1. CD4CDM Philippines Salvador da Bahia Landfillgas Project (PDD Presentation)

2. Description of the project activity Description of the project activity The Project is located in the Municipality of Salvador da Bahia, Brazil The Project involves installing equipment for methane destruction with capacity of 6,250 m 3 /hr in 2000 (expanding to 46,250 m 3 /hr in 2020). The equipment will consist of enclosed flaring with controlled burning condition.

3. Anthropogenic emission of GHG at Salvador Landfill occurs when methane produced at the landfill is not destroyed; The proposed project activity pretends to better the landfill gas capture and destruction efficiency by increasing the total amount of gas to be destroyed over the amount determined by the landfill concession contract. How the anthropogenic emissions by sources are to be reduced by the proposed CDM project activity.

5. Landfill contract barriers to investment: The Salvador municipality established the maximum price to be paid for the landfill activity in 1999 at 16.69 R$/ton (5.6 US$/ton). The winning price Vega has proposed was 15.86R$/ton (5.3 US$/ton). This includes landfill design, licensing, construction, operation and aftercare for a period of 20 years.. Why the emission reductions will not occur in the absence of the proposed activity?

6. There was no specific requirement on gas management. Any investment or operation to destroy more than the contractual amount is additional and will not have other form of remuneration other than the CERs. Why the emission reductions will not occur in the absence of the proposed activity?

7. National and sectoral policies Typical recovery of methane or biogas is minimal and there is no regulatory requirement governing its recovery. A conservative estimate of 20% recovery of methane gas for passive system has been considered as the best practice based on a waste management study. Why the emission reductions will not occur in the absence of the proposed activity?

8. Baseline: Concession agreement between VEGA and the Municipal Government of Salvador da Bahia –Capture and destruction rate of 19-24% of the methane that will be generated from the entire landfill CDM Project: Collection system and destruction capacity will be expanded and improved so that an estimated 75-80% of the methane will be destroyed Project Additionality Assessment

9. Procedure: Investment analysis –Baseline has a higher NPV Baseline has NPV > 0 –Concessionaire is paid fixed fee per ton of waste entering the landfill covering all construction and operating cost Without CERs, CDM Project has NPV < 0 –If there are no CER revenues, concessionaire will not receive additional revenue (from the present contract) to improve significantly landfill capture and destruction efficiency which will be costly Project Additionality Assessment

10. CERs Project Contract CDM Project No CERs Baseline 0 NPV

11. Gas capture and flaring is not conducted in more than 90% of Brazilian landfills. The Salvador de Bahia Landfill as designed by VEGA is probably the only municipal landfill in Brazil that respect European technical standard in relation to bottom lining system, complete drainage layer and water management. The project is The Best Practice on the matter. Discussion on the conservatism of the baseline methodology when applied to Salvador project.

12. Description of how the definition of the project boundary related to the baseline methodology is applied to the project activity: All of the generation of waste occurs locally, within the confines of the country. The Baseline Study has not found leakage since the project is a closed system. Two potential sources of emissions were identified and were assessed immaterial

13. This methodology is applicable to landfill gas capture and flaring project activities where: There exists a contractual agreement to capture a certain volume of biogas from a landfill; The concession obligation stipulate the amounts of landfill gas to be collected by the concessionaire; Given the possibility of generating electricity from captured landfill gas, there should be no electricity generation planned. Evaluation of Meth Panel on the proposed new methodology

14. The project used economic or financial analysis to establish project additionality. The approached used in estimating the baseline emission is paragraph 48 (b) of the CDM modalities and procedures. It is assumed that the contractual obligations of the concession contract define what an “economically attractive course of action” is. The methods for computing the baseline emission have been clearly defined. However, several refinements were made to arrive at a more conservative calculation. Summary

15. The boundary is the whole country and there is no leakage considering that the project is a closed system. The project emissions has been transparently and consistently estimated because the main source of data for the determination of the baseline is the contractual agreement between the project participants and the government agency. However, it has been recommended that the contract be made publicly available. Summary

16. References were given for data and information used. ] The PDD can be recreated in terms of baseline scenario, project boundary and sources of GHG emissions. However, it is difficult to compute for the annual baseline emission considering that the annual actual percentage of LFG to be captured is difficult to estimate. The concession contract provides for a 19- 24% capture of LFG. Summary

17. Marina T. Mallare Klima Climate Change Center Manila Observatory Tel. No : 426-08-37 Email : marina@observatory.ph