How to activate carbon assets with 4 billion tons of agricultural waste annually? CCER methodology provides the 'golden key'

China generates approximately 4 billion tons of Agricultural Waste annually, accounting for a significant proportion of the greenhouse gas emissions from approximately 1 billion tons of agricultural activities in the country. Faced with the increasing difficulty of on-site consumption and the insufficient economic viability of traditional treatment methods, finding solutions is not only an urgent need for agricultural non-point source pollution control, but also a key link in promoting the green and low-carbon transformation of agriculture and implementing the "dual carbon" goals.
Recently, the Ministry of Ecology and Environment and the Ministry of Agriculture and Rural Affairs jointly issued the "Methodology for Voluntary Greenhouse Gas Emission Reduction Projects - Agricultural Waste Centralized Treatment Project" (hereinafter referred to as the "Agricultural Waste Centralized Treatment Methodology"), promoting the transformation of agricultural waste from "treatment" to "use", achieving large-scale, specialized, and high-value centralized treatment, and injecting new impetus into the development of this field.
This article interviewed Dong Hongmin, a researcher at the Institute of Agricultural Environment and Sustainable Development of the Chinese Academy of Agricultural Sciences and Vice Chairman of the Technical Guidance Committee for Resource Utilization of Livestock and Poultry Waste of the Ministry of Agriculture and Rural Affairs, to deeply interpret how this methodology can "empower" green agriculture with greenhouse gas emission reduction benefits.
Centralized processing can overcome problems such as single raw materials, small project scale, and unstable operation in a single breeding farm
This methodology supports the centralized treatment of agricultural waste such as livestock and poultry manure, straw, and tail vegetables. What is the current production of such agricultural waste in China? What are the emission reduction implications of including it in the methodology coverage of voluntary greenhouse gas reduction projects? What are the advantages of centralized processing mode compared to decentralized processing?
Dong Hongmin: China is a major agricultural production country, which generates a huge amount of agricultural waste, with an annual output of about 4 billion tons, including about 3.05 billion tons of livestock and poultry manure and about 870 million tons of straw. These agricultural wastes are not only the focus of agricultural environmental governance, but also an important source of greenhouse gas emissions.
According to the First Biennial Transparency Report on Climate Change of the People's Republic of China, the total greenhouse gas emissions from agricultural activities in China in 2021 were 931 million tons of carbon dioxide equivalent (CO ₂ e). Among them, the total greenhouse gas emissions from livestock and poultry manure management are 165 million tons of carbon dioxide equivalent (CO ₂ e), accounting for 33.9% and 17.8% of the emissions from animal husbandry and agriculture, respectively; According to the IPCC guidelines, straw emissions are only included in the emissions from field burning, which is approximately 0.055 billion tons of carbon dioxide equivalent (CO ₂ e), accounting for 0.6% of agricultural emissions.
This methodology supports the treatment of agricultural waste such as livestock and poultry manure, straw, and tail vegetables through centralized treatment projects with anaerobic reactors as the core. While avoiding methane emissions from liquid and solid manure in storage environments, the collected biogas can be used for power generation, direct supply to users, or production of biogas, thereby reducing carbon dioxide emissions by replacing fossil fuels.
With the steady improvement of China's production capacity in grain, livestock and poultry, fruits and vegetables, and the rapid development of large-scale planting and breeding models, the difficulty of on-site utilization and nearby disposal of agricultural waste continues to increase.
The centralized treatment project of agricultural waste, as an innovative organization and operation of agricultural waste resource utilization, relies on specialized agricultural waste treatment and utilization enterprises to collect manure and straw from surrounding farms, invest in the construction of large-scale biogas projects for anaerobic fermentation, biogas power generation or purification of natural gas, and utilization of biogas residue and liquid in farmland. It can overcome the problems of single raw materials, small project scale, unprofessional management, and unstable operation of individual livestock and poultry farms.
However, due to the high moisture content of livestock and poultry manure, the comprehensive utilization costs of collection, transportation, and treatment are relatively high, and the prices of agricultural products are limited, resulting in a lack of market competitiveness for the project. The projects involved in this methodology can generate multiple social, environmental, and economic benefits. The benefits of greenhouse gas emissions reduction can effectively alleviate the economic pressure of ongoing project operations and promote more market entities to implement centralized agricultural waste treatment projects.
What types of projects are eligible to apply as voluntary greenhouse gas reduction projects based on this methodology? What situations are excluded? How do you evaluate the overall emission reduction potential of such projects?
Dong Hongmin: Projects applying this methodology must meet the following conditions: the treated agricultural waste should be one or more mixtures of livestock and poultry manure, crop straw, tail vegetables, etc; The project owner of the agricultural waste centralized treatment project should sign a cooperation agreement with livestock and poultry breeding and planting households, clarify their respective responsibilities and obligations, and ensure that emission reduction projects and emissions reduction are not declared repeatedly; The electricity, biogas, and biogas supplied outside the project should be measured and settled independently; The centralized treatment project should include biogas engineering and meet the requirements of national laws, regulations, and industry standards; Biogas must be recycled, and the recycling methods include at least one of power generation, biogas supply, and production of biogas; After storage or treatment of biogas residue and slurry, they should be used for agricultural purposes; The project monitoring data should be connected to the national carbon market management platform, and emission reductions should be generated after the project related monitoring data is connected to the network (after completing the network trial operation).
It should be noted that this method is not applicable to the biogas projects built in the supporting facilities of large-scale pig farms within the site area. This is mainly due to the fact that the main purpose of such projects is to treat the manure generated in this site, and considering epidemic prevention requirements, straw is generally not added.
In terms of emission reduction potential, it is estimated that projects that currently meet methodological requirements can generate an annual emission reduction of approximately 3-5 million tons of CO ₂ e.
What are the characteristics and innovations of Q agricultural waste centralized treatment methodology?
Dong Hongmin: This methodology has innovated in terms of applicability, scientificity, and operability based on the reference to internationally recognized methodologies such as the Clean Development Mechanism.
One is to combine methodology with domestic and foreign research results, and solve the international problem of greenhouse gas emission reduction accounting for various mixed waste through innovative methods and key parameters for calculating the methane potential of mixed waste.
Secondly, the methodology for calculating emission reductions takes into account key factors that affect greenhouse gas emissions, such as manure management methods, climate conditions, different characteristics of livestock and poultry manure, and the addition of crop straw.
Thirdly, this methodology takes into account both livestock manure and crop straw. Large, medium, and small enterprises, as well as farmers, can participate in emission reduction projects and obtain benefits, which is in line with the policy orientation and production reality of agricultural waste in China. It can effectively help improve the agricultural and rural environment and contribute to the construction of beautiful countryside.
Covering three types of beneficiary groups, investment returns are influenced by multiple factors
What considerations are used to exempt projects like Q from additional justification? What beneficiary groups can this methodology cover?
Dong Hongmin: Although such projects have significant environmental and social benefits, the implementation process faces multiple obstacles. The construction of facilities for centralized treatment of agricultural waste requires high investment and low return on investment. Considering that the economic viability of the project is influenced by factors such as the type, source, transportation mode and distance of agricultural waste raw materials, project scale, climate conditions, biogas utilization methods, and product prices, the methodology development team for centralized treatment of agricultural waste conducted research and calculations on different regions, biogas utilization methods, and types of centralized treatment engineering projects. The calculation contents include total investment, operation and maintenance costs, power generation and electricity prices, biogas and natural gas external supply and prices, biogas residue and liquid products and prices, etc. The results show that the internal rate of return of various project investments is lower than the industry benchmark rate of return. Without additional incentive measures, such projects do not have economic viability or have poor economic viability.
The beneficiaries of this methodology are divided into three categories: the first category is the owners of agricultural waste centralized treatment projects, who directly benefit from the development of voluntary emission reduction projects. The second category includes farmers and small and medium-sized growers who entrust centralized treatment projects to handle livestock and poultry manure, crop straw, and tail vegetables. These farmers and breeders can obtain certain emission reduction income by signing agreements with project owners. Even without emission reduction income, they can benefit from reducing the cost of livestock and poultry manure and straw treatment. The third type is socialized service organizations for agricultural waste transportation and fertilization. With the development of voluntary emission reduction projects, the continuous operation and economic benefits of centralized treatment projects will be improved. These service-oriented organizations and individuals can gain benefits by participating in processes such as manure transportation and biogas residue and slurry fertilization.
What is the economic attractiveness of the emission reduction benefits of projects like Q? What are the main cost components of project development? Can you provide examples to illustrate the impact of carbon benefits on project investment returns?
Dong Hongmin: There are many factors involved in the project's emission reduction benefits. In addition to the project's emission reduction, it is also related to the construction and operation costs of centralized treatment projects, the installation quantity and accuracy requirements of monitoring instruments, project approval and verification costs, etc. The emission reduction benefits of project development are certainly attractive, but the attractiveness of different projects varies.
Taking a centralized treatment project in Shandong Province as an example, it processes 1800 tons of agricultural waste such as manure and straw mats every day, and produces biogas for power generation, production of biogas, etc. The project construction investment is 87 million yuan, the annual operating cost is 4.8 million yuan, and the operating income is 8 million yuan. In the absence of voluntary emission reduction projects, the expected payback period for the project is 10.5 years. If the project is developed as a voluntary emission reduction project, it is necessary to increase the cost of monitoring instruments and data networking systems for biogas flow rate, biogas concentration, output electricity, and bio natural gas. In addition, project approval and annual verification costs, network operation costs, and annual emission reduction of 60000 to 80000 tons are also required. The expected payback period of the project is shortened to 8.5 years, which can significantly improve the return on investment.
But if the project scale is small, the benefits of greenhouse gas emissions reduction will decrease. In the case where the reduction in monitoring instruments and verification costs is not significant, the attractiveness of voluntary emission reduction projects will weaken.
Conservatively calculated, every carbon credit can withstand the test
How to calculate the emission reduction of Q project? How to ensure the quality of monitoring data?
Dong Hongmin: The project's emission reduction mainly comes from the use of anaerobic reactors and technologies such as sludge and liquid treatment for waste disposal. On the one hand, it can avoid greenhouse gas emissions such as methane generated during the storage and fermentation process of organic matter. On the other hand, it can reduce carbon dioxide emissions by recycling methane for power generation and the production of bio natural gas as a substitute for fossil fuels.
In this methodology, the project emission reduction is obtained by subtracting the project emissions from the project baseline emissions. Among them, the baseline emissions of the project include the baseline methane and nitrous oxide emissions generated from agricultural waste treatment under the baseline scenario, as well as the baseline emissions of fossil fuels replaced by external power supply, output biogas, and biogas. The project emissions include methane emissions from anaerobic digestion reactors and pipelines, methane and nitrous oxide emissions from sludge and slurry treatment systems, methane emissions from flare combustion of biogas, carbon dioxide emissions from purchased electricity consumption during project operation and maintenance, and carbon dioxide emissions from agricultural waste transportation.
For the key parameters that determine the emission reduction of the project (the total amount of volatile solids in livestock and poultry manure entering the waste treatment project), a "forward calculation+reverse calculation" method will be adopted to obtain the baseline emission. Taking livestock and poultry manure as an example, it is calculated based on the monthly average inventory of different types of livestock and poultry entering the centralized waste treatment system; Reverse calculation refers to the use of networked monitoring of biogas production to calculate the baseline emissions by taking the smaller of the two values. It is better to be conservative and not overcharge, ensuring that every carbon credit is of high quality and can withstand the test.
This methodology specifies that project monitoring data should be connected to the national carbon market management platform. This means that the project will monitor important data related to emission reduction data quality through the application of information and intelligent technology, connect online and actively disclose information to better accept social supervision. Especially during the implementation phase, parameters such as biogas production, biogas concentration, external power supply, biogas, and bio natural gas that need to be monitored will be continuously monitored through IoT technology, with hourly records and real-time access to the project monitoring data storage system. This enhances the operability of project monitoring data supervision and can avoid data quality issues.
In addition, to ensure data quality, this methodology also sets clear requirements for both project owners and third-party review and verification agencies. The project owner should implement requirements related to data management system construction, calibration and verification of measuring devices, data management and archiving, data accuracy control and correction, and monitoring data networking; Third party review and verification agencies should refer to the methodology to conduct project review and emission reduction verification based on applicable conditions, project boundaries, project monitoring plans, and key verification points for various parameters. They should also implement the requirement of viewing project monitoring data through the national carbon market management platform, cross checking emission reduction accounting report data parameters, and ensuring that values are taken according to conservative principles.
What may be the difficulties during the project development process? What issues should we pay special attention to?
Dong Hongmin: The waste materials processed in the project have a complex composition, with multiple formulas and monitoring parameters in the methodology itself. The agricultural waste processed by the centralized treatment project may involve different livestock and poultry manure such as pigs, chickens, cows, and sheep, as well as different straw materials such as wheat, corn, and rice straw. The methane production potential, methane conversion rate, and other parameters vary, resulting in 27 formulas involved in this methodology. During the implementation process, 23 parameters need to be monitored. At the same time, livestock and poultry farmers need to record their inventory on a daily basis and cross check their inventory records with sales vouchers. In the event of strict epidemic control or other periods, third-party verification units need to verify each household individually, and should communicate in advance or assist with intelligent assistance such as drones to complete the verification.
In addition, this methodology involves multiple stakeholders, and responsibilities and obligations need to be clearly defined through a contract. The project development process involves waste centralized treatment centers, livestock and poultry breeding and crop planting households, waste collection and transportation enterprises or individuals, and external users of electricity, biogas, and biogas. The methodology clearly requires that the centralized processing center should sign contracts with livestock and poultry breeding and crop planting households, clarify responsibilities and obligations, and avoid duplicate declaration of emission reduction projects and emissions reduction; The electricity, biogas, and biogas supplied outside the project should be measured and settled independently; There may be some difficulties in coordinating between project owners and different stakeholders.