Ethanol producers interested in CDM arrangement

MANILA, Philippines - The Ethanol Producers Association of the Philippines (EPAP) and the Swine Board are eyeing to consolidate clean development mechanism (CDM) projects in the country.

In an interview with The STAR on the sidelines of the recently concluded Conference on Mitigating Greenhouse Emissions from Livestock and Agro-Industrial Waste former Agriculture Undersecretary Teresa Capellan, who is now a director of EPAP as well as the Swine Board, expressed strong support for a consolidated approach to developing,  implementing and registering CDM or carbon reduction initiative projects.

While the Philippines has already been able to successfully register six individual projects with the United Nations, a lot of potential projects remain untapped, Capellan pointed out.

CDM refers to an arrangement under the Kyoto Protocol whereby industrialized countries who have committed to reduce their greenhouse emissions, but are unable to immediately do so, instead invest in projects that reduce emissions in developing countries as an alternative compliance.

A crucial feature of an approved CDM carbon project is that the project would not occur without the additional incentive provided by emission reductions credits, a concept known as “additionality”.

The CDM allows net global greenhouse gas emissions to be reduced at a much lower global cost by financing emissions reduction projects in developing countries where costs are lower than in industrialized countries.

Since the signing of the Kyoto Protocol, trading of carbon credits or certified emission reductions (CERs) has become a lucrative and profitable market with prices per ton now at around $10.

In fact, no less than World Bank Philippines country director Bert Hoffman had informed participants of the conference that should a second agreement be signed following the current Copenhagen round, the trading of CERs could go as high as $80/ton, thereby presenting a lot of resources for countries such as the Philippines.

The Philippines, compared to China which has over 500 registered CDM projects, it was noted in the conference, has several small projects which need to be “bundled” or consolidated.

Capellan said EPAP and the Swine Board are interested in becoming a “bundler” or consolidator.

However, Capellan stressed the need first for the World Bank to help “capacitate” interested parties by providing them with financing to train more people to understand, develop, implement and disseminate more information about CDMs.