CLEAN DEVELOPMENT MECHANISM. PROJECT DESIGN DOCUMENT FORM (CDMSSC-PDD) Version 03 - in effect as of: 22 December, 2006 CONTENTS

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1 CDM Executive Board page 1 CLEAN DEVELOPMENT MECHANISM PROJECT DESIGN DOCUMENT FORM (CDMSSC-PDD) Version 03 - in effect as of: 22 December, 2006 CONTENTS A. General description of the small scale project activity B. Application of a baseline and monitoring methodology C. Duration of the project activity / crediting period D. Environmental impacts E. Stakeholders comments Annexes Annex 1: Contact information on participants in the proposed small scale project activity Annex 2: Information regarding public funding Annex 3: Baseline information Annex 4: Monitoring Information

2 CDM Executive Board page 2 SECTION A. General description of small-scale project activity A.1 Title of the small-scale project activity: Qingzhen Rural Biogas Methane Project in Guizhou Province The version 5.1 PDD was completed on 23/10/2013 Revision history of this document Version Number Date Reason of revision Version /11/2009 Draft PDD Version /09/2010 Revised according to validation protocol Version /11/2012 Revised according to new methodology Version /12/2012 Revised according to the findings from the DOE Version /05/2013 Revised according to new methodology Version /10/2013 Revised according to the update of methodology A.2. Description of the small-scale project activity: Qingzhen Rural Biogas Methane Project in Guizhou Province (here after referred as the proposed project ) is located in Qingzhen County Guiyang City, and the annual average temperature is In the proposed project, 17,230 biogas digester project will be constructed in 17,230 peasant households of 11 townships. The owners of the proposed projects are 17,230 farmers who construct the biogas digesters. But because the number is large and the owners are scatter, Black Carbon Energy Technology Promotion and Application Co.,Ltd.,which is authorized by the owners will execute the corresponding power of distributing CERs revenue on behalf of all peasant households. Qingzhen 17,230 Rural Methane digesters project in Guizhou Province, China (here after referred as the proposed project ) is a rural methane recovery and combustion project. TableA1: The number of biogas digesters in each township TOWN Number Volume/m 3 Xindian Anliu Wangzhuang Weicheng Maige Baihuahu 802 8

3 CDM Executive Board page 3 Liuchang Liwo Zhanjie Hongfenghu Qinglong Total The proposed project aims to help farmers to build methane digesters where organic matter including manure and wastes are decayed anaerobically emitting to methane through the microbial action. According to the investigation report 1 of on rural biogas methane project in Qingzhen County, there are 4.2 pigs every peasant household averagely and a standard biogas digester with 8m 3 capacity is constructed. The anaerobic digester with a capacity of 8m 3 can fully handle the manure of these pigs and to collect biogas generated during the treatment process for heat supply, which will meet the thermal demands of the households themselves by using the biogas stove with rated power 2.0kW each unit. Before the project construction, all the swine manure was left and stored in the uncovered anaerobic mature management system (i.e.deep pit) for about more than three months according to the investigation report 2 in the Qingzhen county by the local energy office, a large amount of methane was emitted to the atmosphere during the manure storage with the anaerobic condition in the deep pit. Moreover, the householders using coal for cooking and heating in the absence of the project activity, that means the heat would be generated in coal stove with fossil fuel coal in the absence of the project activity. The scenario in the absence of the project activity is identical to the baseline scenario. The project will result in a reduction of greenhouse gas (GHG) emissions in these two ways: on the one hand, the recovery and utilization of biogas from digested slurry in a biogas digester will reduce CH4 emission from the slurry that would otherwise have been stored in a deep pit, it can prevent methane (CH 4 ) emissions by changing the management practice of manure in order to achieve the controlled anaerobic digestion equipped with methane recovery system. On the other hand, the biogas will be used as thermal energy to replace the fossil fuel (coal) currently used to meet the households daily energy needs for cooking and heating, the thermal generated from the biogas will replace effectively equal amount of the heat which would otherwise be generated by coal stove. The combined annual GHG emission reduction for both components of the project is estimated at 49,217 tco 2 e, as explained in Section B.6.3. The proposed project will produce positive environmental and economic benefits and contribute to the local sustainable development in the following aspects: 1. To recover methane and substitute the consumption of fossil energy; 2. To increase employment for the local people through the construction of methane pools and the follow-up service. 3. To improve the living and cooking conditions and the health of the local people. 4. To popularize practical energy technology and improve population quality. A.3. Project participants: 1 Source: Investigation report on households-basic information in Qingzhen county in Aug, Source: Investigation report on households-basic information in Qingzhen county in Aug,2006.

4 CDM Executive Board page 4 A.4. Name of Party involved (*) ((host) indicates a host Party) Private and/or public entity(ies) project participants (*)(as applicable) Kindly indicate if the Party involved wishes to be considered as project participant (Yes/No) P.R.China (host) Black Carbon Energy Technology Promotion and No Application Co., Ltd (owner) Japan Eco Asset Incorporated.(buyer) No Technical description of the small-scale project activity: A.4.1. Location of the small-scale project activity: A Host Party(ies): People s Republic of China A Region/State/Province etc.: Guizhou Province A City/Town/Community etc: Qingzhen County, Guiyang City A Detail of physical location, including information allowing the unique identification of this small-scale project activity (maximum one page): The proposed project is located in Qingzhen County, Guiyang City, Guizhou Province. The geographical coordinates of the peasant household methane digesters are east longitude and north latitude Figure A-1, A-2 and A-3 shows the location of the proposed project. Table A2. Location of project counties No. Town Longitude Latitude 1 Xindian E N 2 Anliu E N 3 Wangzhuang E N 4 Weicheng E N 5 Maige E N 6 Baihuahu E N 7 Liuchang E N 8 Liwo E N 9 Zhanjie E N 10 Hongfenghu E N 11 Qinglong E N

5 CDM Executive Board page 5 Guizhou province Figure A-1.Geographical Location of Guizhou Province in China Qingzhen County Figure A-2.Geographical Location of Qingzhen County in Guiyang City

6 CDM Executive Board page 6 Figure A-3.Geographical Location of the project activities in Qingzhen County A.4.2. Type and category(ies) and technology/measure of the small-scale project activity: Type III: Other Project Activities Category III.R: Methane recovery in agricultural activities at household/small farm level (Version 03) Type I: Renewable Energy Projects Category I.C.: Thermal energy production with or without electricity (Version 19) The core of the proposed project is the processor of decomposition of organic wastes. Under the anaerobic circumstance, the swine manure will be decomposed by the cooperation of bacteria of hydrolysis, acidification and methanogen, generating methane. Given the methane digester be constructed, the manure will be stored in deep pits and the methane from the slurry fermentation will be emitted to the atmosphere. The generated methane will be transmitted by pipe to the user and utilized as the energy resource for cooking and interior lighting. The biogas slurry and residue will be aerobically used as the organic in the dry vegetable fields. The following figure A-4 shows the process chart. The manure of pigs Methane Pools Methane Biogas stove Sludge

7 CDM Executive Board page 7 Figure A-4 Schematic diagram of methane production and utilization According to the technical requirements of building methane digester in Guiyang city rural eco-energy construction technical specification, the methane digester of the Project must be constructed in accordance with the design standard layout of Guizhou multi-function high-performance A, B-type pool. Its standard capacity is 8m 3. Figure A-5 Schematic diagram of A, B-type methane digester Technology transfer is not involved because all the technologies and equipment facilities are domestic. The proposed project aims to install 17,230 domestic biogas stoves for rural households in Qingzhen county to replace the traditional coal utilization for cooking and water heating. This will lead to the reduction of coal consumption and consequently the reduction of CO 2 emission. The rated power of each biogas stove is 2kW. Therefore, the total size of the project is 34.46MW (2*17230*10-3 ), below the 45 MW limit of the small scale CDM project. The parameters of the biogas stove engaged in the proposed project are listed below: Parameters Value Justifications Rated Power 2kW The Technical Agreement of the biogas stove 3. 3 Source: The technical agreement was conducted by National Household Metal Products Quality Supervision and Inspection Center (Chengdu), which has the qualification of testing the quality of metal products for daily use.the

8 CDM Executive Board page 8 Thermal Efficiency 55% The minimum value stipulated by National Standard of P.R.China (GB/T ) domestic biogas stove. Technical life of equipment 15 year Required by the project owner and confirmed by stove manufacturer. All the technology and equipment are domestic, thus the technology transfer is not involved. A.4.3. Estimated amount of emission reductions over the chosen crediting period: The estimated annual emission reductions of the proposed project are 49,217tCO 2 e after all the biogas digester have been put into operation. This project applies for a fixed crediting period of 10 years, but no more than their project cycle life. (Project lifetime: 15 years). It is expected that the project activity will generate emission reductions of about 492,170 tco 2 e over the 10 years crediting period from 01/01/2013 to 31/12/2022. Year Annual estimation of emission reductions in tonnes of CO 2 e 01/01/2013~31/12/ ,217 01/01/2014~31/12/ ,217 01/01/2015~31/12/ ,217 01/01/2016~31/12/ ,217 01/01/2017~31/12/ ,217 01/01/2018~31/12/ ,217 01/01/2019~31/12/ ,217 01/01/2020~31/12/ ,217 01/01/2021~31/12/ ,217 01/01/2022~31/12/ ,217 Total emission reductions (tco 2 e) 492,170 The length of the crediting period (Year) 10 biogas stove technical specifications have indicated that the model is JZZ.1-T0620/D and the rated power is 2kWth according to the Technical Agreement of the biogas stove.

9 CDM Executive Board page 9 Annual emission reductions in the crediting 49,217 i ( CO2 ) A.4.4. Public funding of the small-scale project activity: No official development assistant (ODA) from Annex I Parties is involved in the proposed project. A.4.5. Confirmation that the small-scale project activity is not a debundled component of a large scale project activity: The proposed project is not a debundled component of any other large scale project according to the Guidelines on assessment of debundling for SSC project activities (Version 03). The following table, has indicated that the project is not a debundled component of a largerproject activity. Exempling Critieria Each of the independent subsystems/ measures(e.g., Biogas digesters, residential solar energy systems, kerosene or incanescent lighting replacements) included in one or more CDM project activies is no greater than 1% of the small scale thresholds defined by the applied methodology. Justification 1) The thredshold of AMS-III.R is aggregated annual emission reductions of all systems included shall be less than or equal to 60kt CO 2 equivalent. Consequently the 1% threshold of AMS-III.R is 600t CO 2 /system/year.as discussed above, the expected emission reduction per biogas digester from AMS-III.R is t CO 2 /year, which is no greater than 600t CO 2 e, and the methane digesters are each implemented in multiple homes. 2) The threshold of AMS-I.C is the total installed/rated thermal energy generation capacity of the project equipment is equal to or less than 45MW th. As discussed above, the rated unit thermal energy generation capacity is 2.00kW th,which is far below 450MW th, and the methane digesters are each implemented in multiple homes as well The subsystems/measures are indicated in the PDDs to be each implemented at or in multiple locations(e.g., installed at or in multiple homes) 3) The project is installation of biogas digesters in 17,230 individual households.

10 CDM Executive Board page 10 SECTION B. Application of a baseline and monitoring methodology: B.1. Title and reference of the approved baseline and monitoring methodology applied to the project activity: Approved methodologies Version 19 of AMS-I.C titled Thermal energy for the user with or without electricity and Version 03 of AMS-III.R titled Methane recovery in agricultural activities at household/small farm level were applied. According to the required of AMS I.C (Version19), the Tool to calculate project or leakage CO 2. Emission from fossil fuel combustion (Version02) agreed by the CDM Executive Board is used for the calculation of project emissions. Those baseline methodologies can be downloaded from the CDM website: B.2 Justification of the choice of the project methodology: The methodology AMS-III.R comprises recovery and destruction of methane from manure and wastes from household agricultural activities that would be decayed anaerobically emitting methane to the atmosphere in the absence of the project activity. This project is belongs to the (b) of 1st applicability criteria of AMS III.R because the management practice of a biogenic waste or raw material was changed from deep pit storage to biogas digesters. The methodology AMS-I.C comprises renewable energy technologies that supply individual households with thermal energy that displaces fossil fuels. The proposed CDM project activity will change the existing swine manure treatment at the household level from deep pits to household biogas digesters. The biogas digesters provide biogas for cooking and other heating needs for households, replacing the fossil fuel coal. The project will reduce CH4 emission from the slurry stored in a deep pit, and reduce CO 2 emission from burn of coal. Therefore, this project can satisfy the applicable conditions of the methodologies AMS-III.R (version 03) and AMS-I.C (version 19) as follows in Table B1 and Table B2. Table B1: Category III.R-Version 3. Methane recovery in agricultural activities at household/small farm level is defined as follows: Applicability of AMS-III.R-Version 3 1. This project category comprises recovery and destruction of methane from manure and wastes from agricultural activities that would be decaying anaerobically emitting methane to the atmosphere in the absence of the project activity. Methane emissions are prevented by: Project activity The investigation report dated on Aug.2006 shows that before implementation of the proposed project, the swine manure will be stored in deep pits: the methane from the slurry fermentation will be emitted to the atmosphere. The proposed project is to build methane digesters

11 CDM Executive Board page 11 (a) Installing methane recovery and combustion system to an existing source of methane emissions, or: (b) Changing the management practice of a biogenic waste or raw material in order to achieve the controlled anaerobic digestion equipped with methane recovery and combustion system. 2. The category is limited to measures at individual households or small farms (e.g. installation of a domestic biogas digester). Methane recovery systems that achieve an annual emission reduction of less than or equal to 5 tonnes of CO 2 e per system are included in this category. Systems with annual emission reduction higher than 5 tonnes of CO 2 e are eligible under AMS III.D. 3. This project category is only applicable in combination with AMS-I.C, AMS-I.I and /or AMS- I.E. 4.The project activity shall satisfy the following conditions: (a) The sludge must be handled aerobically. In case of soil application of the final sludge the proper conditions and procedures that ensure that there are no methane emissions must be ensured. (b) Measures shall be used (e.g. combusted or burnt in a biogas burner for cooking needs) to ensure that all the methane collected by the recovery system is destroyed. at farmer households, in order to recycle manure and wastes from agricultural activities which are involved in anaerobic reaction.the produced methane is used for cooking and heating instead of fuel, lest GHG emits to the atmosphere. The project is planed to install 17,230 biogas digesters with reactor size of 8 m 3 under the pig pen of each rural household, so it is measured at each individual household. For each biogas digester, the methane recovery systems will achieve an annual emission reduction of tones of CO 2 e, which are less than 5 tones of CO 2 e per system This project category will be applied in combination with AMS I.C. (a)the sludge would be handled aerobically. The final sludge will be used for soil application, which is under aerobic condition, could be ensured that there are no methane emissions. (b)this proposed project is to change swine manure management from deep pit storage to anaerobically digest in biogas digesters, recover methane produced by digester and use biogas for cooking and heating water for individual household. The local technicians provide technical service to ensure all the biogas stoves are always well-maintained and in the normal operation. The basic structure of biogas digester mainly has: main body, gas storage space, hydraulic acidification pool, inlet port, outlet room, etc. The methane is basically stored in the gas storage space in the digester for a period of time then used as a kind of fuel, so as that there is no way to leak to other places. Therefore, all the methane collected in the recovery system will be destroyed under the 4 According to the criteria 2 of AMS III.R/ver.2, the baseline CH 4 emission from pig manure management system is tCO 2 e/year/household, and the CH 4 emission from physical leakage of anaerobic digester for each household is t CO 2 /year/household. The project leakage needs not to be considered since all the biogas digester are newly built and no equipment transfer is involved in the project activity, hence,the each household annual emission reduction from methane recovery systems is ( =0.2885) tco 2 e/year/household.

12 CDM Executive Board page 12 5.Aggregated annual emission reductions of all systems included shall be less than or equal to 60kt CO 2 equivalent combustion process. If the biogas stove is damaged, the methane will be stored in gas storage space of biogas digester for some time, in addition, the household will contact the technicians for any repairs and maintenance activities in the first time to avoid any unexpected leakage from biogas digesters. The annual emission reduction from methane recovery systems is 4,971tCO 2 e (0.2885*17,230=4,971) according to the AMS III.R (Version 03), which is less than the 60kt CO 2 e.in addition, the annual emission reduction from coal consumption is 44,246tCO 2 e ( *17230=44,246) from the methodology AMS I.C(version19), hence, the combined annual emission reductions for both components of all systems included is 49,217t CO 2 e,which is also less than 60kt CO 2 e. Table B2: Category I.C-Version19. Thermal energy for the user with or without electricity is defined as follows: Applicability of AMS-I.C-Version 19 1.This methodology comprises renewable energy technologies that supply users with thermal energy that displaces fossil fuel use. These units include technologies such as solar thermal water heaters and dryers, solar cookers, energy derived from renewable biomass and other technologies that provide thermal energy that displaces fossil fuel. 2. Biomass-based co-generating systems that produce heat and electricity are included in this category. For the purpose of this methodology. Cogeneration shall mean the simultaneous generation of thermal energy and electrical and/or mechanical energy in one process. Project activities that produce heat and power in separate element processes (for example, heat from a boiler and electricity from biogas engine) do not fit under the definition of cogeneration project. Project activity This category comprises renewable energy technologies that supply individual households or users with thermal energy that displaces fossil fuels. Biomass-based co-generating systems are not included in the proposed project. 5 For AMS I.C/ver.19,the baseline CO 2 emission from coal consumption is 2.568tCO 2 e/year/household,the only involved equipment involved in AMS I.C part is the biogas stove. No fossil fuel is involved, hence, no project emissions are considered under the AMS-I.C, the project leakage needs not to be considered since all the biogas digester are newly built and no equipment transfer is involved in the project activity, hence,the each household annual emission reduction from coal consumption is 2.568( =2.568) tco 2 e/year/household.

13 CDM Executive Board page 13 3.Emission reductions from a Cogeneration system Not applicable. can accrue from one of the following activities: (a) Electricity supply to a grid; (b) Electricity and/or thermal energy (steam or heat) production for on-site consumption or for consumption by other facilities; (c) Combination of (a) and (b). 4. The total installed/rated thermal energy generation capacity of the project equipment is equal to or less than 45 MW thermal. The thermal energy generated will be used by the household themselves. The biogas stove is 2KW. The total installed thermal generation capacity of this project is 34.46MW which below 45MW. 5.For co-fired systems, the total installed thermal energy generation capacity of the project equipment, when using both fossil and renewable fuel shall not exceed 45MW thermal (see paragraph 6 for the applicable limits for cogeneration project activities) 6.The following capacity limits apply for biomass cogeneration units: (a) If the project activity includes emission reductions from both the thermal and electrical energy components, the total installed energy generation capacity (thermal and electrical) of the project equipment shall not exceed 45 MW thermal. For the purpose of calculating this capacity limit the conversion factor of 1:3 shall be used for converting electrical energy to thermal energy (i.e., for renewable project activities, the maximal limit of 15 MW(e) is equivalent to 45 MW thermal output of the equipment or the plant); (b) If the emission reductions of the cogeneration project activity are solely on account of thermal energy production (i.e., no emission reductions accrue from electricity component), the total installed thermal energy production capacity of the project equipment of the cogeneration unit shall not exceed 45 MW thermal; (c) If the emission reductions of the cogeneration project activity are solely on account of electrical energy production (i.e., no emission reductions accrue from thermal energy component), the total Not applicable. Not applicable.

14 CDM Executive Board page 14 installed electrical energy generation capacity of the project equipment of the cogeneration unit shall not exceed 15 MW. 7.The capacity limits specified in the above paragraphs apply to both new facilities and retrofit projects. In the case of project activities that involve the addition of renewable energy units at an existing renewable energy facility, the total capacity of the units added by the project should comply with capacity limits in paragraphs 4 to 6 and should be physically distinct from the existing units. 8.Project activities that seek to retrofit or modify an existing facility for renewable energy generation are included in this category. 9.New Facilities (Greenfield projects) and project activities involving capacity additions compared to the baseline scenario are only eligible if they comply with the related and relevant requirements in the "General Guidelines to SSC CDM methodologies" 10.If solid biomass fuel (e.g., briquette) is used, it shall be demonstrated that it has been produced using solely renewable biomass and all project or leakage emissions associated with its production shall be taken into account in emissions reduction calculation. 11. Where the project participant is not the producer of the processed solid biomass fuel, the project participant and the producer are bound by a contract that shall enable the project participant to monitor the source of the renewable biomass to account for any emissions associated with solid biomass fuel production. Such a contract shall also ensure that there is no double-counting of emission reductions. 12.If electricity and/or steam/heat produced by the project activity is delivered to a third party i.e. another facility or facilities within the project boundary, a contract between the supplier and consumer(s) of the energy will have to be entered There is no existing renewable energy facility. The total installed thermal generation capacity of this project is 34.46MW, less than 45 MW. This project is a greenfield project. This project is a greenfield project. The project methodology AMS-III.R Methane recovery in agricultural activities at household/small farm level is only applicable in combination with AMS- I.C Thermal energy production with or without electricity. It is complied with the related and relevant requirements in the General Guidelines to SSC CDM methodologies Not applicable. The proposed project activity is implemented by a project coordinator Black Carbon Energy Technology Promotion and Application Co., Ltd who is authorized by all the rural households and acts as project participant to execute the power on behalf of the rural households. There is a contract between the Black Carbon Energy Technology Promotion and Application Co., Ltd and Qingzhen energy office authorised by rural households to execute their rights, which could ensure that no double counting of emission reductions would occur, and enable the project participant could monitor the source of the renewable biomass to account for any emissions associated with the proposed project. The heat produced by the project activity will be used by the household who installed the biogas digesters themselves. Each household has a unique serial number which will be used for monitoring

15 CDM Executive Board page 15 into that ensure there is no double-counting of emission reduction. 13. If the project activity recovers and utilizes biogas for power/heat production and applies this methodology on a stand alone basis i.e. without using a Type III component of a SSC methodology, any incremental emissions occurring due to the implementation of the project activity (e.g. physical leakage of the anaerobic digester, emissions due to inefficiency of the flaring), shall be taken into account either as project or leakage emissions. 14.Charcoal based biomass energy generation project activities are eligible to apply the methodology only if the charcoal is produced from renewable biomass sources provided: (a) Charcoal is produced in kilns equipped with methane recovery and destruction facility; or (b) If charcoal is produced in kilns not equipped with a methane recovery and destruction facility, methane emissions from the production of charcoal shall be considered. These emissions shall be calculated as per the procedures defined in the approved methodology AMS-III.K. Alternatively, conservative emission factor values from peer reviewed literature or from a registered CDM project activity can be used, provided that it can be demonstrated that the parameters from these are comparable e.g. source of biomass, characteristics of biomass such as moisture, carbon content, type of kiln, operating conditions such as ambient temperature. and avoid double counting of emission reduction. Not applicable. Not applicable. B.3. Description of the project boundary In accordance with the methodology AMS-I.C(vesion19), the spatial extent of the project boundary encompasses (c) Industrial, commercial or residential facility, or facilities, consuming energy generated by the system and the processes or equipment affected by the project activity. The emission reductions from replacing coal for cooking and heating are also need to be considered. The project boundary is the aggregation of 17,230 project boundary at the unit level. Based on the methodology AMS-Ⅲ.R, the project boundary encompasses the physical, geographical site of the methane recovery and combustion systems. The spatial scope of the project boundary is showed in. Figure B1.

16 CDM Executive Board page 16 Figure B1 Project boundary of the proposed project activity Within the project boundary, the proposed CDM project will adopt biogas digester to treat pig manure anaerobically. The produced biogas will be recycled and used for cooking meals and heating water for household members and livestock - replacing coal. Only avoided CO 2 emission from coal burning is included in calculating the project GHG emission reduction. In case of land application of the final sludge the proper condition and procedures will ensure that there are no methane emissions. Moreover, according to the design, the digesters are built under the pigsties and toilets, and as per conservative consideration, the mankind manure from toilets is not considered to calculate the emission. Emission sources and gases included in the project boundary are listed in Table B1. The local energy office takes the charge of the construction and operation as well as Database establishment of the biogas digesters, which included unique serial number complied with household s information. Each digester is given a serial unique number which is specially designed for the proposed CDM project once it has been installed. That can avoid any coincidence with other projects. The specially designed number is closely associated with householder s information including name, ID card and family address. All data are collected, modified and managed by Qingzhen Energy Office. In the proposed project, each household has a biogas digester number as their ID. It will be in charge of the monitoring and avoid double counting when calculating the emission reduction. Table B1. Emission sources and gases included within the project boundary

17 CDM Executive Board page 17 Sources Gas Included/ Excluded Justification /Explanation Baseline Project Activity Emissions from manure Emissions from burning of coal Emissions from biogas digester CH 4 Included Major source N 2 O CO 2 Excluded Excluded CO 2 Included Major source Excluded for simplification. This is conservative. CO 2 emissions from the decomposition of organic waste are not included. Base on the investigation, the coal N 2 O Excluded consumption under baseline condition is higher than that in project condition. Therefore, N 2 O emissions from burning of coal are not included. This is conservative. Base on the investigation, the coal CH 4 Excluded consumption under baseline condition is higher than that in project condition. Therefore, CH 4 emission from burning of coal in the baseline scenario is higher than that in project condition. This is conservative. Excluded for simplification. This is conservative. Leakage from biogas digester is major CH 4 Included emission source under project activity according to AMS III.R N 2 O Excluded No N 2 O formed in biogas digester CO 2 Excluded CO 2 emissions from the decomposition of organic waste are not included. B.4. Description of baseline and its development: As described in section B.3, the GHG emission under the baseline condition comprises two sources: (a) CH 4 emission from manure management; and (b) CO 2 emission from combustion of coal. According to version 19 of AMS I.C. for biogas digesters with biogas recovered and gas burners that displace traditional stove using fossil fuels (coal), the simplified baseline is the coal consumption of the technologies that would have been used in the absence of the project activity.baseline emission (BE y ) is the coal consumption that would have been used in the absence of the project activity times an emission coefficient for replaced coal. Under the baseline condition, through the survey it was found that all of swine manure was thrown directly into deep pit without being treated until the deep pit was all full, and the deep pit only had swine manure. Because 100% of swine manure was left and stored in the deep pit for about more than three months, large amount of methane was emitted to the atmosphere during the manure storage with the anaerobic condition in the deep pit. According to version 3 of AMS III.R, the baseline scenario is the situation where, in the absence of the project activity, swine manure is left to decay anaerobically within

18 CDM Executive Board page 18 the project boundary and methane is emitted to the atmosphere. Baseline emissions (BE y ) are calculated ex ante using the amount of swine manure that would decay anaerobically in the absence of the project activity, with the most recent IPCC tier 2 approach (please refer to the chapter Emissions from Livestock and Manure Management under the volume Agriculture, Forestry and other Land use of the 2006 IPCC Guidelines for National Greenhouse Gas Inventories). According to the methodology AMS-III.R version 03, the option in paragraph 9 (a) and relevant formulae shown in paragraph 10 of AMS-III.D 6 "Methane recovery in animal manure management systems" are used to calculate baseline emissions. B.5. Description of how the anthropogenic emissions of GHG by sources are reduced below those that would have occurred in the absence of the registered small-scale CDM project activity (assessment and demonstration of additionality): CDM activity had been one of the key factors and consideration of the project owner in forecasting impacting to the continuation of operation of the project with CERs revenue helping a lot to battle against barriers from organizational capacity and financial resources. Clear additionality made the project owner believe that the project falls under CDM concept and relevant board decision was made at the beginning of project decision. The CDM consideration and decision making process is presented as follows: Table B2 Project Schedule A chronicle of Events Project implementation CDM efforts Investigation report on households-basic information in Qingzhen county Approved by Qingzhen Energy Offices on biogas project as a Notice of Qingzhen county biogas digester construction programme Start construction (Project starting time) CDM project The meeting summary of each village committee about biogas project as a CDM project Date 08/ /10/ /11/ /02/ /05/2007 Consulting contract was signed about developing CDM project 05/09/2008 LoI was signed 18/03/2009 Draft PDD 11/2009 ERPA was signed with Eco 22/01/2010 Asset Incorporated 6 In the latest version of the methodology AMS.III.D (version 19.0), the two paragraphs have been updated to paragraph 15(a) and paragraph 16.

19 CDM Executive Board page 19 LOA from Annex I country 04/06/2010 was received The proposed project was put 15/06/2010- on UNFCCC s website for GSP 14/07/2010 On-site validation 19/07/ /07/2010 Revised PDD as per draft 26/09/2010 validation report The first time submit LoA 16/03/2011 application to National Development and Reform Commission 7 The second time submit LoA 10/01/2012 application to National Development and Reform Commission 8 The third time submit LoA 17/02/2012 application to National Development and Reform Commission 9 LOA from host country was 05/2012 received According to Guidelines on the Demonstration of Additionality of Small-Scale Project Activities (Version 09.0), the project activity can be regarded as automatically additional. Base on Guidelines on the Demonstration of Additionality of Small-Scale Project Activities (Version 09.0), type (c) in paragraph 2 is not required documentation of barriers which can be defined as automatically additional if each isolate unit is no larger than 5% of the small-scale CDM thresholds. There are two thresholds for the proposed project activity. The size of each unit is no larger than 5% of the small-scale CDM thresholds as follow table B3: Table B3 Demonstration of additionality of the project activity Methodology Criteria i Criteria ii: Thresholds Value Application criteria justified? Yes/No AMS-III.R. (Version 03) Implemented at unit level For AMS-III.R. Version 03/13/, its threshold is aggregated annual emission reductions of all systems included shall be less than or equal to 60kt CO2 equivalent. 5% of threshold tCO 2 /yr( The emission reductions of each household biogas digester) Yes

20 CDM Executive Board page 20 is 3000 tco2e. AMS-I.C. (Version 19) Implemented at unit level For AMS-I.C. Version 19/14/, its threshold is the total installed rated thermal energy generation capacity of the project equipment is equal to or less than 45MW thermal. 5% threshold is 2.25MW per unit. 2Kw(The rated power of each biogas stove) 1) The threshold of the project activity under methodology I.C, the rated power of each installed biogas stove is 2.00KW which is far less than 2.25 MW thermal;say 5% of 45MWth as one of the small-scale CDM thresholds. 2) The threshold of the project activity under methodology III.R, the emission reduction per system is tco 2 /yr that is far lower than 3000t CO 2 equivalent, say 5% of 60 ktco 2 equivalent as another one of the small-scale CDM thresholds. Yes B.6. Emission reductions: >> B.6.1. Explanation of methodological choices: The applicable methodologies are: Version 19 of AMS-I.C titled Thermal energy for the user with or without electricity ; Version 03 of AMS-III.R titled Methane recovery in agricultural activities at household/small farm level. The tool IPCC Guidelines for National Greenhouse Gas Inventories (Version 2006) to calculate the emission factor for a methane recovery system is also quoted in this methodology. Emission Reduction (ER y ) The emission reduction achieved by the proposed project activity will be calculated based on each biogas digester user in Year y: ER y,i =BE y,i -PE y,i -LE y,i (1) ER y,i : the emission reduction per household in Year y associated with the project. BE y,i : the baseline emission per household in Year y. PE y,i : the project emission per household in Year y associated with the project. LE y,i : the leakage in Year y associated with the project.

21 CDM Executive Board page 21 The above-mentioned parameters will be confirmed in the following steps. 1. Baseline Emission Reduction (BE y ) (1) CH 4 emission from manure management In order to obtain information on the swine population raised by households, an extensive household survey was conducted. According to the Qingzhen Countryside Coal Consumption and Biogas Survey Report, the average swine population of the households which have built biogas digesters is According to the methodology AMS-III.R version 03, the option in paragraph 9(a) and relevant formulae shown in paragraph 10 of AMS-III.D 10 Methane recovery in animal manure management system shall be also used to calculate baseline emissions, formula (2) is applied to calculate methane emission as follows: BE CH4, y = GWPCH 4 * D CH 4 *UF b * MCF j * B 0,LT * N LT, y *VS LT, y * MS % Bl, j (2) Where, BE CH4, y : Baseline emissions from manure management for each household in year y (tco 2 e) GWP CH4 : Global Warming Potential (GWP) of CH 4 (21) D CH4: density ( t/m 3 at room temperature (20 ºC) and 1 atm pressure) LT : Index for all types of livestock j : Index for animal manure management system MCF j : Annual methane conversion factor (MCF) for the baseline animal manure management system j B 0, LT: Maximum methane producing potential of the volatile solid generated for animal type LT (m 3 CH 4 /kg dm) N LT, y : Annual average number of animals of type LT in year y (numbers) VS LT, y : Volatile solids for livestock LT entering the animal manure management system in year y (on a dry matter weight basis, kg dm/animal/year) 10 In the latest version of the methodology AMS.III.D (version 19.0), the two paragraphs have been updated to paragraph 15(a) and paragraph 16.

22 CDM Executive Board page 22 MS % Bl, j Fraction of manure handled in baseline animal manure management system j UF b Model correction factor to account for model uncertainties (0.94) 11 (2) Baseline CO 2 emission from coal consumption Three steps will be applied to determine CO 2 emission in baseline: Step 1: Identification of baseline emission sources; Step 2: Identification of emission factors; Step 3: Calculation of baseline CO 2 emission from coal consumption. Step 1: Identification of baseline emission sources Baseline CO 2 emission sources have been identified as listed in Table B1, the baseline CO 2 emission sources is the coal burning used to meet the daily energy needs of a household for cooking and heating and the emissions from manure. Step 2: Identification of emission factor of coal combustion According to the baseline methodology for small-scale CDM project activity categories I.C titled Thermal energy for the user with or without electricity for renewable energy technologies that displace technologies using fossil fuels, the simplified baseline is the fuel consumption of the technologies that would have been used in the absence of the project activity times an emission coefficient for the displaced fossil fuel. In this project, national specific emission factor provided by National Development and Reform Committee (NDRC) will be adopted ( ). According to the latest Chinese government publication, EF =87,300kg CO 2 /TJ. FF, CO 2 Step 3:Calculation of baseline CO 2 emission from coal consumption According to the methodology AMS-I.C, for steam/heat produced using fossil fuels the baseline emissions are calculated as follows: BE thermal,co2,y = (EG thermal,y /η BL, thermal )* EFFF,CO2 (3) Where, BE thermal CO 2y : Baseline CO 2 emission from coal combustion for household before the installation of digester in county i, tco 2e yr-1 for each household; EG thermal,y : The net quantity of heat supplied for household by the project activity, TJ EF FF,CO2 : The CO 2 emission factor of the fossil fuel that would have been used in the baseline plant obtained from reliable local or national data if available, alternatively, IPCC default emission factors can be used (tco 2 /TJ) η BL, thermal : The efficiency of the plant using fossil fuel that would have been used in the absence of the project activity; According to basic physics principle, 11 Reference:FCCC/SBSTA/2003/10/Add.2,page 25.

23 CDM Executive Board page 23 EG thermal = kw thermal H stove DI Where; kw thermal: The manufacturers rated thermal capacity of the biogas stove for household H stove: Average Operating hours of the stoves for household DI: Thermal efficiency of the biogas stove (3) Total baseline GHG emission calculation per household: GHG emission for each household under the baseline scenario can be calculated based on equation BE y,i = BE CH4,y + BE thermal,co2,y (4) Where, BE y, i, : Baseline GHG emission for each household before the installation of digester, t CO2 e yr-1 2. Project Emission(PE y ) As per AMS-I.C, project emissions include: CO 2 emissions from on-site consumption of fossil fuels due to the project activity shall be calculated using the latest version of the Tool to calculate project or leakage CO 2 emissions from fossil fuel combustion ; CO 2 emissions from electricity consumption by the project activity using the latest version of the Tool to calculate baseline, project and/or leakage emissions from electricity consumption ; Any other significant emissions associated with project activity within the project boundary; For geothermal project activities, project participants shall account for the following emission sources, where applicable: fugitive emissions of carbon dioxide and methane due to release of non-condensable gases from produced steam; and carbon dioxide emissions resulting from combustion of fossil fuels related to the operation of the geothermal power plant. The project activity does not involve on-site consumption of fossil fuels and electricity and does not involve geothermal process. Thus the calculation of project emissions according to AMS-I.C is not applicable for the project activity and it is taken as zero. Project emissions consist of CO 2 emissions from physical leakages of methane from anaerobic digester as per AMS-III.R.. (1) CH 4 emission from physical leakages of anaerobic digester According to AMS III.R (version 03), project emissions due to physical leakage of biogas digester is estimated using option a(a:10% of the maximum methane producing potential of the manure fed into the management systems implemented by the project activity 8 indicated in paragraph 19(a) of AMS-III.D (version 19): Methane recovery in animal manure management systems". According to AMS-III.D, the

24 CDM Executive Board page 24 leakage from anaerobic digester is calculated as follows: PE PL, y = 0.10 *GWP CH 4 * D CH 4 * B 0,LT * N LT, y *VS LT, y * MS% i, y i,lt (5) Where: PE PL,y :Project emissions from physical leakages in the biogas digesters for each household in Year y, (t CO 2e ). GWP CH4 :Global Warming Potential of CH 4. D CH4 :Conversion factor of m3 CH 4 to kilogram CH 4 B o, LT :Maximum methane producing potential of the manure type treated in the biogas N LT, y : Annual average number of animals of type LT in year y (numbers) VS LT, y :Volatile solids for livestock LT entering the animal manure management system in year y (on a dry matter weight basis, kg dm/animal/year) MS % Bl,j Fraction of manure handled in baseline animal manure management system j IPCC Guidelines for National Greenhouse Gas Inventories Volume 4 Chapter 10 guidelines specify a default value of 10% of the maximum methane producing potential (Bo) for the physical leakages from anaerobic digesters (2) Project GHG emission calculation for each household GHG emission for each household under the project activity can be calculated based on equation (6) Where, PE y, i= PE PL,y (6) PE y, : Annual project GHG emission of each household after the installation of digester, t CO2 e yr-1 3. Leakage For methodology AMS I.C (Version 19) titled Thermal energy for the user with or without electricity, if the energy generating equipment is transferred from another activity or if the existing equipment is transferred to another activity, leakage is to be considered. For methodology AMS III.R (version 3) titled Methane recovery in agricultural activities at household/small farm level, if the energy methane recover

25 CDM Executive Board page 25 and combustion equipment is transferred from another activity or if the existing equipment is transferred to another activity, leakage is to be considered. For this project, it is not the case. Therefore, leakage will not be considered. 4. GHG emission reduction per household The emission reduction per household within the project activity during a given year y is the amount of the household GHG baseline emissions minus the household GHG emissions with biogas digester installed under the project, as follows: (1) CHG emission reduction per household(er y,i ) The emission reduction per household within the project activity during a given year y can be calculated based on equation: ER y, i BEy, i PEy, i LEy (1) (1) Calculation of total project GHG emission reductions (ER y ) ER N ER, (7) y i d y i ER y :Total GHG emission reductions of this project activity,tco 2 e/yr; N d : The annual number of biogas systems including the digesters and biogas stoves engaged in the proposed project. B.6.2. Data and parameters that are available at validation: GWP CH4 Data / Parameter: Data unit: dimensionless Description: Global warming potential of CH 4 Source of data used: Kyoto protocol Annex Value applied: 21 Justification of the choice Data set by Kyoto protocol of data or description of measurement methods and procedures actually applied : Any comment: Data is reliable. Data / Parameter: Data unit: B o,lt m 3 CH 4 kg -1 of VS excreted

26 CDM Executive Board page 26 Description: Source of data used: Maximum methane producing capacity for manure produced by livestock category T(here T is referred to pig, the following are similar) 2006 IPCC Guidelines for National Greenhouse Gas Inventories Vol.4, Ch.10. Table 10A-7 Value applied: 0.29 Justification of the choice of data or description of measurement methods and procedures actually applied : Any comment: Data is reliable. VS LT, y Data / Parameter: Data unit: kg dry matter animal -1 day -1 Description: Volatile solids for livestock LT entering the animal manure management system in year y Source of data used: 2006 IPCC Guidelines for National Greenhouse Gas Inventories Vol.4, Ch.10. Table 10A-7 Value applied: 0.3 Justification of the There is no site-specific value in the project site. the average weight of swine is choice of data or more than IPCC default. Therefore, in this case, the IPCC default value could description of be used. It s conservative. measurement methods and procedures actually applied : Any comment: Data is reliable. D CH4 Data / Parameter: Data unit: t/m 3 Description: Density of methane Source of data used: Methodology AMS-III.D Value applied: Justification of the choice t/m 3 at room temperature 20 and 1 atm pressure of data or description of measurement methods and procedures actually applied : Any comment: - Data / Parameter: UF b