed.

Guaranteed purchase assurance by for-profit

company

Sales by an urban distribution network of women/men

retailers in main consumption cities (i.e. Accra, Kumasi,

Takoradi) and other channels

Our model can only roll out in countries where charcoal production is legal and where the rate of illegal sourcing does not out beat that of legal sourcing of biomass by a 1.5:1 ratio.Countries such as Ghana, Niger or Burkina Faso are good examples.

When fuelwood and charcoal production is criminalised because the land tenure, biomass resource and use rights are either undefined or defined in such a way as to outlaw widespread practice, harvesting and processing operations are driven underground. This is problematic on two counts. First, there is little incentive for sustainable forest management where the harvesting activities are deemed illegal. Second, no-one will invest in improved kilns if this exposes them.

In such events, Green Cross will first lobby to ensure that the rights and responsibilities of charcoal harvesters, processers and traders are formalised and made sustainable.

SUITABILITY OF OUR MODEL

GHANA : A PILOT COUNTRY

▪ Traditional Biomass energy accounts for over 60% of the country’s total energy consumption. Fuelwood and charcoal are to remain the main sources of cooking in Ghana till 2030.

▪ Fuelwood consumption deficit in the country. Charcoal retail prices have increased more than three-fold since 2000.

▪ A recent multi-country study of fuel switching in developing countries indicates that Ghana has the least tendency towards fuel switching even in the urban areas.

▪ Most charcoal is perceived to be sourced legally and the absence of strong political vested interests offers room for action.

▪ Export charcoal trade is regulated and local charcoal trade regulations are being drafted with the potential to provide incentives for improved kilns.

▪ Substantial presence of alternative biomass as supply sources of charcoal.

WHY GHANA?

BIOMASS SUSTAINABLY SOURCED

We have identified the top 5 woody-biomass feedstock in Ghana as being forest residues (I & II), bamboo wood, old rubber trees and old coconut trees. Neither agricultural residues nor discarded furniture/construction wood, all being less qualitative sources have been considered in our estimations.

Biomass Type Estimations/year % exploitable Amount exploitable

Forest residues (logging residues)

360,000 tonnes 95% 342,000 tonnes

Forest residues (wood processing waste)

128,250 tonnes 40% 51,300 tonnes

Bamboo 225,000 tonnes 80% 180,000 tonnes

Old Rubber Trees 180,000 tonnes 20% 30,000 tonnes

Old Coconut Trees N/A N/A N/A

* 720,000 m3 of residues. The weight of 1m3 is assumed to be 0,5 tonnes** 256,000 m3 of residues. Weight of solid wood sourced from the OECD/IEA. Percentage exploitable falls under a self-exploitation project*** The Bamboo area in Ghana is estimated to cover 15,000 hectares with an average yield of 15 tons per ha to be coppiced **** Based on AfriRen estimated annual export of rubber biomass majored with an assumption of 20% additional wood left as residues*****The Coconut area in Ghana covers 36,000 ha of which an estimated 1/6th are old unproductive trees, a resultant of the cape st. paul wilt disease and previous business unprofitability. Work is in progress to capture data

▪ 25 to 28 million cubic metres of wood are consumed as fuel annually in Ghana but with no segregation of data between wood fuel and charcoal, nor is there any data on the annual consumption of charcoal per household - making it a risky exercise to determine the annual consumption of charcoal in Ghana.

▪ The exploitable amount of the 4 types of biomass mentioned above gives a total sum of 603,300 tonnes (wet weight basis). Given an Adam Retort can handle an input of 143-166 tons of raw biomass (avg. 150 tons), this may require the installation of 4022 kilns.

▪ Our project in Ghana will look in the immediate term at rolling out a self-exploitation project and later on, implement a project aimed at charcoal producers. 4 potential project sites have been identified.

POTENTIAL OF RETORT KILNS IN GHANA

FINANCE AND IMPLEMENTATION

FUNDING

The initial investments (excluding i. upfront costs for securing biomass, ii. studies and iii. ongoing operational expenses) required for the construction of 10 Adam retorts of 3,5 m3 and in implementing the business model in Ghana stands at 44.200 Euros.

For every additional installation of 10 Adam retorts (3,5 m3) and the following ecosystem of services, a cost of 32.300 Euros may apply.

FINANCING THE GAP

Bringing Sustainability Discipline to the Charcoal Industry requires heavy investments in infrastructure and support services that renders Sustainable+ charcoal to be uncompetitive vis-à-vis traditionally produced charcoal.

This may hamper the signing in of charcoal producers/biomass owners as well as jeopardize the long term maintenance or expansion of new infrastructure.

This is how Green Cross Ghana intends to close this unprofitable gap.

Infrastructure Finance by donors

Savings derived from Business

Process Improvement

Tapping New Lucrative Markets

Carbon Financing

IMMEDIATEConduct a feasibility study for initial project in GhanaCreate an ESCO to demonstrate the business model

MID-TERMUndertake a prototyping exercise to domesticate the most suitable kiln technologyUndertake a design and prototyping exercise to create a locally-made, adapted cargo bicycleUndertake an exercise on improved load managementDrawings of village facility construction plans, with priority to tap rurally-available local materialsDevelop local dialect, audio-based materials on optimal carbonization lessonsUndertake post-charcoal quality production tests (moisture changes, mass balance, mass yields, determination of moisture, ash, volatile matter and fixed carbon of charcoal)Undertake market research studies comprised of a quantitative Habits and Attitudes survey of the population charcoal usage and in the case of charcoal made from residues, a qualitative/quantitative product testing

LONG-TERMUse the initial project site to set up a demonstration center and host representatives of candidate villagesProduce Film Documentary about the first-running operating facility, embark on an information road show at charcoal producers nationwide and sponsor representatives to receiving training at demonstration center Develop mechanisms for overcoming financial barriers to set up such facilities and help develop credit practice of an interested financial institution.

OVERVIEW OF STUDIES/INTELLECTUAL WORKTO BE UNDERTAKEN AND FUNDING SUPPORT

Feasibility Study for 1st project

• June-July‘11

Project is operational

•October ‘11-January ‘12

National Replication

2013

International Replication

2013-2014

ACTION PLAN

WE HOPE YOU WOULD JOIN US ON THIS JOURNEY

Traditional charcoal

Sustainable+ charcoal

BoP income flourishing

Cargo bikes

Efficient kilns

Low income

Inefficient kilns

Richard Seshie, Clean Tech Programme Director

richards@greencrossghana.org info@greencrossghana.org

+233(0)260759275 | +233 (0)275766349

Copyright 2011. All rights reserved.