1. Co-Benefits of Financing Vertical Shaft Brick Kilns in Nepal Bhushan Tuladhar, Environment & Public Health Organization (ENPHO), Nepal Jeeven Acharya & Anil Raut Winrock International Nepal

2. Presentation Summary Air Quality & Brick Kilns Vertical Shaft Brick Kilns AQ Benefits of VSBK Potential CDM Benefits

3. Air Quality Issues in Nepal Indoor AQ is a major concern Biomass supplies 85% of energy needs Rate of urbanization is very high Air quality is a major problem in Kathmandu Valley

4. Air Quality & Brick Kilns 166 brick kilns in Kathmandu Valley Brick demand is 1.1 4 billion/yr & growing at 11% /yr In 1993, brick kilns contributed 27% of PM10 Till 2003, most brick kilns utilized very polluting Moving Chimney Bulls Trench Technology Since then new cleaner technologies have been introduced Brick Kilns operate in winter and dry season, when air pollution is also at its peak

5. Inventory of PM10 Sources in Kathmandu Valley (1993)

6. Transformation in Kathmandu’s Brick industry

7. Monthly Average PM10 in Kathmandu Valley

8. VSBK Technology

9. Initially developed in China First introduced in Nepal in 1991; Reintroduced 2003 Energy Efficient and very low emission Effective combustion Arrangement of bricks act as a dust strainer Energy conservation due to natural up drought Vertical kiln with stationary fire and moving brick Operates throughout the year Bull’s Trench Kilns Production capacity – about 6,500 bricks per day per shaft

11. CDM Potential in Nepal Nepal has ratified the Kyoto Protocol Limited potential for large scale projects Some potential in promoting renewable energy & energy efficiency Biogas project has been registered Projects being considered include: solar lighting, improved cook stoves, solid waste management, electric vehicles In the industrial sector, brick industry presents a major opportunity for CDM and AQ benefits

12. What Makes VSBK a CDM Project New technology with low adaptation rate 3 VSBK compared to more than 100 Fixed Chimney 40-50% energy efficient than Fixed Chimney VSBK: 0.069 kg/brick; FC: 0.14 kg/brick Brick production is energy intensive: cost of coal is about 40% of total operating cost Higher capital cost and relatively lower return on investment than fixed chimney Pay back period - FC: 1yr 2 mo.; VSBK: 2 yr. 2 mo. More technical know-how required High local environmental benefits

13. Emission from Various Types of Brick Kilns Compared to Moving Chimney BTK, VSBK Emission is less by a factor of 14 Compared to Fixed Chimney, VSBK emission is less by a factor of 3

14. Emission Reduction through VSBK Source: Institute of Environmental Management, May 2005

15. Main barriers for Promotion of VSBK Investment Barrier Initial investment: FC: US$64368; VSBK (six shafts): US$ 133,200 Technological Barrier Barrier of prevailing practice

16. VSBK CDM Project Activity 72 shafts in KTM valley in five years 10 Years crediting period, starting 2006 Baseline is fixed chimney Baseline emissions 28,241 tCO 2 e/yr Project emissions: 13,891 tCO 2 e/yr 14,351 tons of CO 2 e saved per year At $7/ton: $100,457/year Distribution of revenue: 40% to entrepreneur; 40% to VSBK program; 20% for social activities Currently, PDD is being revised (prepared by Winrock International, Nepal under ADB funded PREGA project)

17. CO 2 Reduction Emission from Fixed Chimney 8.1 To produce 8.1 million bricks/yr (actual production from FC) Coal use: 1,133 tons Total CO 2 emission: 2,792 ton (CO 2 emission/brick: 0.345 kg/brick) Emission from VSBK 8.1 To produce 8.1 million bricks/yr (to produce same as fixed chimney) Coal use: 557 tons Total CO 2 emission: 1,373 tons (CO 2 emission/brick: 0.175 kg/brick) 4.55 Emission reduction from 4-shaft VSBK (brick production 4.55 million bricks/yr) CO 2 emission reduction/brick: 0.175 kg/brick Total CO 2 emission reduction: 797 ton/year

18. Challenges Financial High project development & transaction cost for CDM projects Fixed chimney is financially very attractive Technical CDM is complicated and understanding of CDM is very limited Difficult to verify emission saving Institutional Capacity to develop and process process CDM projects Bringing together several kiln owners can be difficult

19. Conclusion VSBK can significantly reduce air pollution in Kathmandu Valley Existing investment and technological barrier has led to very low adoption rate of this clean brick kiln technology Low energy consumption per brick in VSBK provides opportunity for CDM Promotion of VSBK in Kathmandu valley can provide a good example for co-benefit of local air pollution and global GHG emission

20. Thank You