2 CDM Project Potential In the Poultry Waste Management Sector In Bangladesh FINAL REPORT December 2005 WASTE CONCERN House No. 21 ( Side B), Road-7, Block-G Banani Model Town, Dhaka-1213 Bangladesh Tel: + (880-2) 9873002, 9873067 & 9873110 Fax: (880-2) 9884774 Email: wastecon@dhaka.agni.com Web: www.wasteconcern.org 3 CONTENTS PREFACE 4 EXECUTIVE SUMMARY 5 1.0 Introduction 6 2.0 Methodology 7 3.0 Overview of Poultry Sector in Bangladesh 10 4.0 Options For Poultry Waste Management 11 5.0 Poultry Waste Management In Bangladesh 14 5.1 Disposal Methods in Bangladesh 14 5.2 Environmental Impacts of Poultry Waste Disposal 17 6.0 CDM Options Using Poultry Waste 21 6.1 Existing Practice and CDM Baseline 21 6.2 CDM Baseline Methodology 21 6.3 Potential CDM Projects 22 6.4 Availability of Poultry Waste for CDM projects 25 6.5 CDM Project Summaries and Comparison between different Options 26 6.6 Analysis of Poultry Manure Digestion 28 6.7 Analysis of Poultry Litter Combustion for Electricity Generation 29 6.8 Analysis of Composting Poultry Litter 30 7.0 Conclusions 31 8.0 Recommendations 31 9.0 References 32 4 PREFACE This report is part of the "Community Based Urban Solid Waste Management in Dhaka being conducted by Waste Concern as Sub Implementing Agency (SIA) for Component 3.3.2 of SEMP. This report has been prepared by Ijaz Hossain, Chemical Engineering Department, BUET as a Short Consultant for Waste Concern under the Sustainable Environmental Management Project (SEMP) of the UNDP. This report deals with the prospects of CDM project in the poultry waste management sector in the adjoining areas of the Dhaka city. The report is based on both primary and secondary data. However, the primary data was collected through very limited visits to poultry farms, and the purpose was only to crosscheck the secondary data. Extensive use of Internet resources was made. Given the scope of work this report should be considered to be a pre-feasibility. 5 EXECUTIVE SUMMARY This report has investigated the possibilities of doing CDM projects using poultry waste in and around Dhaka city. The report is based on a combination of secondary and primary data. The opportunities in the poultry waste sector arise out of the fact that the present disposal methods are environmentally unsound. Moreover the use of a renewable resource, which would otherwise emit methane due to anaerobic decomposition, makes this a potential area for CDM. Analysis of the present disposal methods reveal that poultry waste is left in the ground for 6 to 12 months before being used as a fertilizer. No clear-cut methodology could be found either in the IPCC guidelines or in the methodologies approved by EB, UNFCCC. The baseline for CDM projects where methane avoidance is considered was difficult to establish. It is therefore recommended that a baseline study be undertaken. Some CDM options have been analyzed using the 8 months methane avoidance baseline. However, this baseline yields very limited subsidy from CERs, and in most cases adds about 2% to the IRR. At the present time (2005), 2 million tons of poultry manure is produced in two areas adjoining the Dhaka city. If approximately half of that can be utilized then 5-10 small to medium sized CDM projects can be developed. The following CDM options have been investigated in this report. (i) COMPOSTING – Converting the manure into a fertilizer by aerobic composting (ii) DIGESTION – Production of biogas from anaerobic decomposition of poultry manure for use in gas-engine electric generators plus conversion of the digester slurry into a fertilizer (iii) INCINERATION – Incinerate poultry litter to produce steam to run steam turbine electric generator, and additionally produce potash fertilizer from the ash The most noteworthy barrier that was identified was the high price of poultry waste in certain areas of the country (Taka 1/kg). It was found that if poultry waste has to be purchased then no option even with CDM subsidy is possible. However, if an owner of a large poultry farm decides to do a CDM project by purchasing not more than 50% of the waste, then cost effective CDM projects can be developed. Based on the preliminary findings of this report, composting was judged to be the most suitable option, both from profitability and ease of management points of view. The following is a summary of the three CDM options. CDM OPTION FINANCIAL IRR COMMENTS 1. Digestion of Poultry Manure (100 – 200 t/d) 8.9% 10.2% (with CER) 1. Good management critical 2. Low electricity prices + no assurance of utility purchase 2. Incineration of Poultry Litter (200+ t/d) 10.4% 11.6% (with CER) 1. Local air pollution issues 2. Very high initial investment 3. Loss of organic fertilizer 4. Low electricity prices + no assurance of utility purchase 3. Composting of Poultry Manure (50 – 100 t/d) 13.9% 17.8% (with CER) 1. Extremely simple technology 2. Easy management 6 1.0 Introduction This report investigates the problems and prospects of doing CDM projects in the poultry waste disposal or utilization sector in Bangladesh. However, within the scope of the work this report merely lays down the boundaries of the issues involved in CDM project development using poultry waste. The report does not go into details of the technical description of any disposal/utilization options available for poultry waste. To develop CDM projects more comprehensive and detailed studies, i.e., feasibility studies, in each suggested CDM area would be required. The report has the following objectives (i) Present an overview of the poultry industry in Bangladesh (ii) Discuss the growth of the poultry industry in Bangladesh (iii) Estimate the amount of waste generated from the poultry industry (iv) List and comment on the existing disposal/utilization methods available for poultry waste in Bangladesh (v) Document the existing problems with poultry waste in Bangladesh (vi) Identify the best method for dealing with poultry waste (vii) Investigate the CDM technical options using poultry waste (viii) Present three best CDM profiles (ix) Make overall comments on the poultry waste issue in Bangladesh with respect to CDM The poultry industry has seen phenomenal growth worldwide. This fast growth has inevitably resulted in various problems especially in the environmental side because rapid transformation in environmental management is not possible. Guru (2005) has analyzed poultry waste management in the United States and has summarized the issues as follows – “The concentration of poultry production systems has increased the efficiency and overall economic return for poultry producers. This concentration, along with the advent of commercial fertilizers, has led to a change in the way chicken producers now view manure. Manure, once valued as a resource by farmers, is now often treated as a waste. Environmental concerns that arise primarily from the under-utilization or inefficient use of poultry litter contribute to these changing views. However, when properly used and utilized, manure is a resource and should be managed and regulated as such.” The lack of good data in Bangladesh makes it extremely difficult to make a good assessment of CDM potential in the poultry waste sector. Guru (2005) summarizes the data requirement for assessing poultry waste management as follows. 1. Number and location of poultry farms 2. Number of chicken raised at each farm during the year 3. Total waste produced each year 4. Analysis of poultry litter 5. Areas where poultry litter is spread, and 6. Soil analysis of areas where poultry litter is spread. The total number of poultry farms (as a rough estimate) is probably the only data that is available in Bangladesh. With respect to the location of these farms, there is some countrywide breakdown available, but it is certainly not detailed enough to be used for any reliable assessment. However, since commercial poultry meat and eggs are predominantly consumed in urban areas, the locations of these farms are within 20 to 50 kilometers from the outskirts of the large urban centers. Of the urban centers, obviously the largest share would belong to Dhaka, which is the capital city and by far the largest commercial center. It would not be an incorrect estimate to assume that at least 50% of the total farms of the country are located in areas 100 kilometers from 7 the Dhaka city. Since Dhaka is very well connected, it is very easily possible to supply Dhaka city from a distance of even 100 kilometers. Three poultry farm concentrations can be identified – Savar, Sreepur/Bhaluka and Keraniganj (Figures 1 and 2). Therefore, it may be assumed that more than 90% of the Dhaka region poultry waste (assumed to be 50% of the Bangladesh total) will be available in these three areas. These locations can be targeted for setting up poultry waste utilization units. The other data, i.e., analysis of poultry waste and soil analysis are available for very limited cases. With respect to spreading of poultry waste, the data is unclear because land where waste can be spread in Bangladesh is almost non-existent. There is no record of poultry waste being used in any large extent as cropland fertilizer. An important criterion for CDM projects is investment additionality, i.e., the project must not have favorable profitability without CDM subsidy. The investment additionality justification for poultry waste CDM projects is very well captured by the following analysis provided by Guru (2005) of the University of Arkansas – “A key component of the affected areas is the excess poultry litter generated in its watershed. Excess litter is considered a waste in these watersheds, not a resource to be used as a fertilizer. Therefore, a major solution to the problem would be to transport the litter out of sensitive watersheds and into watersheds that could beneficially utilize it. However, the economies of such an option may not (be) viable. Therefore, poultry litter marketing needs a subsidy. If the public lends support to this off-farm management option, litter management can significant(ly) minimize environmental impacts of the poultry industry.” 2.0 Methodology This report is based on both primary and secondary data. The primary data was collected in the following three ways. (i) Visit to poultry farms (ii) Discussion with poultry farm managers/owners (iii) Consultation with poultry experts and consultants The consultant undertook field visits to the two largest farms in Bangladesh, namely, BRAC poultry farm in Bhaluka and Kazi Farms in Sreepur. In addition, the consultant visited two composting facilities in Bhaluka and Sreepur. Figure 1 shows the two data collection locations in a map of Bangladesh, while Figure 2 shows the poultry farm concentrations in the adjoining areas of Dhaka city. The consultant through telephone conversations and face-to-face meetings with several poultry farm owners extracted their perspective on the growth of the poultry sector and waste management. The third source of primary information was a group of consultants preparing a report on sustainable renewable energy under an UNDP funded project entitled “Sustainable Environment Management Project” (SEMP). Since the focus of the study was renewable and sustainable energy, it looked quite closely at poultry waste. The consultant (author) benefited from in-depth discussions with the experts/consultants of the SEMP project regarding utilization of poultry waste. 8 MYMENSINGH SYLHET RAJSHAHI DHAKA KHULNA BARISAL CHITTAGONG Data collection area BAY OF BENGAL INDIA INDIA MYANMAR INDIA Figure 1 Map of Bangladesh Showing the Data Collection Locations 9 Figure 2 Dhaka City and its Adjoining Areas Showing Poultry Farm Concentrations MYMENSINGH NETROKONA TANGAIL KISHOREGANJ GAZIPUR DHAKA MANIKGANJ NARSINGDI BHALUKA NARAYANGANJ MUNSHIGANJ SREEPUR SAVAR KERANIGANJ LEGEND Poultry farm concentration XX 10 3.0 Overview of Poultry Sector in Bangladesh In the last two decades the poultry industry has grown from a handful of medium sized operations to a large industry. Poultry farms having sizes ranging from a few hundred birds to several hundred thousand birds are mushrooming throughout the country. This phenomenal growth has resulted from the decline in the supply of the other two protein sources, namely, fish and beef. The decline of the fishing industry has been the result of filling up of ponds and the general insecurity of investments in rural areas. Even though fish farms have substituted much of the lost supply, the availability of fish has declined significantly. The high price of most species of fish is the clearest evidence of that. The supply of cattle was always fairly low, and it is the import from neighboring India that has held up the supply. The most readily available and affordable protein is poultry. It is extremely difficult to get reliable estimates of poultry farms in Bangladesh. Figures as high as 50,000 have been quoted by some. The best estimates of the number of birds in commercial poultry farms for the year 2000 are due to Islam (2003). In Islam’s very detailed study on the grain requirements for poultry feed, the author has presented an estimate of poultry in Bangladesh. Table 1 shows the data for the year 2000 as provided in Islam’s paper (Islam, 2003). The projected figures calculated by Islam (2003) for the year 2005 appear too low considering the very rapid growth experienced by the sector in recent years. To arrive at more realistic 2005 figures, 6% growth rates for both layers and broilers have been used. Industry analysts are the sources for these growth rates. It is worth pointing out that the figures shown in Table 1 denote the number of birds alive at any given time, and is the figure relevant for this study because the waste on a 365 days basis is produced from this number of birds. It should not be confused with the total number of birds consumed in Bangladesh in a given year. The number of broilers that will be consumed in the year 2005 is over 100 million. This figure differs from that in Table 1 because broilers have a life cycle of only 30-40 days. The number of layers that will eventually get consumed at the end of their egg-laying cycle in 2005 is less than the 46 million shown in Table 1 because the life cycle of a layer is nearly one and a half years. For the purpose of calculating the overall potential of CDM projects an estimate of the amount of waste produced from poultry farms in Bangladesh need to be computed. Since no reliable data exist, the best estimate would be to use an average per bird dropping. Data collected from several poultry farms – and crosschecked with data available in the Internet – reveal the following daily droppings rate. Type of Chicken Dropping per day Layer 136 gm of Manure at 75% moisture Broiler 40 gm of Litter at 25% moisture The projection of poultry manure is based on annual growth rates of birds of 5, 4 and 3% for the years 2006-2010, 2011-2015 and 2016-2020 respectively. These growth rates are the best estimates available from industry analysts and poultry farm owners. The GHG emissions are calculated on the basis of 8 months methane production at the rate of 10 liters of methane per kg of manure. These projected values of manure and emissions are shown in Table 2. [...]... for the two types of waste This difference in waste management also implies that different t pes of CDM projects should be considered for the two y types of wastes In the following paragraphs the information available for poultry waste management are summarized Worldwide there are five methods of dealing with poultry waste, and these are 1 2 3 4 5 Spreading it in fields without much treatment Composting... Poultry Waste in Digesters for Producing Bio-gas (practiced only with layer manure) 20 6.0 CDM Options Using Poultry Waste 6.1 Existing Practice and CDM Baseline The most important thing with respect to developing CDM projects is the baseline If the baseline is such that not enough emission reduction is possible, then the CERs generated will add very little value to the project Therefore, CDM projects are... campaign against incineration of poultry waste Energy Justice Network contends that it is unsafe to incinerate poultry waste predominantly because of the arsenic in the fly ash Composting of poultry waste to produce a fertilizer that replaces chemical fertilizer Among the three options, composting is undoubtedly the best option for the disposal of poultry litter The following are the principal reasons... Composting predominantly because of its simplicity The requirement of close supervision in the Digestion project makes it a very unattractive one for Bangladesh 10 Incineration of poultry litter is possible, but the project would require large subsidy beyond the CDM subsidy In the US and UK, the subsidy is provided in the electricity tariff Table 7 Summary of CDM Prospects in Bangladesh Using Poultry Waste. .. in the p oultry waste sector are made (i) (ii) The prospects of CDM in the poultry waste sector should be investigated by immediately launching feasibility studies It appears that the baseline using the existing very conservative IPCC guidelines is not very attractive for CDM projects The Executive Board of the UNFCCC should be consulted on the baseline aspects of poultry waste management, and a more... role in the supply of protein at affordable prices Additionally, since properly treated poultry waste is a good fish feed, the sustainable growth of the poultry industry can have a beneficial impact on the fish industry These mitigation activities therefore possess adaptation to Climate Change co-benefits 8.0 Recommendations The following two recommendations for promoting CDM projects in the p oultry waste. .. (existing poultry manure management) is not clear-cut None of the existing IPCC guideline adequately covers this emission The baseline adapted from landfill is the most readily applicable one, and is as follows – 6 to 12 months of 8 to 12 liters of methane emission per kg of waste With this baseline it is difficult to justify doing CDM projects in the poultry waste management sector In the context of Bangladesh, ... successful CDM project using poultry waste Several references can be found in literature where the proponents have advocated a baseline where methane is emitted from uncontrolled dumping Lata (2005) and Vimal (2005) have both advocated such a baseline for poultry w aste CDM projects For the case of an Indian 22 poultry waste CDM project these authors have argued that the poultry waste is left in an open dump... in the UK Fibrowatt (EPRL, 2005) operates several power plants using poultry litter However, an environmental watchdog called Energy Justice Network (Ewall, 2004) warns of the dangers of poultry litter incineration as follows – Poultry waste is NOT a clean fuel Biomass is NOT "green" energy” 5.0 Poultry Waste Management In Bangladesh 5.1 Disposal Methods in Bangladesh Poultry waste management in Bangladesh. .. but one thing is certain, and that is, poultry will become the overwhelmingly dominant source of protein in Bangladesh Therefore, further growth is in store for the poultry sector This study focuses on the Dhaka region only Since only the urban population consumes commercial poultry and eggs, and Dhaka city is the largest urban population center (and the most affluent as well), it would not be incorrect . This report deals with the prospects of CDM project in the poultry waste management sector in the adjoining areas of the Dhaka city. The report is based. of Poultry Sector in Bangladesh 10 4.0 Options For Poultry Waste Management 11 5.0 Poultry Waste Management In Bangladesh 14 5.1 Disposal Methods in Bangladesh