When approving of the first large scale biodiesel methodology (ACM0017) in September 2009, the Board sent a clear signal to the carbon market that CDM doors are open to biodiesel production from food crops that have specifically been grown for fuel[1].

Shortly after the approval of this first methodology two new small scale methodologies (NM009 and NM0051) were submitted[2]. They address the production of biodiesel from Jatropha oil produced on degraded land and biodiesel production from soybean and eventually other oilseeds, respectively. In their last meeting, the small scale working group recommended applying some of the elements (i.e. procedures and default values) of these methodologies to an existing small scale methodology AMS III.T[3], which already supports production of vegetable oil for transport applications. The Board is recommended to approve these changes during this week’s meeting.

However, CDM Watch as well as several other environmental organisations have pointed out at several occasions[4] that supporting biodiesel production as part of the CDM may lead to dangerous competition with food crop production and other types of land use. Also other detrimental consequences such as leakage, concerns about additionality, impacts on biodiversity and pollution have been addressed.

In the following are particular concerns about the recommended revision of AMS III.T:

• Procedures create perverse incentives: The procedures only support carbon credits from dedicated plantations that are established on degraded or degrading lands at the start of the project activity. However, this restriction continues to retain dangerous elements as far as peatlands are concerned because the general definition of biodiesel^[5] in AMS.III.T keeps the option open to produce ‘biodiesel’ solely from fossil peat^[6]. Although the new methodology does not explicitly forbid the cultivation of biofuels on drained peatland, a CDM status actually stimulates it.
• Default values underestimate loss of carbon soil:  In order to calculate loss of soil carbon following drainage, IPCC default values shall be applied to AMS.III T. However the real carbon losses might be severely underestimated. More comprehensive lifecycle analyses that address the lifetime of a plantation (usually ~25 years) all arrive at clear carbon debits[7].
• Methodology fails to consider significant N2O emissions: N2O emissions are inevitably associated to the production of biodiesel and need to be considered in the project boundary.
• Methodoly does not avoid uncontrolled expansion of monocultures: ASM.III.T does not provide any concrete measures to avoid an uncontrolled expansion of monocultures, which ultimately destroy ecosystems and reduce their services.

Action to be taken by the Board: Serious concerns about approved biodiesel methodology ACM0017 must be dealt with before any of the flawed elements such as the procedures and default values can be applied to other methodologies.