Additional reductions from palm oil projects? Not so much for the Dutch

download pdf file

Dutch CDM projects in the palm oil sector

by Jan Willem van Gelder and Petra Spaargaren, Profundo

The Netherlands, through the Dutch Ministry of Housing, Spatial Planning and the Environment (VROM), authorized the Bermuda-based company AES AgriVerde as a project proponent in 23 projects in the palm oil sector in Malaysia and Indonesia during June 2008 to April 2009. The projects are to capture methane gas emitted by open-air effluent ponds at many oil palm mills.  In a seven year project period, these projects should rack up 4.9 million CERs, translating to an earning of €36.6 million (54.5 million USD) when these CERs are sold at average market prices of €7.50 in the primary market.

However, the captured methane do not result in true reductions, as the methane is used by the mill owners as an energy source, generating heat and electricity which can be used in the mill or sold to the power grid.  A cost-benefit analysis shows that even without CERs, a methane recovery facility therefore pays itself back between 2 and 10 years, depending on the exact use of the methane (heat or electricity).  Thus, van Gelder and Spaargaren argue that the projects of AES Agriverde in the oil palm sectors of Malaysia and Indonesia approved by the Dutch government  do not meet the crucial additionality criterion of the CDM, and these projects should not be registered as CDM projects.

Author

Related posts

Carbon Market Watch welcomes EU ban on “carbon neutrality” greenwashing

Companies selling in the European Union will no longer be able to claim that their products are carbon or climate neutral, the EU has provisionally agreed. This victory against greenwashing corresponds to longstanding demands from climate campaigners to eliminate the use of offsets and send a signal to the voluntary carbon market.

Integrity Council’s rulebook sets minimum threshold instead of high bar for carbon markets

The Integrity Council for the Voluntary Carbon Market’s latest guidelines provide a set of much-needed incremental improvements but fail to raise the quality of carbon credits sufficiently and leave too much wiggle room to truly tackle the climate crisis. The ICVCM has the opportunity to clear up the loopholes and ambiguities when it issues its first assessments of carbon market programmes.

Additional reductions from palm oil projects? Not so much for the Dutch

Join our mailing list

Stay in touch and receive our monthly newsletter, campaign updates, event invites and more.