CLEAN DEVELOPMENT MECHANISM PROGRAM ACTIVITY DESIGN DOCUMENT FORM (CDM-CPA-DD) Version 01 CONTENTS

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1 CDM Executive Board page 1 CLEAN DEVELOPMENT MECHANISM PROGRAM ACTIVITY DESIGN DOCUMENT FORM (CDM-CPA-DD) Version 01 CONTENTS A. General description of CDM programme activit (CPA) B. Eligibilit of CPA Estimation of Emission Reductions C. Environmental Analsis D. Stakeholder comments Annexes Annex 1: Contact information on entit/individual responsible for the CPA Annex 2: Information regarding public funding Annex 3: Baseline information Annex 4: Monitoring plan NOTE: (i) (ii) This form is for the submission of CPAs that appl a large scale methodolog using provisions of the proposed PoA. The coordinating/managing entit shall prepare a CDM Programme Activit Design Document (CDM-CPA-DD) 1,2 that is specified to the proposed PoA b using the provisions stated in the PoA DD. At the time of requesting registration the PoA DD must be accompanied b a CDM-CPA-DD form that has been specified for the proposed PoA, as well as b one completed CDM-CPA-DD (using a real case). After the first CPA, ever CPA that is added over time to the PoA must submit a completed CDM-CPA-DD. 1 The latest version of the template form CDM-CPA-DD is available on the UNFCCC CDM web site in the reference/document section. 2 At the time of requesting validation/registration, the coordinating managing entit is required to submit a completed CDM-POA-DD, the PoA specific CDM-CPA-DD, as well as one of such CDM-CPA-DD completed (using a real case).

2 CDM Executive Board page 2 SECTION A. General description of CDM programme activit (CPA) A.1. Title of the CPA: Makahado Coal Mine Methane Gas Flaring Project - Version: Date: 24/04/2012 A.2. Description of the CPA: Makhado Coal Mine Methane CPA (hereafter as the CPA) is implemented b Tshipise Energ (PTY) Limited at the Makhado Coal Mine in Limpopo Province Republic of South Africa. Makhado Coal Mine has an annual planned production capacit of 10 Mt. The mine is a combined opencast/underground structure. In the underground Makhado Coal Mine ventilation is not enough to dilute the methane concentration of the airflow in the underground work area to levels below 0.75% as stipulated in the Safet Regulations. Therefore, coal mine methane is drained from the underground emploing gas drainage sstem. In the opencast operations methane escapes as the overburden is removed. Makhado Coal Mine Methane CPA (the CPA) will involve the following options: (i) Capture and flaring of the methane (ii) Continued venting of ventilation air methane (iii) Combination of (i)-(ii) Methane captured as VAM will remain vented to the atmosphere (BAU) but CMM and CBM in either underground or opencast or a combination thereof shall be captured and destroed b flaring. There are no legal requirements for capture of methane in the mine. Methane is released in the atmosphere in the business as usual (BAU) activit, which is also the identified baseline scenario. This CPA is specificall for the capturing methane to prove a resource so further CPA can then utilize the methane to generate electricit, motive power or be piped off site for other use. Once the methane is captured it must be either diluted or flared for safet purposes. The CPA will reduce greenhouse gas emissions b destroing methane through a number of methods generating heat and electricit for the grid as well as compressed for motive power. When the CPA is full operated, kg of methane will be destroed per da Above description is changed according to options included in the CPA.

3 CDM Executive Board page 3 The CPA will reduce greenhouse gas emission b destroing methane, 25 3 times more potent a greenhouse gas than CO2, b oxidation. In the first ear some 105,000 tco2e will of emission reductions are achieved and thereafter some 210,181 tco2e ever ear, thus resulting in 1,261,083 tco2e of emission reductions during the 7 ear crediting period. A.3. Entit/individual responsible for CPA: The CPA implementer/operator is Tshipise Energ (PTY) Limited a subsidiar of Coal of Africa Limited A.4. Technical description of the CPA: A.4.1. Identification of the CPA: >>CPA001 A >> Republic of South Africa Host Part: A Geographic reference of other means of identification allowing the unique identification of the CPA (maximum one page): 3 IPCC 2007 value applicable in 2013

4 CDM Executive Board page 4 Makhado Coal Mine is located near Louis Trichardt, Limpopo Province, South Africa. The plant will be built at Makhado Coal Mine, at latitude S and longitude E.

5 CDM Executive Board page 5 Figure-1 Location of the project site The contact details of the CPA implementer/operator are as follows: Name of the CPA Implementer/operator Address Tshipise Energ (Pt) Limited 2 nd Floor The Gabba 57 Sloane St Branston 2021 Johannesburg TEL FAX john.sparrow@coalofafrica.co.za >> Geographic reference or other means of identification 4, Name/contact details of the entit/individual responsible for the CPA, e.g. in case of stationar CPA geographic reference, in case of mobile CPAs means such as registration number, GPS devices.

6 CDM Executive Board page 6 A.4.2. Duration of the CPA: A Starting date of the CPA: The starting date of the CPA is the earliest of the date(s) on which the implementation or construction or real action of the CPA begins. 21 ears A Expected operational lifetime of the CPA: A.4.3. Choice of the crediting period and related information Renewable crediting period A Starting date of the crediting period: >> dd/mm/ or the date of inclusion of the CPA to the PoA, whichever is later. A Length of the crediting period, first crediting period if the choice is renewable CP:> 7 ears NOTE: Please note that the duration of crediting period of an CPA shall be limited to the end date of the PoA regardless of when the CPA was added.. A.4.4. Estimated amount of emission reductions over the chosen crediting period: The annual estimation of emission reductions are 210,181 tco2e. Over the chosen crediting period of 7 ears, the total emission reductions are therefore expected to amount to 1,261,083tCO2e. Estimated annual emission reductions are given in Table-1. Table-1 Estimated annual emission reductions from the CPA>> Year Annual estimation of Emission reductions (tco2e) , ,181

7 CDM Executive Board page , , , , ,181 Total emission reductions 1,261,083 (tco2e) Total number of crediting ears 7 Annual average over the crediting period of estimated reductions 180,154 (tco2e) A.4.5. Public funding of the CPA: No public funding from Parties included in Annex I countries is involved. A.4.6. Confirmation that CPA is neither registered as an individual CDM project activit nor is part of another Registered PoA: In order to avoid double accounting and to ensure that those operating the CPA are aware of and have agreed that their activit is being subscribed to the PoA, the implementing entit of a CPA has, in accordance with the eligibilit criteria stipulated in section A of the CDM-PoA-DD, confirmed with a written statement that: (i) (ii) The CPA and all the equipment to be installed under the CPA have not been and will not be registered as a single CDM project activit nor as a CPA under another PoA. The implementing entit is aware that the CPA will be subscribed to the present PoA. It can ensure that the CPA have not been and will not be registered as a single CDM project activit nor as a CPA under another PoA. CME will check the CPA against the eligibilit criteria and other information such as the DNA website and UNFCCC website to confirm no double accounting will occur.

8 CDM Executive Board page 8 SECTION B. Eligibilit of CPA and Estimation of emissions reductions B.1. Title and reference of the Registered PoA to which CPA is added: Capture and combustion of Methane in coal mines (Ref. No.:XXXX) B.2. Justification of the wh the CPA is eligible to be included in the Registered PoA : The proposed CPA complies with all of the eligibilit criteria that are described in A of CDM- PoADD. The justifications are given as follows: 1) The geographic boundar of a CPA lies within Republic of South Africa; The geographic boundar of the CPA includes Airshaft and extraction station in Makhado Coal Mine, CMM and CBM wells, pipelines, flaring units, electricit plant and related equipments, and the Power Grid (South Africa Grid). As all components of the boundar are located in Limpopo Province, hence, the geographical boundar of the CPA lies within the geographical boundar of the proposed PoA. 2) A CPA will be checked b CME through dedicated management sstem to avoid double counting of emission reductions; The CME, Environmental Intermediaries & Trading Group Limited, has checked the CPA through dedicated management sstem to avoid double counting of emission reductions. 3) A CPA reduces GHG emission b destroing methane from underground and open cast coal mines using a range of technologies which otherwise have been released in the atmosphere. And a CPA adopts one of following options or combination of them for use of recovered heat energ: (i) Flaring of the methane; (ii) Combustion to generate electricit for the mine (iii) Combustion to generate electricit for the grid (iv) Residual heat from combustion used to displace heating power (v) Compression for use in generating motive power (vi) Pipelining to another location for use; The CPA introduces flaring units and engines to destro methane which otherwise have been released in the atmosphere. The CPA adopts option (i) 4) The start date (defined in the Glossar of CDM terms) of the CPA is not prior to the commencement of validation of the PoA; The start date of the CPA is not prior to the commencement of validation of PoA. 5) Local stakeholder consultations and environmental impact analsis will be carried out for each CPA. The CPA has carried out the local stakeholder consultations and environmental impact analsis.

9 CDM Executive Board page 9 6) A CPA does not involve an official development assistance or does not result in a diversion of official development assistance. The CPA does not involve an official development assistant or dose not result in a diversion of official development assistance. 7) A CPA should meet the applicabilit criteria of the consolidated methodolog ACM0008 version 7.0; ACM0008 version 7.0 defines the applicabilit of this methodolog. The following Table-2 and Table-3 explain the reason wh the methodolog applies to the CPA: Table-2 Comparison of extraction components of the CPA with applicabilit of ACM0008 version 7.0 ACM0008 Applicabilit Surface drainage boreholes to capture CBM associated with mining activities Underground boreholes in the mine to capture pre mining CMM Surface goaf wells, underground boreholes, gas drainage galleries or other goaf gas capture techniques, including gas from sealed areas, to capture post mining CMM Ventilation air methane that would normall vented Extraction Components of a CPA The proposed CPA involves the extraction of CBM. Included Underground boreholes, gas drainage galleries and some other goaf gas capture techniques are adopted to capture the post mining CMM. Excluded remaining vented to the atmosphere as BAU Table-3 Comparison of the utilization components of the CPA with applicabilit of ACM0008 version 7.0 ACM0008 Applicabilit The methane is captured and destroed through flaring The methane is captured and destroed through flameless oxidation with or without utilization of the thermal energ The remaining share of the methane, to be diluted for safet reason, ma still be vented All the CBM or CMM captured b the project should either be used or destroed, and cannot be vented Utilization Components of a CPA flaring is involved in the project No flameless oxidizers will be used in this project Part of CMM/VAM is still vented in the project. All of the VAM captured b the project will be vented. Table-4 Comparison of the utilization components of each CPA with applicabilit of ACM0008 version 7.0 for open cast mines

10 CDM Executive Board page 10 ACM0008 Applicabilit The mine should have been a working concession for 3 ears The methane is captured and destroed through use of flameless oxidizers Onl pre mine drainage from wells placed within the area to be mined are considered as eligible for crediting Such pre mine drainage well life ma be credited up to but no more than ten ears prior to actual mining or the date of issuance of mining concession whichever is later Avoided emission from methane extracted should onl be credited in the ear in which the seam is mined through the zone of influence or the de stressing zone Utilization Components of a CP Onl mines that have been a concession for 3 ears will be included Excluded. CPA will not use flameless oxidizers to destro methane Included Included Included ACM0008 version 7.0 also define the tpes of activities that could not be applied to this methodolog. The CPA does not appl to an of those activities as indicated in Table-5. Table-5 Comparison of the CPA with incompatibilit of ACM0008 version 7.0 ACM0008 Inapplicabilit Capture methane from abandoned/decommissioned coal mines Capture/use of virgin coal-bed methane, e.g. methane of high qualit extracted from coal seams independentl of an mining activities Use CO2 or an other fluid/gas to enhance CBM drainage before mining takes place CPA The project is implemented in a working coal mine All of methane captured/used in the project is dependent with mining activit, CBM captured outside the zone of influence of the mine is excluded for CER but emissions from the methane are included in the project emissions No enhancement of CBM extraction is emploed It can be concluded from the above analsis that the Approved CDM Methodolog ACM0008 is applicable to the CPA. 8) A CPA implementer/operator confirms in a written statement that: (i) All sstems are to be newl installed under a CPA is not and will not be part of another CDM project or PoA; (ii) The are aware and agree with the inclusion of a CPA to the proposed PoA. The CPA implementer has alread submitted the written statement for above confirmation.

11 CDM Executive Board page 11 9 A CPA is/is not constructed at an opencast mine. CBM option for methane gas extraction through surface wells is/is not included; The CPA is constructed at an opencast mine. CBM option is included in the CPA. 10) For the determining project emissions, a CPA should meet following requirements: (i) A CPA does not include the combustion of methane in a flameless oxidiser; The CPA does not include the combustion of methane in a flameless oxidiser; 11) For the determining baseline emissions, a CPA should meet following requirements: (i) In the baseline scenario, all of the methane is released into the atmosphere without destruction and utilization; All methane is released into the atmosphere without destruction and utilization in the baseline. 12) A CPA meets following criteria for assessing additionalit: (i) The IRR of the CPA is calculated based on updated input parameters and assumptions and the method provided in section E.5.1 of CDM-PoA-DD; The IRR of the CPA is calculated according to E.5.1 of CDM-PoA-DD, based on updated input parameters and assumptions as shown in the Table-5. No investment analsis is required as flaring onl is a negative IRR in the absence of carbon credit income. (ii) According to the Guidelines on the Assessment of Investment Analsis EB62 Report Annex 5 version /7/2011 the threshold IRR after taxes in South Africa is 11.9% for Group 2 subclass 8 mining/mineral production. Benchmark IRR chosen b the PDDs for CMM power generation projects uploaded on the UNFCCC website varies from 8% to over 15%. In order to be conservative, 11.9% benchmark (Project IRR after tax) is applied.; Flaring is not required and provides no financial return to the mine other than via carbon credit income. There is no compulsion from a safet or other perspective for pre draining CBM in an open cast mine. (iii) The financial additionalit is demonstrated b showing that the calculated IRR (excluding CDM) below the applied investment benchmark after carring out sensitivit analsis. No sensitivit analsis is required as the IRR without carbon income is negative B.3. Assessment and demonstration of additionalit of the CPA, as per eligibilit criteria listed in the Registered PoA: > Ke criteria listed in E.5.2. of the CDM-PoA-DD for assessing additionalit of a CPA are as follows:

12 CDM Executive Board page 12 Criteria related to the investment analsis To demonstrate that a CPA under the proposed PoA is financiall not attractive, the following three steps should be checked upon inclusion the CPA to the proposed PoA as per the Eligibilit Criteria 13): (i) (ii) (iii) The IRR of the CPA is calculated based on updated input parameters and assumptions and the method provided in section E.5.1 of CDM-PoA-DD; According to the Guidelines on the Assessment of Investment Analsis EB62 Report Annex 5 version /7/2011 the threshold IRR after taxes in South Africa is 11.9% for Group 2 subclass 8 mining/mineral production. Benchmark IRR chosen b the PDDs for CMM power generation projects uploaded on the UNFCCC website varies from 8% to over 15%. In order to be conservative, 11.9% benchmark (Project IRR after tax) is applied.; The financial additionalit is demonstrated b showing that the calculated IRR (excluding CDM) is below the applied investment benchmark after carring out sensitivit analsis. The project involves capturing and flaring the methane. This generates no revenue other than revenue from carbon credits. The IRR on flaring without carbon credits is negative and therefore the project is automaticall additional. These criteria are satisfied during the justification of wh the CPA is eligible to be included in the Registered PoA, for 13th eligibilit criterion, in Section B.2. The CPA is therefore regarded as not financiall attractive. Criteria related to the common practice analsis There is onl one criteria related the common practice analsis. That is, A CPA reduces GHG emission b destroing methane from coal mines which otherwise have been released in the atmosphere. The CPA under the proposed PoA destros methane using either flaring and/or electricit generation and/or compression for use in motive power and/or pipeline to off site use, which is included in the Eligibilit Criteria 3) for inclusion of a CPA in the proposed PoA. If the CPA satisfied this criterion, it would be concluded that similar activit cannot be observed in South Africa without CDM support, as described in Step-4, E.5.1. of the CDM-PoA-DD. Based on the above analsis, it is demonstrated that the CPA under the proposed PoA is additional. B.4. Description of the sources and gases included in the project boundar and proof that the CPA is located within the geographical boundar of the registered PoA. >> The boundar of the CPA includes the Makhado Coal Mine, CBM wells, flaring units, pipelines and related equipment.the project boundar for this project activit is presented in Figure-2, and the overview on emissions sources including in or excluded from the project boundar is presented in Table-8.

13 CDM Executive Board page 13 VAM CBM CMM Methane Ventilated to Atmosphere Methane Flaring Figure-2 Project boundar of the CPA Table-8 Overview on emissions sources included in or excluded from the project boundar Overview on emissions sources included in or excluded from the project boundar

14 Project Emission s Baseline Emissions CDM PROGRAMME ACTIVITY DESIGN DOCUMENT FORM (CDM-CPA-DD) - Version 01 CDM Executive Board page 14 Source Gas Justification / Explanation Emissions of methane CH 4 Included I. Main emission source. However, certain as a result of venting sources of methane ma not be included, as noted in the applicabilit conditions; I. Recover of methane from coal seams will be taken into account onl when the particular seams are mined through or disturbed b the mining activit; I. Recover of methane from abandoned coalmines will not be included; V. The amount of methane to be released depends on the amount used (for local Emissions from destruction of methane in the baseline Grid electricit generation (electricit provided to the grid) Captive power and/or heat, and vehicle fuel use Emissions of methane as a result of continued venting consumption, gas sales, etc) in the baseline CO 2 Included V. Considers an flaring or use for heat and power in the baseline scenario CH 4 Excluded I. Excluded for simplification. This is conservative N 2 O Excluded I. Excluded for simplification. This is conservative CO 2 Included I. Onl CO 2 emissions associated to the same quantit of electricit than electricit generated as a result of the use of methane included as baseline emission will be counted; X. Use of combined margin method as described in Tool to calculate the emission factor for an electricit sstem should be made CH 4 Excluded X. Excluded for simplification. This is conservative N 2 O Excluded I. Excluded for simplification. This is conservative CO 2 Included I. Onl when the baseline scenario involves such usage CH 4 Excluded I. Excluded for simplification. This is conservative N 2 O Excluded V. Excluded for simplification. This is conservative CH 4 Excluded V. Onl the change in CMM/CBM/VAM emissions release will be taken into account, b monitoring the methane used or destroed b the project activit

15 CDM Executive Board page 15 Source Gas Justification / Explanation On-site fuel consumption due to the project activit, including transport of the gas CO 2 Included I. If additional equipment such as compressors or fans are required on top of what is required for purel drainage, energ consumption from such equipment should be accounted for CH 4 Excluded I. Excluded for simplification. This emission source is assumed to be ver small N 2 O Excluded I. Excluded for simplification. This emission source is assumed to be ver small Emissions from CO 2 Included X. From the combustion of methane in a flare, methane destruction Emissions from NMHC destruction Fugitive emissions of unburned methane Fugitive methane emissions from on-site equipment Fugitive methane emissions from gas suppl pipeline or in relation to use in vehicles Accidental methane release or heat/power generation CO 2 Included X. From the combustion of NMHC in a flare or flameless oxidizer, or heat/power generation, if NMHC accounts for more than 1% b volume of extracted coal mine gas CH 4 Included I. Small amounts of methane will remain unburned in flares, flameless oxidizers or heat/power generation CH 4 Excluded I. Excluded for simplification. This emission source is assumed to be ver small CH 4 Excluded I. Excluded for simplification. However taken into account among other potential leakage effects (see leakage section) CH 4 Excluded V. Excluded for simplification. This emission source is assumed to be ver small The geographical boundar of the proposed PoA includes all provinces of South Africa. The geographical site of the CPA is located in XX Province as indicated in Figure-1, A , thus the CPA is located within the geographical boundar of the proposed PoA.. Emission reductions:.1. Data and parameters that are available at validation: Data from the flaring tool

16 CDM Executive Board page 16 GWP CH4 Data unit: tco 2 e/ tch 4 Description: Global warming potential of methane IPCC 2007 Value of data applied 25 for the Description of Ex ante methods and 25 tco 2 e/tch 4

17 CDM Executive Board page 17 CEF CH4 Data unit: tco 2 e/tch 4 Description: Carbon emission factor for combusted methane ACM0008 default value Value of data applied 2.75 for the Description of Ex ante methods and 44/16 = 2.75 tco 2 e/tch 4 CEF ELEC Data unit: tco 2 /MWh Description: Carbon emissions factor of electricit used b coal mine Promethium stud October 2011 Value of data applied 1.04 for the Description of Ex ante methods and

18 CDM Executive Board page 18 NCV ch4 Data unit: GJ Description: Net calorific value of methane IPCC 2006 Value of data applied GJ/m3 for the Description of fixed methods and CBM BL,i, Data unit: tch 4 Description: Measurement procedures (if an): Monitoring frequenc: Data unit: tch 4 Description: Measurement procedures (if an): Monitoring frequenc: CBM that would have been captured, used and destroed b use i in the baseline scenario in ear Estimated ex ante at start of project CMM BL,i CMM that would have been captured, used and destroed b use i in the baseline scenario in ear Estimated ex ante at start of project

19 CDM Executive Board page 19 PMM BL,i Data unit: tch 4 Description: Measurement procedures (if an): Monitoring frequenc: Data unit: tch 4 Description: Measurement procedures (if an): Monitoring frequenc: PMM that would have been captured, used and destroed b use i in the baseline scenario in ear Estimated ex ante at start of project VAM BLi, VAM that would have been captured, used and destroed b use i in the baseline scenario in ear Estimated ex ante at start of project CBMe i,. Data unit: tch 4 Description: Eligible CBM captured, sent to and destroed b use i in the project for ear Measurement procedures (if an): Monitoring Yearl frequenc: CBM BL,i, Data unit: tch 4 Description: Measurement procedures (if an): Monitoring frequenc: CBM that would have been captured, sent to and destroed b use i in the baseline scenario Estimated ex ante at start of project

20 CDM Executive Board page 20 CMM BL, i, Data unit: tch 4 Description: Measurement procedures (if an): Monitoring frequenc: Data unit: tch 4 Description: Measurement procedures (if an): Monitoring frequenc: Pre-mining CMM that would have been captured, sent to and destroed b use i in the baseline scenario in ear Estimated ex ante at start of project VAM BL, i, Data unit: tch 4 Description: Measurement procedures (if an): Monitoring frequenc: VAM that would have been captured, sent to and destroed b use i in the baseline scenario in ear Estimated ex ante at start of project PMM BL, i, Post-mining CMM that would have been captured, sent to and destroed b use i in the baseline scenario in ear Estimated ex ante at start of project.2. Ex-ante calculation of emission reductions: Project Emissions Project emissions are defined b the following equation: PE = PE ME + PE MD + PE UM (1) Where: PE = Project emissions in ear (tco 2 e) PE ME = Project emissions from energ use to capture and use methane (tco 2 e)

21 CDM Executive Board page 21 PE MD = Project emissions from methane destroed (tco 2 e) PE UM = Project emissions from un-combusted methane (tco 2 e) Combustion emissions from additional energ required for CBM/CMM/VAM capture and use Additional energ ma be used for the capture, transport, compression and use or destruction of CBM/CMM/VAM. Emissions from this energ use should be included as project emissions. PE CONS (2) ME ELEC, PJ CEF ELEC CONSFossFuel, PJ CEF FossFuel PEFC,j, Where: PE ME = Project emissions from energ use to capture and use or destro methane (tco 2 e) CONS ELEC,PJ = Additional electricit consumption for capture and use or destruction of methane, if an (MWh) 5 CEF ELEC = Carbon emissions factor of electricit used b coal mine (tco 2 /MWh) CONS FossFuel,PJ = Additional fossil fuel consumption for capture and use or destruction of methane, if an (GJ) 6 CEF FossFuel = Carbon emissions factor of fossil fuel used b coal mine (tco 2 /GJ) PE FC,j, = CO 2 emissions from fossil fuel combustion in process j during the ear. Calculated using the Tool to calculate project or leakage CO 2 emissions from fossil fuel combustion For electricit emissions factor, the same formulae are used as in the calculations of baseline emissions. In other words, if the source of power for the coalmine is the grid, then the formulae from Tool to calculate the emission factor for an electricit sstem for combined margin emissions factor are used. If the source of power for the coalmine is captive power generation, then the emissions factor is calculated based on the emission factor for the fuel used and the efficienc of the captive power plant. The mine has no captive power generation sstem so the EF elec is the same as EF grid or based on the Promethium stud 1.04t C02 e per Mwh Combustion emissions from use of captured methane When the captured methane is burned in a flare, heat or power plant, or oxidized in a flameless oxidation unit, combustion emissions are released. In addition, if NMHC account for more than 5 For instance, pipelines for flaring will consume electricit in fan motors, which are required to push the CMM/CBM. 6 Auto igniters on flaring units are bottled butane or propane. Emissions from this source will be counted as CONS FossFuel,PJ

22 CDM Executive Board page 22 1% b volume of the extracted CMM/CBM or more than 0.1% b volume of the extracted VAM, combustion emission from these gases should also be included. PE MD = (MD FL + MD OX + MD ELEC + MD HEAT + MD GAS ) x (CEF CH4 + r x CEF NMHC ) (3) Where in the POA MD OX = 0, MD ELEC = 0,MD HEAT = 0, MD GAS = 0 PE MD = (MD FL ) x (CEF CH4 + r x CEF NMHC ) (3) with: r = PC NMHC / PC CH4 (4) Where: 7 PE MD = Project emissions from CMM/CBM destroed (tco 2 e) MD FL = Methane destroed through flaring (tch 4 ) MD OX = Methane destroed through flameless oxidation (tch 4 ) MD ELEC = Methane destroed through power generation (tch 4 ) MD HEAT = Methane destroed through heat generation (tch 4 ) MD GAS = Methane destroed after being supplied to gas grid or for vehicle use (tch 4 ) CEF CH4 = Carbon emission factor for combusted methane (2.75 tco 2 /tch 4 ) CEF NMHC = Carbon emission factor for combusted non methane hdrocarbons (the concentration varies and, therefore, to be obtained through periodical analsis of captured methane) (tco 2 /tnmhc) r = Relative proportion of NMHC compared to methane PC CH4 = Concentration (in mass) of methane in extracted gas (%), measured on wet basis PC NMHC = NMHC concentration (in mass) in extracted gas (%) In each end-use, the amount of gas destroed depends on the efficienc of combustion of each end use. MD OX = 0 MD FL = MM FL - (PE flare /GWP CH4 ) (5) Where: MD FL = Methane destroed through flaring (tch 4 ) MM FL = Methane measured sent to flare (tch 4 ) 7 Note that throughout this baseline methodolog, it is assumed that measured quantities of coal mine gas are converted to tonnes of methane using the measured methane concentration of the coal mine gas and the densit of methane.

23 CDM Executive Board page 23 PE flare = Project emissions of non-combusted CH 4, expressed in terms of CO 2e, from flaring of the residual gas stream (tco 2 e) GWP CH4 = Global warming potential of methane (25 tco 2 e/tch 4 ) The project emissions of non-combusted CH 4 expressed in terms of CO 2e from flaring of the residual gas stream (PE flare ) shall be calculated following the procedures described in the Tool to determine project emissions from flaring gases containing methane. PE flare can be calculated on an annual basis or for the required period of time using this tool. Un-combusted methane from project activit Not all of the methane sent to the flare, so a small amount will escape to the atmosphere. These emissions are calculated using the following: PE UM 1 Eff i PE flare PEOX GWP 4 (10) [ GWPCH4 MMi ] CH i Where: PE = Project emissions from un-combusted methane (tco 2 e) UM GWP CH4 = Global warming potential of methane (25 tco 2 e/tch 4 ) i = Use of methane (power generation, heat generation, suppl to gas grid to various combustion end uses) MM = Methane measured sent to use i (tch 4 ) i i Eff = Efficienc of methane destruction in use i (%) PE = Project emissions of non-combusted CH flare 4 expressed in terms of CO 2 e from flaring of the residual gas stream (tco 2 e) PE = Project emissions of non oxidized CH OX 4 from flameless oxidation of the VAM stream (tch 4 ) PEox = 0 as VAM is excluded from POA For flaring onl: PEUM PE flare (10) The project emissions from flaring of the residual gas stream (PE flare ) shall be calculated following the procedures described in the Tool to determine project emissions from flaring gases containing methane. PE flare can be calculated on an annual basis or for the required period of time using this tool. Baseline Emissions

24 CDM Executive Board page 24 Baseline emissions are given b the following equation: BE = BE MD, + BE MR, + BE Use, (11) Where: BE = Baseline emissions in ear (tco 2 e) BE MD, = Baseline emissions from destruction of methane in the baseline scenario in ear (tco 2 e) BE MR, = Baseline emissions from release of methane into the atmosphere in ear that is avoided b the project activit (tco 2 e) BE Use, = Baseline emissions from the production of power, heat or suppl to gas grid replaced b the project activit in ear (tco 2 e) Methane destruction in the baseline Depending on the nature of the activities in the baseline scenario, CBM/CMM can be removed at five different stages (1) as coal bed methane from a CBM to goaf wells prior to mining, or from underground premining CMM drainage; (2) during the mining process using surface or underground post mining CMM drainage techniques, (3) during the mining process using ventilation air, (4) after the mining process b drainage from sealed goafs but before the mine is closed or (5) as coal bed methane from a CBM to open cast mine face. Depending on the baseline scenario, part of this methane ma be destroed in the baseline scenario through flaring, flameless oxidation, power generation, heat generation, suppl to gas grid to various combustion end uses. Baseline emissions should account for the CO 2 emissions resulting from the destruction of that methane. BE MD ( CEFCH4 r CEFNMHC ) ( CBM BL, i, VAM BL, i, CMM BL, i, PMM BL, i, ) (6) i Where: BE = Baseline emissions from destruction of methane in the baseline scenario in MD ear (tco 2 e) i = Use of methane (flaring, power generation, heat generation, suppl to gas grid to various combustion end uses) CBM BL, i, = CBM that would have been captured, sent to and destroed b use i in the baseline scenario in the ear (expressed in tch 4 )

25 CDM Executive Board page 25 VAM BL, i, = VAM that would have been captured, sent to and destroed b use i in the baseline scenario in the ear (expressed in tch 4 ) CMM BL, i, = Pre-mining CMM that would have been captured, sent to and destroed b use i in the baseline scenario in ear (expressed in tch 4 ) PMM BL, i, = Post-mining CMM that would have been captured, sent to and destroed b use i in the baseline scenario in ear (tch 4 ) CEF = Carbon emission factor for combusted methane (2.75 tco 2 e/tch 4 ) CH4 CEF = Carbon emission factor for combusted non methane hdrocarbons. This NMHC parameter should be obtained through periodical analsis of captured methane (tco 2 eq/tnmhc) r = Relative proportion of NMHC compared to methane with : r = PC NMHC / PC CH4 (7) Where: PC CH4 = Concentration (in mass) of methane in extracted gas (%), to be measured on wet basis PC NMHC = NMHC concentration (in mass) in extracted gas (%) Note that to estimate conservativel methane destruction in the baseline over time, it is important to understand the characteristics of an ex ante thermal demand for methane in the baseline scenario. As stated in the applicabilit conditions of this methodolog, project participants must be able to suppl the necessar to data for ex ante projections of methane demand in order to use this methodolog. 1) Project Emissions Project emissions are defined b the following equation: PE = PE ME + PE MD + PE UM (E-1) where: PE Project emissions in ear (tco2e) PE ME Project emissions from energ use to capture and use methane (tco2e) PE MD Project emissions from methane destroed (tco2e) PE UM Project emissions from un-combusted methane (tco2e) Combustion emissions from additional energ required for CBM/CMM capture and use All equipment to capture VAM and CMM is operated under BAU for the safe operation of the mine. There is no additional installation or fuel consumption to capture methane from underground.

26 CDM Executive Board page 26 However, compressors require electricit, for sending the gas to its various uses other than flaring. 2) Baseline Emissions Baseline emissions are defined b the following equation based on the approved methodolog ACM0008 (Version 07): BE = BEMD, + BEMR, + BEUse, (E-6) where: BE BEMD, BEMR, BEUse, Baseline emissions in ear (tco2e) Baseline emissions from destruction of methane in the baseline scenario in ear (tco2e) Baseline emissions from release of methane into the atmosphere in ear that is avoided b the project activit (tco2e) Baseline emissions from the production of power, heat or suppl to gas grid replaced b the project activit in ear (tco2e) Methane destruction in the baseline In the project activit, VAM is extracted during the mining process using ventilation air. This activit is also conducted under BAU, meaning the baseline scenario. Thus, the volume of captured methane in the project activit is equal to that of the baseline scenario. The captured VAM is released into the atmosphere unused under the baseline scenario. These conditions are the eligible requirement for a CPA to be included in the proposed PoA. Hence, BEMD = 0 Methane released into the atmosphere Depending on the nature of the project activit, CBM/VAM/CMM can be removed at five different stages (1) as coal bed methane from a CBM wells prior to mining, or from underground pre-mining CMM drainage; (2) during the mining process using surface or underground post mining CMM drainage techniques; (3) during the mining process using ventilation air (4) after the mining process b drainage from sealed goafs but before the mine is closed or (5) from open cast mine pre-mining. This methane would have been emitted to the atmosphere in the baseline scenario, unless some capture and use activities form part of the baseline:

27 CDM Executive Board page 27 BE i MR ( PMM GWP PJi, CH4 [ PMM i ( CBMe BL i, ) i, i CBM ( VAM BL i, PJi, ) i VAM ( CMM BL i, )] PJi, CMM BL i, ) (8) Where: BE = Baseline emissions from release of methane into the atmosphere in ear that MR is avoided b the project activit (tco 2 e) i = Use of methane (flaring, power generation, heat generation, suppl to gas grid to various combustion end uses) CBMe i, = Eligible CBM captured, sent to and destroed b use i in the project for ear (expressed in tch 4 ) CBM BLi, = CBM that would have been captured, sent to and destroed b use i in the baseline scenario in the ear (expressed in tch 4 ) CMM PJi, = Pre-mining CMM captured, sent to and destroed b use i in the project activit in ear (expressed in tch 4 ) CMM BLi, = Pre-mining CMM that would have been captured, sent to and destroed b use i in the baseline scenario in ear (expressed in tch 4 ) PMM PJi, = Post-mining CMM captured, sent to and destroed b use i in the project activit in ear (tch 4 ) PMM BLi, = Post-mining CMM that would have been captured, sent to and destroed b use i in the baseline scenario in ear (tch 4 ) VAM PJi, = VAM sent to and destroed b use i in the project activit in ear (tch 4 ). In the case of flameless oxidation, VAM PJ,i, is equivalent to MD OX defined previousl VAM BLi, = VAM that would have been captured, sent to and destroed b use i in the baseline scenario in ear (tch 4 ) GWP = Global warming potential of methane (25 tco 2 e/tch 4 ) CH4 The methane that is still vented in the project scenario is not accounted for in the project emissions or in the baseline emissions, since it is vented in both scenarios. For CBM captured, the avoided emissions should onl be credited in the ear in which the seam is mined through the CBM well zone of influence, or the de-stressing zone, as explained in the next section. Emissions from power/heat generation and vehicle fuel replaced b project For emissions from displacing other energ forms, it is necessar to distinguish between emissions reductions derived from the use of CBM versus CMM, because CBM emissions reductions

28 CDM Executive Board page 28 should onl be credited once the mining area has intersected the zone of influence of the CBM well. BE Use, = ED CBMw, + ED CBMz, + ED CPMM, (9) Where: BE Use, = Total baseline emissions from the production of power or heat replaced b the project activit in ear (tco 2 ) ED CBMw, = Emissions from displacement of end uses b use of coal bed methane captured from wells where the mining area intersected the zone of influence in ear (tco 2 ) ED CBMz, = Emissions from displacement of end uses b use of coal bed methane captured from wells where the mining area intersected the zone of influence prior to ear (tco 2 ) ED CPMM, = Emissions from displacement of end uses b use of coal mine methane, VAM and post-mining methane (tco 2 ) The total methane captured during ear can be described as follows: CBMM tot, = CBM w, + CBM z, + CBM x, + CMM PJ, + PMM PJ, + VAM PJ, (10) Where: CBMM tot, = Total CBM, CMM and VAM captured and utilised b the project activit (tch 4 ) CBM w,. = CBM captured from wells where the mining area intersected the zone of influence in ear (tch 4 ) CBM z,. = CBM captured from wells where the mining area intersected the zone of influence prior to ear (tch 4 ) CBM x,. = CBM captured from wells where the mining area has not et intersected the zone of influence in ear (tch 4 ) CMM PJ,i, = Pre-mining CMM captured b the project activit in ear (tch 4 ) PMM PJ, = Post-mining CMM captured b the project activit in ear (tch 4 ) VAM PJ, = VAM captured b the project activit ear (tch 4 ) The total potential emissions reductions from displacement of power/heat generation and vehicle fuels are given b the following equation: PBE Use, = GEN, x EF ELEC + HEAT x EF HEAT + VFUEL x EF V (11) HEAT = 0 VFUEL = 0 GEN = 0

29 CDM Executive Board page 29 PBE Use, = 0 (11) Where: PBE Use, = Potential total baseline emissions from the production of power or heat replaced b the project activit in ear (tco 2 e) GEN = Electricit generated b project activit in ear (MWh), including through the use of CBM EF ELEC = Emissions factor of electricit (grid, captive or a combination) replaced b project (tco 2 /MWh) HEAT = Heat generation b project activit in ear (GJ), including through the use of CBM EF HEAT = Emissions factor for heat production replaced b project activit (tco 2 /GJ) VFUEL = Vehicle fuel provided b the project activit in ear (GJ), including through the use of CBM EF V = Emissions factor for vehicle operation replaced b project activit (tco 2 /GJ) To identif the CBM/CMM that should receive credits in the ear during which the gas is captured and used, the following formulae are used, assuming that CMM and CBM are used for various end uses in the same proportions as the overall suppl for that ear of different gas sources: CBM (12) z, ED CBMz, PBEUse, CBMM tot, Where: ED CBMz, = Emissions from displacement of end uses b use of coal bed methane captured from wells where the mining area intersected the zone of influence prior to ear (tco 2 e) CBM z, = CBM captured from wells where the mining area intersected the zone of influence prior to ear (tch 4 ) CBMM tot, = Total CBM, CMM and VAM captured and utilised b the project activit in ear (tch 4 ) PBE Use, = Potential total baseline emissions from the production of power or heat replaced b the project activit in ear (tco 2 e) CMM PMM VAM ED PBEUse, (13) PJ, PJ, PJ, CPMM, CBMM tot, Where: ED = Emissions from displacement of end uses b use of coal mine methane and CPMM, post-mining methane (tco 2 e) CMM, = Pre-mining CMM captured b the project activit in ear (tch 4 ) PJ

30 CDM Executive Board page 30 PMM, = Post-mining CMM captured b the project activit in ear (tch 4 ) PJ VAM PJ, = VAM captured b the project activit in ear (tch 4 ) CBMM tot, = Total CBM CMM and VAM captured and utilised b the project activit in ear (tch 4 ) PBE Use, = Potential total baseline emissions from the production of power or heat replaced b the project activit in ear (tco 2 e) ED b w, m CBMw, PBEUse, m (14) m 0 CBMM tot, m CBM Where: ED = Emissions from displacement of end uses b use of coal bed methane captured CBMw, from wells where the mining area intersects the zone of influence in ear (tco 2 e) CBM w, = CBM captured in the ear -m from wells where the mining area intersected m the zone of influence in ear (tch 4 ) CBMM tot, m = Total CBM, CMM and VAM captured and utilised b the project activit in ear -m (tch 4 ) PBE = Potential total baseline emissions from the production of power or heat Use, m replaced b the project activit in ear -m (tco 2 e) b = Initial ear of crediting period Note that no emissions reductions are associated with CBM x,, so the actual baseline emissions in each ear will var from the potential baseline emissions. Eligible CBM The approach to quantif the eligible CBM is to identif the zone of influence of CBM wells, and when these are impacted b mining activities. Step 1: Identif relevant wells The first step is to identif the drilling plan and the wells that will be intersected b mining or are likel to extract methane from an area that will overlap with future coal extraction. The location of CBM wells in relation to the mine concession area and mining plan during the initial crediting period is estimated using the latest mine plan information, and a map should be included in the Project Design Document. Indicative mining maps showing relevant CBM wells and their zones of influence is shown in Figures 4a and 4b, with the area of coal to be mined shaded in blue. Figure 4a depicts an underground coal mine plan and the pre-mine drainage boreholes, while Figure 4b depicts a surface coal mine and its pre-mine drainage boreholes

31 CDM Executive Board page 31 Note: Wells that extract virgin coal bed methane, i.e. from areas that would not be mined and would not influence eventual CMM emissions in mined areas, are out of the boundar of both the baseline and the project. An activit intending to extract and use such virgin coal bed methane should refer to another methodolog. Start Date: e.g. 1H08 Roadwa 60m 130m Start Date: e.g. 2H09 Roadwa Roadwa Access Road Direction of mining Seam Thickness = 6m Direction of principal stress 1200m Roadwa Figure 4a: Indicative Figure Showing underground Mining Plan, relevant CBM wells and their zones of influence

32 CDM Executive Board page 32 Figure 4b: Indicative Figure Showing Surface Mining Plan, relevant CBM wells and their zones of influence Step 2: Estimation of the Zone of Influence of a CBM Well and eligible methane This methodolog estimates the overlap between a clindrical gas drainage zone around a production well with the zone of disturbance around an area of coal to be mined, from which gas is emitted. A generalised zone or radius of influence, R, for a particular well can be estimated at an time during the pre drainage process based on either (i) the cumulative flow measured at the well V w or (ii) on the total cumulative gas drained from all the wells measured at the centralised monitoring station V c. Idealised uniform degassing is assumed within a clindrical zone centred on the borehole and a constant production flow. (i) Using cumulative flow at an individual well: R = ((V w )/(π x T x coal x g coal )) 0.5 (15) Where: R = Cumulative radius of zone of influence (m) V w = Cumulative flow measured at an individual well (m 3 ) T = Total thickness of coal in section accessed b well (m) coal = Densit of locall mined coal (t/m 3 ) default value 1.4 t/m 3 g coal = Gas content of the coal (m 3 CH 4 /tonne coal)

33 CDM Executive Board page 33 (ii) Using cumulative flow from a number of wells: R = ((n x V a )/(π x T x coal x g coal )) 0.5 (16) Where: R = Cumulative radius of zone of influence (m) n = Number of das the selected wells are operational V a = Average flow per da across all wells (m 3 /d) T = Total thickness of coal in section accessed b well (m) coal = Densit of locall mined coal default value 1.4 t/m 3 g coal = Gas content of the coal (tch 4 /tonne coal) and V a V c V / N N w (17) Where: V a = Average flow per da (m 3 /d) V c = Total cumulative gas drained from all the wells measured at the centralised monitoring station (m 3 ) V w = Cumulative flow measured at an individual well (m 3 ) N = Sum of das that all wells have been operational (das) As an example, taking the densit of coal as 1.4 tonne per m 3, the gas in coal to be 12 m 3 per tonne, the thickness of the section to be 40 metres and the flow rate to be 2400m 3 /da, then the radius of zone of influence will increase b 20 m per ear. Therefore, if the number pre-drainage ears are n the corresponding radius of zone of influence will be n x20 m. The Project Design Document should elaborate the project specific values for the zone of influence. Area of Overlap Once the zone of influence for a well in a given ear overlaps the area of coal to be mined, then the gas from the well is considered to be eligible CBM. To estimate portion of CBM that would have been released from mining activities, a geometric approach in the horizontal plane and the vertical plane is used where the area of overlap between the defined zones of influence for each well and the area of coal to be mined ( Area of Overlap ) is used as well as the de-stressing zone above and below the seam to be mined. Horizontal plane: The ratio of the Area of Overlap to the total area of the zones of influence of the wells considered is calculated and used to identif the appropriate share of gas counted as eligible CBM. The equations for this are: ES h w w AO AT w w (18)

34 CDM Executive Board page 34 Where: ES = Eligible share of CBM based on the horizontal plane overlap (%) h AO = Area of overlap of well w with the area of coal to be mined(m 2 ) w AT = Total zone of influence of well w (m 2 ) w w = CBM wells with zones of influence that overlap with mining activit Note that for CBM wells which will be phsicall intersected b mining, ES is unit b definition. In h other words, all of the CBM drained from this tpe of well is eligible, unless there is gas coming from seams beond the de-stressing zone. Vertical plane: The de-stressing zone tpicall extends upwards 140 m and downwards 40 metres. If cased boreholes are used and the seams are fractured within the de-stressing zone, then all the gas entering the CBM well is gas that would have appeared as methane in ventilation air and CMM during and after mining. If other seams outside of the de-stressed zone are fractured, then this gas must be excluded from the eligible CBM. The eligible share is defined as follows: t ES v (19) T Where: ES v = Eligible share of CBM based on the vertical plane overlap (%) t = Thickness of coal which lies within the emission zone (m) T = Total thickness of coal that is producing gas in the production well (m) The value for ES v would be 1 for cased boreholes where fraccing is onl done in the seams of relevance. A mine cross section should be included in the PDD together and supporting documentation on the well drilling process should be supplied to the Validator to justif the ratio of t/t. Eligible CBM: Summarising the eligible contribution of CBM in the horizontal and vertical planes gives the final ratio of eligible CBM: ES t ES h ES v (20) Where: ES = Total eligible share of CBM (%) t ES = Eligible share of CBM based on the horizontal plane overlap (%) h ES = Eligible share of CBM based on the vertical plane overlap (%) v