efficient utilization of agricultural wastes project€¦ · 14th september, 2005 fly to shanxi for...

EEEffffffiiiccciiieeennnttt UUUtttiiillliiizzzaaatttiiiooonnn ooofff AAAgggrrriiicccuuullltttuuurrraaalll WWWaaasssttteeesss AAADDDBBB LLLoooaaannn::: PPPRRRCCC 111999222444

FFFIIINNNAAALLL RRREEEPPPOOORRRTTT

MMaayy 22000077

Landell Mills DEVELOPMENT CONSULTANTS

TThhee PPeeooppllee’’ss RReeppuubblliicc ooff CChhiinnaa AAssiiaann DDeevveellooppmmeenntt BBaannkk

Final Report / April 2007

Page i Efficient Utilization of Agricultural Wastes / ADB Loan: PRC 1924 / Landell Mills Ltd

Efficient Utilization of Agricultural Wastes

ADB Loan: PRC 1924

FFFIIINNNAAALLL RRREEEPPPOOORRRTTT

April 2007

Report submitted by

LANDELL MILLS LIMITED

Pat DELAQUIL – Team Leader and Environment Specialist Jinyue Jerry YAN – Renewable Energy Specialist Gene M. OWENS – Training Program Development Specialist

This report was prepared at the request of the Ministry of Agriculture, PRC. The views expressed are those of the Consultants and do not necessarily reflect those of the Ministry

or the Asian Development Bank.


Page ii Efficient Utilization of Agricultural Wastes / ADB Loan: PRC 1924 / Landell Mills Ltd

KEY DATA SHEET

Name of Project: Consulting Services for ‘Efficient Utilization of Agricultural Wastes Project’

Contractor: Landell Mills Limited, Bryer-Ash Business Park, Bradford Road, Trowbridge, Wiltshire, BA14 8HE, UK Tel: +44 1225 763777 Fax: +44 1225 753678 www.landell-mills.com

Contracting Authority: Foreign Economic Cooperation Center, Ministry of Agriculture, PRC

Contract Number: LN 1924 – PRC/QCBS Start/End Date August 29th, 2005 / December 31st, 2007 Budget: USD 819,625 Primary Location: Beijing (Consultant office) Secondary Locations: Shanxi, Henan, Hubei, Jiangxi Key Events to Date: 6th September, 2005 Arrival of team. 7th September, 2005 Meet with FECC and national experts 11th September, 2005 Fly to Henan and meet with PIO officials 12th September, 2005 Site visits in project districts and discussion with PIU 13th September, 2005 Site visits and return to Beijing 14th September, 2005 Fly to Shanxi for site visits and discussion with PIO and PIU 15th September, 2005 Site visits and return to Beijing 16th September, 2005 Initial set-up of Project Office 17th September, 2005 Meet with UNDP/GEF RE Capacity Building Project 19th September, 2005 Meet with MOA officials 19th September, 2005 Fly to Jiangxi for Training Workshop 20th September, 2005 Participate in Training Workshop 21st September, 2005 Participate in Training Workshop 22nd September, 2005 Participate in Training Workshop 23rd September, 2005 Site visits in Jiangxi and Hubei 24th September, 2005 Site visits in Hubei and discussion with PIU 25th September, 2005 Drive to Wuhan and meet with PIO officials 26th September, 2005 Return to Beijing 27th to 30th September, 2005 Continue Project Office set-up and draft Status Report 28th September, 2005 Attend Chinese Association for Sciences and Technologies,

workshop on Sustainable Development and Technology Innovation.

1st to 8th October Complete Status Report (National Holiday in China) 10th October, 2005 Deliver Status Report 12th October, 2005 Coordination meeting with National Experts


Page iii Efficient Utilization of Agricultural Wastes / ADB Loan: PRC 1924 / Landell Mills Ltd

18th to 20th October, 2005 Attend and Present at International Biogas Symposium 24th October, 2005 Coordination meeting with National Experts 13th to 28th October, 2005 Prepare Planning and Design Report 3rd to 4th November, 2005 Hold Workshop on Status Report and Planning and Design 7th to 8th November, 2005 Attend International Conference on Renewable Energy 5th December, 2005 Coordination meeting with National Experts 7th to 11th December, 2005 Field study, Henan, CDM baseline for Type III 7th to 15th December 2005 ADB Review mission 14th December 2005 Workshop on Environmental Monitoring Plan 15th December 2005 Workshop Special Study A 20th February 2006 Released RFP on Beneficiary Assessment 22nd February 2006 Poverty Alleviation and Targeting Workshop 2nd to 24th March 2006 Mid-Term Review Mission 10th to 19th March 2006 CDM Field Visit to Henan Province 2nd to 10th April 2006 Environmental Monitoring Kick-off Meetings 20th June 2006 Planning meeting for SS-D, MOA 21st June 2006 Review meeting for Special Agricultural Research 4th July 2006 CDM Participants Workshop, Zhengzhou 4th to 6th August 2006 Special Review Mission of GEF Activities 19th August 2006 Meeting with ADB Task Manager 26th September 2006 EEME Review Workshop, Beijing 28th September 2006 SS-D Team Meeting 19th October 2006 CDM Review Meeting, Zhengzhou 9th November 2006 SS-D Team Meeting

16th & 17th November 2006 CDM Training Workshop on Technology Selection and Monitoring-Verification Plan, Zhengzhou

9th December 2006 SS-D Team Meeting 11th January 2007 SS-D Team Meeting 21st January 2007 Phase II Planning Meeting 8th February 2007 SS-D Team Meeting 9th March 2007 SS-D Team Meeting 14th March 2007 Workshop to Review GEF-funded Activities 17th March 2007 CDM Training Workshop on PDD Preparation, Zhengzhou 21st March 2007 ADB Mission Wrap-up Meeting 20th April 2007 Final Workshop


Page iv Efficient Utilization of Agricultural Wastes / ADB Loan: PRC 1924 / Landell Mills Ltd

DISTRIBUTION LIST

Recipient Copies (English)

Copies (Chinese)

Format

FECC, Ministry of Agriculture 10 - Electronic & hard copy

Liang Lu, Landell Mills Beijing Office 1 - Electronic & hard copy

Simon Foxwell, Landell Mills HQ Office 1 - Electronic copy only

TA team 1 - Electronic & hard copy* Additional copies available upon request. QUALITY ASSURANCE STATEMENT

Report Status Date

Final Report First submission April 6, 2007

Name Position Signature Date

Prepared by:

Dr. Pat DeLaquil Team Leader

April 20, 2007

Checked by:

Simon Foxwell Director, LML

April 20, 2007

ACKNOWLEDGEMENTS

The authors would like to express their appreciation for the guidance and support provided by the PMO and to the ADB review mission teams for their support in the preparation of the components to this report.


Page v Efficient Utilization of Agricultural Wastes / ADB Loan: PRC 1924 / Landell Mills Ltd

CONTENTS EXECUTIVE SUMMARY ........................................................................................................ 1 1. OVERVIEW AND WORK PLAN....................................................................................... 5

1.1 Introduction.............................................................................................................. 5 1.2 Strategic Overview .................................................................................................. 7 1.3 Technical Assistance Work Plan.............................................................................. 8

2. IMPLEMENTATION SUPPORT ACTIVITIES................................................................. 10 2.1 Project Evaluation Framework .............................................................................. 10 2.2 Energy and Environmental Monitoring and Evaluation Plan ................................. 10 2.3 Beneficiary Impact Assessment Plan and RFP ..................................................... 12 2.4 Management Information System Work Plan........................................................ 12 2.5 Comprehensive Training Program......................................................................... 13 2.6 Applied Research on Effectiveness of Bio-Slurry.................................................. 14 2.7 International Conference on Bio-Energy Partnership............................................ 15 2.8 Type III System Design Guidelines and Technical Standards ............................... 17

3. STUDY RESULTS ......................................................................................................... 19 3.1 Special Study A: Viability of Type III and Type IV Systems.................................... 19 3.2 CDM Pilot Project .................................................................................................. 20 3.3 Special Study B: Determine the Optimal Digester Capacity and the Number for Farm-Scale Systems ......................................................................................................... 21 3.4 Special Study C: Analyze the impact of mercury and lead poisoning to humans from usage of organic fertilizer .......................................................................................... 24 3.5 Special Study D: Crop Straw Utilization for Rural Energy Needs .......................... 25

4. MANAGEMENT SUPPORT ACTIVITIES ...................................................................... 29 4.1 ADB Project Review Missions ............................................................................... 29 4.2 Project Implementation Reports ............................................................................ 29 4.3 Phase 2 Project Development............................................................................... 29

5. CONCLUSIONS AND RECOMMENDATIONS.............................................................. 30 ATTACHMENT A: ENERGY & ENVIRONMENTAL MONITORING & EVALUATION PLAN . 33

Overview ........................................................................................................................... 33 Monitoring and Analysis Data Categories.......................................................................... 34 Determination of Sample Households............................................................................... 46 Data Collection Forms for Farmers ................................................................................... 47 Procedures for Village Leaders ......................................................................................... 48 Procedures for PIU Staff.................................................................................................... 48 Procedures for PIO Experts .............................................................................................. 48

ATTACHMENT B: WORK PLAN FOR BENEFICIARY IMPACT ASSESSMENT .................. 49

Background ....................................................................................................................... 49 Indicators for Project Evaluation........................................................................................ 49 Supporting Information from Provincial Staff ..................................................................... 50 BIA Objectives ................................................................................................................... 50 Economic and Financial Analysis (EFA)............................................................................ 55 BIA and EFA Reporting Requirements .............................................................................. 56

ATTACHMENT C: MANAGEMENT INFORMATION SYSTEM WORK PLAN ...................... 58 ATTACHMENT D: COMPREHENSIVE TRAINING PROGRAM FOR 2006.......................... 62

Introduction........................................................................................................................ 62 Prior Assessments and Training Achievements................................................................. 62 Review of GEF Budgets for Training ................................................................................. 64 Summary of Provincial Training Priorities.......................................................................... 69


Page vi Efficient Utilization of Agricultural Wastes / ADB Loan: PRC 1924 / Landell Mills Ltd

Status of PIO Training Activities ........................................................................................ 70 Proposals for Improved Implementation and Supervision of Training Plans ..................... 73

ATTACHMENT E: WORK PLAN AND TOR FOR TYPE III (Medium/Large Biogas Engineering Projects) SYSTEM GUIDELINES AND STANDARDS...................................... 85 1. Background and Objective............................................................................................. 85 2. Framework of Technical Guideline for Type III System.................................................. 85 3. Implementation of Technical Guideline .......................................................................... 85 4. Integration of Technical Guideline into Project Management......................................... 86 5. ToR of National Expert for Technical Guideline for Type III Systems............................. 89

5.1 Responsibilities ........................................................................................................... 89 5.2 Qualifications............................................................................................................... 89

6. Appendix - Agriculture Sector Technical Standards ....................................................... 89 ATTACHMENT F: INSTITUTIONAL FRAMEWORK FOR CDM PROMOTION IN HENAN PROVINCE ........................................................................................................................... 90 ATTACHMENT G: SPECIAL STUDY C: RISK OF MERCURY AND LEAD CONCENTRATION IN THE ECO-AGRICULTURAL SYSTEM ........................................... 100

Introduction...................................................................................................................... 100 Work plan for National expert .......................................................................................... 105

The following Annexes are stand-alone reports that were separately delivered under this project and are included as part of this Final Report.

ANNEX 1: STATUS REPORT

ANNEX 2: PLANNING AND DESIGN REPORT

ANNEX 3: SPECIAL STUDY A: VIABILITY OF TYPE III AND TYPE IV SYSTEMS

ANNEX 4: PDD FOR HENAN BIOGAS CDM PILOT PROJECT

ANNEX 5: SPECIAL STUDY B: OPTIMAL DIGESTER SIZE FOR TYPE I AND TYPE II SYSTEMS

ANNEX 6: SPECIAL STUDY D: CROP STRAW UTILIZATION FOR RURAL ENERGY NEEDS

LIST OF FIGURES Figure 1: Location of Project Counties and Municipalities ...................................................... 5 Figure 2: Project Strategic Objectives are achieved through Implementation Activities that

flow from the Core Technology – Rural Biogas Integrated Systems................................ 8 Figure 3: Technical Assistance Final Work Plan ..................................................................... 9 Figure 4: Outline of the Project Evaluation Framework ........................................................ 10 Figure 5: Overview of Energy and Environmental Monitoring and Evaluation Plan...............11 Figure 6: Flow Chart for Analysis of the Optimal Size and Number of Farm-Scale Digester

Systems ......................................................................................................................... 21 Figure 7: Work Plan for Special Study D............................................................................... 27 Figure 8: Institutional Framework for Promoting Biogas CDM Projects in Henan Province.. 91 Figure 9: Organizational Functions of the Biogas CDM Promotion Company ...................... 92 Figure 10: Simplified Diagram of Mercury in the Biogas Digester / Food Cycle ................. 102 Figure 11: Mercury and Lead in the Biogas Digester / Food Cycle..................................... 103 Figure 12: Mercury and Lead in the Biogas Digester / Food Cycle .................................... 105 Figure 13: Simplified Diagram of Mercury and Lead in the Biogas Digester / Food Cycle . 106


Page vii Efficient Utilization of Agricultural Wastes / ADB Loan: PRC 1924 / Landell Mills Ltd

LIST OF TABLES Table 1: Planned Units of Different Provinces and Types of Technologies ............................. 7 Table 2: Biogas CDM Promotion Company Business Cash Flow......................................... 95 ABBREVIATIONS AND ACRONYMS ADB Asian Development Bank AF Aerobic Filter CDM Clean Development Mechanism CO Carbon Monoxide CO2 Carbon Dioxide CSTR Continuous Stirred Tank Reactor EGSB Expanded Granular Sludge Bed reactor EPB Environmental Protection Bureau (provincial level) EU European Union FECC Foreign Economic Cooperation Center GEF Global Environment Facility GHG Greenhouse Gas IC Internal Circulation Reactor IEA International Energy Agency IGCC Integrated Gasification Combined Cycle LPG Liquid Petroleum Gas MOA Ministry of Agriculture mu 1/15 hectare NDRC National Development and Reform Commission O&M Operation and Maintenance PAM Project Administration Memorandum PMO Project Management Office PIO Project Implementation Office PIU Project Implementation Unit PPMS Program Performance Monitoring System R&D Research and Development RE Renewable Energy SEA Strategic Environmental Assessment SEPA State Environmental Protection Agency TA Technical Assistance TNA Training Needs Assessment TPY Tons per Year USAB Up-flow Anaerobic Sludge Blanket UBF Up-flow Sludge Bed Filter UNDP United Nations Development Programme


Page 1 Efficient Utilization of Agricultural Wastes / ADB Loan: PRC 1924 / Landell Mills Ltd

EXECUTIVE SUMMARY This ADB Loan Project: Efficient Utilization of Agricultural Wastes (L1924-PRC) is intended to overcome barriers to widespread adoption of biomass-based renewable energy systems, improve the environment and promote economic growth in rural areas of Shanxi, Henan, Hubei and Jiangxi provinces. Implementation was started in June 2003, and international consultants providing support under the GEF component of the Project started work in September 2005. This Final Report is intended to document all the areas and activities in which the international consultants have provided guidance, technical analysis and support to the Project. The report is organized according to the main components of the work plan for technical assistance: implementation support, special studies and management support. The principal accomplishments and conclusions are summarized below: Component A: Support for Systems Implementation By December 31, 2006, the Project had achieved an implementation ratio 95% of the Type I and 73% of Type II household digester systems. Overall, the project had financed the construction of 14,797 biogas digesters, and trained 20,738 technicians, farmers and extension workers in biogas technology. The optimization of household biogas digesters into an integrated agriculture system is a complex process which should be handled in a systematic way. Under Special Study B, a framework and methodology has been proposed for optimizing the size of Type I and II systems by introducing module modeling and integration of modules. The modules and their contents for the analysis have been defined and specified. Detailed steps for the implementation and integration of the modules have been designed. Data document template for collecting data is designed. It is recommended that the development of this modeling and analysis framework be continued to provide a tool for the future study and development in this area. Implementation of the Type III systems, medium-scale biogas plants, is proceeding, but only 3 of the 16 planned systems have been implemented, and significant concerns remain regarding technology selection and the development of reliable and effective system designs. The TA team prepared a work plan and terms of reference for establishing “Technical Guidelines for Type III Systems” for technical support and quality assurance, setting up a database to record technical information for the whole process and procedures of project implementation. It is strongly recommended that this work plan be implemented quickly, as the results can still be of benefit to the Type III systems still under development on this Project. Type III systems appear to be ideal candidates for CDM implementation, but given their relatively small size a bundled CDM project approach is needed. The CDM pilot project in Henan, implemented under this TA, has provided a roadmap, supporting documentation and analytical tools that other provinces and projects can use to quickly develop their bundled medium to large scale livestock biogas applications into valid CDM projects. It is recommended that these tools be integrated into the next phase ADB Project, and with the help of the planned Type III System Technical Guidelines, should greatly improve the viability and sustainability of Type III systems. Regarding Type IV systems, village-scale crop straw gasification plants, the institutional, economic and technical issues that were identified in Special Study A still remain. The ADB project in Sangda village, Gansu province was reviewed by the project team, and many of these issues exist at this project. One problem appears to be a lack of institutional learning



regarding the various technical solutions that do exist regarding tar cleanup from the gas and mechanical equipment reliability. The current institutional arrangement at the village level requires significant training and continual technical support that require a committed institution to provide over the long-term. Without a new institutional approach to technology improvement and technical support to the villages, these systems are unlikely to be successfully implemented in the future. With the cancellation of the Type IV systems, Special Study D was developed to address the issue of how to best use the abundant crop straw residues. Its main conclusions are provided in Section 3.5 and summarized here.

• The total yield of the principal crop straws (rice, wheat, corn, soy and cotton) comprised about 675 million tons in 2005. Given the various competing uses for these crop residues, such as animal fodder, paper production and soil fertilizer, the percentage of residues available for new uses ranges from a low of just under 9% in Qinghai-Tibet to a high of 56% in South China. In most regions, the percentage is between 20% and 40%.

• With the improvement of income and living standards, utilization of energy by rural residents is expected to increase greatly and will likely have a significant impact on the overall structure and volume of energy consumption in China. Three scenarios for rural residential energy consumption in the years 2010 and 2020 were developed based on different policy enforcement assumptions and indicate that household energy consumption in rural China will range from 280 to 358 million tons of coal equivalent (tce) by 2020 representing an annual increase of 1.88% to 3.44%. The potential savings in energy consumption by 2020 due to implementation of effective policies was about 78 million tce, which represents 25.4% of the total rural energy consumption.

• The evaluation of biomass solid pellet fuels shows that it is at the early stage of industrial development with small profit margins and low investment returns, which needs government guidance and policy support to promote technological improvements, expand demonstration and enter the commercialized stage as soon as possible.

• Commercial stove technologies for burning straw and stalk have seen rapid development in recent years, but the manufacturing enterprises are relatively small and simply equipped. The following measures requiring government support should be taken: 1) giving priority to small and medium-scale in pellet fuel technology development, 2) promoting pelletizing technology applications, 3) supporting the scale-up of pelletizing equipment manufacturing, and 4) strengthening R&D in pelletizing machines and special stoves.

• Three types of biomass power generation technology were analyzing: direction combustion, co-firing of coal and biomass and biomass gasification. All of these are still in the demonstration stage, and a technical assessment and cost-benefit analysis are provided based on the data and estimation of the most current demonstration projects. The conclusion is drawn that it is feasible to apply straw-fired power generation technology in China. It is recommended to strengthen systematic research on characterizing the biomass resource supply and planning work for the implementation of biomass power plants, as well as strengthening related policy support and implementation measures.

• Regarding policy recommendations for crop straw electricity generation, pelletized biomass fuel and energy saving stoves, the analysis identified additional compulsive policies mainly including compulsive purchasing system and compulsive quota system, and also incentive policies mainly including subsidies, credit, revenue



policies and guarantee measures on capital, rules of laws, technologies, market and society.

Component B: Improvement of Biomass Technology Transfer In support of this Loan component, a preliminary Training Needs Assessment was prepared covering all aspects of biomass technology, project management, energy and the environment. It assessed the requirements for capacity development at the provincial and local levels, and identified specific project management, energy and environmental training requirements, including training requirements for poor farmers and women, and requirements for domestic and overseas training/study tours.

The preliminary Training Needs Assessment was reviewed with the PMO and PIOs to further develop and refine the training program, and the Comprehensive Training Program for 2006-2007 was developed as a result of this process. The process of developing the Training Program Plan was difficult because the concept of continual, results-oriented training was not initially appreciated. In particular with management training, it took time to gain the acceptance of a program based on a planned series of specialized management training courses which build cumulatively on each other and reinforce the actual utilization of the techniques being taught. However, the approach was finally accepted and the program is now in the process of being implemented. Three specific activities were developed by the Project that are aimed at specific scientific analyses related to the biogas eco-agricultural system. The first of these, applied research into the effectiveness of bio-digester slurry, is being implemented by Chinese Academy of Agricultural Sciences and Shanxi Agricultural University. Two new activities: a special R&D activity to explore methods to improve the effectiveness of bio-digesting crop residues and an assessment of methods to develop a sustainable agricultural support system, were developed and proposed by Hubei province. The implementation of these two activities is recommended. Component D: Improve Environmental Policy Implementation The critical support activities under this component were the Energy and Environmental Monitoring and Evaluation Plan (EEME Plan), the Management Information System (MIS) and the Beneficiary Impact Assessment (BIA). These three activities were defined and are currently under implementation as the principal elements of the Project Performance Management System.

The EEME Plan will require continuing monitoring and review by the PMO and the national expert for preparing the national consolidation of the provincial results. The review and monitoring should focus on ensuring that proper procedures are followed and that timely results are prepared.

The implementation of the MIS has been delayed because the financial commitments to the national expert heading this activity have not been met in a timely manner. This activity needs to be implemented as quickly as possible to ensure that 1) the PIO and PIU staff are trained in using the system before the Project is complete, 2) the important data developed by this project is captured in an electronic form for future analysis, and 3) the results of the project are widely disseminated through a professional web site and data display interface.

Lack of timely payments to national experts has also affected other project components, but not as significantly as in this case. Timely payment to national experts is an area where improved procedures in the PMO/FECC and better coordination with MOF are needed.

Implementation of the first phase of the BIA was completed in March 2007, but system implementation on the Project started in 2004. Therefore, it was not possible to establish a real baseline against which the project results could be measured. The TA consultants recommended starting the BIA in March 2006, which would have provided a reasonable



baseline to be established. However, delays in obtaining GEF approval of the contingency re-allocation, which was used to fund the BIA, prevented this. In retrospect, the BIA should have been a panned component that should have been conducted at the start of the project.

Cumulatively, the above activities will support the overall assessment of the Project results relative to the intended outcomes defined at the start of the Project.

Special Study C was another element of the TA work under this component. While this work was not completed because the consultants were given higher priority tasks in terms of the CDM pilot and Special Study D, this issue – the potential risk of heavy metal concentration in the biogas eco-agricultural system – remains a concern, and follow-on activities through the designed work plan and expert TOR provided in Attachment G is strongly recommended. Component E: Pilot Poverty-Focused Approaches This Project component was intended to remove constraints to participation by poor farmers in rural areas through specially designed training programs and biomass development assistance (grants) to enable them to adopt integrated agricultural production with biomass systems. The TA consultants supported this component by conducting workshops with national experts and the PIO/PIU staff to discuss approaches for implementing this component. The Poverty Pilot component has now been approved and is under implementation. Component F: Improve Project Implementation and Capacity Development This component of the Project is intended to strengthen management support and coordination, and to improve the capability of the implementing agencies and the national, provincial and county levels. As part of the Comprehensive Training Plan, a series of specialized management training courses which build cumulatively on each other and reinforce the actual utilization of the techniques being taught is in the process of being implemented. In addition, specialized environmental management training programs and other individual capacity training programs were identified and will be implemented.



1. OVERVIEW AND WORK PLAN

1.1 Introduction This ADB Loan Project: Efficient Utilization of Agricultural Wastes (L1924-PRC) started implementation in June 2003 and is focusing on disadvantaged districts in four provinces: Shanxi, Henan, Hubei and Jiangxi, as shown in the Figure 1.

Figure 1: Location of Project Counties and Municipalities



The Project is intended to overcome barriers to widespread adoption of biomass-based renewable energy systems, improve the environment and promote economic growth in rural areas. The Project is organized according to the following six components.

A. Providing funding support for the development of i) an estimated 15,600 biogas digesters using integrated farm production systems that expand livestock, vegetable, fruit, and other crop production, and ii) an estimated 42 medium-scale biogas and gasification plants;

B. Introducing improved mechanisms for transferring biomass technology by providing

training to rural energy officials, technicians, beneficiary farmers, contractors, and medium-scale plant operators;

C. Improving farmer-selected farm-to-market facilities by constructing and rehabilitating

about 60 kilometers of access road; D. Assisting environment policy implementation and awareness by providing

environmental equipment, technical support and training and assuring environmental standards by establishing facilities and systems for environmental monitoring;

E. Developing poverty-focused approaches for household biogas development by

providing training and other elements to the poor farmers through appropriate community-based biogas energy programs; and

F. Project implementation and capacity development by providing consulting services to

the Project Executing Agencies. Agricultural wastes in the form of animal manures and crop residues are both an environmental burden and an important energy resource. The Project was designed to use these resources to fuel the following four types of systems. Type I systems are the 4-in-1 model eco-farm. The four elements are: greenhouse, pigs (or other livestock) in an integrated pigpen inside the greenhouse, vegetable crops, and a biogas digester. Manure from the pigs and household wastes provide the fuel for the underground digester to produce biogas for lighting and cooking, and for greenhouse heating and CO2 generation. The fermented sludge and effluent produced by the digester are an organic fertilizer that improves the production of vegetables or flowers in the greenhouse. Type II systems are the 3-in-1 model eco-farm. The three elements are pigs (or other livestock), orchard and a biogas digester. Manure from the pigs and household wastes provide the fuel for the underground digester to produce biogas for lighting and cooking. The fermented sludge and effluent are an organic fertilizer for the orchard. In addition to orchards, the model can also be used for vegetables, cotton, fishponds, grain crops or other crops. Type III systems are medium-scale biogas plants located in commercial pig farms. Pig manure and other liquid wastes provide the fuel for an anaerobic digester which can produce biogas to supply heating, cooking and electricity generation for the central pig farm and biogas for lighting and cooking to local households. The plant effluent is a liquid organic fertilizer, which can be sold to adjacent farms. Type IV systems are medium-scale biomass gasification plants using straw or other crop residue that is normally burned in the field after harvesting. The gasification plant converts



the crop residue into a combustible gas which can be distributed to farm households for cooking, lighting, and heating. As a result of the conclusions and recommendations from Special Study A (discussed in the next section) and other factors, the Project implementation targets were revised during the Mid-term Review Mission and later approved by MOA and ADB. In particular, the conditions that had lead to the inclusion of Type IV systems in the Project design were no longer valid, and they were dropped from the project and the funds reallocated to other system types. Other adjustments were made to reflect changes in the basic cost of systems during the interval between project design and the start of implementation. The numbers of planned systems of each type, as revised as result of the Mid-term Review Mission, are listed in Table 1.

Table 1: Planned Units of Different Provinces and Types of Technologies

Type I Type II Type III Type IV Shanxi 1,685 3,500 6 - Henan 860 2,370 10 - Hubei - 5,000 - -

Jiangxi - 6,100 - - Total 2,545 16,970 16 -

This Final Report documents the technical assistance activities and accomplishments by the International Consultant team working under the GEF component of the ADB Loan Project 1924-PRC: Efficient Utilization of Agricultural Wastes.

1.2 Strategic Overview The strategic objectives of the Project are to improve the environment, promote growth, and improve welfare and living conditions of rural households through a commercially viable and sustainable service sector centered on biogas technology and integrated utilization of agricultural residues. These strategic objectives can be further elaborated as shown in the outer ring of Figure 2. To achieve these strategic objectives, implementation activities are needed and are shown in the figure’s inner ring. Rural biogas integrated systems are the enabling technology and the activities under this technical assistance are designed to support and enhance these implementation activities in order to help the Project achieve these strategic objectives.



Social

Economic

Evaluation

Rural Economic

Development

Awareness of External

Financing Benefits

RuralBiogas

Integrated Systems

Sensitivity To Market Conditions

Increas

ed

Agricultu

ral

Producti

vity

Impro

ved

Environmen

tal

Health

&

Sanita

tion

AttractiveEconomic Returns

Public

Acceptance

Understanding

Integrated

Farm Risk

Management

Environmen

tal

Monitorin

g

Implem

entat

ion

Policies

Financing

Mechanisms

Strategic Strategic ObjectivesObjectives

Implementation Implementation ActivitiesActivities

CoreCoreTechnologyTechnology

Social

Economic

Evaluation

Rural Economic

Development


Financing Benefits

RuralBiogas

Integrated Systems


Increas

ed

Agricultu

ral

Producti

vity

Impro

ved

Environmen

tal

Health

&

Sanita

tion


Public

Acceptance

Understanding

Integrated

Farm Risk

Management

Environmen

tal

Monitorin

g

Implem

entat

ion

Policies

Financing

MechanismsSocial

Economic

Evaluation

Rural Economic

Development


Financing Benefits

RuralBiogas

Integrated Systems


Increas

ed

Agricultu

ral

Producti

vity

Impro

ved

Environmen

tal

Health

&

Sanita

tion


Public

Acceptance

Understanding

Integrated

Farm Risk

Management

Environmen

tal

Monitorin

g

Implem

entat

ion

Policies

Financing

Mechanisms

Strategic Strategic ObjectivesObjectives

Implementation Implementation ActivitiesActivities

CoreCoreTechnologyTechnology

Figure 2: Project Strategic Objectives are achieved through Implementation Activities that flow

from the Core Technology – Rural Biogas Integrated Systems

1.3 Technical Assistance Work Plan In accordance with the Consultant team’s proposed work plan, the technical assistance activities were organized into three main areas: Mobilization & Planning, Implementation Support Activities, and Special Studies, as shown in Figure 3. The TA activities were initiated on 6th September 2005 and were completed on 21st April 2007. Under Mobilization & Planning, the Consultant team prepared and delivered a Status Report based on its initial assessment of the Project activities. The Status Report is included with this Final Report as ANNEX 1. The Consultant team also prepared this Planning & Design Report, and conducted a management workshop to review the Status Report and the Planning & Design Report and coordinate PMO and provincial inputs to this technical assistance activity. The Planning & Design Report is included with this Final Report as ANNEX 2.



Mobilization & Planning

Implementation Support Activities

Special StudiesStatus Review

Planning & Design

Pilot PovertyFocused

Approaches

ImproveEnvironmental Implementation

RehabilitateFarm to Market

Systems

TransferBiomass

Technology

Fund Biogas Systems

C. Impact of Mercury and Lead

B. Optimal DigesterSize and Number

A. Viability of Type III & Type IV

Systems

Improve ProjectImplementation

D. Crop Straw Utilization

CDM Pilot Project

Mobilization & Planning

Implementation Support Activities

Special StudiesStatus Review

Planning & Design

Pilot PovertyFocused

Approaches

ImproveEnvironmental Implementation

RehabilitateFarm to Market

Systems

TransferBiomass

Technology

Fund Biogas Systems

C. Impact of Mercury and Lead

B. Optimal DigesterSize and Number

A. Viability of Type III & Type IV

Systems

Improve ProjectImplementation

D. Crop Straw Utilization

CDM Pilot Project

Figure 3: Technical Assistance Final Work Plan

Under the Implementation Support Activities, the Consultant team has provided a range of inputs covering all six components of the Project. These inputs, or advisory services, have covered renewable energy and environmental policy, project management and implementation, a wide range of training activities, financing mechanisms for poor and disadvantaged groups, and study tours. In carrying out these support activities, the Consultant team has interacted extensively with the MOA, the PMO, PIOs and PIUs, other government agencies at the national and provincial level and private companies active in the supply and support of biogas systems in rural areas. Section 3 provides details of these Implementation Support Activities. Under Special Studies, the Consultant team has carried out focused studies directed initially at three topics of immediate or overall concern to the Project so as to provide specific advice and guidance to future Project direction and activities. A fourth Special Study, on the Utilization of Crop Straw Residues, was added to the TA scope as a result of the Mid-term Review Mission. In addition, a pilot CDM project for Henan province was developed as a result of the Mid-term Review Mission, and that activity is reported as a Special Study. Section 4 provides details of these Special Studies. Finally, the Consultant team provided a range of Management Support Activities, which are summarized in Section 5.



2. IMPLEMENTATION SUPPORT ACTIVITIES

2.1 Project Evaluation Framework The Project Administration Memorandum (PAM) identifies environmental requirements that are to be met during implementation of the Project. These environmental requirements were reviewed and assessed with regard to the overall Project objectives and the best practices for environmental monitoring and evaluation (M&E). These best practices include the need for clear M&E objectives, identification of distinct monitoring levels and determination of appropriate indicators at each level. This assessment resulted in development of the Project Evaluation Framework shown in Figure 4 along with a set of recommendations for structuring and implementing the Project Evaluation Framework to ensure the Project environmental requirements are met and that the resulting framework and capabilities are sustainable after the completion of this Project. Three project evaluation implementation activities were developed based on this framework: 1) Energy and Environmental Monitoring and Evaluation Plan, 2) Beneficiary Impact Assessment, and 3) Management Information System. These are discussed in the next sections.

Project Objectives

Data Collection Equipment

Implementation Structure

Target Indicators

& Sample Sets

Reporting Levels- PIU level- PIO level- PMO level

M&E Objectives

Training for Project/Environmental

Monitoring

Data Collection Activities

HouseholdVillageCounty

Provincial

Analysis andReporting

Energy and Environmental Monitoring and Evaluation PlanBeneficiary Impact Assessment

Management Information System

ProjectEvaluation & Reviews

PPMS Reports

EnvironmentalMonitoring

Reports

Project Objectives

Data Collection Equipment

Implementation Structure

Target Indicators

& Sample Sets

Reporting Levels- PIU level- PIO level- PMO level

M&E Objectives

Training for Project/Environmental

Monitoring

Data Collection Activities

HouseholdVillageCounty

Provincial

Analysis andReporting

Energy and Environmental Monitoring and Evaluation PlanBeneficiary Impact Assessment

Management Information System

ProjectEvaluation & Reviews

PPMS Reports

EnvironmentalMonitoring

Reports

Figure 4: Outline of the Project Evaluation Framework

2.2 Energy and Environmental Monitoring and Evaluation Plan The environmental indicators identified in the PAM were reviewed and further elaborated by the international and national environmental experts, thorough the creation of a plan for monitoring the energy and environmental impacts of the Project. A detailed Energy and Environmental Monitoring and Evaluation Plan (EEME Plan) was then developed with the support of the provincial environmental experts. The EEME Plan has been designed to effectively measure the intended benefits of the Project.



The EEME plan is summarized in Figure 5 and specifies 1) training at the provincial, county and village level, 2) the development of data collection forms and procedures for collecting data, verifying the accuracy of the data, and analyzing the data to support evaluation of multiple project benefits, 3) administrative and evaluative activities at the PIU and PIO levels, and 4) monitoring and reporting requirements.

PIO Experts • Review data questionnaires

and procedures developed by PMO

• Visit each village annually to conduct data verification tests and procedures

• Conduct indoor air quality testing

• Conduct water pollution assessment

• Analyze data from all counties and prepare quarterly M&E reports to the PMO

PIU Staff • Select villages and

households based on criteria from PMO

• Visit each village quarterly to collect and spot check data and adjust procedures

• Collect slurry, sludge and soil samples and send to PIO lab

• Conduct interviews on health and sanitation

• Compiles data from all villages and report quarterly to the PIO

Selected Farmers collect data based on questionnaire

and tools provided

Village Leaders monitor progress of data collection and report problems to the PIU

Energy, crop, fertilizer,

pesticide and sanitation data

FarmerQuestionnaires,

Tools and Procedures

Training for • PIO Experts• PIU Staff• All selected farmers

and village leaders

Village leader Instructions and

Procedures

PMO Experts• Prepare selection criteria,

data questionnaires, tools and procedures

• Prepare and provide training• Regularly interact with PIO

experts on data verification tests and procedures

• Analyze data and prepare semi-annual evaluation reports to PMO














and tools provided







and village leaders


Procedures






Figure 5: Overview of Energy and Environmental Monitoring and Evaluation Plan

Under the EEME Plan, data is being collected at the household level to measure changes in energy use, agricultural production, fertilizer use, pesticide use, livestock production, health and sanitation, and household economics. In addition, special studies are being conducted to measure changes in indoor air quality, soil organic material, and water run-off from farms. Laboratory analyses are being conducted on the digester slurry and sludge and the various crop being raised by the farmers. The complete EEME Plan is included as Attachment A. Detailed work plans were developed by each province that specify their approach to implementation of the EEME Plan in selected Project counties and villages. These work plans formed the basis of subcontracts between the PMO and the PIOs for implementation of the EEME Plan. The subcontracts were executed in September 2006, and each PIO began to undertake the EEME Plan activities in their province during the fall of 2006. The EEME Plan includes a provision for the national environmental expert to compile and evaluate the PIO evaluation reports to prepare a national-level evaluation of the Project energy and environmental impacts and assess how well the Project has achieved the intended objectives.



2.3 Beneficiary Impact Assessment Plan and RFP ADB Loan-1924 PRC is officially classified as one embracing “Poverty Intervention” with a thematic classification of “Environment.” At the time of Project Appraisal and Start-up neither a baseline for poverty assessment nor the foundation for measuring gender impacts were included as components under the Loan. Also, these components were not identified as ones requiring allocation of GEF Funds for implementation. Few provincial staff have the sociological skills required to conduct surveys to assess the scope of socioeconomic impacts on representative households, nor to evaluate impacts on gender. To rectify this oversight, and to ensure effective evaluation of Project’s impacts on all households, including poverty groups and women, a Beneficiary Impact Assessment (BIA) was designed in November 2005. The BIA was designed to cover a representative sample of households in the villages and counties in each of the four provinces where the Project is being implemented. In addition, key stakeholders, including village leaders, village technicians (both male and female), and investors in Types III biogas systems will be included either as interview respondents or as members of a focus group. It is estimated that a representative sample from all provinces would comprise a total of about 1000 respondents. To ensure a foundation for longitudinal evaluation of project impacts over the Project’s duration, it was initially proposed that the BIA cover three phases: (i) a baseline assessment during March-April 2006; (ii) a mid-term evaluation scheduled during November-December 2006; and an end-of-project evaluation scheduled in December 2007. The proposed program was approved by the ADB Review Mission in December 2005, and on this basis a formal request for proposals was prepared and submitted to three local, pre-qualified social assessment organizations in February 2006. Both Technical and Financial Proposals were received and evaluated in March 2006 by an evaluation committee consisting of PMO, PIO, and international TA staff. At the Mid-term Review Mission, it was determined that funding for the BIA involved reallocation of the GEF contingency fund, and that this would require GEF approval in addition to the normal ADB approvals. The GEF approval was received in August 2006, and finalization of the BIA contractor, selected in March, was completed in September 2006. Because of the delay in implementing the BIA, its scope was reduced to two phases. Attachment B contains the work plan for the BIA. It was also determined at the Mid-term Review Mission that L1924-PRC required an update to the financial and economic analyses that were initially performed during the Project design. Terms of Reference were prepared for an Economic and Financial Analysis (EFA) to perform this work as part of the BIA contract. The EFA was designed to build upon the two other project monitoring activities: the EEME Plan, and the BIA. The information from those two monitoring activities will provide the necessary financial and economic inputs needed to update the evaluation of the financial and economic viability of the biogas systems implemented by the Project. Attachment B also contains the work plan for the EFA. The preparatory work of BIA started in October of 2006. After four months of preparation, discussions, pilot test, and full scale surveys, the BIA Team has completed the Phase I surveys in all four provinces and is preparing their Phase I report. The first phase of the EFA will be completed shortly afterwards.

2.4 Management Information System Work Plan The Project Administration Memorandum (PAM) states that each province will establish a Project Performance Monitoring System (PPMS) to ensure that project facilities are



managed effectively. During the initial two years of Project implementation, the PIOs developed reporting procedures tailored specifically to developmental activities in each province that are descriptively adequate but not based on a computerized data management system. Based on the principals of the Project Evaluation Framework, the TA consultant team supported the development of a computer-based Management Information System (MIS) that is accessible for continuous data inputting, updating, monitoring and evaluation. Terms of Reference were developed for a qualified contractor to design, implement and support the MIS for the Project. In consultation with the PMO, the Center for Energy and Environmental Protection, (CEEP) was selected under a single source selection procedure to carry out the consulting services. The selection of CEEP is justified on the basis of its successful implementation of the computer-based MIS for the government’s national program (the so-called “T-Bond” program) aimed at providing credit and financial services for the construction of biomass digesters throughout all provinces in China. Attachment C contains the work plan that was prepared for the consulting services, which fall into three categories: 1) strategic planning and review of the MIS requirements; 2) design of the architecture, database, and information technology requirements; and 3) testing, training and dissemination of the MIS among the end users and key stakeholders.

2.5 Comprehensive Training Program A Training Needs Assessment (TNA) and Stakeholder Analysis were conducted in September-October 2005. Five key groups were identified as those requiring training and capacity building under the project:

(i) Project Management Office (PMO) and Provincial Implementation Office (PIO) officers and staff responsible for project management, administration and supervision;

(ii) PIO and Provincial Implementation Unit (PIU) officers and staff working directly with farmers on practical aspects of implementation;

(iii) Farmer and farm groups, including women, directly responsible for sustaining and utilizing project benefits;

(iv) Private sector groups who can support and contribute to the project objectives, including engineers, technical experts, bankers and financiers, among others; and

(v) Other trainees, students and personnel not directly involved in project implementation.

As discussed in the Status Report, five critical areas requiring training and capacity building were identified:

(i) Policy and Management Training for Implementation

(ii) Practical Aspects of Development and Transfer of Biomass Technologies

(iii) Awareness of Biomass Development and Energy Applications—with special emphasis on gender and poor farmer groups

(iv) Targeting of Poor Farmers to receive Benefits of Biomass Technologies

(v) Overcoming Credit and Financial Barriers to Sustain Rural Energy Applications of Biomass Technologies.



The ADB Mid-Term Review, a comprehensive training program for implementation from April 2006 through project completion was requested. This Comprehensive Training Plan was prepared by the international and national training experts based on the training priorities as provided by the PIOs, linked to expected outputs of the Project. A results-oriented training staff leadership and teaming workshop was undertaken in mid-May 2006. Each provincial team used this workshop as an opportunity to identify and develop its list of priorities. A second workshop was held in August 2006 to prioritize specific training activities, to identify stakeholders and training participants, and to link training activities to the Project’s technical and management implementation requirements. Finally, a review of the Training Program Plan was undertaken in October-November 2006 by the domestic and international training specialists. The Comprehensive Training Program for 2006-2007 in included as Attachment E to this Final Report. The Components of this Training Program Plan include the following:

Summary of prior assessments and achievements of the Project with respect to training at the village, county, PIO and national levels.

Review of general budget practices with respect to PIO training activities; current difficulties with respect to reimbursement by DOF and MOF; and suggested procedures for budget consolidation and adjustment to meet the balance of training requirements.

Summary of provincial training priorities and issues and concerns highlighted by the PIO leadership during the training program review.

Required adjustments in the proposed implementation of the Project’s training program including discussion of the roles and terms of reference for the domestic training specialists (recruited in August 2006), and required budget for travel for monitoring of training program effectiveness; and, discussion of the role of the PMO in management and oversight of overall project management training for implementation.

Detailed PIO Training Plans as drafted by the PIO training coordinators and the PMO.

2.6 Applied Research on Effectiveness of Bio-Slurry Component D of the Project, Improve Environmental Policy Implementation and Awareness, which is funded by the GEF grant, is intended to help remove institutional barriers to the promotion and expansion of biomass technology adoption for environmental improvement and public awareness. Livestock waste has become one of the major sources of environmental pollution in rural China, and solving this problem has become a major environmental challenge. Biogas digester technology is an economic and effective approach for handling and treating livestock manure wastes, and facilitates the utilization of this potential resource. In addition to reducing the environmental pollution from livestock manure wastes, the technology can provide both clean energy and an organic fertilizer for enhancing crop growth. This principal is the cornerstone of the eco-agricultural farming practice that is being promoted under this ADB project. In addition, eco-agricultural farming activities, using biogas digester technology promise to become an effective approach for building economic development in rural areas, and can be a cornerstone of the government’s plans to develop the New Socialist Countryside. Farmers have long recognized the importance of utilizing biogas and the associated anaerobic digester residues (ADRs), commonly called sludge, and anaerobic digester wastewater (ADW), commonly called slurry, in a comprehensive manner. The Project has made noticeable accomplishments in raising crop yields and qualities, enhancing disease



and pest control, and improving fertilizer use and water efficiency. In addition, the Project provides an economic and effective platform for technical analysis of the comprehensive utilization of agricultural wastes. However, the findings so far are mostly directed at evaluating crop production activities and yield, with no analysis or experiment to determine the mechanisms underlying improved product quality and yield. To further raise the comprehensive application value of the Project, a plan for applied research to determine the effectiveness of utilizing biogas digester slurry and sludge (hereinafter known as “the Applied Research”) was approved by ADB at the Mid-term Review in March 2006. In August 2006, the GEF approved reallocation of GEF contingency funds to provide resources for implementation of this and other activities identified at the Mid-term Review. The applied research activity was jointly proposed by the Chinese Academy Of Agricultural Sciences and the Shanxi PIO together with the Shanxi Agricultural University. These cooperative applied research activities will focus on measuring, experimenting, and demonstration on a quantitative basis in four areas, including 1) the quantitative measurement of the properties of ADRs, 2) the effects of ADRs on vegetable yield, 3) the effects of ADR utilization on environment, 4) and pathogenic bacteria inhibition. Striving for extending the influence and benefits of the previous ADB project, the new effort will work to produce basic data and technical modules for the comprehensive utilization of biogas. The TA Consultants have provided technical guidance and review to these applied research activities.

2.7 International Conference on Bio-Energy Partnership At the request of ADB and MOA, the Consultant team prepared an outline plan for preparation of an international conference for partnership on rural biomass renewable energy development. That plan, which is summarized below was circulated to MOA and ADB for comment and implementation. More detailed conference preparation including conference program, final date, keynotes and invited speakers, conference venue and other logistic issues should be started as soon as possible led by to be established “Organization Committee”.

2.7.1 Conference Objectives The International Conference should be a high-level event with the following objectives:

• Influence Ministerial-level decision-makers in the GoC, ADB and donor governments regarding support for bio-energy utilization.

• Share new study results and technical insights regarding programs and strategies to meet GoC targets for bio-energy utilization in the 11th Five-year Plan.

• Seek national and international donor support for these new programs and strategies.

• Promote national and international business investment in marketing and implementation of bio-energy technologies and systems.

• Provide a forum for building professional relationships among national and international technical experts and working groups.

2.7.2 Tentative Conference Dates The optimal time period is second half of 2007. The Conference should be combined with the Mid-term or Final Workshop of the ADB Advisory Technical Assistance on Preparing a National Strategy for Rural Biomass Utilization. The target time should be September-October 2007. Conflicts with the dates for other major RE conferences in Beijing and elsewhere should be avoided.



2.7.3 Working Title First International Conference for Partnership on Rural Biomass Renewable Energy Development in China

2.7.4 Organization and Sponsorship It is recommended that an Organizing Committee be established that will be responsible for key programmatic and all financial decisions. The Organizing Committee should have representatives from other ministries to ensure good cooperation regarding the national rural biomass development strategy to be promoted at the Conference. MOA should appoint the Chairperson for this Committee.

An Executive Committee is recommended that will be formed by MOA, PMO and other organizations as appropriate to perform the day-to-day activities needed to ensure a successful conference. As quickly as possible, the Executive Committee should develop the following draft materials for review:

• Workshop Announcement • Preliminary Program • List of Invited Participants and Workshop Sponsors • Target participants and planned workshop size • Workshop Location - Most likely in Beijing, but other options can be considered.

Based on the above workshop materials, the Executive Committee will support the Chairperson in discussions with the potential Key Sponsors in efforts to obtain their commitment to support the workshop.

2.7.5 Critical Decisions/Activities Once firm commitments by Key Sponsors are obtained, the following decisions can be made, as the amount of funds available will have a critical impact on the selections that can be made.

• Select workshop venue: Must offer the type of facilities required, including a plenary hall of sufficient size to accommodate the number of participants, and several optional meeting rooms for break-out sessions, and a separate exhibition hall for industry promotion of equipment and services. Assess and negotiate with several venues before selection by EC. Deposit payment will likely be required.

• Establish Workshop Website: Communication to potential participants and interested parties can be facilitated by establishing a website to hold General information on the workshop, Calls for papers, Solicitation of sponsors, Registration forms, Hotel and travel information, etc.

• Support for Developing Country Participants: Depending on the nature of the Key Sponsors, a decision will be needed from the Organizing Committee regarding the number of international participants that will be given financial support to attend the Workshop. Support can include transportation (air fare), and accommodation at the hotel in exchange for the selected international participant offering a technical paper, chairing a session, or providing some other support for the Workshop.

2.7.6 Follow-on Work by Executive Committee The Executive Committee will provide day-to-day management of the activities leading to the Workshop. Some of the required activities are:

• Sending invitations to prospective workshop participants

• Requesting abstracts for papers and presentations at the various workshop sessions

• Establishing technical working groups for review and selection of papers.



• Establishing agendas for the various plenary and technical sessions

• Preparing and distributing promotional material and publicity

• Making arrangements for workshop packages, proceedings, translations and other organizing details.

• Arranging the Technical Study Tours that are to be held before or after the Workshop.

2.7.7 Conference Topics • National Strategy for Rural Biomass Energy Development

- National biomass RE development framework & strategy - Partnership framework for external assistance - Roadmap of biomass RE development

• Status and Programs for Rural Biomass Energy - Rural biomass resources - Biomass energy conversion technologies - Biomass energy applications

• Rural Biomass Energy Development Impacts - Rural biomass energy and environment - Social impacts of rural biomass energy development - Ecological agriculture production integrated with rural biomass energy

2.8 Type III System Design Guidelines and Technical Standards

2.8.1 Background and Objective Based on findings and recommendations from the Special Study A “Viability and Sustainability of Biogas Digester (Types III) and Biomass Gasification (Type IV) Technologies” and observations during the implementation of the Type III1 systems, it is of importance to set up a technical guideline for quality assurance of Type III for the whole process of the implementation of the medium/large biogas engineering project, including planning, bidding, design, construction, operation and maintenance etc. The guideline is also very useful for the future ADB Phase II Project in which Type III systems will be main implemented technical systems. The objective of this task is to develop a technical guideline which can be easily applied for the implementation project for the quality assurance and quality control of Type III systems

2.8.2 Framework of Technical Guideline for Type III System Implementation of a Type III system is an engineering process which involves all process such as planning, construction, operation, and maintenance etc. Thus reliability and quality control of the project is necessary. In addition, the core business of most of users or operators of Type III systems in the ADB project is the livestock in agricultural sector which has significant different characteristics compared to biogas plant operation. The framework of technical guideline for Type III system consists of the detailed steps of the implementation and how the experts to provide the assistance during each step, see Annex E.

1 The Type III system is defined as medium/large biogas engineering systems in ADB Project.



2.8.3 Implementation of Technical Guideline Followings have been recommended for the considerations of the further development of implementation procedure: • Provide the documented instruction on contents of each step, • Defined the key technical parameters and data which are required to be collected or

recorded in each step, • Recommend the criteria for the technology selection, • Set up the quality evaluation procedure for the plant, • Integrate the Technical Guideline into the project management system The detailed flow chart of the implementation of the Technical Guideline has been given in Figure 2 in Annex E. National and provincial technical experts can provide the guidance through the all stages of the project implementation. Collection and record document templates should be developed for the quality assurance and control. It is recommended to combine the technical guideline with the Agriculture Sector Standards as listed in Annex E.

2.8.4 Integration of Technical Guideline into Project Management It is recommended to integrate the Technical Guideline as one component into the Project Management System.



3. STUDY RESULTS

3.1 Special Study A: Viability of Type III and Type IV Systems Special Study A, “Viability and Sustainability of Biogas Digester (Type III) and Biomass Gasification (Type IV) Technologies” was documented in a report submitted in January 2006. That report is included with this Final Report as ANNEX 3. The Special Study A report includes the technical assessment and cost analysis of both technologies. Reference designs for several Type III and Type IV systems were developed as a result of the technology survey within the three provinces scheduled to implement Type III and Type IV systems. Using the reference systems, a model for the cost analysis was developed and used for the economic performance analysis of the Type III and IV systems. Sensitivity analyses were also performed to investigate the impact on the economics by the major input parameters including gas price, electricity price, fertilizer price, etc. Other issues such as greenhouse gas reduction, intuitional barriers, and renewable energy policy were also investigated, and suggestions for modifying and the improving the implementation of these subprojects have been provided. The Special Study A reached the following conclusions and recommendations:

• Type III is a mature technology. However, further improvement in design, engineering, O&M and management is needed. Recommendations to establish “Guidelines of technical support and service for quality control” and a database to record technical information for the whole process and procedures of project implementation are provided.

• Type III systems appear to be ideal candidates for CDM, and the qualification of the proposed Type III subprojects under the CDM validation process can be integrated into the current ADB Project with the help of the existing ADB CDM support organization. This will greatly improve the viability and sustainability of Type III systems. Given the size of the proposed Type III systems and the requirements of most potential buyers of the CDM credits, development of a set of Type III systems as a bundled CDM project is recommended.

• Regarding Type IV systems, Institutional, economic and technical issues that were the basis for recommending these “village-based” systems have changed since the time of the initial Project design. As a result from these changes, this assessment indicates that the planned Type IV systems do not appear to be viable within the current Project situation. The economic performance of Type IV technology for cooking is poor, and the recent Type IV projects implemented under the national and provincial programs were mostly based on grants and even the operation of the plants had to be subsidized by the village.

• Technical issues with Type IV systems, such as tar accumulations in the equipment, were frequent and poor institutional arrangements at the village level led to many plants closing very quickly. Given this situation, we recommend that the Project management consider reprogramming the current Type IV funding to Type II or Type III systems as appropriate to the province.

• The assessment indicates that the future for utilization of agricultural residues lies with large biomass gasification plants for electricity production. In particular, the new Renewable Energy law provides these larger plants the opportunity to be economically viable. However, the reliability of the large plants especially for the size of 6 MWe needs to be further proved with increasing cumulated operation hours.



3.2 CDM Pilot Project The Clean Development Mechanism (CDM) is an international mechanism under the Kyoto Protocol for promoting environmental and renewable energy projects that reduce greenhouse gas emissions. It promises to provide a future revenue stream for qualified projects, but the process for qualifying projects is complex and requires both upfront investment and technical expertise. Henan province has a significant number of attractive CDM projects within its animal raising industry sector, as represented by the Type III projects to be implemented under this ADB loan project. Because of this potential, the ADB CDM Facility offered to provide significant support for a pilot project with approximately 15 livestock farms so that the project will generate a sufficient volume of greenhouse reduction activity to be attractive to potential CDM buyers. The TA consultants supported the CDM expert from ADB to develop a work plan, budget and schedule for implementation of the pilot project with GEF support for training and capacity building in Henan. In addition, the TA Consultants developed an institutional approach to cost-effectively and sustainably implementing these projects in the future. The pilot project plan and institutional approach were reviewed and approved at the Mid-term Review Missions in March 2006, and the GEF approved the reallocation of funds for this activity in August 2006. The key to successful for both this pilot project and for sustainable CDM project development in the future, is an institutional arrangement that includes an organizing agency to coordinate different stakeholders for project implementation, facilitate CDM project validation and registration, ensure quality control and assurance, coordinate to undertake emission reduction monitoring and verification and coordinate the sale of the CDM credits for the benefit of the organizing agency and the livestock farm owners. Attachment F describes the proposed institutional framework for CDM promotional, including a mission, objectives, organizational structure and key responsibilities and preliminary cash flow for a Biogas CDM Promotional Unit in Henan province. ADB CDM Expert was responsible for development of the CDM Project Design Document (PDD). Henan PIO established a Biogas CDM Unit to support this pilot project and collect the data necessary for the PDD from the participating livestock farms. The TA consultants supported and coordinated activities between ADB CDM Expert and the Henan Biogas CDM Unit. The first issues that needed to be resolved were the selection of participating farms and the choice of approved CDM methodology. After reviewing operations at several cattle, dairy and pig farms in the province, it was decided that the cattle and dairy farms did not necessarily meet the definition of confined animal feed operations, as specified in the approved methodologies. Therefore, only pig farms were included in the CDM project bundle, and 12 farms were selected for participation based on a minimum size of 5000 pigs, modern operating practices and a willingness to share in the upfront costs of the CDM validation process. These pig farms and the Henan Biogas CDM Unit formed a special CDM project company in accordance with the proposed institutional framework and NDRC rules for CDM in China. During the farm selection process, the two methodologies planned for use came under review by the CDM Methodology Panel, and these two methodologies were revised and merged with stricter requirements for baseline emissions calculations and monitoring practices. During this interim period, the focus of the work was on data collection and verification. At the end of October 2006, after the new approved methodology was released, the development of the PDD was begun, and an initial review draft was prepared at the end of December 2006.



The ADB CDM expert left the project at this time, and the TA Consultants and the national CDM expert took full responsibility for completion of the PDD. The draft PDD was first reviewed and revised internally, then in February 2007 was sent for external review to two international methane experts. In addition, a review workshop was held in Zhengzhou with the Henan Biogas CDM Unit and the participating pig farm owners. During this meeting final questions regarding data verification and consistency were resolved, and final adjustments were made to the PDD and the emission reduction (ER) calculations. Also at the workshop, several open issues that are requirements for the PDD were discussed and plans were developed for their completion as soon as possible. These include: completion of the environmental approval process for each biogas project, approval of the biogas feasibility studies by the local planning bureau, and legal review of the CDM project company documentation to be sure it will meet the needs of international buyers of the CDM credits the project plans to generate. Completion of the first two issues is required to allow submission of the PDD to NDRC, which is the agency in China that must provide national approval of all CDM projects. The PDD, as developed for submission to NDRC is included with this Final Report as ANNEX 4.

3.3 Special Study B: Determine the Optimal Digester Capacity and the Number for Farm-Scale Systems

The objective of this Special Study is to make an overall systematic analysis of the economic and other benefits of integrating a biogas digester with livestock manure treatment, use of organic fertilizers for eco-logical agriculture production. Due to the large difference between the geological locations where the agriculture products, market mechanism of livestock and agriculture products, and climate conditions etc. the studied systems can vary significantly. This Special Study has been focused on the typical integrated systems defined by different project provinces taking into the considerations of the agriculture and livestock production, type of by-product (vegetables, fruits, or other products), climate conditions etc. Figure 6 illustrates the flow sheet of the analysis process in this study that represents the methodology adapted.

Figure 6: Flow Chart for Analysis of the Optimal Size and Number of Farm-Scale Digester Systems

Input Selection and characteristics - Technical data of

digesters and systems

- Products and byproducts

- Overall economic & market structure

- Other special considerations

Site visits

Field data

Scenarios, applications & definition

Quantifications - Key variables & conditions - Outputs

Analysis

Primary analysis cases

Risk & Sensitivity analysis

Evaluation and interpretation of outputs



3.3.1 Integrated Farm-Scale Bio-digester System A generic integrated bio-digester system is illustrated as Figure 7. Through a bio-digester, livestock production, pond for fishes or water plants, and agriculture production with recycle of all excreta have been integrated together to produce energy, organic fertilizer, meat, fishes and food. Such closing integration of livestock in the farming system can be highly productive and also sustainable.

Bio-Digester

Livestock(Pigs)

Ponds(Waterplants,

Fishes …)

Agr. Products(crops,

vegetable, fruits …)

Market & Family

fuelorganic fertilizer

excretanutrients

nutrients feeding

meatfishes…

food

Bio-Digester

Livestock(Pigs)

Ponds(Waterplants,

Fishes …)

Agr. Products(crops,

vegetable, fruits …)

Market & Family

fuelorganic fertilizer

excretanutrients

nutrients feeding

meatfishes…

food

Figure 7: Generic Integrated Bio-digester Systems that Combine Biogas Production, Ecological Agriculture Production and Waste Management to Generate the Economical and

Environmental Benefits for Farmers

3.3.2 Definition and Benefits of Integrated Bio-Digester Systems Three systems have been defined for the study based on the size of digester (or the treatment volume of livestock manure). They are the large/medium, corporative and household systems. The special study is focused on the analysis of benefits of the corporative and household systems. The optimization of the biogas based integrated agriculture systems shall be performed based on the benefits that generated by the systems. There are a number of potential benefits that are usually mentioned as the rationale behind the choice of biogas technology with integrated with agriculture systems. These potential benefits can be seen as driving forces for biogas introduction and can be divided into:

• Energy-related benefits • Fertilizer-related benefits • Health-related benefits • Development-related benefits • Economic benefits



3.3.3 Field Study, Data Collection and Analysis The economic benefits are dependent on the investment costs, operation costs, and economic profits by different products generated from the integrated systems. By field study and literature survey, we find the benefits of the biogas based agriculture systems can be significantly influenced by various factors, for example, the investment costs, operation and maintenance costs, the matching performance of biogas digester and application of effluent as organic fertilizers for the agricultural activities. Analytic analyses of investment costs, operation and maintenance costs, and benefits of selected cases have been performed. A parallel coupling by forming a household scale bio-digester net for the corporative applications is recommended with the comparison of the scale-up digester. Technical issues related to the bio-digester size for the different applications have also been discussed.

3.3.4 Systematic Analysis and Future Work Plan The optimization of biogas based integrated agriculture systems is a complex process which shall be handled in a systematic way. Minimizing the uncertainty of input data and trade-off considerations of various parameters are of importance to the optimization results. A systematic framework and methodology have been proposed by introducing module modeling and integration of modules as shown in Figure 8. The modules and their contents for the analysis have been defined and specified. Detailed steps for the implementation and integration of the modules have been designed as shown Figure 9. Data document template for collecting data is designed. A flow chart of the modeling and analysis is formulated which will provide the guidance as a useful tool for the future study and development in this area.

Investment Module

OperationModule

Profit Module Market Module

Figure 8: Integration of Modules and Their Relationships



StartStart

Identify livestock farm size (no. of pigs) and type

Selection of bio-digester Technology

Matching agriculture systems

Fruits ? Vegetable? Fish? Others?Fruits ? Vegetable? Fish? Others?

Data Sufficient?

Yes

No Literature Survey

Filed Study

Literature Survey

Filed Study

Scenarios (1, 2, ..n) generation

Market Info & Data- Price of products- Material costs- Fuel prices- Labor costs

Profit calculations

Sensitivity Analysis

Other Info & Data

Results

Figure 9: Flow Chart of Module Simulation and Analysis of Bio-digester Based Agriculture Systems

3.4 Special Study C: Analyze the impact of mercury and lead poisoning to humans from usage of organic fertilizer

This special study examines the hypothesis that human exposure to mercury and lead could be concentrated by the use of manure-based organic fertilizer, as is central to the eco-agricultural system that is being promoted in this project and the planned phase 2 follow-on project. Mercury, lead and other heavy metals are of concern to the eco-agricultural production cycle being promoted in China because these elements tend to accumulate in the food chain. Activities such as coal-fired power plants, mining and smelting of metal ores, industrial emissions and applications of insecticides and fertilizers have all contributed to elevated levels of heavy metals in the environment. These heavy metals pose a serious threat to human and animal health, and this threat is aggravated by their long-term persistence in the environment. The concern which prompted this study is that the eco-agricultural production cycle might concentrate the pollutants and lead to higher exposure to humans consuming the products of the eco-agricultural system. The plan for performing this study was designed to use a two-part approach. In the first part, the simplified model of mercury and lead exposure, intake, excretion, uptake and re-



ingestion in the biogas digester food cycle was developed, and a desk review was conducted to identify whether the key modeling parameters (i.e., mercury and lead uptake, absorption and excretion rates) have already been determined. These parameters would be used in the model to determine if plants and livestock grown with bio-digester fertilizer/feed can result in harmful concentrations of mercury and lead in humans. If the model results using the parameters available in the open literature show negative results, work on this task can be concluded. If the model results indicate that an accumulation of harmful levels of mercury and lead is possible, then the second part of the task will be implemented. The analytical model will be further developed, and field measurements will be identified and implemented. Part 1 of this study has not been completed because the TA consultants have been directed to focus on higher priority activities, such as CDM and Special Study D. The review of international and national research in this field has been performed, and preliminary indications are as follows:

• More than four hundreds plant species are known as hyper-accumulators of heavy metals, which include trees, vegetable crops, grasses and weeds.

• The data indicates that most plants and crops have low uptake rates for heavy metals. However, more work needs to be done; including investigating the data on known plant hyper-accumulators to determine if any of them are common crops used in the biogas eco-agricultural system in China.

• The formation of methyl-mercury, the most bio-active form of mercury, is known to occur in wet lands and shallow lakes and concentration of this form of mercury in fish is a well established fact. Methyl-mercury formation rates in fish ponds unknown, but mercury deposited in fish ponds from atmospheric sources or water run-off is likely to accumulate in the fish grown in the pond.

• More work is needed to determine how fish produced in these ponds will generally be used and whether the mercury or lead contamination they contain is likely to become concentrated in the biogas eco-agricultural system.

A report of the work completed to date is provided in Attachment G, including a Work Plan and Terms of Reference for a national expert to complete this study. The priority remains to complete the initial part 1 assessment and determine if further study and analysis is warranted. A highly qualified national expert from China Agricultural University has also been identified to perform this work.

3.5 Special Study D: Crop Straw Utilization for Rural Energy Needs During the design of this ADB Loan Project, village-scale biomass gasification plants (Type IV systems) were considered the principle technology for the utilization of agricultural residues. However, Special Study A, which assessed the viability of biogas digester (Type III) and biomass gasification (Type IV) technologies determined that the institutional, economic and technical issues that were the basis for recommending Type IV “village-based” systems have changed since the time of the initial Project design. The economic performance of Type IV technology for cooking is poor, and the recent Type IV projects implemented under the national and provincial programs were mostly based on grants and even the operation of the plants had to be subsidized by the village. Technical issues, such as tar accumulations in the equipment, were frequent and poor institutional arrangements at the village level led to many plants closing very quickly. As a result from these changes, the study concluded that the planned Type IV systems no longer appeared to be viable within the current Project situation. Given the results of this special study, the future course for technologies to utilize the abundant agricultural residues (especially crop straws) became very uncertain. Possible



technology options range from pelletization on the small scale for rural cooking and heating to large-scale biomass gasification plants for electricity production under the new Renewable Energy Law. However, there is not yet a clear answer, and new analysis is needed to better assess these options and the proper course to their promotion. Special Study D was designed to address the future options for crop straw utilization. In addition, the results from this study will be available to the consultant team performing the Advisory Technical Assistance (TA-4810 PRC) Preparing a National Strategy for Rural Biomass Renewable Energy Development.

3.5.1 Goal and Objectives The goal of Special Study D is to determine the near-term technologies, applications and programs for utilization of crop straw residues in the new rural socialist economy that is a cornerstone of the 11th Five-Year Plan. The objectives of the study are as follows:

• Update the availability of crop straw residues given the increased demands for animal fodder, paper production and other competing applications for this resource.

• Update the scale of rural household energy needs for cooking and heating and determine the affordability of modern rural energy technologies that can meet these needs using crop straw residues.

• Based on the assessment of resources and technologies, identify set of technologies that will best meet the goals of the new rural socialist economy.

• Assess the current policy environment for modernizing rural energy applications and determine the specific programs that will speed the implementation of these technologies identified above.

3.5.2 Work Plan A team of experts was assembled to conduct the work and coordinate with the PMO and the MOA Director of Energy & Environment Division to undertake Special Study D and achieve the objectives defined above. Work on the special study was conducted according to the tasks defined below and summarized in Figure 1.

• Task 1: Crop Straw Resource Update - The objective of this task was to update the estimates of crop straw resources that are available for energy use. No new overall resource projections were made.

• Task 2: Rural Energy Needs Update - The focus of this task was to update the current estimates of rural household energy needs for cooking and space heating.

• Task 3: Rural Biomass Technology Assessment - The focus of this task was to review and update the cost and performance data for modern biomass utilization technologies that meet rural energy needs. Special attention was given to small-scale resource conversion technologies using pelletization of agricultural residues and to crop-straw gasification plants providing a combination of gas for rural cooking and heating and electricity sales to the grid.

• Task 4: Crop Straw Utilization Policy Options - The focus of this task was to prepare a conceptual program plan for implementing the technologies identified in Task 3 as having the best characteristics for achieving the goals of the new rural socialist economy.

The expert team consists of:

A national biomass resource expert responsible for Task 1.

A national rural energy use expert responsible for Task 2.

Two national biomass technology experts responsible for Task 3.



A national rural energy/environment policy expert responsible for Task 4.

The Team Leader and International biomass expert under the current TA, provided overall coordination and direction of all inputs, worked directly on the policy/program portions of the study, and compiled this report.

The Special Study will be conducted with a national perspective and six specific provinces were selected that represent the regional characteristics of China to provide a specific focus for the assessments of resource availability and energy needs.

Crop Straw Resources Available

for Energy Use

Competing Uses for Biomass Resources

in up to 6 regions

Non-energy Uses for Crop

Straw

Task 1:Crop Straw Resource

Assessment

Soil fertility needs

Existing Resource Estimates

Rural Cooking and Heating

Needs

Rural Electricity and CHP Needs

Potential Demand for Crop Straw Residues in

up to 6 regions

Task 2:Rural Energy Needs Update

Task 4:Crop Straw Utilization

Policy Options

Regulatory and Institutional

Recommendations

Market Stimulation Incentive, Regulation & Program

Recommendations

Economic, Environmental and Social Benefit

Estimates

Task 3:Rural Biomass

Technology Assessment

Energy Efficient Stoves

Power Generation Technology

Applicability of Technologies to Rural Energy Needs

PelletizationTechnology


for Energy Use


in up to 6 regions


Straw


Assessment




for Energy Use


in up to 6 regions


Straw


Assessment




Needs



up to 6 regions



Needs



up to 6 regions



Policy Options


Recommendations


Recommendations


Estimates


Policy Options


Recommendations


Recommendations


Estimates













Figure 10: Work Plan for Special Study D

The conclusion and recommendations for developed by Special Study D are:

• In 2005, the total yield of agricultural residues was about 840 million tons, of which rice straw, wheat straw, corn stalk, soy stalk and cotton stalk comprise about 675 million tons. Given the various competing uses for crop residues, such as animal fodder, paper production and soil fertilizer, the percentage of residues available for new uses ranges from a low of just under 9% in Qinghai-Tibet to a high of 56% in South China. In most regions, the percentage is between 20% and 40%.

• With the improvement of income and living standards, utilization of energy by rural residents is expected to increase greatly and will likely have a significant impact on the overall structure and volume of energy consumption in China. Current information regarding rural energy consumption was analyzed to determine the d\regional levels of energy consumption and the development trends of each end-use device for rural households. LEAP modeling of three scenarios for rural residential energy consumption in the years 2010 and 2020 indicates that household energy consumption in rural China will range from 280 to 358 million tons of coal equivalent



(tce) by 2020 representing an annual increase of 1.88% to 3.44%. Comparing the three scenarios that were developed based on different policy enforcement assumptions, there will be a difference by 2020 of about 78 million tce, which represents 25.4% of the total rural energy consumption.

• Eight different technology types for manufacture of biomass solid pellet fuels were evaluated. A set of evaluation indicators were developed based on production practices and statistical analysis to determine the performance of biomass pellet fuel technologies. The economic benefit analysis shows that the biomass solid pellet fuel is at the early stage of industrial development with small profit margins and low investment returns, which needs government guidance and policy support to promote technological improvements, expand demonstration and enter the commercialized stage as soon as possible.

• Four commercial stove technologies were also assessed for burning straw and stalk and other crop residues. These have seen rapid development in recent years, but the manufacturing enterprises are relatively small and simply equipped. The following measures requiring government support should be taken: 1) giving priority to small and medium-scale in pellet fuel technology development, 2) promoting pelletizing technology applications, 3) supporting the scale-up of pelletizing equipment manufacturing, and 4) strengthening R&D in pelletizing machines and special stoves.

• Three types of biomass power generation technology were analyzing: direction combustion, co-firing of coal and biomass and biomass gasification. All of these are still in the demonstration stage, and a technical assessment and cost-benefit analysis are provided based on the data and estimation of the most current demonstration projects. The conclusion is drawn that it is feasible to apply straw-fired power generation technology in China. It is recommended to strengthen systematic research on characterizing the biomass resource supply and planning work for the implementation of biomass power plants, as well as strengthening related policy support and implementation measures.

• Regarding policy recommendations for crop straw electricity generation, pelletized biomass fuel and energy saving stoves, the currently established policies were analyzed relative to the problems and barriers to expanded utilization of crop straw residues. The analysis identified additional compulsive policies mainly including compulsive purchasing system and compulsive quota system, and also incentive policies mainly including subsidies, credit, revenue policies and guarantee measures on capital, rules of laws, technologies, market and society.

The complete Special Study D report is included with this Final Report as ANNEX 5.



4. MANAGEMENT SUPPORT ACTIVITIES

4.1 ADB Project Review Missions The TA Consultants supported the following ADB missions, during which time the TA consultants supported the ADB team and the PMO through site visits, workshops, MOU reviews and wrap-up meetings.

4.1.1 Review Missions During the mission from December 5 to December 16, 2005, the TA Consultants organized and conducted two workshops: A review of the Energy and Environmental Monitoring and Evaluation work plan, budget and schedule; and a review of the results of Special Study A: Viability of Type III and Type IV Systems.

Based on the results of the two workshops above and more informal discussions regarding the Beneficiary Impact Assessment, the following actions were taken. The conclusions of Special Study A were accepted regarding the viability of Type IV systems within this Project. The budget and approach for the Beneficiary assessment was approved, and the budget and approach for the Energy and Environmental Monitoring and Evaluation Plan was approved.

During the review mission from March 14 to March 21, 2007, the TA Consultants organized and conducted two workshops: a review of all the GEF funded activities and a training workshop for the CDM pilot project in Henan.

4.1.2 Mid-Term Review Mission During the Mid-Term Review (MTR) mission, from March 2 to March 23, 2006, the TA consultants: 1) organized a training program on poverty reduction and targeting of poverty groups Planning and Budget Support, 2) prepared a comprehensive training program plan for 2006, 3) developed a work plan, budget, schedule and institutional framework developed by the TA consultants and the ADB CDM expert and 4) an outline objectives and work plan for a new special study regarding the utilization of crop straw residue. During the MTR, the new special study in support of a CDM pilot project in Henan province was approved. The study was designed to support both the implementation of the pilot project and the capacity building required to ensure a sustainable institutional framework for future CDM promotion in the province. In addition, the TA consultants were requested to develop the full work plan and terms of reference for the new special study on crop straw utilization (SS-D).

4.1.3 Special Review Mission for GEF Activities During this mission, from August 4 to August 6, 2006, the TA Consultants supported meetings to review all the GEF funded activities on the Project. Based on the results of the meetings, the GEF approved the reallocation of contingency funds to support the newly defined tasks for EEME, BIA, CDM, SS-D, Special Agricultural Research and International Conference.

4.2 Project Implementation Reports The TA Consultants have supported the PMO with review and inputs to their semi-annual project implementation reports and to their annual GEF implementation reports.

4.3 Phase 2 Project Development At the request of ADB, the TA Consultants have also provided support, document review and analysis regarding the development of the Phase 2 follow-on project.



5. CONCLUSIONS AND RECOMMENDATIONS This Final Report documents the contributions of the international consultants to the performance of this ADB Loan Project. Over the course of about 18 months, the project has achieved significant accomplishments, which are summarized below under the Project components supported by the TA consultants. Component A: Funding Support for Systems Implementation By December 31, 2006, the Project had achieved an implementation ratio 95% of the Type I and 73% of Type II household digester systems. Overall, the project had financed the construction of 14,797 biogas digesters, and trained 20,738 technicians, farmers and extension workers in biogas technology. Implementation of the Type III systems, medium-scale gasification plants, is proceeding, but only 3 of the 16 planned systems have been implemented, and significant concerns remain regarding technology selection and the development of reliable and effective system designs. Further improvement in design, engineering, O&M and management is needed for these larger engineered systems. As a result, the TA team prepared a work plan and terms of reference for establishing “Technical Guidelines for Type III Systems” for technical support and quality assurance, setting up a database to record technical information for the whole process and procedures of project implementation. It is strongly recommended that the work plan and terms of reference for establishing “Technical Guidelines for Type III Systems” be implemented quickly, as the results can still be of benefit to the Type III systems still under development on this Project. Type III systems appear to be ideal candidates for CDM implementation, but given their relatively small size a bundled CDM project approach is needed. The CDM pilot project in Henan, implemented under this TA, has provided a roadmap, supporting documentation and analytical tools that other provinces and projects can use to quickly develop their bundled medium to large scale livestock biogas applications into valid CDM projects. It is planned that these tools will be integrated into the next phase ADB Project, and with the help of the planned Type III System Technical Guidelines, will greatly improve the viability and sustainability of Type III systems. Regarding Type IV systems, village-scale crop straw gasification plants, the institutional, economic and technical issues that were identified in Special Study a still remain. The ADB project in Sangda village, Gansu province was reviewed by the project team, and many of these issues exist at this project. One problem appears to be a lack of institutional learning regarding the various technical solutions that do exist regarding tar cleanup from the gas and mechanical equipment reliability. The current institutional arrangement at the village level requires significant training and continual technical support than require a committed institution to provide over the long-term. Without a new institutional approach to technology improvement and technical support to the villages, these systems are unlikely to be successfully implemented in the future. Analyzing the optimum sizing of Type I and II systems indicates that the system benefits can be significantly influenced by various factors, including the investment costs, operation and maintenance costs, the matching performance of biogas digester and application of effluent as organic fertilizers for the agricultural activities. Analytical analyses of investment costs, operation and maintenance costs, and benefits of selected cases were performed. The optimization of biogas based integrated agriculture systems is a complex process which shall be handled in a systematic way. A systematic framework and methodology has been proposed by introducing module modeling and integration of modules. The modules and their contents for the analysis have been defined and specified. Detailed steps for the



implementation and integration of the modules have been designed. Data document template for collecting data is designed. It is recommended that the development of this modeling and analysis framework be continued to provide a tool for the future study and development in this area. Component B: Improve Biomass Technology Transfer In support of this Loan component, a preliminary Training Needs Assessment was prepared covering all aspects of biomass technology, project management, energy and the environment. It assessed the requirements for capacity development at the provincial and local levels, and identified specific project management, energy and environmental training requirements, including training requirements for poor farmers and women, and requirements for domestic and overseas training/study tours.

The preliminary Training Needs Assessment was reviewed with the PMO and PIOs to further develop and refine the training program, and the Comprehensive Training Program for 2006-2007 was developed as a result of this process. The process of developing the Training Program Plan was difficult because the concept of continual, results-oriented training was not initially appreciated. In particular with management training, it took time to gain the acceptance of a program based on a planned series of specialized management training courses which build cumulatively on each other and reinforce the actual utilization of the techniques being taught. However, the approach was finally accepted and the program is now in the process of being implemented. Three specific activities were developed by the Project that are aimed at specific scientific analyses related to the biogas eco-agricultural system. The first of these is applied research into the effectiveness of bio-digester slurry, which is being implemented by Chinese Academy of Agricultural Sciences and Shanxi Agricultural University. A special R&D activity was developed to explore methods to improve the effectiveness of bio-digesting crop residues and an assessment of methods to develop a sustainable agricultural support system, both developed and proposed by Hubei province. The implementation of these latter two activities is recommended. Component D: Improve Environmental Policy Implementation The critical support activities under this component were the Energy and Environmental Monitoring and Evaluation Plan (EEME Plan), the Management Information System (MIS) and the Beneficiary Impact Assessment (BIA). These three activities were defined and are currently under implementation.

The EEME Plan will require continuing monitoring and review by the PMO and the national expert for preparing the national consolidation of the provincial results. The review and monitoring should focus on ensuring that proper procedures are followed and that timely results are prepared.

The implementation of the MIS has been delayed because the financial commitments to the national expert heading this activity have not been met in a timely manner. This activity needs to be implemented as quickly as possible to ensure that 1) the PIO and PIU staff are trained in using the system before the Project is complete, 2) the important data developed by this project is captured in an electronic form for future analysis, and 3) the results of the project are widely disseminated through a professional web site and data display interface.

Lack of timely payments to national experts has also affected other project components, but not a significantly as in this case. Timely payment to national experts is an area where improved procedures in the PMO/FECC and better coordination with MOF are needed.

Implementation of the first phase of the BIA was completed in March 2007, but system implementation on the Project started in 2004. Therefore, it was not possible to establish a real baseline against which the project results could be measured. The TA consultants



recommended starting the BIA in March 2006, which would have provided a reasonable baseline to be established. However, delays in obtaining GEF approval of the contingency re-allocation, which was used to fund the BIA, prevented this. In retrospect, the BIA should have been a panned component that should have been conducted at the start of the project.

Cumulatively, the above activities will support the overall assessment of the Project results relative to the intended outcomes defined at the start of the Project.

Special Study C was another element of the TA work under this component. While this work was not completed because the consultants were given higher priority tasks in terms of the CDM pilot and Special Study D, this issue – the potential risk of heavy metal concentration in the biogas eco-agricultural system – remains a concern, and follow-on activities through the designed work plan and expert TOR provided in Attachment G is strongly recommended. Component E: Pilot Poverty-Focused Approaches This Project component was intended to remove constraints to participation by poor farmers in rural areas through specially designed training programs and biomass development assistance (grants) to enable them to adopt integrated agricultural production with biomass systems. The TA consultants supported this component by conducting workshops with national experts and the PIO/PIU staff to discuss approaches for implementing this component. The Poverty Pilot component has now been approved and is under implementation. Component F: Improve Project Implementation and Capacity Development This component of the Project is intended to strengthen management support and coordination, and to improve the capability of the implementing agencies and the national, provincial and county levels. As part of the Comprehensive Training Plan, a series of specialized management training courses which build cumulatively on each other and reinforce the actual utilization of the techniques being taught is in the process of being implemented. In addition, specialized environmental management training programs and other individual capacity training programs were identified and will be implemented.



ATTACHMENT A: ENERGY & ENVIRONMENTAL MONITORING & EVALUATION PLAN

Overview This Energy and Environmental Monitoring & Evaluation Plan is intended to guide and support the development of data collection forms and procedures for collecting data, verifying the accuracy of the data, and analyzing the data to support evaluation of the Project benefits. This plan primarily pertains to Type I and Type II systems. These systems will need to be monitored via sampling and a broad range of inputs are required compared to Type III and IV systems. All Type III systems will be monitored, and a project specific M&E plan will need to be prepared for each subproject during the system design phase. The process envisioned for carrying out this Plan for Type I and Type II systems is shown in the figure below, which identifies the roles and responsibilities at each Project level from the PMO experts to the farm households selected for data collection. This M&E Plan represents the first step in this process, and after review and adjustment, will be adopted as the guiding document for the Project’s energy and environmental monitoring activities. Following acceptance of the Plan, including the selection criteria, data collection forms, tools and procedures, training workshops will be prepared and conducted, and data collection activities will be started.














and tools provided







and village leaders


Procedures



















and tools provided







and village leaders


Procedures






The Plan is organized into two sections. The first section is organized according functional categories, such as system data, energy use, fertilizer use, etc. In each functional category, the Plan identifies the set of data and analyses that are required to answer the specific questions of significance to the PIOs, PMO, ADB and national policy makers in the PRC.



Each category subsection also identifies who collects the data, how often it is collected and who receives the data. The second section of the Plan contains the selection criteria, data collection forms, tools and procedures to be used by every level in the M&E process from the farmers to the PMO.

Monitoring and Analysis Data Categories This section is organized according to the following data collection and analysis categories. The quarterly reports on the M&E activities will also be organized according to these categories. The PMO will prepare a format for the reports to be prepared by the PIU and PIO staff involved in the M&E activities.

• S. System Data • E. Energy Use • A. Agricultural Production • F. Fertilizer Use • P. Pesticide Use • L. Livestock production • M. CDM Baseline • H. Health and Sanitation • Q. Indoor Air Quality • O. Soil, Slurry and Crop Analyses • V. Environment • C. Economics

S. System Data The following system data will be used in several of the subsequent analyses, especially the calculations needed to determine energy and fertilizer use. It partially consists of data that should already exist in the PPMS system.

No. Measures/What they need to know?

Indicators How are they measured/calculated?

Who measures/collects it and frequency?

S1 How many and what type of system have been installed?

Number, size, type, feedstock, application, location, etc.

Data taken from Loan Application forms

PIU staff collects data for PPMS and reports to the PIO quarterly

S2 Household data Number, gender, age and other information on the household

Provided by farmer according to data collection form and reported to village leader


S3 Livestock data Number, type, size, feed material, etc.

Provided by farmer according to data collection form and reported to village leader


S4 How much and what types of manure were produced?

kg/month Measured by farmer according to data collection form and reported to village leader (need a procedure)


S5 How much and what types of manure were input to the digester?

kg/month Measured by farmer according to data collection form and reported to village leader (need a procedure)




E. Energy Use The following energy use data will be collected to determine the value of the biogas as an effective energy source. The ability of the biogas to displace traditional fuels and save money is one of the major incentives for farmers to adopt biogas systems. Because monthly data is required for many of these parameters, the farmer is the prime source of the basic data. A simple form and measurement procedures will be prepared to guide the farmer in the data collection process. The village leader will monitor the data collection process and report any problems to the PIU staff. The PIU staff will be responsible for spot checks to verify the accuracy of the data and to adjust procedures as needed. The PIU staff will be assisted by graduate students from a local university that will be supported under the Fellowship budget.




E1 How much gas was produced?

m3 of gas produced per month (convert to KJ at 20900 KJ/m3)

Calculated from digester volume and gas production factor (size, type, feedstock, etc.)

PIU Staff collects data and reports to the PIO quarterly

E1A How much gas was consumed?

m3 of gas consumed per month (convert to KJ at 20900 KJ/m3)

Measured by meter provided by PIO


E2 How much energy was consumed?

Quantity of all types of fuel (physical units and KJ/month)

Measured by farmer according to data collection form and reported to village leader (need a procedure)


E3 What is the cost of the traditional fuels?

Cost of all types of fuel (RMB/physical units and (RMB/month)

Recorded by farmer at each fuel purchase according to data collection form


E4 What traditional fuels and what amounts were displaced?

Quantity of traditional fuels displaced (physical units and KJ/month)

Calculated as the difference between Indicator E2 baseline and reported data

Analysis at the PIU level and reported to the PIO quarterly

E5 How effective is the biogas to displace traditional fuels?

Number of months biogas displaces 80% of traditional fuels

Calculated fuel displacement for each month from the ratio of Indicator E4/Indicator E2, both in KJ.

Analysis at the PIU level and reported to the PIO

E6 What is the savings from biogas displacing traditional fuels?

RMB/month Calculated from Indicators E3 and E4




A. Agricultural Production The following crop production data will be collected to determine the impact of the bio-digester slurry and sludge on agricultural production. Increased crop production and the growing of higher value crops will allow the farmer to earn more money and is one of the major incentives for farmers to adopt biogas systems. Crop-specific data is desired to improve understanding of the types of crops that are best suited for integrated application with biogas systems. Given that crop-specific application data is desired for many of these parameters, the farmer is the prime source of the basic data. A simple data collection form and measurement procedures will be prepared to guide the farmer in the data collection process. The village leader will monitor the data collection process and report any problems to the PIU staff. The PIU staff will be responsible for spot checks to verify the accuracy of the data and to adjust procedures as needed. The PIU staff will be assisted by graduate students from a local university that will be supported under the Fellowship budget.




A1 What types and areas of crops are being produced?

Mu of land planted in each crop for each growing season

Measured by farmer according to data collection form for each growing season


A2 What is the production of each crop type?

Yield for each crop type in Kg/mu



A3 What is the market price for each crop type?

Price for each crop type in Yuan/kg



A4 Was agricultural production increased? By how much?

Yields (kg/mu) for similar crops and growing conditions

Compare crop yields for project and pre-project farmers in the same village


A5 What is the change in irrigation water use?

m3 per crop type per season





F. Fertilizer Use The following fertilizer use data will be collected to determine the value of the bio-digester slurry and sludge as effective fertilizers. The ability of the slurry and sludge to displace chemical fertilizer and save money is one of the major incentives for farmers to adopt biogas systems. Because fertilizer application data for each crop is desired for many of these parameters, the farmer is the prime source of the basic data. A simple data collection form and measurement procedures will be prepared to guide the farmer in the data collection process. The village leader will monitor the data collection process and report any problems to the PIU staff. The PIU staff will be responsible for spot checks to verify the accuracy of the data and to adjust procedures as needed. The PIU staff will be assisted by graduate students from a local university that will be supported under the Fellowship budget.




F1 How much biodigester fertilizer was produced?

Quantities of biodigester slurry and sludge used (kg/month)



F2 What is the fertilizer value of the biodigester slurry and sludge?

Amounts of N, P, K (%)

Sample data for different digester types from each village analyzed in provincial labs

Collected by PIU technicians annually

F3 What trace elements are in the slurry and sludge?

Amounts of trace elements: Fe, Mn, Cu, Zn, Hg, Pb and As (mg/kg)

Sample data for different digester types from each village analyzed in provincial labs

Collected by PIU technicians annually

F4 How much biodigester fertilizer was consumed/sold?

Quantities of biodigester slurry and sludge (kg/month)



F5 How much and what type chemical fertilizer was used in the past?

Reported amount of chemical fertilizer

Survey to determine farmers recollection of prior situation

Part of pre and post evaluation data collection form

F6 How much and what type chemical fertilizer is now used?

Amount of chemical fertilizer



F7 What is the cost of the chemical fertilizer?

RMB/physical units Common information in the village

Reported by Village leader

F8 How effective is the bio-fertilizer to displace chemical fertilizer?

% of chemical fertilizer reduction

Calculated from Indicators F4 and F6


F9 What is the savings from biogas displacing traditional fertilizer?

RMB/month Calculated from Indicators F5, F6 and F7




P. Pesticide Use The following pesticide use data will be collected to determine the ability of the bio-digester slurry and sludge to reduce pesticide use. Reduced pesticide use will allow the farmer to save money to raise “green” crops, which will gain higher value in the market and is one of the incentives for farmers to adopt biogas systems. Because crop-specific application data is desired for many of these parameters, the farmer is the prime source of the basic data. A simple data collection form and measurement procedures will be prepared to guide the farmer in the data collection process. The village leader will monitor the data collection process and report any problems to the PIU staff. The PIU staff will be responsible for spot checks to verify the accuracy of the data and to adjust procedures as needed. The PIU staff will be assisted by graduate students from a local university that will be supported under the Fellowship budget.




P1 How much and what type pesticide was used in the past?

Reported amount of pesticide

Data collection form will specify types and amounts of pesticide

Part of pre and post evaluation data collection form

P2 How much and what type pesticide is now used?

Amount of pesticide



P3 What is the cost of the pesticide?

RMB/physical units Common information in the village

Reported by Village leader

P4 How effective is the bio-fertilizer to displace pesticide use?

Reported % of fertilizer reduction

Calculated from Indicators P1 and P2


P5 What is the savings from bio-fertilizer displacing pesticide?

RMB/month Calculated from Indicators P3 and P4




L. Livestock Production The following livestock production data will be collected to determine the impacts that biogas systems have on livestock production. Increased and accelerated livestock production will allow the farmer to earn more money and is one of the major incentives for farmers to adopt biogas systems. Livestock-specific data is desired to improve understanding of the types of livestock that are best suited for integrated application with biogas systems, including the impact of the various manure types on biogas production. Given that livestock-specific application data is desired for many of these parameters, the farmer is the prime source of the basic data. A simple data collection form and measurement procedures will be prepared to guide the farmer in the data collection process. The village leader will monitor the data collection process and report any problems to the PIU staff. The PIU staff will be responsible for spot checks to verify the accuracy of the data and to adjust procedures as needed. The PIU staff will be assisted by graduate students from a local university that will be supported under the Fellowship budget.




L1 What types and numbers of livestock are being raised?

Number, initial weight and type of livestock

Measured by farmer according to data collection form and reported to village leader


L2 What is the annual production of each livestock type?

Number and weight of livestock sold in Kg/year



L3 What is the sale price of each livestock type?

Price for each livestock type in Yuan/kg



L4 Was livestock production increased? By how much?

Yields (kg/head) for similar livestock types and feed

Compare livestock yields for project and pre-project farmers in the same village


L5 What is the change in waste water generation?

Change in COD released to environment

This will be measured as calculated from the household model and measured parameters

See Section V. Environment, line V6



M. CDM Baseline The following data will be collected to determine the general ability of the biogas system to reduce greenhouse gas emissions – particularly regarding methane emissions from baseline manure handling approaches. CDM credits could lead to additional revenues that would incentivize farmers to adopt biogas systems. The data will be collected by the PIU staff during their quarterly visits to each village. Season-specific data is desired for some of these parameters, and the PIU staff will schedule their visits accordingly. A simple data collection form and measurement procedures will be prepared to guide the PIU staff in the data collection process.




M1 What is the common method of manure disposal?

Cess pool, dry composting, other

Observed by PIU staff during quarterly visits.


M2 What is the amount of methane release from the digester?

Amount of biogas released

Venting reported by farmer on data collection form and checked by PIU staff


M3 What is the leakage from the digester?

Rate of gas escape from inlet and outlet openings

Measured according to approach used in Nepal

TDB

H. Health and Sanitation The following health and sanitation data will be collected to determine the general ability of the biogas system to improve general health and sanitation. These improvements are one of the incentives for farmers to adopt biogas systems. The data will be collected by the PIU staff during their quarterly visits to each village. Season-specific data is desired for some of these parameters, and the PIU staff will schedule their visits accordingly. A simple data collection form and measurement procedures will be prepared to guide the PIU staff in the data collection process.




H1 What is the impact on the external household environment?

Decrease in flies and other pests, odors

Measured by PIU staff using an insect-attracting collector strip or other such device.


H2 What is the impact on the household sanitation?

Did the household move from an outdoor toilet to an indoor toilet?

Reported by farmer as part of the PPMS data


H3 What is the impact on the household health?

Change in frequency of digestive disorders and respiratory diseases

Reported by farmer during interview




I. Indoor Air Quality The following indoor air quality data will be collected to determine the general ability of the biogas system to improve indoor air quality and health. These improvements are one of the incentives for farmers to adopt biogas systems. PIO experts will have the principle responsibility to manage the indoor air quality testing. A qualified university or provincial environmental measurement center will be contracted by the PIO to perform the collection and analysis of the basic data with the provincial. An outline monitoring plan is described below.




I1 What is the pre-project household indoor air environment

Concentrations of CO, SO2, NH3, PM10 and F

Measurement plan to be prepared

Provincial monitoring center

I2 What is the project household indoor air environment

Concentrations of CO, SO2, NH3, PM10 and F

Measurement plan to be prepared

Provincial monitoring center

I3 What is the impact on indoor air quality?

Change in concentrations

Analysis of the measured data

Analysis by the PIO Experts and provincial monitoring center

Indoor Air Quality Monitoring Plan 1. Monitoring indicators and methods According to Indoor Air Quality Standard (GB/T 18883-2002), Ambient Air Quality Standard (GB3095-1996) of China, the following air quality indicators are suggested as following:

1) CO: hourly average 2) PM10: daily average 3) SO2: hourly average 4) NH3: hourly average 5) F: hourly average

Compared with Sino-Netherlands project, F was included because of high F in coal which can easily cause the contamination for air quality which is a big concern. In addition, particles of less than 10µm are used instead of PM2.5. Monitoring methods should be in line with governmental regulatory requirements. 2. Monitoring requirements For each province, one village will be sampled and within the sampled village, 5 project households and 3 non-project households will be sampled and evaluated. Over the course of one year, monitoring will be done in April, July, October and January. For each times of monitoring, it will take 3 days and within everyday, the monitoring time will be on 6:00- 8:00, 10:00-12:00, 14:00-16:00 and 18:00-20:00 respectively.



O. Soil and Crop Analyses The following indicators of long-term soil benefits will be determined from samples of soil, slurry, sludge and crops taken quarterly by the PIU staff and sent to designated PIO laboratories for analysis. Over the next two years, samples will be taken from one third (1/3) of the project households and non-project households in each county for each province, and the timing of the household samples will be staggered to ensure that each season is represented. For each type of sample household (non-project households, project households that have already implements a system, and pre-project households that will implement a system in the future), one sample will be taken initially and a second sample will be taken after 2 years.




O1 What are the parameters that indicate healthy soil?

Soil organic matter,N, P and K levels Trace elements

Laboratory analysis of samples

PIU staff collects samples and sends these to a PIO designated lab for analysis

O2 Do integrated biogas farms have better soil parameters? If so, by how much?

Changes in indicators

Comparison of project and non project samples

Analysis at the PIO lab

O3 Are the soil parameters from integrated biogas farms improving? If so, by how much?

Changes in indicators

Comparison of project samples from the same farm over time


O4 What are the parameters of the liquid slurry?

N, P and K levels Trace elements


Collected under F2 and F3

O5 What are the parameters of the dry sludge?

N, P and K levels Trace elements


Collected under F2 and F3

O6 How do the slurry and sludge parameters correlate to the soil parameters?

Comparison of indicators

Analysis of soil and slurry/sludge samples to identify correlations in the changes in parameters


O7 Do crops show reduced levels of pesticide or other contaminants

Concentration of contaminants


PIU staff collects samples and sends these to a PIO designated lab for analysis

A data sheet will be attached to each sample (soil, slurry and sludge) that indicates the following information:

• Household location – farm, village, county, province • Basic soil type • Manure type • Amounts of slurry and sludge application • Amounts of chemical fertilizer and pesticide use • Crops grown recently and crop yields

Soil: Soil organic matter, pH, Available N, Available P, Available K, Fe, Mn, Cu, Zn, Pb, As, Hg Slurry: Organic matter, pH, Total N, Total P, Total K, Fe, Mn, Cu, Zn, Pb, As, Hg Crop: 6 pesticides most commonly used in each province



V. Environment The following environmental indicators will be calculated to determine the ability of the biogas systems to reduce environmental pollution and other harmful impacts, such as deforestation. The PIO experts will be responsible for calculation of these indicators based on the data and analyses reported by the PIU staff. The monitoring of environmental pollution, primarily in the form of COD/BOD contamination in the water discharges from industrial facilities and the water run-off from household farms will be measured by PIO experts and contractors with the necessary expertise. These measurements will be critical to the determination of the environmental benefits that can result from the use of integrated biogas systems. These results will be critical inputs to a Strategic Environmental Assessment (SEA) that will integrate the environmental monitoring results with the social, health and economic impacts as determined from a Beneficiary Assessment and other monitoring and evaluation work carried out under the project. The SEA will extrapolate the project impacts from the project counties and villages to the provincial level for each of the four project provinces, and it will estimate the societal costs and benefits of expanding the implementation of farm-scale biogas systems2 throughout other provinces in China.




V1 How much fuel wood was displaced?

Kg/year/household Taken from E4 Analysis by the PIO Expert

V2 What is the reduction in CO2 emissions

Kg/year/household Calculated from E4 Analysis by the PIO Expert

V3 What is the reduction in SO2 emissions


V4 What is the reduction in NOx emissions


V5 What is the reduction in TSP emissions


V6 What is the reduction in water and soil pollution

COD/year/household Calculated from household model and measured parameters

Analysis by the PIO Expert

The environmental impacts of water and soil pollution are complex and can best be determined using a controlled setting and the household water and soil assessment model described below. Without a controlled setting, accurate measurements of the critical water run-off parameters are unlikely to be obtained. The controlled setting should be established in cooperation with a local university that will make students available for regular data collection and analysis. In this manner, accurate measurements can be obtained that should be applicable to the broad array of households that exist in the Project provinces. Because of the requirement for controlled setting and more rigorous and frequent data collection, this portion of the M&E plan will use a much smaller sample of Project households. The same households that are sampled for indoor air pollution will be sampled for water run-off pollution. The key parameters for monitoring water and soil pollution require careful measurements over a period of at least a year to fully characterize the likely seasonal variations due to farm practices and weather. If possible, a small number of farm households will be selected for instrumentation and data collection to generate the parameters needed for the household water and soil assessment model. The model, the critical parameters to be measured, and the instrumentation requirements will be further developed after discussion of this approach with the PIO experts. 2 A separate Environmental M&E Plan will be prepared for industrial scale biogas systems.



The proposed methodology should allow a complete assessment of the various sources of water and soil pollution for typical households in both the pre-project and project conditions, and the project improvements can be determined from the difference between these two conditions. Models can be developed for both Type I and Type II systems and a variety of agricultural products. The two figures below show representative models for the pre-project and project household conditions.

Farm Household

Livestock pen

Compost pit

Farm fields

Outhouse

Run-off Amount & COD




Water

Chemical FertilizerPesticide

Manure

Manure

Compost

GreyWater

IrrigationWater

RainWater

RainWater

Farm Household

Livestock pen

Compost pit

Farm fields

Outhouse





Water


Manure

Manure

Compost

GreyWater

IrrigationWater

RainWater

RainWater

Household Water and Soil Assessment Model - Pre-Project Condition

Farm Household

Livestock pen

Biogas Digester

Farm fields

Toilet



Water


Manure

Manure

Slurry & Sludge

GreyWater

IrrigationWater

RainWater

RainWater

Farm Household

Livestock pen

Biogas Digester

Farm fields

Toilet



Water


Manure

Manure

Slurry & Sludge

GreyWater

IrrigationWater

RainWater

RainWater

Household Water and Soil Assessment Model - Project Condition



C. Economics The following cost and economic data will be collected to determine the economic viability of integrated biogas farm systems. Reduced pesticide use will allow the farmer to save money to raise “green” crops, which will gain higher value in the market and is one of the incentives for farmers to adopt biogas systems. The PIO experts will be responsible for calculation of these indicators based on the data and analyses reported by the PIU staff.




C1 What the level of system investment by the farmer?

Initial expenditure in Yuan

Recorded in PPMS data Collected under F2 and F3

C2 What the level of grant by the government?

Amount in Yuan

Recorded in PPMS data PIU Staff collects data for the PPMS and reports to the PIO quarterly

C2a What the level of Household income?

Amount in Yuan

Recorded in PPMS data PIU Staff collects data for the PPMS and reports to the PIO quarterly

C3 What are the annual operating costs?

Annual expenditures in Yuan/year

Reported by farmer during interview

PIU staff

C4 What is the savings in household fuel use?

Annual savings in Yuan/year

E6 Analysis by the PIO Expert

C5 What is the savings in chemical fertilizer use?


F9 Analysis by the PIO Expert

C6 What is the savings in pesticide use?


P5 Analysis by the PIO Expert

C7 What is the potential revenue that could be realized from CDM?

Annual revenue in Yuan/year

Calculated using V2 Analysis by the PIO Expert

C8 What additional amount of revenue was gained from the agricultural produce?


Calculated from A3 and A4 Analysis by the PIO Expert

C9 Were additional revenue was gained from the production of livestock?


Calculated from L3 and L4 Analysis by the PIO Expert

C10 What was the financial payback to the farmer?

Simple payback in years

=C1/(C4+C5+C6+C8+C9-C3)


C11 What is the economic value of the environmental and social benefits?

Annual benefit in Yuan/year

Calculated from V3, V4, V5 and V6


C12 What is the economic payback to the government?

Simple payback in years

=(C1+C2)/(C4+C5+C6+C7+C8+C9+C11-C3)




Determination of Sample Households

M&E Plan Sample Size Currently, this Energy and Environmental M&E Plan addresses only the requirements for Type I and Type II systems. As soon as the implementation of Type III and Type IV systems is determined, the Plan will be expanded to encompass these systems as well. The sample size for the M&E Plan has been based on the number of systems planned in each province by each system type. In addition, the Plan calls for two non-Project households in each county to be included in the sample. Table A1 identifies the projected sample by province and system type, and Table A2 provides a preliminary allocation of the number of sample households in each county. In order to keep the costs of administering the M&E Plan, the sample households will be all located in one or two villages within each county.

Table A1: Determination of the Sample Size for the M&E Plan

Province System Type

Project Target Household Systems

Project Household Samples by

Type

Counties in Province

Non-Project Household Samples

Total Household Samples

Type I 1,200 35 9 18 44 Henan

Type II 1,500 39 48

Jiangxi Type II 6,600 81 14 28 109 Hubei Type II 4,400 66 9 18 84 Shanxi Type I 3,500 59 5 10 69

Type I 4,700 94 113 Subtotal

Type II 12,500 186 241 Total 17,200 280 37 74 354

Table A2: Preliminary Number of Sample Households in Each County

Province County Total Household Samples Province County Total Household

Samples Mengzhou 14 Zhanggong 7

Mengjin 12 Nankang 8

Qixian 8 Xunwu 8

Xinzheng 14 Xinfeng 8 Xiayi 10 Congren 8

Zhecheng 9 Lean 8 Wenxian 9 Qianshan 8 Huixian 10 Dexin 8

Henan

Liangyuan 7 Guangfen 8 Tianmen 9 Hukuo 8

Chibi 9 Yujiang 8 Fangxian 9 Fenxing 8 Songzi 9 Zhangshu 8

Tongcheng 9

Jiangxi

Jinan 8 Yuanxian 9 Jiaocheng 31 Wuxue 9 Yaodu 15

Gong'an 9 Hongtong 3

Hubei

Yunxi 9 Qixian 13

Shanxi

Jinyuan 6



Criteria for Selection of M&E Villages and Households The following criteria are intended to guide the PIO and PIU directors in the selection of one or two villages where the sample households for this M&E plan will be located. Criteria are also provided to guide the PIU staff and village leaders in the selection of sample households. Village Selection Criteria

1. For a sample size of less than 8, a single village should be selected.

2. For a sample size of greater than 12, two or more villages should be selected, and the minimum number of sample households per village should be 6.

3. The village should be representative of the system types and application common in the county.

4. The village leader should be capable and interested in monitoring and supporting the data collection activities.

5. Where possible, the village should only be partially completed in implementation of its total number of systems.

Household Selection Criteria

1. The set of selected farm households should represent as many different system applications as possible.

2. The farmer in the selected households should be willing and capable of completing the data collection forms.

3. To the extent possible, the selected households should not be adjacent and should be reasonably dispersed throughout the village.

4. To the extent possible, the sample households will have a number of pre-project and post-project households in proportional to the current implementation ratio in the county.

5. The pre-project households should have a high likelihood of becoming project households.

6. The two non-project households should have a low probability of becoming project households, but they should be comparable to the project households in terms of farming practices and standard of living.

Data Collection Forms for Farmers The farmers in the selected households will be asked to record data regarding their activities in three areas:

1. Agricultural production, including the types of crops planted, fertilizers and pesticides used, and crop yield.

2. Livestock production, including types of livestock, feed material, manure production and livestock yields.

3. Energy purchases and use.

The data collection forms have been designed to be simple and contain clear instruction about what information to record. They will follow the normal activities expected by the farmer and only ask that he record these activities. All units will be those normally used by the farmer, and a small incentive will be provided to completion of forms on a quarterly basis. Training will be provided to the farmers in the use of the forms by the PIU staff.



Procedures for Village Leaders Village Leaders will monitor the data collection process and report any problems to the PIU staff. They will be trained by the PIU staff to provide this support.

Procedures for PIU Staff The selection of the sample villages will be made by the PIU director in collaboration with the PIO director and should be in accordance with criteria provided in this M&E Plan. The selection of farm households will be made by the PIU director in collaboration with the Village leader and should be in accordance with criteria provided in this M&E Plan. The designated M&E staff person at the PIU will visit each sample village quarterly to interview farmers, collect and spot check the data and review the data collection procedures as needed with the farmer. Preliminary instructions for the interviews and for data checking are included as Appendix B to this M&E Plan. Containers and procedures for collecting samples of soil, slurry and sludge will be developed by the PMO in conjunction with the provincial labs. The PIU staff will be trained to follow these procedures and provided with the sample containers and instructions for sending the filled containers to the lab for analysis. At the end of each quarter, the PIU staff will compile and analyze the data collected from all the sample households in the county and prepare a report to the PIO. The format and outline for the report will be prepared by the PMO and will follow the outline for Section 2 of this M&E Plan.

Procedures for PIO Experts The environmental monitoring experts hired by the PIOs will be responsible for reviewing and refining this M&E Plan in collaboration with the national and international environmental experts. The PIO experts will also support the efforts to test and refine the data collection form for farmers and instructions to the PIU staff. The PIO experts will visit each village annually to conduct data verification tests and procedures. The visits will be scheduled throughout the year so that a roughly equal number of villages are visited each quarter. The PIO experts will be responsible for managing the collection and analysis of the indoor air quality testing in cooperation with a qualified provincial environmental monitoring center. The PIO experts will be responsible for conducting the assessment of water and soil pollution impacts. The PIO experts will identify the provincial level university or center that has experience and capability to make the necessary complex measurements under a controlled setting. The PIO expert and the selected university/center will identify the appropriate locations and number of farm households for setting up the controlled measurement environment. The PIO expert and the university/center will identify the key parameters for monitoring water and soil pollution, identify the farm modifications and select the instrumentation and data collection procedures. The university/center will perform the data collection and assessment under the supervision of the PIO expert. The PIO expert will analyze data from sample households in all counties, the indoor air monitoring and the water and soil monitoring work and prepare quarterly M&E reports to the PMO.



ATTACHMENT B: WORK PLAN FOR BENEFICIARY IMPACT ASSESSMENT

Background A Project Loan has been negotiated between ADB and MOA comprising foreign exchange and local currencies in the amount of $77.27 million. Components of this loan have been designed to support installation of biomass digester systems in rural villages. The stated objectives of the Project are to improve the environment, promote growth, and improve welfare and living conditions of rural households in disadvantaged areas in Henan, Hubei, Jiangxi and Shanxi provinces by generating cleaner and sustainable biomass technology and increasing productivity through efficient utilization of agriculture residues. The loan’s financing plan includes $6.36 million provided by the Global Environment Facility (GEF) intended to (i) promote biomass development for the poor; (ii) provide essential equipment for implementation at provincial levels; and (iii) provide for consultants, training, workshops, special studies and tours, including contingencies. The ADB has classified the loan as one directed at poverty alleviation, with a thematic classification focusing on environmental improvement. As part of the GEF funding a Project Beneficiary Impact Assessment (BIA) has been proposed to evaluate long-term quantitative and qualitative socio-economic and environmental changes and to measure the achievement of overall Project objectives. A Social Research/Consulting firm will be engaged to implement the proposed BIA. It is expected that the BIA Team will comprise a professional Project Coordinator, assisted by a senior professional and a junior professional during the sampling and questionnaire design, testing and training phases. They will be provided appropriate administrative support. During the implementation of the assessment, it is expected that a provincial interview team will be engaged in each province comprising a Provincial Interview Supervisor and four provincial interviewers. All field activities will be supervised by the Project Coordinator. It is intended that the Ministry’s Project Management Office (PMO), and particularly the GEF-financed international consultant for Training Program Development, will work closely with the Beneficiary Assessment Team during implementation of the assessment, and in drafting the Final Report for Phase I. PIO/PIU implementation staff will also be involved in a “hands-on” approach in the conduct of the assessment. Additionally, the BIA Team will be expected to liaise with local counterparts in conducting the evaluation to ensure coverage of local linguistic, cultural and social norms.

Indicators for Project Evaluation One of the activities of the proposed Work Plan is to further elaborate and define appropriate indicators for evaluating the Project’s objectives. The BIA Team will review available documentation, discuss possible indicators with the PMO and TA Consultants, and provide suggestions regarding evaluation components and the indicators that measure achievements. After the final list of Project Evaluation Components has been selected, they will guide the construction of questionnaires. An indicative list of topics for evaluation is outlined in Appendix 1. The topics are drawn from Project documents and statements regarding long-term subproject objectives; statements regarding indicators and targets as outlined in the PPMS; national and provincial targets concerning the well-being of rural households; poverty alleviation; and, enhancement of the role of women. The Evaluation Team will suggest in its Proposal the adjustments that may be required to effectively measure Project outcomes.



Supporting Information from Provincial Staff As background data for the Household (HH) Questionnaire and Focus Group Discussions, the PMO, and the PIO/PIUs will be requested to provide data regarding the village baseline conditions in those project villages and counties that are selected for interviews. Much of this village data currently exist in PPMS reports and monitored data. Examples of county/village baseline data include: (i) Current status (pre-Project) of economic development, i.e, is the country or village

considered a “poor” village under national classification schemes? (ii) Village institutional structure; (iii) Access, communication and linkage to neighboring counties or market centers; (iv) Resource endowment and topography (i.e. water supply, quality of soils, temperature); (v) Major agrarian activities in terms of crops, sources of income; (vi) Socio-demographic characteristics of the village or country (i.e. age-structure, economic

well-being, education levels); and (vii) Cultural background and history of village (if relevant). The initial survey of baseline conditions is to provide the contextual framework in which to interpret the data from the household (HH) interviews. The BIA Team will provide guidance to the PIU staff in providing data concerning the village conditions.

BIA Objectives The overall objective of the assessment is to identify the social-economic impact of the Project on the well-being of the beneficiaries, and make suggestions to the project management and policy makers on the areas for improvement, in order to enhance the positive project impacts on the beneficiaries, and the replicability and sustainability of the Project. The BIA will be conducted in two phases in order to create a baseline data set and to compare changes over time. Phase I will start soon after the contract is signed and will establish the baseline and a preliminary assessment of Project impacts. Phase II is planned for completion by December 2007, which is the current time of Loan Completion. The following Work Plan is specific for Phase I, but it is also indicative of the final beneficiary assessment phase. It is expected that there will be some institutional learning, and the final assessment will be somewhat easier than the first one. The Consultant team will consist of leading consultants, survey supervisors and survey assistants, who are expected to be graduate or Ph.D students from the Consultant’s affiliated university and from identified local universities in each province. Work Plan for Phase I: Baseline Beneficiary Assessment Task 1 - Document Review and Selection of Key Indicators The Consultant will review the project documents, such as project design documents, progress report, PPMS, and work with the Client to select the set of indicators to be monitored in the assessment. The tentative set of indicators provided by the Consultant in their proposal will be the starting point for this work. After the final list of indicators has been selected, they will guide the construction of the questionnaires. Task 2 - Scoping Mission The leading consultants and the survey supervisors will be divided into groups and travel to each the four project provinces. The scoping mission will hold the meetings with PIOs to confirm the selected indicators, and select the counties to for the beneficiary assessment. Then the consultants will travel to one of the selected counties in each province to visit the



project villages, to hold household interviews and focus group interviews, including current and the potential project households, and the non-project households, village leaders, and technicians, village clinics, etc., to understand people’s perspectives and needs on the project, so as to form the criteria for sample village selection and the basis of the design of questionnaires. Then the consultants will go back to the PIO and meet with the PIUs from all the selected sample counties, finalize the criteria for the selection of the sample villages, and select the sample villages. The sample size will be also finalized. In the scoping mission, the consultants will also visit the local universities which may provide survey assistants in the upcoming surveys to make the initial contact, and discuss the potential ways of cooperation and arrangement. Task 3 - Formulation of Questionnaires The different types of questionnaires will be drafted, discussed, revised, and agreed within the Consultant team. The suggestions and feedback will be also solicited from the PMO and the international consultants of the project. Two types of questionnaires will be designed: the formal structured interview questionnaires mainly used to collect the quantitative data to demonstrate the evidence on project impacts, and the focus group interview questionnaire used to collect the qualitative data to identify the key issues and explore the issues in depth. To allow for the various groups that will be surveyed a total of 6 kinds of questionnaires or interview guide will be designed: (1) formal structured interview with the current project households, potential project

households, and the non-project households in project villages to understand the project impacts on them, or their needs and expectations on the project, or understand why they did not participate

(2) Formal structured interview questionnaire with the households in the adjunct non-project villages to make the comparison on the social-economic differences with or without the project

(3) Formal structured interview questionnaire with the village committee on the basic village information, and understand how the village organize and manage the project

(4) Focus group interviews with different groups: men, women, and the poor to get the different perspectives regarding the project from different social groups.

(5) Key informant interview questionnaire with the technicians to understand how they provided the technical services on biomass system to the village

(6) Case study guideline for Type III systems Task 4 - Formulation and Structure of Survey Teams The leading consultants and the survey supervisors will be responsible to select the survey assistants from graduate or Ph.D students from the Consultant’s affiliated university and from identified local universities in each province. Once the teams are selected, the leading consultants and the survey supervisors will discuss the work plans and mobilize the survey teams. Task 5 - Pilot Test of the Questionnaires and the Training of Survey Teams One project province will be selected to pilot test the questionnaires. The leading consultants, the survey supervisors, and the key survey assistants will participate in the pilot test of the questionnaires so that the leading consultants can provide the training on how to apply the survey instruments to the survey supervisors and the key survey assistants. The questionnaires will be revised and updated based upon the results of the pilot test. Task 6 - Implementation of Full-scale Surveys in Four Provinces The full-scale survey will be implemented in each project Province. At the initial days of the survey, the survey supervisors and the trained survey assistants will train and guide the survey work of other survey assistants until these survey assistants can work independently.



In applying the various types of questionnaires, the on-site observations will be also made by the survey team on the attitudes, the expressions, and the subjective judgments of the respondents. In addition, the institutional assessment will be also made during the surveys, linking the information collected from the farmer households to the management process and institutional structures throughout the project duration. Task 7 - Data Tabulation and Processing The data on the questionnaires will be checked, inserted, and processed by the survey assistants under the supervision of survey supervisors. Task 8 - Draft the Report The leading consultants and the survey supervisors will work together to prepare a draft of the survey report, and solicit the comments and suggestions from the PMO and TA team. Work Plan for Phase II—End of Project Beneficiary Evaluation

The following Work Plan for Phase II will build upon the survey tools, approaches and knowledge developed in Phase 1. Phase II consists of the following five tasks. (1) Revise the data collection instruments whenever it is necessary (1 week) (2) Select and mobilize the survey team (1 week) (3) Implement the full scale surveys (basically the same sample as in phase I) (2 weeks) (4) Data tabulation and processing, the data in two phases will be compared and analyzed

(2 weeks) (5) Draft the mid-term evaluation report (2 weeks) Sample Size Since the project counties are quite scattered in each province, if too many counties are chosen in each province, the survey team may have to spend more time in travel instead of surveying the beneficiaries. Therefore, the sampling strategy is to choose relatively small number of project counties to visit and conduct in-depth surveys in the selected counties. Based upon the number of project counties in each of the province, it is proposed to select 2-3 project counties in each project Province based upon the number of beneficiaries in each province. The variables to be considered in the selection of project counties includes the social, economic, and physical zoning of these counties, the classifications of the national designated poverty counties, and the types of project activities. In each selected counties, 2-3 project villages will be selected. In each province, one adjunct non-project village nearby by some of the sample villages will be selected to make the comparisons on the social-economic differences between the villages with project and the villages without the project. As a total, 700 household interviews will be interviewed in the four provinces. Of these, 600 households will be from the project villages, and 100 will be from the non-project villages. Of the 600 households from the project villages, about 50% are the current project households, 30% are the potential project households, and 20% are the non-project households. Of the household respondents, women and the poor will be included. To confirm and complement the information from the household interview, focus group discussions and key informant interviewed will be conducted in the sample villages. The three types of focus group discussions are: men’s group, women’s group, and the poor people’s group. Each group will consist of 4-6 people. The two types of key informant interviews are: one with the village technician group, one with the village committee. In addition, six case studies on type III system will be conducted. The details of the sample size are indicated in the Table 1.



Appendix 1: Suggested Project Evaluation Indicators A. Household Check List comprising a check list of major items describing the

household, its size, type, obvious crops, size of house, kitchen implements, digester size, type of biomass system, number of livestock, farm implements observed, etc.(one page)

B. Data on the Respondent – name of principal respondent, address of the household, number and type of members of the HH, number of people working the farm, ownership data, length of time in the village, general knowledge about the village, village leadership, role of village technicians, and relationship with neighbors (probe for participation levels within village)

C. Type of Farming Activities a. Scale and type activities and economic return on investment b. Probe on perceived benefits of biomass system

D. Knowledge/Awareness about Biomass Farm Systems a. Types, size, installation, cost, experience during implementation b. Fertilizer generation and use (aware of organic versus chemical) c. Livestock management d. Gas use, control, efficiency

E. Economic Impact of the Biomass system installed or expected a. Pre-project economic condition of farm HH b. Probe on government investment versus personal investment c. Perception of personal risk d. Expectations regarding expansion of system e. Attitudes toward project advisors or village technicians

F. Household impacts a. probe on time savings b. indoor air pollution c. sanitation d. health impacts—decrease in respiratory and stomach ailments e. household cleanliness

G. Participation and Gender Impact of the Project a. Training received under the project—individual programs for women? b. Demonstration visits or extension services provided—for women? c. Provision of biomass facilities d. Specific women’s programs provided under the project e. If no women’s programs get suggestions about what can be provided?

H. Long term socioeconomic Impacts a. Sensitivity to market conditions for farm income b. Awareness of external financing benefits c. If biogas digester installed what is next? d. If biogas digester not yet installed, what is expected? e. Awareness of community level impact

I. Subjective assessment of pre- and post-project conditions a. Environmental improvements b. Economic well-being c. Changes in quality of life d. Food security



Table 1. Planned Sample Size Province No. of

County No. of

Project Villages Sample of HHs

in Project Villages

Number of Focus Group

Interviews (project villages)

Key Informant Interview

(project villages)

No. of Non-Project Villages

Sample of HHs in Non-Project

Villages

Focus Group Discussions

Jiangxi 3 3 villages/county Sub-total: 9

200 18 18 1 30 2

Hubei 3 2 villages/county Sub-total: 6

150 12 12 1 30 2

Henan 3 2 villages/county Sub-total: 6

125 12 12 1 20 2

Shanxi 2 3 villages/county Sub-total: 6

125 12 12 1 20 2

Total 11 27 villages 600 HHs 54 focus groups 54 Key Informant Interviews

4 villages 100 HHs 8 Focus Groups

Note At least 1 county in each province should be the national designated poverty county if any

In each Province, about 50% are current project HHs, 30% are potential project households, 20% are non-project households; The respondents should include women and the poor

The focus groups include: one-third women’s group one-third men’s groupone-third poor household group Each group includes 4-6 persons

1 village technician group interview, 1 village committee interview

The respondents should include women and the poor

1 village committee interview, 1 ordinary farmer group interview

Case studies on Type III system: 6 cases from four project villages HH – Household



Economic and Financial Analysis (EFA) ADB Loan Project 1924-PRC, Efficient Utilization of Agricultural Wastes, has been implemented for 3 years. Two project monitoring activities are to be carried out: the Energy and Environmental Monitoring & Evaluation Plan (EEME), and the Beneficiary Impact Assessment (BIA). Based on the information from the two monitoring activities, financial and economic analysis will be carried out to evaluate the financial and economic viability of the biogas systems. The objective of the economic and financial analysis is to evaluate the financial and economic viability of the biogas systems built in the Project. EFA Work Plan Task 1: Review of Data Collection The Consultant will review the Energy and Environmental Monitoring and Evaluation Plan (EEME) and the Beneficiary Impact Assessment (BIA) plans and respective questionnaires to ensure that all the necessary parameters for the financial and economic analysis have been included. Necessary information for financial/economic analysis:

• Investment costs of the biogas systems (3 types, 2 applications, 4 provinces, same below). Separate government grant from own investment for the biogas systems.

• Operating costs. Including utensil, maintenance, labor (labor use increased or decreased?)

• Benefits as possible savings in fuel/coal, in chemical fertilizers, in pesticides, in electricity, …

• Benefits as possible revenues from additional agricultural produce and livestock • Health benefits as possible decrease in respiratory and water-bore diseases. • Environmental benefits as possible decrease in soil erosion resulted from reduced

demand for fuel wood. • Opportunity cost of labor in local labor market • Household annual net income

The Consultant will conduct site visits whenever it is necessary and will provide feedback to the PMO on possible inclusion of additional information in questionnaires. As needed, the Consultant will provide training to EEME and BIA consultants, PMO and PIO staff on how to collect and process data for financial and economic analysis, supervise data collection and processing for the part of data related to financial and economic analysis, and review the data available and provide comments on its adequacy and completeness to advise PMO for any possible revision of EEME and BIA activities. Under this task, the Consultant will also discuss with the PMO (i) the selection of the applications for each of the 3 biogas systems and (ii) the determination of key parameters as project life, discount rate, loan terms, and benefits included. Task 2: Calculation of Financial Performance Indicators The Consultant will calculate two indicators to assess the financial viability of the biogas systems. One is the Financial Payback Period of Investment (total investment/own investment). The other is the Financial Inner Rate of Return (FIRR). Take 8% as discount rate, and 15 years as project life. These indicators will be calculated for each of the 4 provinces for all 3 system types using 2 typical applications each. Sensitivity analysis will be done to exam which variables have the most impact on the financial performance of the biogas system. Select discount rate, increase in some kind of operating costs (eg. Labor cost), decrease in benefits or government grant as possible variables.



Task 3: Calculation of Economic Performance Indicators The Consultant will utilize a benefit transfer approach to determine the valuation of environmental benefits. The Consultant will refer to environmental valuation studies done in China, with high quality standard. The valuation will include health benefits and other external benefits. The Consultant will revise the financial cash flow performed under Task 2 into the economic cash flow analysis, including the health benefits and other external benefits which have been monetized. Take 4% as the social discount rate. The Consultant will calculate 2 indicators. One is the Economic Payback Period of Investment. The other is the Economic Inner Rate of Return (EIRR). This will be done for the same three biogas systems types, 2 applications, and 4 provinces.

BIA and EFA Reporting Requirements Beneficiary Impact Assessment

Socioeconomic Indicators: Within 2 weeks of commencing Phase 1, Consultants will confirm with PMO and TA Advisory Staff a List of Socio-Economic Indicators selected as the basis for conducting household interviews in the Project Area. This confirmation may take the form of a brief working document to be sent via electronic mail to the PMO and TA Advisory Staff.

Debriefing Workshop: Within 3 months of commencing Phase I, Consultants will prepare a Summary of the Results of the Household Surveys and Socioeconomic Impact Assessment in order to brief the officers and staff of the PMO and the four Provincial PIOs during a Workshop to be held at the FECC. The Summary may comprise briefing papers, overhead slides, graphical presentations, and an open forum for discussion of the methodological approaches used, the assumptions and usefulness of the data collected during the survey. This Summary, in both Chinese and English, should focus on the lessons learned and potential areas for adjustment and improvements to ensure expected Project impacts on beneficiaries.

Baseline Report: Within 4 months of commencing Phase I, this Report will discuss the approaches and methodology used for data collection; the lessons learned during the field investigations; suggest areas for improvement in subsequent phases; and to provide an overall report on the findings of Phase I of the Special Study. The overall objective of the Report is to identify social-economic impact of the project on the well-being of the beneficiaries, and make suggestions to the project management and policy makers on the areas for improvement in order to enhance the positive impacts on the beneficiaries to ensure replicability and sustainability of the project.

Final Report: Within 4 months of commencing Phase II, this Report will discuss - for all of the Provincial villages covered - the approaches and methodology used for data collection; the lessons learned during the field investigations; and to provide an overall report on the findings of both Phases of the Study. The Final Report will identify social-economic impact of the project on the well-being of the beneficiaries, and make suggestions to the project management and policy makers on the areas for improvement of future designs for similar projects. To the extent possible the Consultants will discuss the PMO and ADB the types of measures required to provide for overall project evaluation.



Economic and Financial Analysis Status Report: To support the Semi-Annual Progress report to be prepared by the PMO, the Consultant will prepare a Status Report that documents the review of data collected for the financial and economic analysis, discusses the adequacy and completeness of the data, including the selection of key parameters as project life, discount rate, loan terms, and benefits included, and documents a preliminary financial and economic analysis using the data available as of fall of 2006.

Final Report: The Consultant will prepare a Final Report that summarizes the data collection and processing for the financial and economic analysis, discusses the selection of key parameters, and fully documents the performance of the final financial and economic analysis of the biogas systems. The report will also discuss any policy implications resulting from the analysis.



ATTACHMENT C: MANAGEMENT INFORMATION SYSTEM WORK PLAN

Background The Project Administration Memorandum (PAM) of ADB Loan 1924-PRC states that within 12 months of the effective date of the loan (16 June 2003), each province—Henan, Hubei, Jiangxi and Shanxi—will establish a suitably staffed Project Performance Monitoring System (PPMS) unit within the concerned PIO and PIUs. The role of the PPMS is to ensure that project facilities are managed effectively and that benefits are maximized. PIOs are required to conduct routine results monitoring, and socio-economic surveys (including poverty and gender issues). Results are to be transmitted to the PMO, which will in turn consolidate and report the results to MOF, GEF, and ADB together with the semi-annual progress reports.

Current Status Over the past two years, beginning in mid-2004, provincial offices have developed reporting procedures tailored specifically to developmental activities in each province. While descriptively adequate, such reports are not based on quantitative baseline data. Moreover, data has focused almost exclusively on financial inputs, and tangible outputs in terms of digesters constructed and operational. There has been no baseline data established to measure poverty and gender issues (it is expected that this objective will be completed in part with the engagement of consultants to initiate a three-phase beneficiary impact assessment). Environmental impacts and economic impacts have been measured largely in qualitative terms.

Justification for Consultant Selection This consulting assignment will (i) require highly specialized expertise in a specific technical area; (ii) immediate and speedy implementation time (less than six months in duration); and (iii) a highly qualified consultant team with current experience in conducting computer based farm-level monitoring of loans for biogas digester systems. Consequently, it is proposed that the Center for Energy and Environmental Protection, (CEEP) be selected under a single source selection procedure to carry out the consulting services. The selection of CEEP is justified on the basis of its successful implementation of the computer-based MIS for the government’s T-Bond program aimed at providing credit and financial services for the construction of biomass digesters throughout all provinces in China. CEEP designed and implemented the MIS system for the T-Bond project, which measures the contributions and impacts of more than 1,000,000 rural households. A similar MIS design is envisioned for the current assignment. However, the scope of coverage—only 4 provinces, and approximately 18,000 households—is at a much smaller scale. On the basis of its unique qualifications, demonstrated expertise, and immediate availability to conduct the assignment, sole selection of the Center for Energy and Environmental Protection, MOA is recommended.

Objective of the Consulting Services The overall objective of the Consulting Services is to design a computer-based MIS that is accessible for continuous data monitoring and updating of household level inputs collected by the Project Implementation Units (PIUs) in each Project county. The system will include several templates for inputting the monitored data—some for all households in the Project and some for selected villages and households that will be sampled under specific monitoring activities. A preliminary list of quantifiable indicators covering basic household information, environmental impacts, social impacts and economic impacts is shown in Appendix 1. On the basis of the data obtained from the households, the PIUs will input the data into the MIS, and the data can be monitored by the PIO, PMO and other parties that have authorized



access to the MIS. The PIOs will use the data to prepare quarterly compilations of progress indicators as outlined in Appendix 12 of the PAM. These data will be further aggregated by the PMO in order to prepare and submit Semi-Annual Progress Reports, as required under the Loan’s Reporting Requirements.

MIS Work Plan The services to be provided by the Consultant fall into three categories:

Strategic planning and review of the management information requirements under the PPMS jointly with the PMO, the Technical Assistant consultants, and the PIO heads;

Design of the architecture, database, and information technology requirements to configure the MIS, and programming of the system; and

Testing, training and dissemination of the MIS requirements among the end users and key stakeholders.

A. Strategic Planning

1. Following authorization to proceed, the Consultant will establish a computer domain name and Project Web Site to serve as a base framework for the MIS database. Procedures for restricted access and update of data will be established.

2. During the initial two weeks, the Consultant will conduct a general review of the Project’s objectives and current status, carry out interviews with key stakeholders, and examine the data requirements for effective management at central, provincial and county levels.

3. The Consultant will review project operations for each biomass system type.

4. The Consultant will review the Project PPMS requirements, as outlined in the PAM, and as implemented over the past two years and identify any revisions required to accommodate the computerized system.

5. The Consultant will recommend the staff qualifications and levels of responsibility for monitoring, the indicators and parameters for monitored data and the design of templates to be completed at the household level.

6. A review of the templates and indicators will be performed before moving to the next task.

B. Design and Program the Computerized MIS System Based on final decisions by the PMO, the Consultant will:

1. Design the architecture for the computerized data management system in accordance with database requirements. Attention should be given to special requirements for sampling and monitoring of environmental indicators and socio-economic indicators.

2. Develop the website portal and design and test the data input systems.

3. Program the overall PPMS system for electronic data management.

4. On-line and in-person reviews of the architecture and framework for the MIS and website will be conducted before beginning the next task.



C. Testing, Training and Documentation (approximately one and one half month) Following programming of the MIS, the Consultant will:

1. Facilitate remote testing of the system at PIO/PIU level and provide feedback to relevant stakeholders. A briefing of the status of the design and testing is expected in mid June 2006.

2. Conduct a trial of the MIS at the end of June 2006 during preparation of the mid-year report.

3. Based on the trials, adjust the MIS as required and prepare documentation for deployment of the system in each of the four provinces during July 2006.

4. Provide training for effective implementation of all aspects of the MIS in August 2006 in each Province.

Attachment 1: Preliminary List of MIS Indicators Project System Implementation (Project total and per Province)

Type 1: Numbers and percentage Type 2: Numbers and percentage Type 3: Numbers and percentage Type 4: Note - Removed at mid-term adjustment – Provide rationale

General Indicators (Data collected from farmers by PIU staff)

Number of systems constructed under each type Household (HH) information

− Name of head of HH − ID Code − Members of HH (Name, age, gender, other?) − Number of pigs

Bio-digester information − Size (Cubic meters) − Additional number of pigs − Pigpen additions (m2) − Kitchen additions (m2) − Toilet additions (m2)

Farm information − Type (greenhouse, vegetables, orchard, fish, etc.) − Expansion of farm (mu) − Additional farm production

Financial Indicators

Investment in system (Data collected from farmers by PIU staff) − ADB loan

Amount Duration

− Commercial loan − Government grant − Loan from relatives/friends − Farmers own funds

Repayment of the ADB loan (Data provided to PIU staff by Financial bureau) − Payment schedule − Interest rate − Status (On time, in arrears) − % repaid



Economic Indicators Increase in farm production (Data collected from farmers by PIU staff) Increase in farm income

− Pigs, number/value − Green vegetables, area/value − Fruits, area/value − Fish ponds, area/yield/value − Other field crops, area/yield/value

Incremental productive investment − Investment scale − Simple payback

Environmental Indicators (Indicative values and data collected from EEMP3) Amount of manure treated, calculated Cubic meter of biogas generated, calculated Methane (CO2 equivalent) reduced, calculated CO2 reduced, calculated Fertilizer (slurry and sludge) produced, calculated Reduction in pesticides, data collected from EEMP

− Baseline consumption − After project consumption

Improved sanitation − Change from outdoor to indoor toilet

Cooking fuel (wood or coal) displaced, calculated Reduction in water and soil pollution, calculated

Social indicators

Number of people trained (Data collected from PIU) Types of training sessions Savings of living cost, including:

− Cooking fuel cost (wood or coal) − Chemical fertilizer − Pesticide

Health impacts (Data collected from EEMP) − Decrease flies and pests − Reduction in digestive and respiratory disease

Women benefits − Time saved gathering fuel − Time saved cooking

Change in quality of life − Consider system investment was worth while? Y/N − Chose most important reasons:

More opportunity of making money Environmental improvement Health improvement Community social equality Other

3 Energy and Environmental Monitoring Program



ATTACHMENT D: COMPREHENSIVE TRAINING PROGRAM FOR 2006

Introduction The ADB Mid-Term Review requested the following activity: “a comprehensive training program for implementation from April 2006 through project completion. A budget (based on remaining GEF funds) and timeline will accompany this program, to ensure it can be effectively delivered. Training plans should be provided by the PIOs, linked to expected outputs of the international and domestic consultants. In addition, the domestic training specialist may be recruited either for the PMO with extensive travel, or in each PIO depending on assessed best impact. The results-oriented training staff leadership and teaming workshop is to be undertaken in mid-April 2006. Each provincial team will use this workshop as an opportunity to develop and finalize its plans which are expected during the leadership training planned in mid April 2006. In addition a domestic consultant should be recruited to support the proposed training programs. The PMO international consultant should develop an appropriate terms of reference for this activity and work with the PMO leadership to determine whether such consulting services should be based in the PIOs or in the PMO office with extensive travel.” This Comprehensive Training Program for 2006-2007 describes the several steps taken by the PMO and PIOs to respond to this ADB request since April 2006. Two workshops—in May and August 2006—were held to prioritize training activities, to identify stakeholders and training participants, and to link training activities to the Project’s technical and management implementation requirements. In addition to these actions, the Training Program Plan is based on a detailed provincial level review of the PIO training programs that was undertaken in October-November 2006 by the domestic and international training specialists. A short summary of the status of training activities in each PIO is also included. Components of this Training Program Plan include the following:

Summary of prior assessments and achievements of the Project with respect to training at the village, county, PIO and national levels;

Review of general budget practices with respect to PIO training activities; current difficulties with respect to reimbursement by DOF and MOF; and suggested procedures for budget consolidation and adjustment to meet the balance of training requirements;

Summary of provincial training priorities and issues and concerns highlighted by the PIO leadership during the training program review;

Required adjustments in the proposed implementation of the Project’s training program including discussion of the roles and terms of reference for the domestic training specialists (recruited in August 2006), and required budget for travel for monitoring of training program effectiveness; and, discussion of the role of the PMO in management and oversight of overall project management training for implementation; and

Detailed PIO Training Plans as drafted by the PIO training coordinators and the PMO. These are included as Appendices 1 through 4.

Prior Assessments and Training Achievements ADB Review Missions and Annual Progress Reports have commented favorably on training program implementation and achievements since the Project’s inception. In fact, most ADB reviews note that project-related training by PIO and PIU staff represents one of the more successful activities of the Project. The following statements are taken from various ADB Project Reviews:



“Project management trainings were conducted for staff of the project implementation offices (PIOs) at the provincial and county levels. These included training on financial and accounting matters, project administration on loan disbursement and procurement procedures, and credit payment schemes. . . . Some good practices were developed like the Project Farmer’s Manual in Henan and the study tour organized by Jiangxi PIO to learn the project management for the ADB-funded Fujian Project. . . . [The MOU noted] We have reviewed the training plan for November 2004 and are pleased to inform you that we found it in order.” Source: ADB Review Mission of Loan 1924-PRC from 18 to 28 October 2004

The Annual Progress Report for 2005 noted the following:

“PIO of Henan province has compiled a textbook, Rural Well-to-do Life & Biogas Construction, as the assigned materials for technical training. Meanwhile, a series of biogas construction and eco-agriculture trainings were held in the 9 project counties in the year, with the beneficiary farmers and technicians more than 2,000 person/times. . . . In Jiangxi Province over 61 training classes were sponsored by the project this year with 6,762 people trained. Among the 61 trainings programs, 10 were for county project managers with 340 trained in terms of project engineering and financing, designing, constructing and maintenance of biogas digester and comprehensive utilization of biogas digested fertilizer. 51 training classes were for the beneficiary farmers, with 4801 (including women 942 person/times) people trained. . . Jiangxi also organized 9 project study tours to learn the advanced biogas technologies and project management skills of different places. . . . In Hubei, the project counties have conducted 28 project technical training programs, with 2028 people trained. . . . Shanxi Province organized trainings for 292 households and women, developing the technology of the Type I sub-project and ensuring the beneficiary farmers benefit from the project construction. Source: Annual Progress Report of 2005, Project Management Office, MOA

The ADB Mid-Term Review from 2-24 March 2006 provided extensive coverage of training activities. Some of the key findings and recommendations were:

“Under Component B the four PIOs have now completed technical training for farmer-beneficiaries, biogas contractors, and biogas technicians. A total of 112 training programs, special studies, and study tours were conducted on bio-agricultural technologies, benefiting about 10, 516 farmers and 1,037 technicians as well as 1,297 extension workers and 245 EPB staff. . . . Observed weaknesses in training activities included targeting, uptake and timing, and this varied significantly between counties and between provinces. . . . Some provided adequate and appropriate training based on farmers needs, while others had insufficient responses to training requirements of beneficiaries. . . . Often men are trained in areas where women are responsible for the activity in the household. All provinces are aware of the importance of training women and will encourage more women to participate actively. [The Review noted that] : training methods need to be improved. . . . activities need to be retargeted to women . . . training is delivered in a rote manner without focus on experiential and adult learning techniques. . . timing a training varied . . . and a timing schedule would be useful. . . . There is a good deal of training planned for 2006, particularly on capacity building (project management, financial management, monitoring and evaluation, renewable energy development, etc., being considered by PMO. . . “ Source: Midterm Review Mission, 2-24 March 2006, MOU between ADB and FECC, April 2006



Most recently, the ADB Review Mission from 15-21 October 2006, noted:

“The four PIOs have now completed technical training for farmer-beneficiaries, biogas contractors, and biogas technicians. A total of 15,000 farmer households, 11,200 technical workers, and 1,300 technical staff have been trained in the different programs. . . . During the field study tour in Qian-Shan county and Yu-Jiang County in Jiangxi province, the Mission found the training programs are very welcomed by the farmers. Different kind of training programs, for example, on field demonstration and lecture instruction, have been organized based on the farmer’ needs. The training contents include not only the technology of how to operate and maintain the biodigester, but also how to integrate with ecological agriculture production. . . . , the Mission’s field visits also observed that the training and capacity building activities of the project for farmers, for technicians and for women participation have been uneven, conducted, with mixed results. . . . During the field visits, Jiangxi PIO reported that this province has used out most of the training funds [under the GEF allocation] and request to increase their training budget for carrying out training for the new farmers who are going to construct new Type II systems.” Source: Draft MOU, ADB Review Mission 14-20 October 2006

Achievements in training, particularly beneficiary training at the village and county level, can be attributed to several factors. Most important is a long tradition of training linked to the distribution of biogas technologies provided by the Government’s Rural Energy Offices (REOs) in each of the Project’s targeted provinces over the past 20 years. ADB Project Loan No. 1924-PRC was able to piggy-back on an extensive network of training courses, qualified trainers, technology manuals, and an existing Governmental program for providing certified biogas technicians at the village level to support the implementation of the ADB’s lending of subloans to households for biogas digesters. ADB Loan No. 1924-PRC is only one of among many governmental programs available in the four provinces to promote farm level biogas development, including the T-Bond program, and other provincial government subsidies, such as the 1,000 Yuan subsidy provided to all ADB beneficiaries that take up the loan. As a consequence, much of the training provided by the REOs focuses on the delivery of a broad range of skills for overall village level development using biogas technologies. Training is provided to village participants in many cases without distinction between whether the individual farm household is borrowing funds for their biodigester installation from the ADB, or the World Bank, or the T-Bond program or some other governmental financing scheme. This is indeed the most efficient way to share understanding about a common technology. Training is often provided by the REOs to large groups of farmers, some of whom will take up the ADB loan under the Project, and some of whom will not. Other farmers may take up a loan from another loan program such as T-Bond. Some of those trained may not reside in designated villages covered by ADB. It is sometimes difficult at the county level to allocate the costs of farmer training to one project on another except on a proportional basis.

Review of GEF Budgets for Training With the exception of the PMO, there were no reallocations of GEF Grant proceeds among the PIOs for Training Activities at the time of the Mid-Term Review. The GEF Budget Allocation for all components, including Training is shown in Appendix 1. The status of the budget allocation for the training component with respect to expenditure is shown in Table 1 below for each PIO and the PMO. Expenditures are shown using the following breakdowns: (i) the original GEF Allocation, (ii) the Revised GEF Allocation at the Midterm Review, (iii) amounts committed and reimbursed, (iv) amounts committed and submitted to DOF or MOF for reimbursement, (v) amounts spent and no claim submitted for reimbursement; and (vi) balance available for commitment.



Table 1: GEF Grant Proceeds In US$

Jiangxi PIO

Original GEF

Allocation

Revised GEF

Allocation

Amount spent and

reimbursed

Amount spent and claim submitted

Amount spent and claim for

reimbursement not submitted

Balance available for commitment

Training 261,000 261,000 146,160 47,780 47,660 19,400Workshop 75,000 75,000 75,000Special Studies

28,000 28,000 Not included in training analysis

Tours 178,000 178,000 42,470 24,250 5,620 105,660Total Training excluding Special Studies

514,000 514,000 200,060

Hubei PIO

Original GEF

Allocation

Revised GEF

Allocation

Amount spent and

reimbursed





Training 178,000 178,000 18,187.50 46,237.50 55,762.50 57,130.00Workshop 51,000 51,000 0 0 5,625.00 45,900.00Special Studies

19,000 19,000 0 0 0 19,000.00

Tours 122,000 122,000 8,111.25 10,000 0 10,380.00Total Training excluding Special Studies

351,000 351,000 132,410.00

Henan PIO

Original GEF

Allocation

Revised GEF

Allocation

Amount spent and

reimbursed

Amount spent and

claim submitted




Training 214,000 214,000 51,000 11,000 152,000Workshop 62,000 62,000 21,400 5,000 35,600Special Studies

23,000 23,000 23,000 Not included in training analysis

Tours 146,000 146,000 0 5,500 140,500Total Training excluding Special Studies

422,000 422,000 72,400 21,500 328,100

Shanxi PIO

Original GEF

Allocation

Revised GEF

Allocation

Amount spent and

reimbursed





Training 216,000 216,000 43,750 46,250 101,250 24,750Workshop 62,000 62,000 32,500 29,500Special Studies

23,000 23,000 Not included in training analysis

Tours 147,000 147,000 3,750 143,250Total Training excluding Special Studies

425,000 425,000 197,500



Project Management Organization—FECC

Original GEF

Allocation

Revised GEF

Allocation

Amount spent and

reimbursed





Training 170,000 567,000 not reported 330,000*

Workshop 50,000 100,000 not reported 100,000Special Studies

0 1,071,000 Not included in training analysis

Tours 100,000 not reported 50,000*Total Training excluding Special Studies

220,000 767,000 480,000*

* Represents amount budgeted for 2007 for domestic and international training, workshop and study tours While no changes were made in the GEF budget allocation for training activities during the Mid-term Review, significant changes were made in the physical Training Targets as shown in Midterm Review MOU Attachment 10: Revised Project Targets as of 31 December 2005. The reason why there was no reallocation of the GEF budget based on revised training targets is not known. Nevertheless, Table 2 below provides a theoretical analysis of budget reallocation among PIOs based on the percentage increase or decrease in revised training targets for 2006-2007. The total revised target for all project persons to be trained in 2006-2007 is less than one third of the original target. Yet, no corresponding revision in the budget allocation for training was made. Since training plans are based on the budget allocation, the result will be training activities undertaken in excess of Project requirements, unless reallocation is made. Finally, with the exception of Jiangxi PIO where training targets are increased by 21%, targets in all other PIOs have decreased from 30% to 72%. Theoretically, this would indicate insufficient budget in Jiangxi PIO, and excess budget resources in the three other PIOs. The October 2006 ADB Review Mission also noted this discrepancy in budget allocation in Jiangxi PIO. The data suggest adequate justification for some level of budget adjustment to meet actual and future training requirements. Another conclusion taken from review of the original training targets is that there was little clarity or understanding about the training function at the time of Project design. Training targets have in some cases been revised more than 1000% since project inception. Secondly, there is little common understanding of what activities are included under the category of “training,” and other activities under the category of “workshops,” and then under “study tours”, which also includes the training function. These unclear distinctions have caused considerable confusion in budget expense and requests for reimbursement. All of these activities—training, workshops and study tours—are part of the objective of institutional capacity building for the future. It is recommended that all these budget categories be lumped together under one item called “Total Training”. This number provides the best picture of the balance of funds that are available for capacity building activities up to the end of the Project.



Table 2: Adjustments in Training Targets Compared to GEF Budget for Training Activities

Component B: Training Activities

Original Targets Revised Targets Henan Hubei Jiangxi Shanxi Total Henan Hubei Jiangxi Shanxi Total

Inc/(Dec) in Target

Biogas Digester Technicians Training 30 30 30 30 120 500 400 550 300 1750 1358% Farmers Training 8250 8250 8250 8250 33000 3230 5000 9140 1500 18870 -43%

Extension Workers Training 163 163 163 161 650 500 500 500 500 2000 208% Annual Workshops 5 5 5 5 20 8 8 25 8 49 145% Study Tours 25 25 25 25 100 10 20 40 10 80 -20% Total All Training 8473 8473 8473 8471 33890 4248 5928 10255 2318 22749 -33% Theoretical Budget Reallocation based on Percentage Increase or (Decrease) in Revised Targets for 2006-2007

Henan Hubei Jiangxi Shanxi Percent increase/decrease in targets -50% -30% +21% -72%

Total Budget Allocation for Training based on Original Targets $422,000 $351,000 $514,000 $425,000

Percent Change in GEF Budget Allocation for all Training activities 2006-2007 0 0 0 0

decrease decrease increase decrease

Theoretical increase/decrease based on Revised Targets for 2006-2007 $211,000 $105,300 $107,940 $306,000

Theoretical revised budget allocation based on increase/decrease in Revised Targets $211,000 $245,700 $621,940 $119,000



The data in Table 1 on claims and disbursements for Total Training Activities under GEF highlight three major financial issues:

1. A significant amount of the line item for “training” under the GEF budget has reportedly been spent for training at the provincial level (principally farmer level training), for which claims for reimbursement have not been submitted. It is estimated that for the line item for “training” of the total training budget among the four PIOs about 50% of the GEF budget has been spent, for which claims for reimbursement have not been submitted;

2. Expenditures under the line item for training do not reflect to total expenditure for total training. For example, Jiangxi has spent 93% of its budget for “training”, but only 60% of the budget for Total Training. Also in Shanxi, they report having spent about 90% of the “training” line item, but only about 55% to the total training budget. These data suggest that there are sufficient funds in each of the PIOs for the proposed training activities in 2007, if appropriate allocations are made within the province to spend their total capacity building budget (i.e., funds for training, workshops and study tours);

3. If the balance of total training funds after reimbursement is not sufficient to meet important and high priority training expenditures as required, then reallocations in the GEF budget must be undertaken from either different categories of GEF expenditure (such as contingencies or student fellowships or similar categories) or funds reallocated among the five recipients of the GEF budget, based on justification of the actual physical targets required in each province.

Ascertaining the validity of prior training expenditures—As noted above, in three provinces—Jiangxi, Hubei and Shanxi—staff report that approximately 90% of training funds (under the line item for training) have been spent. The first step is to review the validity of these claims, examine the supporting documentation to be submitted for reimbursement, and to help the PIOs make the claims for reimbursement from the provincial Departments of Finance (DOF). The actual balance of funds remaining for total training activities in each PIO and the PMO for activities in 2006-2007, has not yet been determined. What has been recorded has been a consistent record of accomplishments and training activities undertaken by the PIOs since 2004 to train large (and measurable) numbers of project beneficiaries, project implementation staff, and project management staff. These training activities have been recorded in ADB Review Mission documents, in PMO annual and mid-term reports, and cited in the ADB’s Midterm Review and GEF review. As noted above, ADB cites training activities as an important achievement of the Project. These official claims of project accomplishment are the foundation for justifying reimbursement for the training activities using GEF funds. The next critical step is to sit down with the DOF and the ADB to validate the claims and seek a disbursement for approved expenditures. The longer this process is delayed, the more likely is it that supporting documentation is lost and claims are not supported. Budget Assumptions for the 2006-2007 Training Plan—while the precise expenditure for training in each PIO is undetermined, even in those provinces where training expense has been highest—Jiangxi and Shanxi—considerable resources are available in the total training budget. For purposes of planning expenditures for total training activities in the PIOs, two assumptions are possible:

1. It can be assumed that most of the past training expenditures for which claims are pending or for which claims have not been made, can be validated for reimbursement against the GEF budget allocations for training activities. If this assumption is adopted, then future training activities will have to be limited to the balance of funds available, specific planned training activities will have to be prioritized both within provinces and among provinces to achieve overall Project



objectives, and funds from other budget categories will need to be reallocated to cover high priority training needs for 2007; or

2. It can be assumed that most of the past training activities did not follow procedures for reimbursement required by DOF and ADB, and will not be validated for reimbursement. If this assumption is the correct one, then there would be an excess of funds for training activities. It would be difficult to find an efficient and effective way to spend all of the funds in the one year remaining under the project. The task would be to maximize training opportunities, perhaps looking to build the local capacities for future project investments.

The 2006-2007 Training Plan presented in this Report chooses a middle course, assuming that some of the outstanding claims will be validated and others will not be validated. It is therefore recommended that the GEF budget categories for training be collapsed into one Total Training category comprising the budgets for training, workshops and study tours (as shown in Table 1). It is also recommended that each PIO and the PMO prioritize each training activity. At another level, all training activities should be prioritized from the point-of-view of the contribution to overall Project objectives. In other words, someone must decided whether one overseas study tour for 10 senior staff costing $20,000 is worth more to the Project than five farmer-level training activities costing $4,000 each for a total of 100 farmer beneficiaries.

Summary of Provincial Training Priorities As noted in the Introduction, the reason for carrying out the provincial survey of training needs was to collect the required data to finalize the Revised Training Plan for 2006-2007 as requested by ADB. Additionally, the visit provided an opportunity for PIO staff to meet and discuss their training activities with the national Training Advisor (one of two who were recruited in August 2006). Lastly, in addition to discussions about provincial training priorities, a general survey was undertaken to find out what kind of training assistance was required, which types of management training courses were desired, and whether or not there were specific training consultants, professors or training institutes that could be recommended by the PIOs. Discussion with PIO staff suggest that much of the management training that has been provided has been traditional lecture-type courses (or worse, such as the reading of Power Point presentations), with minimal participant interaction with other trainees, few team-building activities, and little opportunity for oral presentation. Modern management tools and western concepts of team training have generally not been provided to date. The top two priorities listed by Project Staff were courses in (i) project management and implementation, and (ii) ADB financing and financial management. In general, there was strong support for the objectives of the proposed program for Project Management Training which will provide up to 12 courses to PMO and PIO staff over a six month duration. Some of the objectives of the project management training that builds on the relationships established with a single Training Institution are:

• Training should provide reinforcement of management tools and learning over the long term;

• The Training Institution will have to visit the PIOs and the project sites to get an understanding of the implementation issues and adapt the project management training to local circumstances in each PIO;

• The trainers need to provide training with the same group frequently enough to get to know participant strengths, in order to reinforce management strengths and provide the foundation for training of PIO trainers;



• To be cost effective the training activities should build upon past training activities by the same Training Institute. This saves money on course design and builds on past activities; and

• It was considered important by the PIOs that a business relationship is built over time so that particular management problems and issues can be freely discussed with the Trainers.

A proposal for long-term management training is under consideration by PMO. It is expected that the training on Project Management will begin implementation in December through May 2007. Comments by the PIO directors and training officers suggest that there is a limited period available for management training of PIO staff given their work and travel demands. They cited several training activities, including workshops on Energy and Environmental Monitoring and Evaluation (EEME), project workshops and training sessions on the computerized MIS requirements, preparation of Clean Development Mechanism (CDM) projects, review of Special Studies financed by GEF, and the anticipated travel related to the conduct of the Beneficiary Impact Assessment (BIA) that will draw heavily on staff time. In this regard, the PIO directors requested that the national Training Specialist carefully monitor the time line for training activities and other workshops to ensure that staff are not committed for training activities or similar functions more than approximately twice per quarter.

Status of PIO Training Activities Jiangxi Province The general impression is that the organization, management and monitoring of training activities is proceeding very well. It was noted that documentation of each training session is both timely and carefully recorded. The training data include whether training is included under the GEF project, an ADB statement of expenditures, receipts, an abstract of the training process, types of cost, the training announcement, workshop agenda, training evaluation, participant’s lists and signatures, training materials and related photo documentation. For training at city/counties, a training report is sent to the PIO either right after each training course or after a certain period such as a quarter or half year. The city/county training plan is made by the PIU and then submitted for approval by PIO. Three reasons were provided to explain why training has been successful in Jiangxi:

• The PIO has 20 years experience on international cooperation projects; • The PIO has a highly qualified team of experienced management staff; • The Jiangxi PIO was established as a special organization for implementation of

foreign funds. It is different from the other three PIOs whose major functions are technical matters such as agricultural energy promotion, and service as an environment protection and monitoring station.

The difficulties and obstacles that the PIO has faced in past training activities are mainly:

• Lack of a national training advisor in the past period, which could have given them support and help in training;

• Shortage of training budget. The are a many project farmers who are located over a large area; also, the farmers required different types of training content, such as biogas technology, construction, finance, agriculture, digester maintenance, monitoring and household use of methane. Before each training course begins, the PIU will inform the PIO by fax or phone call. PIO staff attends some of the city/county training courses for farmers as a part of their training monitoring.

• As of today, the GEF training budget has been almost spent; there remains only about US$10,000.



The total demand for training in 2007 is about US$150,000, which comprises of US$110,000 for training more than 2,000 farmers over an average of 2 days each farmer, or about 4,000 days of training, and another US$40,000 for training of PIO staff. The PIO training is designed for project management skills. The type of future training needed for PIO staff includes:

• Advanced project management conception and knowledge; • Monitoring and supervision, and effective budgeting; • Understanding project trends and directions for future projects, including trend

information from international organizations such as UN, WB, ADB and so on. PIO training could be 3 to 5 days per training, and 2 to 3 times per year. The training place could be anywhere in China. The Jiangxi training advisor noted that winter is the best time for farmer training, since this is farmer rest time. Finally, as identified during the discussions on training, there will be an urgent need at the end of the Project to carry out at a Workshop on Sustainability for rural bio-energy at the County Level. This workshop will be aimed at giving the project farmers the required skills to maintain and properly use their biodigeters after the Project closure. This should be included in the training plan. However, training cannot proceed without confirmation from PMO about the reallocation of training budget to cover the additional needs of Jiangxi PIO. As soon as confirmation is received about how much additional funds are available for training, they can start training as soon as possible. The detailed Training Plan for Jiangxi is provided in Appendix 1. Hubei Province The general impression is there is no clear conception about training at the PIO level. Most training is focused on farmer training at the County level. Also there are frequent changes in PIO staff functions, which makes project implementation difficult. The 2006-2007 Training Plan was under preparation and was to be submitted in time for this Report. Regarding the on-going training process carried out by the Rural Energy Stations, about half of the project farmers have received training; that is 200 farmers in 9 counties. Regarding the training budget, it was reported that almost the entire GEF budget for each county has been used up. Some of these funds have been reimbursed. Other training expenses have been claimed but have not yet been paid. Other expenditures have not yet been claimed. The PIO confirmed that the financial data for training will be sent to PMO from the Hubei financial officer the following week. Future Project training needs, which can be provided by PMO resources include:

• Overseas Study tour about renewable energy systems; about 10 days • Workshop on Sustainability for rural bio-energy at county level, at the time of Project

completion and handover to farmers; • Project management training for the core officers and project leaders, better to theory

together with case studies, 2~3 days, anywhere in China. This training might also include courses in Training of Trainers.

Future Project training needs at the PIO/PIU level includes training to county level management stuff on financial and project implementation, and future Project training needs at the County level include:

• Training to township, village, biogas technicians: • Follow up service training: such as bio-gas digester maintenance, planting, safety

operation of new productions; • Biogas technicians training, such as standard pipes installation; • Type II biodigester construction and implementation; and



• Project management stuff training on financial, performance evaluation, project implementation workshop and so on.

The detailed Training Plan for Hubei is provided in Appendix 1. Shanxi Province In general, while the Rural Energy Stations have been successful in providing training at the farm level, it has been difficult to integrate activities financed by the GEF Grant training component into the PIO/PIU training activities. For the most part, training for farmers has been carried out by the Agricultural Training Center in Shanxi in a series of training programs. Participants in these programs include farmers that either have or intend to take up the ADB biodigester loan, together with many other farmers that are not part of the ADB loan. The PIO is satisfied with the training process, although they started later than other provinces. There are few printed reports or summaries of the training activities that have been provided. The PIO did not provide printed out reports or a training summary during the visit, all the data is from memory. The PIO agreed to provide a training plan for 2007 the following week. County level training is conducted by the PIUs without direct monitoring of the program by PIO staff. It was agreed that the PIO staff should give support and supervision to PIUs with attention to training skills. In this regard a proposed Training of Trainers course for PIO and PIU staff was considered useful. With regard to training needs in Shanxi, the following suggestions were made:

• Training of Type I system farmers has been completed. Training for adoption of biodigester systems for Type II systems has completed 56% (1,970 households) of the target of 3,500 total households targeted.

• In terms of total training budget utilization, RMB350,000 ($43,750) has been reimbursed by DOF, RMB370,000 ($46,250) has been claimed and not yet reimbursed, and RMB810,000 ($101,250) of county-level training has not been claimed yet. In Shanxi’s proposed Training Plan for 2006-2007, the proposed budget has been adjusted according to the reimbursed and claimed cost. If real costs exceed the allocated amount, the county much pay the balance from their own budget.

Training needs for 2006-2007 to the end of the Project identified by PMO include:

• English skill training, for up to one month; • Project management training for the all PIO and city PIU leaders, 3~5 days,

anywhere in China; • Workshop with other PIOs on project management, sharing experience; and • Workshop on Sustainability for rural bio-energy at county level.

One of the major advantages of for training in Shanxi is the Agriculture Training Center which is available together with the provincial agriculture university. The Training Center has been certificated by China’s Ministry of Labor. This Center has an established technician training center with biogas digesters and related equipments such as biogas stoves available to farmer participants under the ADB loan. The detailed Training Plan for Shanxi is provided in Appendix 3. Henan Province In general, Henan is satisfied with the training process up to now, but requested that the national training advisors assist the PIO in providing a survey of the impacts of training and suggestions on how to improve training activities. The 2006-2007 Training Plan has been completed and was given to the training review team. In terms of training commitments



under the GEF budget, a total of RMB1,326,000 ($165,750) has been utilized. The balance of the training budget is RMB1,874,000 ($234,250). No details were available on how much has been disbursed, was claimed and pending disbursement, or was spend and claims under preparation. It was noted that the training budget for services to be provided under the Energy and Environmental Monitoring and Evaluation (EEME) budget is not yet available, so the GEF training budget is now being used for EEME training. The Henan training budget for 2007, also includes a budget for an international study tour. Specific future training needs for Henan PIO that can be provided by the PMO include:

• Workshop for staff of the 4 PIOs to exchange and share their experiences in implementing the project;

• Training to be provided by in helping to complete the Project Summary, including checking and acceptance according to ADB standards. This training is needed so that the PIOs can pre-check the Reports before being sent to ADB for checking. Information is need on the kinds of materials and documents that should be prepared and what is the final checking procedure;

• For type III Systems, training is need on the procedures for how to reimburse? There is no uniform requirement from PMO. What is the requirement from ADB?

• End of Project Workshop on Sustainability for rural bio-energy at county level • Training of trainers; best time for this training is from Dec. 2006 to the end of Feb.

2007. • Regarding the training frequency, once a quarter is recommended. Venue could be

any where in China. The detailed Training Plan for Henan is provided in Appendix 4.

Proposals for Improved Implementation and Supervision of Training Plans As requested by ADB during the MTR, the Project engaged a National Training Specialist in August 2006. In order to provide effective guidance and support for training at the provincial level, the PMO training budget includes a modest allocation (US$2,000 per quarter) to cover the additional costs of travel of PMO staff for training supervision and guidance in the four Project provinces (travel and per diem expenses of the national training experts are included in their contracts).. This allocation covers the additional cost of participation in training, travel to various venues and other training related expenses. The specific objective is to ensure that the PMO staff and the National Training Advisor has resources required to spend sufficient time with PIO staff to assist them in training supervision, dealing with financial disbursement for training activities, prioritization of the activities listed in the Revised Training Plan, and participation by PMO staff in training supervision activities. The detailed Training Plan for PMO is provided in Appendix 5. ADB has offered to give a brief one half-day financial management training session for PIO training officers and to PMO staff at no cost to the Project. This session will be offered at the ADB Resident Mission. The objective of the course would be to provide information on the types of documentation required by the DOF and the MOF to make claims to ADB. The objective would be to speed up the disbursement process, particularly for training expenditures that have been committed but not claimed. PMO will decide on whether the training offer is appropriate for PIO staff.



Appendix 1: Plan for Training Activities to be Allocated from GEF Funds (2006-2007) - Jiangxi Project Implementation Office I. Proposed GEF Financed Training and Workshop Activities—Jiangxi PIO

Course Title Proposed Dates

Estimated Cost US$

Principal Stakeholders

Remarks/ Adjustments

First Quarter 2007 GEF Poverty Management January 2007 3,987.50 PIO 32 partic., 2 days, 12 women Financial Management February 2007 3,750.00 PIO 30 partic. 2 days, 20 women PIU project management February 2007 3,000.00 PIU staff city 40 partic. 2 days, 15 women Financial management and engineering technics January 2007 3,000.00 PIU staff city 40 partic. 2 days, 15 women Eco-farming and biogas engineering February 2007 3,750.00 Agri. Extensions staff 50 partic. 2 days, 10 women biogas technical training March 2007 2,250.00 Biogas technicians 40 partic. 2 days, 5 women Tobacco diseases, pest management and biogas management and use

March 2007 2,750.00 End users—farmers, enterprises,contractor

100 farmers, 2 days, 25 women

Fruit and animal husbandry March 2007 3,300.00 End users—farmers 120 farmers, 2 days, 40 women Eco-farming March 2007 3,300.00 End users—farmers 120 farmers, 2 days, 50 women Organic fruit planting March 2007 3,300.00 End users—farmers 120 farmers, 2 days, 70 women Pest management, animal husbandry, biogas use February 2007 3,300.00 End users—farmers 120 farmers, 2 days, 60 women Biogas maintenance and use March 2007 3,025.00 End users—farmers 110 farmers, 2 days, 50 women

Second Quarter 2007 EEME and MIS training under PMO budgets June 2007 (7,500.00) PIO/PIU 90 partic., 2 days, 30 women GEF Poverty Management May 2007 3,750.00 PIU staff city 30 partic. 2 days, 8 women PIU project management May 2007 2,250.00 PIU county 100 partic., 2 days, 52 women Biogas technical training June 2007 2,500.00 Biogas technicians 30 partic., 2 days, 5 women Paddy production and management April 2007 1,125.00 End users—farmers 110 farmers, 2 days, 52 women Eco-farming May 2007 2,750.00 End users—farmers 210 farmers,2 days,143 women Digester use and maintenance April 2007 5,250.00 End users—farmers 140 farmers, 2 days, 62 women Agriculture and animal raising June 2007 3,500.00 End users—farmers 100 farmers, 2 days, 55 women Eco-farming and biogas management June 2007 2,500.00 End users—farmers 100 farmers, 2 days, 60 women Pig raising and practical biogas technics April 2007 2,750.00 End users—farmers 110 farmers, 2 days, 40 women Fruit planting and biogas digester use April 2007 2,000.00 End users—farmers 80 farmers, 2 days, 56 women Project HH level knowledge and biogas utilization May 2007 2,500.00 End users—farmers 100 farmers, 2 days, 85 women Pig raising June 2007 2,500.00 End users—farmers 100 farmers, 2 days, 70 women

Third Quarter Engineering acceptance and accreditation July 2007 6,250.00 PIO/PIU 50 partic., 2 days, 10 women Financial Management September 2007 6,250.00 PIO 50 partic., 2 days, 60 women Product processing an biogas technics September 2007 1,500.00 Agricultural Extension 40 partic. 2 days, 10 women



Use of slurry and sludge August 2007 1,125.00 Biomass Extension 30 partic. 2 days, 8 women Biogas management and maintenance July 2007 3,000.00 End users—farmers 120 farmers 2 days 48 women Orchard maintenance, bird flu prevention, greenhouse vegetable management

July 2007 2,500.00 End users—farmers 100 farmers, 2 days, 60 women

Summer fruit pruning and animal husbandry July 2007 2,500.00 End users—farmers 100 farmers, 2 days, 40 women Fruit and vegetable planting August 2007 3,250.00 End users—farmers 130 farmers, 2 days, 45 women Agricultural economics and management August 2007 3,000.00 End users—farmers 120 farmers, 2 days, 56 women Waste use, biogas digester use, orchard mgmt. September 2007 3,500.00 End users—farmers 140 farmers 2 days, 60 women

Fourth Quarter Project Completion Assessment October 2007 11,250.00 PIO/PIU 90 partic., 2 days, 30 women Animal, poultry and fish production November 2007 1,500.00 Agricultural Extension 40 partic., 2 days, 10 women Pig rearing and management, bird flu prevention November 2007 3,000.00 End users—farmers 800 farmers, 2 days 50 women pig raising October 2007 3,300.00 End users—farmers 120 farmers, 2 days 40 women pig and poultry epidemic prevention, orchards November 2007 3,575.00 End users—farmers 130 farmers, 2 days 60 women Winter management/modification of fruits December 2007 2,750.00 End users—farmers 100 farmers, 2 days 25 women Pear winter management, slurry applications October 2007 3,025.00 End users—farmers 110 farmers, 2 days 40 women Biogas knowledge and utilization for households December 2007 3,575.00 End users—farmers 130 farmers, 2 days 85 women Biogas application for “Sanping” agriculture Sept 2007 3,300.00 End users—farmers 120 farmers, 2 days 48 women

II. Study Tours under the GEF Budget—Jiangxi PIO [based on initial projections]

Name of Study Tour Proposed Dates

Estimated Cost US$



Study Tour biomass technics—Fujian March 2007 5,250.00 PIO and PIU directors 20 participants for 8 days Study Tour agricultural production—Dalian May 2007 5250.00 PIO and PIU directors 20 participants for 8 days Study tour project management—Yunnan June 2007 4.500.00 PIO and PIU directors 12 participants for 6 days Study tour project management—Qinghai August 2007 4,500.00 PIO and PIU directors 12 participants for 6 days Study tour financial management—Shenyang September 2007 4,875.00 financial manager 13 participants for 6 days Study tour financial management—Henan December 2007 3,125.00 financial managers 12 particpants for 6 days PPMS and financial management in Ganzhou city and counties

May 2007 4,000.00 Finance, engineering, EEME staff

15 particpants for 6 days

PPMS and financial management in Fuzhou city and counties

June 2007 2,625.00 Finance, engineering, EEME staff

10 participants for 6 days

PPMS and financial management in Shangrao city and counties

June 2007 3,375.00 Finance, engineering, EEME staff


PPMS and financial management in Jiujiang and Yingtan cities and counties

August 2007 3,375.00 Finance, engineering, EEME staff




PPMS and financial management in Yichun city and counties

August 2007 3,125.00 Finance, engineering, EEME staff


Project management exchange among counties July 2007 10,000.00 county level staff 24 participants for 12 days Project management exchange among counties November 2007 10,000.00 county level staff 24 participants for 12 days

Pending budget reallocation, a Workshop Plan for 2008, has also been developed by Jiangxi PIO III. Workshops—Jiangxi PIO


Estimated Cost US$



Project Benefit forecast 1st quarter 2008 7,737.50 Namchang PIO/PIU s 100 staff for 2 days Final Project Financial Projections 1st quarter 2008 7,500.00 Namchang PIO/PIUs 60 staff for 2 days Project Summary at city level 1st quarter 2008 15,500.00 6 project cities 15 staff for 2 days Project Summary at county level 1st quarter 2008 28,350.00 14 project counties 378 PIU staff Environment Protection and Monitoring June 2008 4,975.00 Namchang 60 staff for 2 days Final Project Summary Workshop June 2008 10,000.00 Namchang 100 staff for 2 days



Appendix 2: Plan for Training Activities to be Allocated from GEF Funds (2006-2007) - Hubei Project Implementation Office I. Proposed GEF Financed Training and Workshop Activities—Hubei PIO


Estimated Cost US$



Planned Training Activities In Tianmen City/County • eco-farming and animal husbandry March 10, 2007 1,437.50 Farm households 100 participants • project management, PPMS, biogas utilization March 15-17, 2007 9,875.00 PIU management 120 participants • follow-up service and eco-farming April 11-13, 2007 9,250.00 PIU management 110 participants • biogas new technics for extension workers March 20-24, 2007 2000.00 technical staff 30 participants • biogas maintenance & utilization, fruit planting August 2007 950.00 Farm households 68 participants • biogas maintenance & utilization, fruit planting November 2007 1,500.00 Farm households 112 participants Planned Training Activities In Wuxue City • project management, PPMS, biogas utilization March 10, 2007 10,000.00 PIU management 120 participants • biogas new technics for extension workers March 20, 2007 2,000.00 technical staff 30 participants • biogas fish technics for farm HH February 20, 2007 1,375.00 Farm households 100 participants • follow-up service and eco-farming April, 1-3,2007 9,875.00 PIU management 120 participants • biogas pig technics for loan HH April-May 2007 1,375.00 Farm households 100 participants • biogas planting technics for loan HH Oct-Nov, 2007 1,187.50 Farm households 85 participants Planned Training Activities in Chibi City • project management June 5, 2007 5,000.00 PIU management 100 participants • eco-farming and animal husbandry March 2007 4,000.00 Farm households 100 participants • follow-up service and eco-farming April 23-25, 2007 10,000.00 PIU management 120 participants • biogas new technics for extension workers May 15, 2007 2,125.00 technical staff 30 participants • biogas maintenance & utilization, fruit planting June 8, 2007 1,375.00 Farm households 100 participants • biogas maintenance & utilization, fruit planting November 2, 2007 3,750.00 Farm households 100 participants Planned Training Activities in Tongcheng County • project management, PPMS, biogas utilization March 6, 2007 10,000.00 PIU management 120 participants • biogas new technics for extension workers April 8, 2007 2,000.00 technical staff 30 participants • pig raising July 30, 2007 1,375.00 Farm households 100 participants • biogas rice cultivation July 5, 2007 1,062.50 Farm households 65 participants • biogas vegetable cultivation July 8, 2007 1,000.00 Farm households 50 participants • biogas fruit cultivation July 10, 2007 1,250.00 Farm households 70 participants • follow-up service and eco-farming August 15-17,2007 10,000.00 PIU management 120 participants Planned Training Activities in Fangxian County



• fermentation theory and biogas engineering March 10-12, 2007 875.00 Farm households 60 participants • Type 3 biogas utilization May 20-22, 2007 1,500.00 Farm households 100 participants • Eco-farming and biogas construction August 20-22, 2007 1,625.00 Farm households 120 participants • biogas new technics for extension workers April 8-12, 2007 2,125.00 technical staff 30 participants • project management, PPMS April 15-17, 2007 10,000.00 PIU management 120 participants • follow-up service and eco-farming July 8-10, 2007 9,780.00 PIU management 120 participants Planned Training Activities in Yunxian County • eco-farming and animal husbandry March 14-17, 2007 10,000.00 PIU management 120 participants • biogas new technics for extension workers March 25-29, 2007 2,000.00 technical staff 30 participants • biogas fish technics for farm HH April 1, 2007 1,375.00 Farm households 100 participants • follow-up service and eco-farming June 8-10, 2007 10,000.00 PIU management 120 participants • biogas pig technics for loan HH April, May 2007 1,375.00 Farm households 100 participants • biogas planting technics for loan HH Oct, Nov, 2007 1,250.00 Farm households 85 participants Planned Training Activities in Yunxi County • eco-farming and animal husbandry March 8, 2007 1,375.00 Farm households 100 participants • financial management, PPMS, etc March 18-20, 2007 10,000.00 PIU management 120 participants • follow-up service and eco-farming April 16-18, 2007 10,000.00 PIU management 120 participants • biogas new technics for extension workers May 20-24, 2007 2,000.00 technical staff 30 participants • biogas maintenance & utilization, fruit planting July 6, 2007 1,000.00 Farm households 68 participants • biogas maintenance & utilization, fruit planting Oct 22, 2007 1,500.00 Farm households 112 participants Planned Training Activities in Songzi City • eco-farming and animal husbandry March 8, 2007 1,375.00 Farm households 100 participants • financial management, PPMS, etc. March 18-20, 2007 10,000.00 PIU management 120 participants • follow-up service and eco-farming April 2-5, 2007 10,000.00 PIU management 120 participants • biogas new technics for extension workers May 10-14, 2007 2,125.00 technical staff 30 participants • biogas maintenance & utilization, fruit planting July 9, 2007 1,125.00 Farm households 68 participants • biogas maintenance & utilization, fruit planting Oct 22, 2007 1,625.00 Farm households 112 participants Planned Training Activities in Gongan County • pig raising Sept 1-3, 2007 3,750.00 Farm households 100 participants • eco-farming and animal husbandry March 1-5, 2007 7,500.00 Farm households 110 participants • technician training April 16-19, 2007 6,250.00 technical staff 100 participants • eco-farming and animal husbandry Sept 2-6, 2007 3,750.00 Farm households 100 participants • fruit and animal raising technics March 18-20, 2007 10,000.00 PIU management 120 participants Planned Training Activities in the PIO in Wuhan • Eco-farming technics March 18-21, 2007 7,500.00 PIO management 48 participants • GEF Povery Reduction for HH March 2-5, 2007 7,500.00 PIO management 48 participants



• Financial management and PPMS June 8-13, 2007 10,000.00 PIO management 48 participants • Eco-farming technics Sept 1-4, 2007 7,500.00 PIO management 48 participants

II. Study Tours under the GEF Budget—Hubei PIO


Estimated Cost US$



Not included



Appendix 3: Plan for Training Activities to be Allocated from GEF Funds (2006-2007) - Shanxi Project Implementation Office I. Proposed GEF Financed Training and Workshop Activities—Shanxi PIO


Estimated Cost US$



Project Householder’s Training Nov.-Dec 2006 14,062.50 Project households PIU level training

750 person days of training

Workshop on Comprehensive Utilization of biogas technology

November 2006 28,800.00 Farm level household 230 person days training

Workshop on gender development December 2006 10,600.00 women in Project HH 85 person days training 1st Quarter Project HH Training Jan-March 2007 55,800.00 Project HH at PIU level 3000 person days training 1st Quarter Workshop on Large Scale Biogas Engineering Technology

Feb 2007 10,600.00 Commercial investors and pig farm owners

85 person days training

2nd Quarter Project HH Training April – June 2007 24,200.00 Project HH PIU level 1300 person days training 3rd Quarter Project HH Training July - Sept 2007 24,200.00 Project HH PIU level 1300 person days training 4th Quarter Project HH Training Oct – Dec 2007 20,500.00 Project HH PIU level 1100 person days training II. Study Tours under the GEF Budget—Shanxi PIO


Estimated Cost US$



Travel for project training in Jianxi and large scale biogas engineering in Beijing

Nov. – Dec 2006 16,600.00 commercial investors and pig farm owners

16 participants

Project management in Henan, Hubei and large scale biogas engineering design in Xinjing, Gansu

Jan – Mar 2007 27,500.00 PIO – PIU staff 40 participants

Exchange of experiences among project counties Apr – June 2007 60,000.00 project farmers HH 300 participants Large and medium scale biogas engineering design and standards in Sichuan, Yunnan

July – Sept 2007 17,500.00 PIO staff commercial investors, pig farmers

Large scale biogas engineering operation & follow-up management in Zhejiang, Fujian

Oct – Dec 2007 17,500.00 PIO staff commercial investors pig farmers



Appendix 4: Plan for Training Activities to be Allocated from GEF Funds (2006-2007) - Henan Project Implementation Office I. Proposed GEF Financed Training and Workshop Activities—Henan PIO


Estimated Cost US$



Biogas & eco-farming technology for poverty HH Jan – Mar 2007 37,500 750 women HH in 9 counties

2 days each session in all project counties

Medium Scale Biogas Engineering Technology mid-March 2007 10,625 rural energy dept technical chiefs

90 persons from each city and related counties in Zhengzhou

Project Service System Construction late April 2007 16,875 country and rural energy EPA depts., biogas providers

150 persons in Xinxheng for exchange and sharing experience in construction

Project Implementation Management Workshop mid June 2007 9,500 PIO/PIU/DOF from city and county levels

share experience and complete mid year progress report

Project management procedures for ADB Projects late Sept 2007 27,500 County Agriculture and Finance Bureaus in Phase II

180 persons to learn procedure for ADB project mgmt, disbursement, procurement

End of Project W/S on Sustainability for biogas systems at the county level

late Dec 2007 15,000 PIO, PIUs, financial officers, DOFs,

120 persons including NDRC, SEPA, CPAD, staff Zhengzhou

Training EEME and implementation of MIS various dates included under the PMO Special Project Budget contracts II. Study Tours under the GEF Budget—Henan PIO


Estimated Cost US$



Tour among Project counties late April 2007 18,750 PIO/PIUs 25 staff exchange experience on completed projects

Project construction in Hubei late April 2007 14,000 PIO/PIU/DOF 40 staff share exp. In Hubei Intl Study Tour on large scale biogas technology mid-late Aug 2007 60,000 12 PIO, DOF staff for preparation of Phase II Project construction in Shanxi late Sept 2007 14,000 PIO/PIU/DOF 40 staff share exp. In Shanxi



Appendix 5: Plan for Training Activities to be Allocated from GEF Funds (2006-2007) - Project Management Office, FECC I. Proposed GEF Financed Training Activities--PMO


Estimated Cost US$



PMO-PIO Review of GEF Poverty Implementation and Training Plan Proposals and Priorities

September 2006 3,000 PMO-PIOs completed at Yichang, Hubei

Supervision and Management of EEMP (PMO and PIO) 3 days for 30 participants (MIS stakeholder consultation)

September 2006 6,000 EEMP (PIO Environment Specialists)

completed Taiyuan 22-24 Sept

PMO Training Supervision, Participation and Planning (Finalize 2007 Training Plans)

Oct-Nov 2006 2,000 PIO heads and training specialists

completed Rev Training Plan 2006-2007 for ADB prepared

(Proposal Review for LT Training Services) How to Supervise and Organize a Training Course

November 2006 3,500 PMO- PIO heads and training specialists

Proposed Internal Review of Training Needs/Plans--Pending

Training on Project Management Tools—Applications (ADB procedures, writing TOR, contract negotiations, progress reporting, budget and financial tools, MOUs)

November 2006 to April 2007 (long-term Contract)

50,000 Senior and middle management staff at PMO-PIO-PIU levels

12 to 18 separate sessions over six months, 12-15 participants per session. Status pending

Expansion of Project Management Tools Training to PIO and PIU levels

March-April 2007 10,000 PIO and PIU leaders and staff

Part of the long term contract for Project Management Tools

Validation of Designated Operational Entities for CDM—Stakeholder survey

November 2006 4,000 PIO/PIU and Prov EPA CDM Unit Henan and pig farm owners

completed--Briefing following the CDM workshop by Intl Tech Cons.

CDM Technology Selection November 2006 4,000 CDM Unit Henan and pig farm owners

completed

PMO Training Supervision, Participation and Planning (Province to the determined)

4th Quarter 2006 2,000 PIO heads and training specialists

Review of revised Training Plan

Business English Training by Language Key January – March 2006 6,750 PMO and FECC staff Focus on report and documentation for ADB Projects

Review of the Effectiveness of the GEF Poverty Program—Compare Project Provinces with national level poverty indicators

January 2007 4,000 PIU/PMO and PIU staff implementing Component E

Intended to provide review of lessons learned and sharing on poverty implementation issues


1st Quarter 2007 2,000 PIO heads and training specialists

Training of Trainers Program 4 months (one course per month) Jan to May

20,000 PIO/PIU staff (selected as trainers)

6 to 10 participants will undertaken training for two days in each PIO

Evaluation of the Socioeconomic Benefits of the Project—Review of the BIA Analysis

March 2007 6,000

GEF Capacity Building End of Project Review—Special Studies, BIA, MIS, CDM and implementation requirements to end of Project

April 2007 7, 250 PMO/PIO Review of Final Report and Recommendations by International GEF Specialists

Management Training on Loan Administration/Implementation (Issues to include Extension of Loan/GEF Agreement and final year

May 2007 10,000 PMO/PIO/PIU staff with ADB and

2 days 50-60 participants for planning of final 12 month Project implementation



benchmarks) Eco-Farming Action in New Counties—Strategies to Expand the Biogas Program

May/June 2007 35,000 PIO, PIU, farmer and village representative

Held in Jian, Jianxi (100-150 participants)


2nd Quarter 2007 2,000 PIO heads and training specialists

Management Training for End-of-Project Evaluation (3 months before Project Termination)

September 2007 (or March 2008)

7,500 PMO, PIO staff and management

Link to ADB Review Mission

Project Sustainability—Lessons learned 11,000 PMO Training Supervision, Participation and Planning (Province to the determined)

3rd Quarter 2007 2,000 PIO heads and training specialists


4th Quarter 2007 2,000 PIO heads and training specialists

II. Study Tours under the GEF Budget--PMO


Estimated Cost US$



European Study Tour on Bioenergy Options August 2006 45,000 (no air fare)

PMO-PIO senior management staff

completed

Study Tour HH Biogas Systems in India and Nepal December 2006 25,000 (no air fare)

PMP-PIO senior management staff

Letters of invitation received

Bioenergy Experiences in Western China—Guanxi and Sichuan

July 2007 25,000 PIO-PMO-PIU staff 12 persons over 10 days

III. Overseas Training

Name of Training Activity Proposed Dates

Estimated Cost US$



Beahrs Environmental Leadership Program June-July 2006 30,000 Management staff 2 staff --completed SETYM Intl. Project Management Training May 21-June 1,2007 45,000 (no air

fare) PIO/PMO staff 5 participants (in English) in

Montreal, Canada PM College Training in Project Management in US April 2007 108,000 (no air

fare) PIO/PMO staff 9 participants (taught in Mandarin) at

Philadelphia USA IV. Off-Budget Training Activities for PIO/PMO Staff (Training Opportunities Paid from other GEF Budget Allocations)


Estimated Cost US$



Training under Energy Environment Monitoring and Evaluation Program (EEMP)

various dates Sept 2006 to Dec 2007

Included in the Contract

Environmental Staff and Farmers

Conducted at PIO level

Training under the MIS Contract for Project Performance Monitoring System (PPMS)

Various dates Jan to March 2007


PIU/PIO staff and PMO Conducted at PIO/PIU level

Provincial Reviews of Beneficiary Impact Assessment Data and Surveys

February 2007 and January 2008


PIO/PIU staff and village leaders

Conducted at PIO level



V. Workshop Participation (optional GEF budget impact to be determined)


Estimated Cost US$



Great Wall Energy Forum October 2006 no cost to staff PMO completed – paper presentation UNDP-World Bank Energy Sustainability in NY May 2007 to be determined PMO, MOA Linked to World Bank Energy Forum International Bioenergy Conference MOA Beijing September 2007 100,000 PMO, MOA Under preparation by MOA, GEF consultants Other International Conferences as appropriate various to be determined to be decided



ATTACHMENT E: WORK PLAN AND TOR FOR TYPE III (Medium/Large Biogas Engineering Projects) SYSTEM GUIDELINES AND STANDARDS

1. BACKGROUND AND OBJECTIVE Based on findings and recommendations from the Special Study A “Viability and Sustainability of Biogas Digester (Types III) and Biomass Gasification (Type IV) Technologies” and observations during the implementation of the Type III4 systems, it is of importance to set up a technical guideline for quality assurance of Type III for the whole process of the implementation of the medium/large biogas engineering project, including planning, bidding, design, construction, operation and maintenance etc. The guideline is also very useful for the future ADB Phase II Project in which Type III systems will be main implemented technical systems. The objective of this task is to develop a technical guideline which can be easily applied for the implementation project for the quality assurance and quality control of Type III systems 2. FRAMEWORK OF TECHNICAL GUIDELINE FOR TYPE III SYSTEM Implementation of a Type III system is an engineering process which involves all process such as planning, construction, operation, and maintenance etc. Thus reliability and quality control of the project is necessary. In addition, the core business of most of users or operators of Type III systems in the ADB project is the livestock in agricultural sector which has significant different characteristics compared to biogas plant operation. Figure 1 illustrates the framework of technical guideline for Type III system’s implementation. It consists of the detailed steps of the implementation and how the experts to provide the assistance during each step. 3. IMPLEMENTATION OF TECHNICAL GUIDELINE Based on the framework suggested above, it needs to develop the detailed contents for each of the steps of the framework. Followings have been recommended for the consideration of the further development of implementation procedure: • Provide the documented instruction on contents of each step, • Defined the key technical parameters and data which are required to be collected or

recorded in each step, • Recommend the criteria for the technology selection, • Set up the quality evaluation procedure for the plant, • Integrate the Technical Guideline into the project management system The detailed flow chart of the implementation of the Technical Guideline has been given in Figure 2. National and provincial technical experts can provide the guidance through the all stages of the project implementation. Collection and record document templates should be developed for the quality assurance and control. It is recommended to combine the technical guideline with the Agriculture Sector Standards as listed in Table 1 Table 1 Agriculture Sector Standards of Large/Medium Scale Biogas Plants 4 The Type III system is defined as medium/large biogas engineering systems in ADB Project.



Standard code Title* Contents NY/T 1220.1 – 2006 NY/T 1220.2 – 2006 NY/T 1220.3 – 2006 NY/T 1220.4 – 2006 NY/T 1220.5 – 2006

Technical code for biogas engineering, Part 1: Process Design 沼气工程技术规范，第 1部分：工艺设计 Technical code for biogas engineering, Part 2: Design of biogas supply 沼气工程技术规范，第 2部分：供气设计 Technical code for biogas engineering, Part 3: Construction and acceptance 沼气工程技术规范，第 3部分：施工及验收 Technical code for biogas engineering, Part 4: Operation and maintenance 沼气工程技术规范，第 4部分：运行管理 Technical code for biogas engineering, Part 5: Evaluation of quality 沼气工程技术规范，第 5部分：质量评价

Conceptual principles and recommenda-tion of parameters for the design of a biogas plant Biogas clean-up, storage, transport and safety issues Quality assurance and control of the construction and inspection of trial operation and complete of the project Operation, maintenance, and safety issues of equipment and instruments The evaluation of biogas engineering project including four aspects of construction, operation, safety and others

NY/T1221 -2006 Technical specification for operation maintenance and safety of biogas plant in scale animal and poultry farms规范化畜禽养殖场沼气工程运行, 维护及其安全技术规程

Operation, maintenance and safety issues of livestock biogas plants including a score system for the evaluation

NY/T1222 -2006 Criteria for designing of biogas plant in scale livestock and poultry breeding farms 规范化畜禽养殖场沼气工程技术规范

Design of livestock biogas plant including parameters and process selection

NY/T1223 -2006 Biogas-powered generating sets 沼气发电机组

Biogas engine for electricity generation

* Titles are original titles in both English and Chinese 4. INTEGRATION OF TECHNICAL GUIDELINE INTO PROJECT MANAGEMENT It is recommended to integrate the Technical Guideline as one component into the Project Management System.



Figure 1: Framework of Technical Guideline for Type III Systems

Project Site Basic Information

Basic technical data Technical requirements

Bidding Process

Contract between Owner and Bidder

Evaluation of Preliminary Engineering Design

Final Engineering Design

Installation & Construction

Installation Evaluation

Operational Evaluation - 6 months - 1 year

Trial Operation (100 days)

International and National experts (Inputs)

Guidelines for Processes & Procedures at each sub-project

stage

Provincial experts (Inputs)Implementation of Processes & Procedures at each sub-project stage

Template Documents (Outputs) Examples of Processes & Procedures at each sub-project stage Owners

Participation in Processes & Procedures at each sub-project stage



Stage Porject Implementation Technical Assistance Contents

Designer Owner Int.&Dom. Experts Prov. Exp. Expert Guidence Output Documents1 Project Preparation Project site information Input data template Fesibility study report

Basic techincal data Feasibility study EIA Report Technicl requirements EIA Fesibility study/EIA Ref: NY/T 1220.1-2006Training NY/T 1222-2006

2 Bidding and Contract Handled by the bidding entity Call for bidding documents

Biding Process Techanical asistance Bidding documents

Template/Sample of contract Contract Contract betwen Owner and Bidder

3 Design Take part in the evaluation Design documents incl. all Drawings Evaluation of preliminary Critera for evaluation of design engineering design Ref: NY/T 1220.1,2-2006

NY/T 1222-2006

Final Engineerign Design Evaluation Design documents incl. all Drawings

4 Construction and installation Ref: NY/T 1220.3-2006 Construction & Installation

Evaluation template Evaluation (Construction) report5 Operation Complete of Installation Ref: NY/T 1220.3-2006

Evaluation

Evaluation template 100 days trial operation Ref: NY/T 1220.4-2006 Evaluation (Trial Operation) report

Evaluation and quality control

6 Evaluation Evaluation of the project Evaluation template Evaluation (Project) ReportRef: NY/T 1220.5-2006

Training operators 6 mon. Oepration evaluation

Report (Performance)Evluate the operation peformance

7 Complete Operation evaluation, 1 yr

Figure 2 Detailed Steps of Technical Guideline for Type III Systems



5. TOR OF NATIONAL EXPERT FOR TECHNICAL GUIDELINE FOR TYPE III SYSTEMS

The PMO intends to assign a qualified national expert to develop the Technical Guideline. Work plan described above and the following tasks and qualifications will constitute the Terms of Reference (TOR) for that National Expert.

5.1 Responsibilities The national expert will undertake the activities defined in the Work Plan, see above. Specific responsibilities include:

• Set up a framework of the technical guideline and consult with other international and national experts in this area for additional inputs which might not be included in the initial framework;

• Define the detailed procedure of the Technical Guideline following the whole project implementation processes,

• Develop working document template for the monitoring and record the project process implementation;

• Develop evaluation document template for the quality assurance and control for the design, construction, operation and maintenance etc.

• Introduce the new technologies and updated information to the operators and users; • Take leading role for the technical training activities in cooperation with the Project

implementation. • Supervise provincial experts to provide the local technical assistances for Type III

systems

5.2 Qualifications • BSc degree in Energy engineering, Agro-ecology, Environmental Science, or similarly

related field. • Technical expertise in biogas engineering, waste treatment, agriculture production. • At least five years experience undertaking engineering design or analytical research

in the medium and/or large biogas engineering. • Good interpersonal skills and ability to establish and maintain effective working

relations with clients. • Willing to travel to the various Project provinces • Having English language skills will be very beneficial

6. APPENDIX - AGRICULTURE SECTOR TECHNICAL STANDARDS

NY/T 1220.1 – 2006 NY/T 1220.2 – 2006 NY/T 1220.3 – 2006 NY/T 1220.4 – 2006 NY/T 1220.5 – 2006 NY/T1221 -2006 NY/T1222 -2006 NY/T1223 -2006



ATTACHMENT F: INSTITUTIONAL FRAMEWORK FOR CDM PROMOTION IN HENAN PROVINCE

1. Background & Justification The Clean Development Mechanism (CDM) is an international mechanism for promoting environmental and renewable energy projects that reduce greenhouse gas emissions. It promises to provide a future revenue stream for qualified projects, but the process for qualifying projects is complex and requires both upfront investment and technical expertise. Henan province has a significant number of attractive CDM projects within its animal raising industry sector, and this paper describes an approach to cost-effectively and sustainably developing these projects to the benefit of the provincial government and the rural communities. This approach focuses on the CDM integration of Type III medium scale biogas digester systems for livestock farms as defined under ADB Loan Project 1924-PRC. CDM requires each project proponent to undertake a number of technically complex activities in order to satisfy the CDM rules and modalities to be able to receive CDM revenues. For small projects, such as each individual Type III system, the transaction costs of qualifying for CDM could easily outweigh the potential revenue. Therefore, the CDM Executive Board (EB) has provided an approach called “bundling” that allows small projects of a similar type to package together so that the transaction costs can be shared. Under the Type III component of the ADB project, the similarities in baseline conditions (anaerobic lagoon), of participating livestock farms practices, and available digester technology options offers attractive conditions for bundling a number of livestock farms under one CDM project activity that will streamline the CDM process and reduce the related transaction costs. Because of this potential, the ADB CDM Facility is providing significant support for a pilot project with a minimum of 15 livestock farms so that the project will generate a sufficient volume of greenhouse reduction activity to be attractive to potential CDM buyers. The key to successful bundling, both for this pilot project and for sustainable CDM project development in the future, is an institutional arrangement that includes an organizing agency to coordinate different stakeholders for project implementation, facilitate CDM project validation and registration, ensure quality control and assurance, coordinate to undertake emission reduction monitoring and verification and coordinate the sale of the CDM credits for the benefit of the organizing agency and the livestock farm owners. Henan province PIO has proposed that a Biogas CDM unit be created under the Henan Biogas Association to be the organizing agency for the pilot CDM project and for follow-on projects. The following sections propose a framework, mission, objectives, organizational structure and key responsibilities for the Biogas CDM Unit. According to Chinese requirements for CDM, the project participant that applies for CDM approval must be company that has an ownership share in the facilities that generate the emission reductions. In this situation, the project proponent could either be a new sharehold company formed by all the owners of livestock farms in the bundle, or one livestock farm owner could be designated as the project participant on behalf of all the other livestock farm owners. Also, according to Chinese CDM requirements, the Biogas CDM unit that is being proposed in this document to develop to promote bundling of livestock farms for CDM, will be viewed as a consulting company, and according to Chinese CDM regulations cannot share in the ownership of CERs, receive a portion of the revenue from the sale of CERs, or sell CERs on behalf of its clients. The Biogas CDM unit can charge for all the services it provides, including training, PDD development, monitoring and verification support and finding CER buyers and supporting project participants to negotiate and sell their CERs.



2. Mission & Vision Apply the Clean Development Mechanism (CDM), a flexible financing instrument defined in the Kyoto Protocol, to promote the use of biogas digesters for livestock waste management and sustainable energy production while mitigating greenhouse gas emission for the sustainable economic development of Henan Province.

3. Objectives and Framework In the near term, the Biogas CDM unit, called the Biogas CDM Promotion Company, shall implement the CDM pilot project in conjunction with the national biogas program and the ADB Loan Project 1924-PRC by bundling 15 livestock farms Type III sub-projects. The long-term goals shall include scaling up the Type III livestock farm CDM activity to broaden the beneficiary base of biogas digester technologies in the province. Figure 1 shows the basic functions of the Biogas CDM Promotion Company in relationship to CDM project development and CER generation and sales in China. In principle, the Biogas CDM Promotion Company will organize and assist the livestock farm owners to form a project company or to designate one farm owner to be the lead participation. It will assist them to develop and sign Participation Agreements to control their ownership share in the develop their biogas system for CDM. The Biogas CDM Promotion Company will prepare the PDDs, organize the validation and registration of the projects, support the monitoring and verification by the livestock farm owners, organize the verification and certification of the CERs and manage the sale of the CERs to international buyers. In return for performing this service, the farm owners will agree to pay for this service out of the revenues from the sale of the CERs.

National Climate Change Coordinating Committee (NC4)

Henan Biogas CDM Promotion Company

• Promotion• PDD Development• Support Validation & Registration• Support Verification & Certification• Identify Buyers and Support CER Sales• Monitoring and QA Plans• Training & Technical Support

Submit PDDson behalf of CDM Company

Policy Guidance & CER Release

$s

International CDM

Investors/ CER Buyers

CERs

National CDM Review Board

RecommendationsApprovals

National Endorsement Letters

CDM Executive Board

Operational Entity

Validated PDDs for Registration and Verified ERs for Certification

Registered PDDs & CERs

Consulting Agreement

Consulting Fees

Hire OE for Validation and Verification /Certification

Bundle-1 CDM Project Company (sharehold company)

Biogas Project Owners






…






$s

International CDM


CERs




CDM Executive Board

Operational Entity




Consulting Fees









…






$s

International CDM


CERs $s

International CDM


CERs






CDM Executive Board

Operational Entity




Consulting Fees









…Bundle-1 CDM Project Company (sharehold company)







…Biogas Project Owners






…

Figure 11: Institutional Framework for Promoting Biogas CDM Projects in Henan Province



4. Organizational Structure and Core Functions The following core functions have been identified for the proposed Biogas CDM Promotion Company to effectively achieve both near and long term goals. These are shown in Figure 2 and described in more detail in the following sections. The ADB CDM Facility and the consultants on TA-1924 PRC will lead the activities for the development of the project design document (PDD) for the Pilot CDM Project. However, the Biogas CDM Promotion Company will need to create and staff an office with a minimum personnel consisting of a Manager, Lead CDM Expert, Technology/Monitoring/Quality Control Expert and support staff. These personnel will be the main recipients of the capacity building activities during this process in order to ensure the effective replication of the PDD development and other CDM activities in the future. Terms of Reference for these lead staff are provided in Attachment 1.


Coordination & Administration

• Maintain Consulting Agreements

• Maintain Project Monitoring Database

• Identify CER Buyers • Support Negotiation of CER

sales

CDM Implementation• Develop PDDs• Obtain DNA Approval• Identify and Support Hiring of OE• Support Validation & Registration• Develop M/V and QA Plans• Support Verification &

Certification

Technical Support & Training

• Eligibility Criteria• Technology Selection• Monitoring & Verification

Procedures• Data Collection Guidelines

Promotion & Project Development

• Promote CDM Benefits• Identify & Screen Projects • Support Negotiation of

Project Companies

Financing Facilitation (Optional for Discussion)

• Access National Grants• Create Finance Facility• Explore & Develop Other

Financing Arrangements


Coordination & Administration

• Maintain Consulting Agreements

• Maintain Project Monitoring Database

• Identify CER Buyers • Support Negotiation of CER

sales

CDM Implementation• Develop PDDs• Obtain DNA Approval• Identify and Support Hiring of OE• Support Validation & Registration• Develop M/V and QA Plans• Support Verification &

Certification

Technical Support & Training

• Eligibility Criteria• Technology Selection• Monitoring & Verification

Procedures• Data Collection Guidelines

Promotion & Project Development

• Promote CDM Benefits• Identify & Screen Projects • Support Negotiation of

Project Companies

Financing Facilitation (Optional for Discussion)

• Access National Grants• Create Finance Facility• Explore & Develop Other

Financing Arrangements

Figure 12: Organizational Functions of the Biogas CDM Promotion Company

1) Promotion and Project Development • Promote the benefits of biogas digester systems and CDM throughout the province

through advertising, educational workshops, media coverage and other such activities.

• Support organizational capacity building through organization of relevant training and management programs.

• Identify and screen livestock farms for participation in a bundled CDM project to make sure they meet eligibility criteria and have sufficient technical and financial capacity.

• Negotiate partnership agreements with the livestock farm owners regarding the CDM process, data requirements, technical guidelines, monitoring and verification requirements, quality control and assurance procedures, and CER ownership, distribution and revenue sharing.



2) CDM Implementation • Development of the PDD for bundled CDM projects and obtain DNA approval.

• Facilitate the undertaking of EIA and stakeholder consultation to meet the environmental compliance for construction and operation.

• Hire the Operation Entity and manage the process of validation of the project as well as the verification and certification of the project emission reductions.

• Monitor design, construction and commissioning of sub-projects within the bundle.

• Support implementation of data collection and monitoring system with proper quality control and assurance procedure

3) Coordination and Administration • Maintain the Participation Agreements for all CDM Projects.

• Maintain a project monitoring database for all CDM Projects.

• Market and sell the CERs that result from Project activity

• Manage the sharing of CER revenues with all project participants

• Communicate with the DNA and CDM EB Board as required

4) Technical Support and Training • Maintain selection criteria for CDM eligibility and performance guideline for

technology selection.

• Prepare and regularly update a CDM manual for project performance, monitoring and verification including quality control and assurance.

• Develop and maintain data collection guidelines.

• Provide training and technical support to project participants in accordance with the Participation Agreement and on an as needed basis.

5) Financing Facilitation This possible function of the Biogas CDM Promotion Company is provided for discussion purposes. The functions listed are only possible activities that could be undertaken, but none of them are strictly necessary to the functioning of the Company for CDM purposes.

• Coordinate access National grants • Create Finance Facility in partnership with a bank or financial institution • Explore and Develop Other Financing Arrangements

5. Preliminary Business Plan and Cash Flow Table 1 provides a very preliminary example cash flow for the Biogas CDM Promotion Company based on the development costs and revenues from a single CDM project of the same size as the planned Pilot Project. The development costs are based on a permanent staff in the Company, which initially consists of a Manager and two professionals plus support staff, office costs and a consultant budget. This was estimated at US$94,800 per year. In addition, there is the validation and registration cost of about US$ 60,000 for each project. These are expended in year 1, when the projects are constructed. The first verification expense is assumed to be needed at the end of year 2, when the non-labor related CER marketing costs are also expended. The Biogas CDM Promotion Company is assumed to recover all its initial investment over a five year period and continue to receive a



share of the CER revenues for the remaining five years of the crediting period. The remaining CER revenues are provided to the farm owners. The rate of return on the CDM project investment by the Biogas CDM Promotion Company is quite attractive if the farms continue to generate the planned number of CERs over the entire period. However, one project cannot maintain the annual operating cost of the Company. If at least one new project is developed annually, then the cash flow can be maintained, and the Company will be financially healthy. If new projects are not developed annually, then the Company will not be able to cover its operating costs and the viability of the existing projects will be jeopardized.



Table 2: Biogas CDM Promotion Company Business Cash Flow

Functions Activities Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11

Identify and Screen livestock farms for CDMProject

6,636

Negotiate Participation Agreements 4,740Collect Farm Specific data 9,480

Technical Training

Provide training on the requirements of the CDMimplementation- Technology selection and implentation- Database creation and management- Quality control and monitoring framework

18,960

Develop Project PDDs 28,440Obtain letter of approval from NCCCC 948Hire OE for PDD Validation & Registration 45,000 Hire OE for annual verification and certificationof CERs

30,000 30,000 30,000 30,000 30,000 30,000 30,000 30,000 30,000 30,000

Management of Biogas CDM Unit 4,740Monitor Project implementation 9,480Market CERs, Identify Buyers and Negote 9,480 2,000Sell CERs 1,896 300,000 300,000 300,000 300,000 300,000 300,000 300,000 300,000 300,000 300,000Distribute CERs revenues for Farm Owners 242,040 242,040 242,040 242,040 242,040 256,020 256,020 256,020 256,020 256,020

Total Investment 139,800CDM Cash Flow to Biogas CDM Unit -139,800 57,960 57,960 57,960 57,960 57,960 43,980 43,980 43,980 43,980 43,980Return on Investment (Pre-Tax) 38%

Annual Number of CERs 50,000Annual Operating Costs $94,800

CER Cost $6.00Notes:

Biogas CDM unit has permanent staff of a Manager and two professionals plus support staff, office costs and consultant budgetCDM Project is assumed to be a 15-project bundle of the same size as the Pilot ProjectDevelopment of one project per year by the Biogas CDM Unit is required to maintian positive cash flow in the business

Project Development

CDM Implementation

Coordinaton &Administration



Appendix 1: ToRs for Specific Experts to Undertake the Set-up of the Biogas CDM Promotion Company Lead CDM Expert The Biogas CDM Promotion Company must assign a qualified person that will become their Lead CDM Expert. The near-term tasks and qualifications of that person are defined below. Tasks Working closely with International CDM Expert, the TA consultants and the PIO, the Lead CDM Expert will coordinate with all parties involved in the CDM Pilot Project (pig farm entrepreneurs, technology providers, Operation Entity, National CDM Review Board, NC4) and the CDM ADB Facility to oversee the implementation of a bundled biogas digester project under the Clean Development Mechanism. Specific tasks include: 1) Promotion and Project Development

• Promote the benefits of biogas digester systems and CDM throughout the province through advertising, educational workshops, media coverage and other such activities.

• Support organizational capacity building through organization of relevant training and management programs.

• Identify and screen livestock farms for participation in a bundled CDM project to make sure they meet eligibility criteria and have sufficient technical and financial capacity.

• Negotiate partnership agreements with the livestock farm owners regarding the CDM process, data requirements, technical guidelines, monitoring and verification requirements, quality control and assurance procedures, and CER ownership and revenue sharing.

2) CDM Implementation Support the International CDM expert to perform the following activities:

• Develop the PDD for bundled CDM projects and obtain DNA approval.

• Facilitate the undertaking of EIA and stakeholder consultation to meet the environmental compliance for construction and operation.

• Hire the Operation Entity and manage the process of validation of the project as well as the verification and certification of the project emission reductions.

• Monitor design, construction and commissioning of sub-projects within the bundle.

• Support implementation of data collection and monitoring system with proper quality control and assurance procedure

3) Coordination and Administration • Maintain the Participation Agreements for all CDM Projects.

• Maintain a project monitoring database for all CDM Projects.

• Market and sell the Certified Emission Reductions (CER) that result from Project activity

• Under the direction of the International CDM expert, manage the sharing of CER revenues with all project participants



• Under the direction of the International CDM expert, communicate with the National CDM Review Board, the OE and the CDM EB Board

4) Technical Support and Training • Maintain selection criteria for CDM eligibility and performance guideline for

technology selection.

• Under the direction of the International CDM expert, coordinate to prepare and regularly update a CDM manual for project performance, monitoring and verification including quality control and assurance.

• Under the direction of the International CDM expert, develop and maintain data collection guidelines.

• Under the direction of the International CDM expert, coordinate training and technical support to project participants in accordance with the Participation Agreement and on an as needed basis.

Qualifications • Master’s Degree in Engineering, Environmental Engineering, Environmental

Economics, and Environmental Management or Policy.

• Technical expertise in agriculture operation especially in livestock waste management a plus

• Knowledge and interest in the Kyoto Protocol, CDM process, CDM baseline and monitoring methodology and the carbon market.

• Skills in undertaking environmental impact assessment

• At least three years 3 years work experience working in environment project management and development, preferably on biogas projects

• Good interpersonal skills and ability to establish and maintain effective working relations with clients.

• Willing to travel extensively in various counties within Henan Province

• Having English language skills will be very beneficial Technology/Monitoring/Quality Control Expert The Biogas CDM Promotion Company must assign a qualified person that will become their lead expert for CDM-related to technology, monitoring and quality control and assurance. The near-term tasks and qualifications of that person are defined below. Tasks Working closely with the International CDM expert, the TA consultants and the PIO, the Technology/Monitoring/Quality Control Expert will coordinate with PIUs, pig farm entrepreneurs and technology providers to ensure a proper installation and performance of biogas digester technologies, implementation of database collection, management and monitoring system in pig farms, and conduct regular supervision, data collection and reporting. Specific tasks include

1) Promotion and Project Development

• Support to promote the benefits of biogas digester systems and CDM throughout the province through advertising, educational workshops, media coverage and other such activities.



• Identify and screen technologies and technology providers for participation in a bundled CDM project to make sure they meet minimum performance and reliability criteria and have sufficient technical and financial capacity.

2) CDM Implementation

Support the International CDM expert and the TA Consultants to: • Develop the PDD for bundled CDM projects

• Support the undertaking of EIA and stakeholder consultation to meet the environmental compliance for construction and operation.

• Prepare farms managers to prepare for the validation and provide inputs to the process as necessary.

• Facilitate design, construction and commissioning of sub-projects within the bundle.

• Develop and implement database collection, management and monitoring system as well as quality control and assurance plan in livestock farms

• Conduct regular monitoring and reporting for emission reductions generations

4) Technical Support and Training

• Maintain selection criteria for CDM eligibility and performance guideline for technology selection.

• Under the direction of International CDM expert and TA Consultants, prepare and regularly update a CDM manual for project performance, monitoring and verification including quality control and assurance.

• Under the direction of International CDM expert and TA Consultants, develop and maintain data collection guidelines.

• Under the direction of International CDM expert and TA Consultants, provide training and technical support to project participants in accordance with the Participation Agreement and on an as needed basis

• Support pig farm owners during initial on-site and periodic verification

Qualifications

• Master’s Degree in Engineering (Mechanical, Energy, or Environmental), Environmental Management and Quality Control Management and Assurance

• At least three years of working experience in technology operation and quality control and assurance preferably in agriculture operation with relation to manure management and biodigester technologies

• Skills in developing farm-level database collection, monitoring and management system

• A good understanding of environmental impact assessment

• Knowledge and interest in climate change, greenhouse gas mitigation measures and the CDM

• Good interpersonal skills and ability to establish and maintain effective working relations with clients

• Willing to travel extensively within Henan Province

• English language skills a plus



CDM Legal Consultant The Biogas CDM Promotion Company will need to hire an outside CDM Legal expert to support the establishment of the legal framework for the Company and draft the pro forma agreements for participation by farm owners in bundled CDM projects that will be developed by the Company. The tasks and qualifications of that expert are defined below. Tasks Working closely with the PIO, the Biogas Users Association, the Lead CDM expert, and the International CDM expert, the CDM Legal Consultant, will develop the legal mechanism for operation of the Biogas CDM Promotion Company and a set of pro forma agreements for CDM project bundling. Specific tasks include:

• In accordance with the national CDM regulation, develop the legal framework for operation of the Biogas CDM Promotion Company within the Henan Biogas Users Association to allow it to activity as the CDM project entity and the ownership and management of CERs,

• Develop a set of Operating Principles for the CDM Biogas Promotion Company

• Develop a pro froma partnership agreement between pig farm owners and Biogas CDM Organization for the administration of the planned bundled CDM projects

• Develop a mechanism for carbon revenue management that is consistent with Chinese policy as defined by the NCCCC.

Qualifications

• Advanced Degree in law (International law, contract development and institutional development)

• Expert in legal and regulatory issues associated with the Kyoto Protocol’s Clean Development Mechanism

• Familiar with national CDM rules and regulation and other legal issues related to CDM transactions

• Good English language skills



ATTACHMENT G: SPECIAL STUDY C: RISK OF MERCURY AND LEAD CONCENTRATION IN THE ECO-AGRICULTURAL SYSTEM

Introduction This special study examines the hypothesis that human exposure to mercury and lead could be concentrated by the use of manure-based organic fertilizer, as is central to the eco-agricultural system that is being promoted in this project and the planned phase 2 follow-on project. Mercury, lead and other heavy metals are of concern to the eco-agricultural production cycle being promoted in China because these elements tend to accumulate in the food chain. Activities such as coal-fired power plants, mining and smelting of metal ores, industrial emissions and applications of insecticides and fertilizers have all contributed to elevated levels of heavy metals in the environment. These heavy metals pose a serious threat to human and animal health, and this threat is aggravated by their long-term persistence in the environment. The concern which prompted this study is that the eco-agricultural production cycle might concentrate the pollutants and lead to higher exposure to humans consuming the products of the eco-agricultural system. The plan for performing this study calls for a two-part approach. In the first part, the simplified model of mercury and lead exposure, intake, excretion, uptake and re-ingestion in the biogas digester food cycle was developed, and a desk review was conducted to identify whether the key modeling parameters (i.e., mercury and lead uptake, absorption and excretion rates) have already been determined. These parameters will be used in the model to determine if plants and livestock grown with bio-digester fertilizer/feed can result in harmful concentrations of mercury and lead in humans. If the model results using the parameters available in the open literature show negative results, work on this task can be concluded. If the model results indicate that an accumulation of harmful levels of mercury and lead is possible, then the second part of the task will be implemented. The analytical model will be further developed, and field measurements will be identified and implemented.

Mercury Mercury is a naturally occurring element that is found in air, water and soil. It exists in several forms: elemental or metallic mercury, inorganic mercury compounds, and organic mercury compounds.

• Elemental or metallic mercury is a shiny, silver-white metal and is liquid at room temperature. It is used in thermometers, fluorescent light bulbs and some electrical switches.

• Inorganic mercury compounds take the form of mercury salts and are generally white powder or crystals, with the exception of mercuric sulfide (cinnabar) which is red. Inorganic mercury compounds have been included in products such as fungicides, antiseptics or disinfectants. Some skin lightening and freckle creams, as well as some traditional medicines, can contain mercury compounds.

• Organic mercury compounds, such as methylmercury, are formed when mercury combines with carbon. Microscopic organisms convert inorganic mercury into methylmercury, which is the most common organic mercury compound found in the environment. Methylmercury accumulates up the food chain.

Sources of Mercury Alkali and metal processing, combustion of coal, and incineration of medical and other waste, and mining of gold and mercury contribute greatly to mercury concentrations in some areas, but atmospheric deposition is the dominant source of mercury over most of the landscape. Once in the atmosphere, mercury is widely disseminated and can circulate for years, accounting for its wide-spread distribution. Natural sources of atmospheric mercury include



volcanoes, geologic deposits of mercury, and volatilization from the ocean. Although all rocks, sediments, water, and soils naturally contain small but varying amounts of mercury, scientists have found some local mineral occurrences and thermal springs that are naturally high in mercury.

Toxic Effects of Mercury Although mercury is a globally dispersed contaminant, it is not a problem everywhere. Its toxic effects depend on the chemical form that the mercury takes and the route of exposure. Methylmercury [CH3Hg] is the most toxic form5. It affects the immune system, alters genetic and enzyme systems, and damages the nervous system, including coordination and the senses of touch, taste, and sight. Methylmercury is particularly damaging to developing embryos, which are five to ten times more sensitive than adults. Exposure to methylmercury is usually by ingestion, and it is absorbed more readily and excreted more slowly than other forms of mercury. Elemental mercury, Hg(0), the form released from broken thermometers, causes tremors, gingivitis, and excitability when vapors are inhaled over a long period of time. Although it is less toxic than methylmercury, elemental mercury may be found in higher concentrations in environments such as gold mine sites, where it has been used to extract gold. If elemental mercury is ingested, it is absorbed relatively slowly and may pass through the digestive system without causing damage. Ingestion of other common forms of mercury, such as the salt HgCl2, which damages the gastrointestinal tract and causes kidney failure, is unlikely from environmental sources. Given the high toxicity of methylmercury, mercury contamination is normally a problem only where the rate of natural formation of methylmercury from inorganic mercury is greater than the reverse reaction. Environments that are known to favor the production of methylmercury include certain types of wetlands, dilute low-pH lakes in Northeast and Northcentral United States, parts of the Florida Everglades, newly flooded reservoirs, and coastal wetlands, particularly along the Gulf of Mexico, Atlantic Ocean, and San Francisco Bay.

Mercury Entry into the Food Chain Figure 1 is a simplified diagram of the pathways for entry of mercury into the food chain. Many complex processes affect the likelihood and the impact of mercury contamination in humans and livestock, such as pigs. These processes include:

• General environmental levels of mercury emissions and their deposition rates onto soils and bodies of water,

• Conversion of the elemental and inorganic forms of mercury into organic forms, particularly methylmercury (MeHg),

• Volatilization of MeHg back to the elemental forms, which is known to be catalyzed by exposure to sunlight,

• Uptake of mercury by food crops or fish,

• Intake, absorption and excretion rates for humans and livestock, and

• Methylation of mercury in the biogas digester, which is facilitated by anaerobic bacteria.

5 http://www.epa.gov/mercury/faq.htm#14



Mercury uptakein food crops

or fish

Mercuryin excrement

Mercuryconcentrations

In humans

Mercuryabsorption by humans and

livestock

Mercuryemissions to the

environment


In pigs


in farm soils

Mercurydeposition rates

Mercuryvolatilization

Methylation of mercuryin digester

Mercury uptakein food crops

or fish

Mercuryin excrement


In humans

Mercuryabsorption by humans and

livestock


environment


In pigs


in farm soils


Mercuryvolatilization

Methylation of mercuryin digester

Figure 13: Simplified Diagram of Mercury in the Biogas Digester / Food Cycle

Unfortunately, the exact mechanisms which govern these processes are not very well understood, and the mechanisms by which mercury enters the food chain vary according to the specifics of the ecosystems involved. Certain bacteria play an important early role. Bacteria that process sulfate (SO4=) in the environment take up mercury in its inorganic form and convert it to methylmercury through metabolic processes. The conversion of inorganic mercury to methylmercury is important because its toxicity is greater and because organisms require considerably longer to eliminate methylmercury. These methylmercury-containing bacteria may be consumed by the next higher level in the food chain, or the bacteria may excrete the methylmercury to the water where it can quickly adsorb to plankton, which are also consumed by the next level in the food chain. Because animals accumulate methylmercury faster than they eliminate it, animals consume higher concentrations of mercury at each successive level of the food chain. Therefore, small environmental concentrations of methylmercury can readily accumulate to potentially harmful concentrations in fish, fish-eating wildlife and people. Even at very low atmospheric deposition rates in locations remote from point sources, this mercury bio-magnification can result in toxic effects in consumers at the top of these aquatic food chains6.

Mercury Emissions in China Mercury emissions in China were estimated to be 535.8 tons in 19997. As shown in Figure 2, about 38% of these emissions came from coal combustion from a variety of applications, about 45% came from metals smelting industries, and the remainder from other activities.

6 http://www.usgs.gov/themes/factsheet/146-00/ 7 Anthropogenic Mercury Emission Inventory in China, 1999, Argonne National Laboratory and Tsinghua University, published in Atmospheric Environment 39 (2005): 7789-7806.



Figure 14: Mercury and Lead in the Biogas Digester / Food Cycle

Mercury Deposition Rates in China When considering mercury, it is customary to perform separate treatments of the metallic (Hg0), ionic (Hg+2), and particulate (Hgp) forms. For intercontinental transport, only emissions of Hg0 are considered because the other two mercury species have considerably short lifetimes during a rain event. A mild precipitation event (10 mm/hr for 4 hours) can reduce the Hg+2 and Hgp by higher than 90%. Measurements and modeling have shown some preliminary results. A 1999 study conducted in Changchun City8, revealed that average atmospheric concentration of Hgp was 0.145 ng/m3 in the summer and 0.491 ng/m3 in the winter. The higher value is attributed to increased coal combustion. Yearly average dry deposition net ground flux was theoretically calculated to be 45 µg/m2.

Global Flows of Mercury Estimates of global anthropogenic emissions of mercury are quite uncertain, but the most recent estimate is approximately 2,000 to 2,500 metric tons/year9. China is by far a major contributor. By comparison, the US emissions of mercury were 144 tons in 1996, mostly coming from combustion of coal and various forms of waste materials. This represented a decrease of almost 97 tons from 1990 emission levels due to mine closures and clean-up and process improvements in the metals smelting sector. A recent study indicates that global flows of atmospheric mercury are significant, and that intercontinental transport of mercury emissions from China increase deposition fluxes of

8 Fang F, Wang Q, Li J. “Atmospheric particulate mercury concentration and its dry deposition flux in Changchun City, China” The Science of the Total Environment (281) 2001 p. 229. 9 Mercury Releases from Industrial Ore Processing, Great Lakes Binational Toxics Strategy, Alexis Cain, USEPA, December 6, 2005.



mercury in the US by up to 4 times10. The impact of global flows of mercury on deposition rates in China appear to be unknown at this time.

Factors Affecting Methylation Methylation is a product of complex processes that move and transform mercury. Atmospheric deposition contains the three principal forms of mercury, although inorganic divalent mercury, Hg(II), is the dominant form. Once in surface water, mercury enters a complex cycle in which one form can be converted to another. Mercury attached to particles can settle onto the sediments where it can diffuse into the water column, be resuspended, be buried by other sediments, or be methylated. Methylmercury can enter the food chain, or it can be released back to the atmosphere by volatilization. The concentration of dissolved organic carbon (DOC) and pH have a strong effect on the ultimate fate of mercury in an ecosystem. Studies have shown that for the same species of fish taken from the same region, increasing the acidity of the water (decreasing pH) and/or the DOC content generally results in higher mercury levels in fish, an indicator of greater net methylation. Higher acidity and DOC levels enhance the mobility of mercury in the environment, thus making it more likely to enter the food chain. Mercury and methylmercury exposure to sunlight (specifically ultra-violet light) has an overall detoxifying effect. Sunlight can break down methylmercury to Hg(II) or Hg(0), which can leave the aquatic environment and reenter the atmosphere as a gas.

Mercury in the Biogas Eco-Agricultural System Mercury Uptake in Plants Mercury is not commonly found in plant products, but it can enter human bodies through vegetables and other crops because of uptake from contaminated soils or when sprays that contain mercury are applied to the crops. Data on crop uptake rates of mercury, lead and other heavy metals is not common, but some data is available from studies looking to use varieties of plant species to remediate soils that are contaminated by these heavy metals. Phytoextraction, i.e. the uptake and accumulation of metals into plant shoots, which can then be harvested and removed from the site, is one proposed strategies for remediation of metal-contaminated soil. More than four hundreds plants are known as hyper-accumulators of metals, which can accumulate high concentration of metals into their aboveground biomass. These plants include trees, vegetable crops, grasses and weeds. One evaluated the potential of 36 plants (17 species) growing on a contaminated site in North Florida11. Plants and the associated soil samples were collected and analyzed for total metal concentrations. None of the plants investigated in that study, which were all species native to that region, were suitable for phytoextraction because no hyper-accumulator was identified. This data is indicative of the general conclusion that most plants and crops have low uptake rates for heavy metals. However, more work needs to be done; including investigating the data on known plant hyper-accumulators to determine if any of them are common crops used in the biogas eco-agricultural system in China.

Mercury Uptake in Fish Ponds The formation of methyl-mercury is known to occur in wet lands and shallow lakes and to be enhanced if the pH of the water is low. Methyl-mercury formation rate in fish ponds unknown, but assumed to be equal to dilute low-pH lakes. Therefore, mercury deposited in fish ponds from atmospheric sources or water run-off is likely to accumulate in the fish grown in the pond. See Figure 3. Because the fish produced in these ponds will generally be sold outside the farm system, the mercury or lead contamination they contain is less likely to become concentrated in the biogas eco-agricultural system. However, this assumption

10 Effect of mercury emissions in China on North America, Brian Weiss, Industrial Ecology, 8/8/2005. 11 Accumulation of Pb, Cu, and Zn in native plants growing on a contaminated Florida site, Joonki Yoona, Xinde Caoa, Qixing Zhoub and Lena Q. Maa, Science of The Total Environment, Elsevier, Volume 368, Issues 2-3 , 15 September 2006, Pages 456-464.



needs to be verified and the degree of separation in small rural communities with fish ponds needs to be investigated. For example, if the rural households purchasing the fish were also contributing manure or slurry from their household digester to the fish pond, then the mercury and lead contamination loop gets closed and serious accumulations could occur.

Mercuryin excrement


In humans


environment


In pigs


in ponds


Mercuryuptake in

fishMercury

absorption by humans

Mercury conversion to methylmercury

Mercuryconcentration in

pig feed

Mercuryin excrement


In humans


environment


In pigs


in ponds


Mercuryuptake in

fishMercury

absorption by humans

Mercury conversion to methylmercury

Mercuryconcentration in

pig feed

Figure 15: Mercury and Lead in the Biogas Digester / Food Cycle

Work plan for National expert The following is a work plan and terms of reference for a national expert to continue the work of this special study to examine possibility that human exposure to mercury and lead could be concentrated by the use of manure based organic fertilizer in the biogas eco-agricultural system.

SS-C Work Plan Task 1: Review of international and national literature/documentation The first part of the task will involve a desk review to identify whether the key modeling parameters have already been determined. These parameters include but are not limited to:

• Mercury and lead uptake rates for various crops grown in conjunction with Type I and Type II systems, in particular, the most common types of fruits and vegetables;

• Absorption rates of mercury and lead for humans and livestock; • Proportions of food products eaten by humans that contain mercury and lead from

plants and livestock grown with bio-digester fertilized products; • Proportions of feed provided to livestock that contain mercury and lead from plants

grown with bio-digester fertilizer; and • Mercury and lead excretion rates for humans and livestock.

Task 2: Visit key biogas sites in the project provinces and elsewhere The environment specialist will visit selected project sites as part of the data gathering effort, and will meet with agricultural and environment experts at the local universities. Also as part of the data gathering effort, the environment specialist will meet or correspond with experts at the Chinese Academy of Agricultural Sciences in Beijing, SEPA, and the US Environmental Protection Agency.



Task 3: Design a model of mercury and lead exposure Figure 4 shows the simplified model of mercury and lead exposure, intake, excretion, uptake and re-ingestion in the biogas digester food cycle. This model will be developed in more detail by elaborating the inputs and outputs of each process and determining simple analytical models for the processes. The detailed model will be run with the data and parameters identified in the literature search and data collection efforts above.

Mercury and leaduptake in crops

Mercury and leadin excrement

Mercury and leadconcentrations

In humans

Mercury and leadabsorption by

humans and pigsLead in the environment

Mercury and leadin the food supply


In pigs

Mercury and leaduptake in crops

Mercury and leadin excrement


In humans

Mercury and leadabsorption by

humans and pigsLead in the environment

Mercury and leadin the food supply


In pigs

Figure 16: Simplified Diagram of Mercury and Lead in the Biogas Digester / Food Cycle

If these preliminary model results are negative for harmful accumulations of mercury and lead in humans from bio-digester activity, then work on this task can be concluded. If, on the other hand, the model results indicate that an accumulation of harmful levels of mercury and lead are possible, then the remaining tasks under this special study will be implemented.

Field sampling and testing of model The analytical model will be further developed to refine the input parameters and analytical processes for each step in the cycle. Field tests and measurement will be identified and procedures for conducting the tests and collecting the data will be developed. The field tests and data collection will be implemented with the assistance of agricultural universities and the fellowship program.

Research and analyze results With the improved model and new field data, more detailed analysis will be performed to determine the degree to which accumulations of mercury and lead can occur in humans and to investigate potential strategies for minimizing potentially harmful accumulations. The research may identify the types of fruits or vegetables that lead to the most significant (and the least significant) accumulations. It may identify bio-digester practices that can help minimize mercury and lead exposure to humans.

Prepare a report including policy, institutional and technical recommendations The results of the research and analysis will be documented in a report identifying the policy recommendations, institutional changes, technical improvements to the bio-digester design or operating procedures, and investment requirements or restrictions regarding acceptable digester designs, products that are grown, and other requirements that may be needed to protect human health.

Hold workshop to discuss results and implications for Project implementation In conjunction with the PMO, the environmental expert will organize and conduct a workshop to review the research results and discuss the implication of the resulting policy, institutional, technical and investment related recommendations.



Terms of Reference for SS-C National Expert The PMO intends to assign a qualified national expert to continue the research started under Special Study C. The work plan described above and the following tasks and qualifications will constitute the terms of reference (TOR) for that national expert.

Responsibilities Following the work performed by International Energy and Environmental Expert, the SS-C expert will undertake the research defined in the Work Plan. Specific responsibilities include:

• Collect and analyze the relevant data regarding heavy metal contamination in the biogas eco-agricultural system.

• Prepare an analytical model to assess the magnitude of the potential for concentration of heavy metal pollutants through the biogas eco-agricultural system.

• Field test the analytical model to determine the risk of increased exposure to humans and animals through concentration of heavy metal pollutants in the biogas eco-agricultural system.

• Prepare and disseminate a report on the research findings including policy, institutional and technical recommendations.

Qualifications • PhD Degree in Agro-ecology, Environmental Science, Soil Chemistry, or similarly

related field.

• Technical expertise in heavy metals pollution in soils and their effect on plant ecology and crop and vegetable production.

• Knowledge of the biogas eco-agriculture operations including in livestock waste management.

• At least three years 3 years experience undertaking analytical research and collecting field data in this area of expertise

• Good interpersonal skills and ability to establish and maintain effective working relations with clients.

• Willing to travel to the various Project provinces

• Having English language skills will be very beneficial