CLEAN DEVELOPMENT MECHANISEM PROJECT DESIGN DOCUMENT FORM (CDM-PDD) Version 02 - in effect as of: 1 July 2004) CONTENTS

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1 CDM Executive Board page 1 CLEAN DEVELOPMENT MECHANISEM PROJECT DESIGN DOCUMENT FORM (CDM-PDD) Version 02 - in effect as of: 1 July 2004) CONTENTS A. General description of project activity B. Application of a baseline methodology C. Duration of the project activity / Crediting period D. Application of a monitoring methodology and plan E. Estimation of GHG emissions by sources F. Environmental impacts G. Stakeholders comments Annexes Annex 1: Contact information on participants in the project activity Annex 2: Information regarding public funding N/A Annex 3: Baseline information Annex 4: Monitoring plan

2 CDM Executive Board page 2 SECTION A. General description of project activity A.1 Title of the project activity: Lusakert Biogas Plant (LBP), methane capture and combustion from poultry manure treatment. Version: 06 Date: A.2. Description of the project activity: Purpose: The purpose of this project is to mitigate Lusakert Pedigree Poultry Plant s animal effluent related GHG-emissions, by improving the farm s AWMS (Animal Waste Management System) practices. The project consists of an advanced improvement to the common practice of poultry waste treatment, reducing a significant volume of greenhouse gases, as well as improving the quality of the reject water. The technology implementation is based on the use of anaerobic digester treatment as first step before a lagoon system. The decision to consider the implementation of a more expensive technology was influenced by the adoption of the Kyoto Protocol and the Clean Development Mechanism. The expected result from this project activity will be a significant reduction in the volume of methane (CH 4 ) emissions compared to those emissions that would otherwise occur in a scenario with traditional poultry manure treatment systems. The improved management of the poultry manure as a result of the implementation of digesters does not require changes to the barns or their physical structure, i.e.; there will be no changes in the physical housing capacity or in the management of the barns. Therefore, the volume of effluents to be treated does not increase and only treatment parameters are improved. The manure treatment system determined to be the baseline is the use of traditional open stabilisation lagoons as the treatment process of liquid waste from poultry production. Anaerobic lagoons lead to the direct release of CH 4 into the atmosphere as a result of the anaerobic digestion process that takes place inside the lagoons. The biogas recovered in the digester is immediately used in a gas engine generator to produce heat and electricity, and any excess gas is flared. The heat from the cogeneration plant is used for heating the digester, in order to optimise operation and to increase the speed of decomposition of the organic matter of effluents, thus replacing the use of fossil fuel that would otherwise contribute to emissions leakage. The "LBP methane capture and combustion from poultry manure treatment" is a project developed by Max Group, and treating manure from Lusakert Pedigree Poultry Plant. MaxGroup's goal is to offer the best product to the market, and at the same time, maintain a good relationship with the community through initiatives such as good environmental performance. The project will effectively mitigate odour from treatment of the poultry manure through the use of digesters as opposed to anaerobic lagoons. MaxGroup complies with all Armenian environmental regulations. The total estimated reduction is 63,000 tonnes per year of CO 2 equivalent.

3 CDM Executive Board page 3 A.3. Project participants: A.3. Project participants: Name of Party involved ((host) indicates a host Party) Armenia (host Contry) Denmark (Initiating Country) Private and/or public entity(ies) project participants (as applicable) Max Concern LLC, owner of Lusakert Pedigree Poultry Plant (Host and principal project proponent and Developer) Danish Environmental Protection Agency (DEPA) Kindly indicate if the Party involved wishes to be considered as project participant (Yes/No) No Yes A.4. Technical description of the project activity: A.4.1. Location of the project activity: A Host Country: A Kotayk region Host Party(ies): Republic of Armenia Region/State/Province etc.: A City/Town/Community etc: Nor Geghi village. A Detail of physical location, including information allowing the unique identification of this project activity (maximum one page): Republic of Armenia

4 CDM Executive Board page 4 Nor Greghi village Lusakert Pedigree Poultry Plant is situated approximately 25 km from Yerevan A.4.2. Category(ies) of project activity: Sectoral scope 15: Agriculture Greenhouse Gases: CH 4, N 2 O A.4.3. Technology to be employed by the project activity: The technology to be employed by the project activity introduces 2 anaerobic digesters of 2200m³ each to be used to reduce Volatile Solids in the manure stream before entering the open lagoons. The system will have a sufficient capacity to create an adequate Hydraulic Retention Time (HRT) to ensure a stable biogas process. Two existing oil tanks will be rebuilding. An existing steel tank will be used as gas storage for the produced biogas. Processed effluent from the biogas plant will be routed to the existing lagoons and the captured gas will be routed to the gas engine and/or a flare and destructed. The existing lagoons will be used for storage of the digested biomass. Technology and know-how transfer:

5 CDM Executive Board page 5 The project is based on well-known technology from Denmark. The design will be prepared based on many years of experience of establishing and managing biogas plants in Europe. More information can be found at Bigadan s website: Most of the mechanical equipment such as engines, pumping equipment and software will be imported from Denmark as standard units. The project developer in conjunction with its in-country suppliers will be responsible for the civil works and the on-site construction of digesters. The project developer is implementing a multi-faceted approach to ensure that the project, including technology transfer, proceeds smoothly. This approach includes careful specification and design of a complete technology solution, identification and qualification of appropriate technology/service providers, supervision of the complete project installation, farm staff training, ongoing monitoring and developing/implementing a complete Operations & Maintenance plan using project developer staff. The plant manager of the Lukasert biogas Plant will come to a biogas plant in Denmark owned and operated by the Supplier for a period of 4 weeks. During the stay of 4 weeks he will be trained and educated in the operation and the maintenance of a biogas plant. After this stay, the plant manager will be responsible for training of the local staff with the Danish supplier as supervisor. A.4.4. Brief explanation of how the anthropogenic emissions of anthropogenic greenhouse gas (GHGs) by sources are to be reduced by the proposed CDM project activity, including why the emission reductions would not occur in the absence of the proposed project activity, taking into account national and/or sectoral policies and circumstances: Anthropogenic GHG Reductions Anthropogenic GHGs, specifically methane and nitrous oxide, are released into the atmosphere via decomposition of animal manure and a nitrification/denitrification process associated with volatilization of nitrogen. Currently, farm produced biogas is not collected or destroyed. The proposed project activity intends to improve current AWMS practices by introducing heated anaerobic digesters to produce and collect biogas and a gas engine/generator to combust the biogas generated and at the same time produce electricity and heat. Excess gas will be flared. These changes will result in the mitigation of anthropogenic GHG emissions by minimizing the lagoon s decomposition processes. THE TOTAL ESTIMATED REDUCTION IS 63,000 TONNES PER YEAR OF CO 2 EQUIVALENT The figures listed in section A are based upon the current animal head counts. The proposed project activity will be sized to accommodate this capacity. There are no existing, pending, or planned national, state, or local regulatory requirements that govern GHG emissions from agricultural operations, specifically, poultry production activities as outlined in this PDD. The present lagoon system fulfils all national requirements and will not be improved unless the proposed project is implemented. Only a modest income derived from the operation of the lagoon selling a small amount of fertiliser. The introduction of the digester technology will bring improvements in the AWMS practice, and may pave the way for the upgrading of the manure into commercial production of fertilizer. Furthermore, the produced biogas will be utilized in the production of power and heat. The expected income from these

6 CDM Executive Board page 6 two sources alone is not sufficient to ensure project viability. The additional income from the CDMsystem will assist the economic performance of the project to a level where it becomes feasible. Most European biogas plants receive additional organic waste to improve gas-production, and this may also be relevant for this project at a future stage, but is not included in the present project. A Estimated amount of emission reductions over the chosen crediting period: The Baseline Emission has been calculated to 173,170 tonnes of CO 2eqv. /year, while the Project Emissions are calculated at 110,338 tonnes of CO 2eqv. /year. The leakage losses outside the boundary is more than offset by the co generated green electricity and is therefore included at 0, giving a yearly reduction of 62,832 tonnes of CO 2eqv. /year. The first crediting period will be 7 years giving a total of 439,824 tonnes of CO 2eqv. The first full year of crediting will be Years Annual estimation of emission reductions in tonnes of CO 2 e Year ,832 Year ,832 Year ,832 Year ,832 Year ,832 Year ,832 Year ,832 Total estimated reductions (tonnes of CO 2 e) 439,824 Number of crediting years first period 7 Annual average over the first crediting period of 62,832 estimated reductions (tonnes of CO 2e ) A.4.5. Public funding of the project activity: There is no public funding for the project. The Danish Government purchase of CERs (and related monitoring, verification and certification of the emission reductions) under the CDM project does not use or cause a diversion of Official Development Assistance (ODA) Funds. The CER purchase is separate from, and not counted towards, the Government of Denmark s financial obligations under the UNFCCC and the Kyoto Protocol. SECTION B. Application of a baseline methodology B.1. Title and reference of the approved baseline methodology applied to the project activity: This project activity utilizes the CDM approved baseline methodology AM0016/Version 03 entitled Greenhouse gas mitigation from improved Animal Waste Management Systems in confined animal feeding operations.

7 CDM Executive Board page 7 B.1.1. Justification of the choice of the methodology and why it is applicable to the project activity: This baseline methodology was chosen because it offers a GHG emissions model that can be used to characterize baseline emissions for project activity involving poultry operations. Specifically, the methodology is applicable because: 1. A minor part of the captured gas is being flared, while 2. The major part of the captured gas is being used to produce energy (e.g., electricity/thermal energy), but no emission reductions are claimed for displacing or avoiding energy from other sources. 3. The farms with livestock populations are managed under confined conditions, which operate in a competitive market. 4. The livestock population comprises poultry. 5. The AWMS system, including both the baseline scenario and the manure management systems introduced as part of the project activity, is in accordance with the regulatory framework in the host country. 6. On-farm systems introduce AWMS practice and technology changes to reduce GHG emissions. 7. The on-farm project systems reduce GHG emissions due to the AWMS improvements. 8. The on- farm project systems establish a sound framework for sustaining these improvements over time to provide economic sustainability and ensure that mitigation measures result in a continuous, verifiable, reduction of GHGs. B.2. Description of how the methodology is applied in the context of the project activity: The following steps are used to determine the baseline scenario at Lusakert Pedigree Poultry Plant: Step 1: List of Possible Baseline Scenarios The following list of scenario alternatives is derived from different AWMS presented in the methodology: Solid Storage Dry lot Liquid/Slurry Anaerobic lagoon Pit storage below animal confinements Anaerobic Digester Anaerobic covered Lagoons Deep litter Composting Aerobic treatment Step 2: Identify Plausible Scenarios

8 CDM Executive Board page 8 Listed below are the proposed project activity and other plausible scenarios for Lusakert Pedigree Poultry Plant operations and conditions. Justification to include or exclude a scenario from consideration is provided. Included scenarios: Anaerobic Lagoon: The anaerobic stabilization lagoon represents Lusakert Pedigree Poultry Plant s current practice. It is often considered to be the most economical, efficient, and reliable AWMS, and is the most common AWMS technology in the Armenia, if not both in the developed and developing world. Anaerobic covered lagoons: Anaerobic covered lagoons (often called ambient temperature digester) are lined lagoons with a cover to collect the produced biogas. It is not common practice and demands substantial more storage capacity than the existing lagoon system. Anaerobic digester: The anaerobic digester is an operation where the waste is heated under controlled conditions to process temperature and pumped to the digester for production of biogas under anaerobic conditions. This technology is not common practice and introduces new technology. This scenario has been included as the proposed project activity. Excluded scenarios: Solid Storage: Depending on storage design, this system will not be efficient enough for odour and vector control; so the exclusion of this potential baseline scenario can be justified. Dry lot: This AWMS has been excluded because it is not applicable to the conditions of Lusakert Pedigree Poultry Plant, because dry lot is a completely different manure handling system than established at Lusakert. Liquid Slurry: Most of the barriers to this technology relate to the cost required to store the volumes of liquid necessary from confined animal operations. It is not common practice and demands substantial more storage capacity than the existing lagoon system, as land application will have to comply with crop fertiliser requirements. The storage requirement will result in the scenario being rejected. Pit Storage below animal confinements: Installing pit storage would require excavation underneath each of the existing 23 chicken houses or actual replacement (which is more likely). Further, reliable, uninterrupted electric supply is essential; if power fails the chickens will be quickly killed by the accumulation of toxic fumes, including hydrogen sulphide (H2S). It s not a plausible solution to an existing operation and will not be considered. Deep litter: Poultry farmers have found the tending of the deep litter bedding so laborious and unpleasant that they have replaced it with liquid manure or solid-manure systems. It becomes difficult to optimize the composting process with large numbers of animals; this is counter to achieving economies of scale associated with large animal counts. Further, the deep litter practice is not often used in Armenia and has been excluded from consideration. Composting: Composting systems are not applicable where large volumes of water, or moisture is present. This dry aerobic system can only be applied after solid separation stages of activated sludge. Separation is an expensive operation.

9 CDM Executive Board page 9 Aerobic treatment: Aerobic treatment is typically suited for separated slurry or diluted effluents. Solids in manure increase the amount of oxygen needed and also increase the energy needed for mixing. Since complete stabilization of livestock manure by aerobic treatment is normally not economically justifiable, lower levels of aeration have been recommended for partial odour control. The biggest drawbacks to aerated lagoons are (a) the cost of energy to run the aerators; (b) bio-solids production, which is higher than in anaerobic systems; and (c) the potential for release of ammonia if the aeration level is not correct. This scenario has been excluded from the list of plausible scenarios. Therefore, the list of plausible scenarios has been reduced to three alternative scenarios of which one is the proposed project activity scenario: Plausible alternative scenarios: (i) Anaerobic open lagoons (ii) Anaerobic covered lagoons (iii) Anaerobic digester Proposed project activity scenario: Anaerobic digester Step 3: Economic Comparison Table B1 Anaerobic open Lagoons, Cost and benefits Year 1 Year 2 Year n Year n+1 Equipment costs Installation costs (15,307) (15,307) Maintenance cost (15,307) (15,307) Additional costs (consultancy, engineering) (250) (250) (250) (250) Revenue from sale of electricity or other project related products, when applicable (15,557) (15,557) Sub total (15,557) (15,557) Total NPV EURO 10% discount rate (95,591) IRR (%) Undefined Table B2 Anaerobic covered lagoons Cost and benefits Year 1 Year 2 Year n Year n+1 Equipment costs: Lined covered lagoons, Gas engine/generator, gas cleaning device (1,485,000) Installation costs - Maintenance cost (82,500) (82,500) (82,500) Additional costs (consultancy, engineering) (40,000) Revenue from sale of electricity or other project related products, when applicable - 241, , ,000 Sub total (1,525,000) 158, , ,500 Total NPV EURO 10% discount rate (556,541) IRR (%) -1%

10 CDM Executive Board page 10 Table B3 Anaerobic Digester (Project) Cost and benefits Year 1 Year 2 Year n Year n+1 Equipment costs: Digesters, agitators, Gasholder Engine/generator and flare (2,080,000) Installation costs (120,000) Maintenance cost (75,000) (75,000) (100,000) (100,000) Additional costs (consultancy, engineering) (385,000) Revenue from sale of electricity or other project related products, when applicable 133, , , ,239 Sub total (2,526,186) 222, , ,239 Total NPV EURO 10% discount rate (960,594) IRR (%) -2% In the project revenues from selling fertilizer has not been taken in to account as sale of fertilizer is very uncertain and will under the best circumstances give a revenue of maximum As shown in the above tables, none of the above scenarios yield potential revenues. Because there are no positive cash flows, the economic analysis compares Net Present Value (NPV) parameters between the different scenarios. An economic comparison suffices to identify the best AWMS scenario favouring those with lower costs. In this instance it can be seen that the anaerobic open lagoon AWMS, the prevailing practice on Lusakert Pedigree Poultry Plant, is the most economically attractive course of action. The project activity scenario has an estimated range of NPV that is far more negative than the prevailing practice. The cost of implementing an anaerobic digester, with or without electricity cogeneration, is much higher than the cost of an open lagoon system. Conclusion: The most likely plausible scenario, the anaerobic lagoon, is the baseline scenario. The proposed project activity scenario is not an economically attractive course of action and therefore it is not the baseline scenario. B.3. Description of how the anthropogenic emissions of GHG by sources are reduced below those that would have occurred in the absence of the registered CDM project activity: In the absence of the project activity, the Lusakert Pedigree Poultry Plant, would not change their AWMS practice. As noted earlier in Section A.4.4, they do not have the motivation or resources (especially financial resources) to change their AWMS: there are no laws or regulatory directives driving such change and even if a producer were so inclined, it has been demonstrated in Table B1, B2 and Table B3 that they would find the upgrade costs prohibitive. This, in itself, demonstrates additionality between the baseline scenario and project activity scenario. Additionally, Step 4 of the methodology requires a barrier assessment of the proposed project activity: Step 4: Assessment of barriers.

11 CDM Executive Board page 11 Absent CDM project activities, the proposed project activity has not been adopted on a national or worldwide scale due to the following barriers: a) Investment Barriers: This treatment approach is considered one of the most advanced AWMS systems in the world. Only a few countries have implemented such technology because of the high investment costs compared to other available systems and due to regionalized subsidies for electric generation. The Armenia the energy market does not currently offer incentives to sell biogas into the grid. The investment required to produce energy by utilizing biogas is still too high compared to electricity prices in Armenia. b) Technology barriers: Anaerobic digester systems have to be sized to handle projected animal/effluent volumes with a Hydraulic Retention Time (HRT) consistent with extracting most/all CH 4 from the manure. These systems become progressively more expensive on a per animal basis as farm animal population (i.e., farm size) is decreased. Moreover, operations and maintenance requirements involved with this technology, including a detailed monitoring program to maintain system performance levels, must also be considered. Worldwide, few anaerobic digesters have achieved long-term operations, due primarily to inappropriate operations and maintenance. The proposed AWMS represents the most advanced AWMS technology in the state. The proposed project activity AWMS mitigates GHG emissions with associated environmental cobenefits. c) Legal barriers: The implementation of this project activity by Lusakert Pedigree Poultry Plant highly exceeds current Armenian regulations for poultry waste treatment. Apart from existing legislation in Armenia for maximum permissible discharge concentration to urban sewage system, there is no legislation in place that requires specific poultry manure treatment, especially as it relates to the emission of GHG. Per local and state officials, as well as the project developer s legal consul, there were no existing laws or regulations, nor were any anticipated, that would require Lusakert Pedigree Poultry Plant to change their open lagoon AWMS practice in order to mitigate GHG emissions. Step 5: Analysis of development during the crediting period Analysis An analysis was performed to assess whether the basis in choosing the baseline scenario is expected to change during the crediting period and the results follow: a) Economic performance: Given that (1) the technology required to implement the proposed project activity is both specialized and advanced, (2) the demonstrated demand for this technology in Armenia is minimal, and (3) inflation rates in developing nations typically range from 5% to 60%, there is no reason to expect that implementation costs will drop so dramatically that the economic models summarized in tables B.1, B.2 and B.7 will become invalid. b) Legal constraints: There is no expectation that Armenian legislation will require future use of digesters due to the significant investments required. Further, there is no expectation that Armenia will pass any legislation which deals with the GHG emissions (see Step 4c above).

12 CDM Executive Board page 12 c) Common practice: While past practices cannot predict future events, it is worth noting that Lusakert Pedigree Poultry Plant have been in existence for many years, during which time they have only used open lagoons as their AWMS practice. For lager Poultry Plants in Armnia, it is common practice to use open lagoon AWMS. These anaerobic lagoon systems are economically feasible, reliable, effective, and satisfy regulatory and social requirements, and there is no reason to expect that these conditions will change in the foreseeable future. By incorporating Animal Waste Management Systems (AWMS) such as proposed in this PDD, GHG emissions will be captured and combusted. The resulting emission reduction credits would then be sold to large emitters in developed countries, helping to offset the costs of implementing the AWMS change. This mechanism was the primary factor influencing the consideration of installing heated anaerobic digesters at Lusakert Pedigree Poultry Plant. B.4. Description of how the definition of the project boundary related to the baseline methodology selected is applied to the project activity: The project boundary is defined as shown in Figure B1. The proposed project boundary considers the GHG emissions that come from AWMS practices, including the manure storage structure, and the GHG resulting from the capture and combustion of biogas. The project activity at site uses a system of three biogas digesters. Proposed AWMS practice changes include rebuilding two existing oil tanks to biogas digesters and construction of one new digester that capture the biogas, which is then combusted. The project boundary considers these practice changes. Import electricity PROJECT BOUNDARY Hen houses Combustion Gas engine generator Flare Loading Heated anaerobic digester (CH 4) (N 2O) Digester Output storage open lagoon WWTP Fertilizer Exporting electricity Figure B1. Lusakert Pedigree Poultry Plant Project Boundary The project boundary does not consider the effects of enteric emissions, nor does it include barn-related emissions, whether directly or indirectly associated with the animals, as these emissions are not affected by the proposed practice changes.

13 CDM Executive Board page 13 B.5. Details of baseline information, including the date of completion of the baseline study and the name of person (s)/entity (ies) determining the baseline: The baseline study has been compiled by GasCon and Ramboll, Denmark, and was completed 19 September Baseline details can be found in Annex 3. Baseline information about animal count is obtained from Lusakert Pedigree Poultry Plant (LPPP) about the record of animals for the year The records give the number of animals in each house, the average weight for that month and the day s resident in system. LPPP have similar records years back. Other baseline information is primarily obtained from IPCC default values. The baseline system is operated as a primary through-flow system with sedimentation and anaerobic decomposition taking place in a lagoon system. After sedimentation the remaining Volatile Solids in the overspill is treated in a standard aerobic Waste Water Treatment Plant. Sediments are emptied from the lagoons in a 6 year cycle, with the first three lagoons being emptied once a year, the next two lagoons every second year and the last lagoon every 3 year. The combination of this ensures that all lagoons are effectively empty at the same time every 6 th year and a new cycle will begin. Beyond this primary lagoon system a secondary system of lagoons consisting of 7 more lagoons. In these lagoons some of the solid matter from the primary lagoons are stored. To be conservative this secondary system has not been taken into the calculations for the baseline. (See the drawing of the primary and secondary lagoon system next page).

14 CDM Executive Board page 14 Principle drawing Lusakert Pedigree Poultry Plant C1 B5 B6 A2 A2 B3 B2 A3 A1 B4 B1

15 CDM Executive Board page 15 SECTION C. Duration of the project activity / Crediting period C.1 Duration of the project activity: Main milestones of project activity: Submission of PDD Signing of ERPA March 2006 Building of plant Spring 2006 Start up operations Autumn 2006 Crediting period start January 2007 C.1.1. Starting date of the project activity: Building of plant will commence Spring 2005 and is expected to be ready for operation Autumn 2006 C.1.2. Expected operational lifetime of the project activity: The project is expected to operate for 21 years. C.2 Choice of the crediting period and related information: The crediting period is 3 times 7 years 2014 C.2.1. Renewable crediting period 01/01/ years C C Starting date of the first crediting period: Length of the first crediting period: No C.2.2. Fixed crediting period: N/A N/A C C Starting date: Length:

16 CDM Executive Board page 16 SECTION D. Monitoring methodology and plan D.1. Name and reference of approved monitoring methodology applied to the project activity: The project activity utilizes the CDM approved monitoring methodology AM0016/Version 03 entitled Greenhouse gas mitigation from improved Animal Waste Management Systems in confined animal feeding operations. D.2. Justification of the choice of the methodology and why it is applicable to the project activity: This monitoring methodology was chosen because it offers a GHG emissions model that can be used to characterize baseline and project activity emissions. Specifically, the methodology is applicable because: 1. A minor part of the captured gas is being flared, while 2. The major part of the captured gas will be used to produce energy (e.g., electricity/thermal energy), but no reductions will be claimed for displacing or avoiding energy from other sources. 3. The farms have livestock populations managed under confined conditions and operate in a competitive market. 4. The livestock population comprises poultry, an applicable animal type according to AM The AWMS, including both the baseline scenario and the manure management systems introduced as part of the project activity, is in accordance with the regulatory framework in the country. 6. The project activity introduces an AWMS practice and technology to reduce GHG emissions at the designated farm. 7. The project activity at the designated farm results in a reduction of GHG emissions due to the AWMS improvements.

17 CDM Executive Board page 17 D Option 1: Monitoring of the emissions in the project scenario and the baseline scenario D Data to be collected in order to monitor emissions from the project activity, and how this data will be archived: ID number Data type Data variable Data unit Measured (m), calculated (c) or estimated (e) Recording Frequency Proportion of data to be monitored How will the data be archived? For how long is archived data to be kept? Comment 1. Population month Integer, Classific ation Herd/breed counts per type #, Type m Entrance - exit records of animals to the barn 100% Electronic Duration of project + 5 years Animal counts by population classification and genetics. Classification data also includes weight, and days resident in system. 2. T 3. INT 4. EPy Integer, volume N/A Electricity Temperature Operation al status o C, cm m Monthly 100% Electronic N/A m Weekly 100% Electronic Power kwh m Monthly 100% Electronic Duration of project + 5 years Duration of project + 5 years Duration of project + 5 years Monthly ambient temperature and rainfall from national or regional authority. Operational status of all project equipment is checked. This parameter helps ensure proper digester operation. Electricity used for project equipment.

18 CDM Executive Board page 18 5.HF Hours Time of running Hours m Hourly 100% Electronic Duration of project +5 years Flaring of biogas 6. HG Hours Time of running Hours m Hourly 100% Electronic Duration of project + 5 years Gas engine running on biogas 7. VS_l 8.V Integer Integer VS content % m Once, and whenever operation changes Volume m³ m/e Every time lagoons are emptied 100% Electronic 100% Electronic Duration of project + 5 years Duration of project + 5 years VS content in lagoons to be determined at the project start and when operation is changed Volume of solid removal from lagoons 9.M Integer Density Kg/m³ m Every time lagoons are emptied 100% Electronic Duration of project + 5 years Density of solid removal from lagoons is measured. 12. EPp Electricity Power kwh m Monthly 100% Electronic Duration of project + 5 years Electricity produced by cogeneration 13. BA Type of barn Classification and AWMS Type m Entrance-exit records of animals to the barn 100% electronics Duration of project + 5 years Barn and AWMS layout and configuration.

19 CDM Executive Board page CF 15. CF 16.DR 17.EFL Volumetric part Volumetric part Classification % CH 4 in gas % CO 2 in gas Reference data from standard tables Effluent disposal % m Monthly, and whenever operation changes % m Monthly, and whenever operation changes Type m Entrance-exit records of animals to the barn % VS m/c Once, and whenever operation changes 100% Electronic 100% Electronic 100% electronic 100% electronic Duration of project + 5 years Duration of project + 5 years Duration of project + 5 years Duration of project + 5 years Measured at outlet digester. Used to verify anaerobic digestion process. Measured at outlet digester. Used to verify anaerobic digestion process. Data from standard references and IPCC tables. VS loss due to effluent disposal to WWTP is calculated from VS s measurement. 18. CF Volume Biogas produced M3 m Cumulative monthly 100% electronic Duration of project + 5 years This parameter guarantees the correct performance of digester and gas recovery

20 CDM Executive Board page FE % Flare efficiency determined by operation hours (1) and the methane content in the exhaust gas (2) % measured and calculated (1)Continiously (2)Quarterly, monthly if unstable n/a electronic Duration of crediting period This parameter guarantees the correct performance of digester and gas recovery. (1) Continuous measurement of operation time of flare using a run time meter connected to a flame detector or a flame continuous temperature controller (2) Periodic measurement of methane content of flare exhaust gas D Description of formulae used to estimate project emissions (for each gas, source, formulae/algorithm, emissions units of CO 2 equ.) The methane produced by anaerobic digestion in the lagoon system is determined by the available volatile solids, and the temperature, and is calculated following the Approved Methodology AM0016. Main steps are: a) Determine Volatile solids excretion rate from AWPS Animal Waste Production System b) Determine methane production from AWMS Animal Waste Management System c) Determine project activity emissions d) Determine leakage see (D ) e) Determine total emissions (D.2.4.) Step a) Determine volatile solids excretion rate from AWPS Animal Waste Production System

21 CDM Executive Board page 21 According to AM0016 several means are presented for determining specific emission terms or coefficients depending on available data and circumstances. The emission factor determination test for AWMS applications, figure 2, page 8, is used to choose the correct calculation path: Figure 2: Emission factor determination test Emission factor determination test for AWMS applications 1. Has the project activity host Party published country-specific, emission factors that apply to the project activity? a. If yes, go to A. b. If no, proceed to question 2. No country-specific factors available. 2. Does the genetic source of the production operations livestock originate from an Annex I Party? a. If yes, go to question 3. Livestock genetics and production system are German/French/Scotch. b. If no, proceed to B. 3. Does the farm use formulated feed rations (FFR), which are optimized for the various animal(s), stage of growth, category, weight gain/productivity and/or genetics? a. If yes, go to question 4. FFR as recommended by the genetic supplier is used. b. If no, proceed to B. 4. Can the use of FFR be validated (through on-farm record keeping, feed supplier, etc.)? a. If yes, use IPCC Guidelines developed nation emission factors in conjunction with equations A3-8 through A3-11 to determine methane emissions. Farm records document use of FFR. b. If no, proceed to B. A. Use country-specific default emission factors provided by host Party or determine applicable site-specific factors. B. Use default value emission factor for developing countries (1996 Rev IPCC Guidelines,

22 CDM Executive Board page 22 Annex B of Chapter 4.2 or 2000 Rev IPCC Guidelines, Chapter 4). The test questions were replied by Lusakert Pedigree Poultry Plant as indicated resulting in the selection of approach 4a: use IPCC Guidelines developed nation emission factors in conjunction with equations A3-8 through A3-11 to determine methane emissions. The AMPS key parameter V s is determined from livestock population figures through the approach 3) from livestock population by scaling Vs to adjust for a site-specific average animal weight as shown in equation 1: where Vs = (Wsite/Wdefault) * VsIPCC (1) Wsite/Wdefault is the ratio of site-specific weight to IPCC default weight (1,1 kg for poultry) Similarly, the nitrogen excretion rate N ex is adjusted as shown in equation 4: Nex = (Wsite/Wdefault) * Nex-IPCC (4) where Wsite/Wdefault is the ratio of site-specific weight to IPCC default weight. Nex- IPCC is the default Nex published by IPCC. Step b) Determine methane production from AWMS Animal Waste Management System In the project situation V s is reduced before entering the lagoon system, and this reduction must be calculated before calculating the MCFs for the liquid anaerobic lagoon system, equation (7) and onwards. The calculation method is described in the two new equations (b1) and (b2) which closely follows the methodology, (see (8)). The Vs from step a) is fed into an anaerobic digester which produces methane according to the following expression: where Methane produced,month = Vs, available,month * B 0,project (b1) Methane produced,month Methane produced in digester in given month Vs available,,month Volatile solid fed into digester in given month

23 CDM Executive Board page 23 B 0,project Specific methane production m 3 CH 4 / kg Vs. IPCC default value. The digestion process will never utilize 100% of the digestible Vs, and the remaining Vs in the effluent will flow into the existing lagoon system (identical to the baseline system). The methane will be produced along with other normal byproducts of digestion to form a biogas at a composition depending upon the properties in the digester. The biogas will leave the digester through the gas system. The reduction of V s is calculated from the mass balance of the digester. The Vs flowing from the digester and into the lagoon system can be calculated from the mass balance of the digester as the mass of biogas leaving the digester must equal the Vs consumed in the production: Vs lagoon,,month = Vs available,,month - Methane produced,month / Methane % * Mass, biogas (b2) where Vs lagoon,,month Volatile solid flowing to lagoon system in a given month Methane % Methane content of biogas produced in digester Specific mass in kg/m 3 of biogas produced Mass, biogas By calculating the V s reduction in the digester from the V s input and the IPCC default value according to (b1) and (b2), the V s reduction can be calculated from the livestock records. The Vs from the digester now enters the lagoon system where the anaerobic conversion can be calculated following AM0016: The anaerobic conversion of available Vs to methane is a temperature dependent process, which is calculated using the van t Hoff-Arrhenius equation 7 with a base temperature of 30 C: f = exp[e*(t2-t1)/(r*t1*t2)] (7) where f Conversion efficiency of Vs to CH4 per month. E Activation energy constant (15,175 cal/mol). T2 Ambient temperature (Kelvin) for the climate. T ( ). R Ideal gas constant (1.987 cal/ K mol).

24 CDM Executive Board page 24 The factor f represents the proportion of volatile solids that are biologically available for conversion to methane based upon the temperature of the system. The assumed temperature is equal to the ambient temperature. For colder temperatures AM0016 gives a minimum temperature of 5 C for anaerobic lagoons. The MCFs for liquid anaerobic lagoon systems are calculated as follows: (1) The monthly average temperature for the area is obtained from published national weather service information. (2) Monthly temperatures are used to calculate a monthly van t Hoff Arrhenius f factor using Equation-7. A minimum temperature of 5 C is used for anaerobic lagoons. (3) Monthly production of volatile solids added to the system is calculated by summing the number of animals present, by weight grouping, by month. The result is multiplied by a Management Design Practices (MDP) factor, which reflects uncertainties arising from barn losses (AWPS). In this calculation MDP=1 is used as all effluent is pumped directly to lagoon system. (4) The amount of volatile solids available for conversion to methane is assumed to be equal to the amount of volatile solids produced during the month (from step 3). For anaerobic lagoons, the amount of volatile solids available also includes volatile solids that may remain in the system from previous months. (5) The amount of volatile solids consumed during the month is equal to the amount available for consumption multiplied by the f factor. (6) For anaerobic lagoons, the amount of volatile solids carried over from one month to the next equals to the amount available for conversion minus the amount consumed and minus the amount removed from the lagoon. In the case of the emptying of the lagoon, the accumulation of volatile solids restarts with the next inflow. For partial removal (e.g., dewatering for irrigation) the volatile solid carryover should be reduced by an amount that is proportional to the partial fraction (of the lagoon s storage capacity or HRT ) that is removed. (7) The estimated amount of methane generated during the month is equal to the monthly volatile solids consumed multiplied by the maximum methane potential (B o ). (8) It is then possible to calculate both monthly and annual MCFs as: MCF = CH4 generated/(vs generated * B 0 ) (8) where MCF Methane conversion factor.

25 CDM Executive Board page 25 CH 4generated See step 7 above. Vs generated Volatile solids entering lagoon monthly. B 0 Maximum methane producing potential of the waste. The primary lagoon system comprises a total of 6 lagoons with the first 3 running in parallel and receiving the waste directly from the digester, and the remaining 3 lagoons operated in series (existing system and mode of operation). An overspill system allows the liquid overspill to pass the lagoon system and continue onwards into a wastewater treatment plant WWTP and the secondary lagoon system, (also existing). Lagoons 1,2 and 3 are emptied every year. Lagoons 4 and 5 are emptied every second year, and lagoon 6 is emptied every third year. Lagoon sizes and emptying schedule is shown in the table below: Lagoon Solid Year m3/year level % 2,275 2,275 2,275 2,275 2,275 2, % 5,040 5,040 5,040 5,040 5,040 5, % 4,032 4,032 4,032 4,032 4,032 4, % 3,920 3,920 3, % 3,920 3,920 3, % 8,750 8,750 Total 11,347 19,187 20,097 19,187 11,347 27,937 Table B1: Sizes and emptying schedule of primary lagoons (Information given by Lusakert Pedigree Poultry Plant) Lagoons are emptied when approximately 70% full of sediment. The sediment material is long time stored in the secondary lagoon system from where a part of the material is applied to arable land as fertilizer. To be conservative this secondary lagoon system is not taken into account producing methane. The overspill water is discharged to the WWTP and the secondary lagoon system. The Ts and Vs of the effluent has been measured at 0,79% Ts, with 63,3% Vs, resulting in 0,5% Vs at the outlet from the lagoon system (inlet to the WWTP) indicating a very high rate of Vs-conversion or Vs-retention in the lagoon system. The Ts and Vs has also been measured at the inlet to the primary lagoon system giving 22,01% Ts, with 71,8% Vs, resulting in 15,8% Vs. (The measurements have been prepared by Lusakert Pedigree Poultry Plant)

26 CDM Executive Board page 26 According to AM0016 (6) page 11, partial removal of Vs such as the abovementioned must be accounted for by reducing the carryover of Vs from month to month. As the lagoon system consists of a series of lagoons which are emptied in the rotating scheme indicated above, as well as a continuous discharge of waste water to the WWTP, the loss of V s for this must be taken into account in the calculation. AM0016 does not specify the exact calculation method. The calculation applied here is specified in the equations (b3) and (b4). (b3) and (b4) results in a lower amount of V s participating in the methane generation of the lagoon system, and thus ensures that the calculation is conservative. The following calculation is applied to account for the loss of V s to the WWTP: where Vs, WWTP,month = Vs, available / Vs, inle%t * Vs, % WWTP /12 (b3) Vs, WWTP,month Volatile solids to WWTP in one month Vs, available Volatile solid total full year Vs, inlet% Volatile solid % at inlet Vs, % WWTP Volatile solid % outle to WWTP The calculation assumes an even flow to the WWTP and secondary lagoons over the year. The emptying of lagoons will also result in loss of Vs corresponding to the amount of undigested Vs among the sedimentation. The real volumes will probably vary substantially, and will be measured in the monitoring programme. For calculation purposes the following method has been used: where Vs, emptying,,month = Min(lagoon Vs, n ; Vs, available month-1 Vs, wwtp Vs, consumed month 1 + Vs, received month ) (b4) Vs, emptying,,month Vs lost by emptying of lagoon in the month lagoon Vs, n Vs content of lagoon calculated as Lagoon volume * 70%*sediment density*sediment drymatter content*sediment V s content. The factor 70% is used as lagoon will always be emptied before full. Vs, available month-1 Volatile solids in lagoon system previous month Vs, wwtp Volatile solids lost to WWTP, Vs, consumed month 1 Volatile solids consumed in lagoon system previous month Vs, received month Volatile solids received into lagoon system in month (b4) is only applicable in months where lagoons are actually emptied. Step c) Determine project activity emissions

27 CDM Executive Board page 27 Equations 9, 10, 11, 13, 14, 15 and 16 from AM0016 are used to determine project activity emissions. The AWMS methane emissions (expressed in terms of CO2 equivalents) is given as: CO 2eq methane = CH4 annual * GWPCH4/1000 (9) where CO 2eq methane Carbon dioxide equivalent emission in metric tonnes. CH 4 annual Methane produced in kg/year. GWP CH4 Global Warming Potential of methane (GWP CH4 = 21). The annual CH4 emissions are obtained by summing the monthly emissions using: CH 4 annual = mj EF month * Population month * MS%j (10) where EF month Emission Factor in kg/head/month. Population month Number of head in the defined population that month. m Months 1, 2, 3,,12. MS%j Fraction of animal manure handled in system j. The emission factor for the animal group for any given month is: where EF month = Vs *n m *B 0 * 0.67 kg/m 3 * MCF month (11) Vs Volatile solids excreted in kg/day. n m Number of days in the month. Bo Maximum methane potential m 3 /kg Vs. MCF month Methane conversion factor for the month.

28 CDM Executive Board page 28 Similarly, the nitrogen oxide emissions is calculated: The nitrous oxide emission (expressed in terms of CO 2 equivalents) is given as: and where CO 2equiv N2O = GWP N2O * N 2 O total annual /1000 (13) N 2Ototal annual = mj (N 2Od + N 2 O i ) * Population month * MS%j (14) CO 2equiv N2O Carbon dioxide equivalent emissions of nitrous oxide in metric tonnes. N 2Ototal annual Nitrous oxide in emissions annually in kg/year. GWP N2O Global Warming Potential of nitrous oxide (GWPN2O = 310). N 2 O d Direct nitrous oxide emission in kg/month/animal. N 2 O i Indirect nitrous oxide emission in kg/month/animal. Population month Number of head in the defined population that month. m Months 1, 2, 3,,12. MS%j: Fraction of animal manure handled in system j. Note: The divisor of 1000 converts from kg to metric tonnes. The equation that describes the direct nitrous oxide emissions is: N 2 O d = N ex month * EF 3 * (1- F gasm ) * C m (15) And the equation that describes indirect nitrous oxide emissions is: N 2 O i = N ex month * EF 4 * F gasm * C m (16)

29 CDM Executive Board page 29 where N ex month Average annual N excretion per head per category in kg - N/animal-month and adjusted for prior losses. EF 4 Emission factor for indirect N 2 O emissions from atmospheric deposition of N on soils and water surfaces in kg N 2 O-N per kg NH 3 -N and NO X -N emitted. F gasm Fraction of animal manure N that volatizes as NH 3 and NO X in kg NH 3 -N and NO X -N per kg of N. C m Conversion factor from [N 2 O N] to N 2 O (Cm= 44/28). Project emissions arising from methane losses from digester and gas usage system is usually estimated as a percentage of the total gas generated, as it cannot be measured or monitored. Physically leakage will arise from three areas: Digester system Gas use in gas engine Excess gas flaring The proposed gas digester system will be a sealed steel system, with no openings. Gas will leave the digester in closed piping, and the AW will be pumped into the system in closed piping. The leakage will be close 0, but in order to be conservative a value of 1% has been assigned to account for accidental losses through safety valves. It should be noted that the digester system will be comparable to a gas tight manure storage which is defined with zero loss in IPCC Good Practice Guidance and uncertainty Management in National Greenhouse Gas Inventories p Gas will leave the digester through the gas storage and be pumped to the cogeneration unit consisting of a gas engine and generator. According to studies by Dansk Gasteknisk Center (DGC Projektrapport, June 2000: Energi og miljøoversigt ) the losses of UHC from gas engines is primarily methane, and primarily related to stop and start sequences, while the losses during operation is low and normally lower than 1%, although it can be higher for specific engines. In order to be conservative a figure of 3% is used. Excess gas will be flared. A flare efficiency of 99% (as used by World bank) is assumed resulting in a leakage of 1%. Combined a leakage figure of 5 % is used. (Mathematically the weighted sum of the above would be 3,7%, but a conservative figure is used). The emission is deducted before the methane is combusted in the calculation.