Roxas unit inks $3.2-M carbon credit deal with World Bank
abs-cbnNEWS.com | 01/14/2009 6:02 PM
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The World Bank will purchase carbon emission reduction credits worth $3.2 million from the bioethanol project of listed Roxas Holdings Inc. in Negros Occidental over the ten years.
The multilateral lender, which manages the Community Development Carbon Fund, signed yesterday an emission reductions purchase agreement with Roxol Bioenergy Corp., the bioethanol unit of sugar firm Roxas Holdings.
The carbon fund, supported by developed economies and large companies worldwide, focuses on financing enterprises in developing countries, such as the Philippines, engaged in reducing the emission of carbon, one of the toxic gases that harm the environment and cause global warning.
A carbon credit is the market value of one metric ton of carbon dioxide that is not released into the air when an enterprise uses an alternative and environmentally friendly technology or a business process.
These credits are securitized and traded in capital markets where countries or businesses that exceed their target carbon emissions buy them.
World Bank provides the seal that assures buyers that an enterprise or a project could "sell" carbon credits.
50,000 metric tons less
Under the agreement, the World Bank will purchase the carbon credits derived from Roxol Bioenergy's wastewater treatment facility and the methane gas recovery system in its ethanol plant in La Carlota, Negros Occidental.
"I am pleased to have signed this agreement because of its contribution to the country's growth, poverty reduction, environmental improvement and mitigation of the impacts of climate change," said World Bank country director Bert Hofman.
Environment Secretary Lito Atienza said the project will support and strengthen the implementation of the country's important environmental legislations such as the Biofuels Act of 2006, the Clean Water Act of 2004 and the Clean Air Act of 1999.
Pedro Roxas, chairman of Roxol Bioenergy, said the project will avoid the emission of at least 50,000 metric tons of carbon dioxide annually.
Roxas said the company will allocate a part of the assured annual income stream of $3.2 million for its community development projects, including livelihood, health services, scholarships, vocational training for out-of-school youth, rehabilitation of schools and day care centers.
"About 3,500 residents in Barangay Roberto S. Benedicto in La Carlota City and Barangay Don Salvador Benedicto in Pontevedra, Negros, many of whom are beneficiaries of the government's agrarian reform program, will benefit from this project," Roxas said.
Methane recovery and wastewater treatment
The carbon credits will be generated through the adoption of a clean, advanced and more efficient biomethanation technology in treating the ethanol plant's wastewater, a significant shift from the traditional open lagoon system that emits large amount of methane, a highly potent greenhouse gas.
The project will avoid the emission of methane from the ethanol plant's wastewater by collecting it instead of just letting it escape into the atmosphere, as usually done in an open lagoon system, the cheapest method of treating distillery wastewater.
The collected methane will be used to power the ethanol plant's boiler, thus displacing the traditional bunker fuel.
Roxol Bioenergy, which will use molasses sourced from its three sugar mills as raw material in its ethanol production, will have a production capacity of 100,000 liters a year.
Last year, the company engaged the Indian firm KBK Chem-Engineering Pvt. Ltd. to build and activate its ethanol plant on a turnkey basis.
The carbon emission reductions purchase agreement with Roxol Bioenergy forms part of the growing number of CDM projects in the country, which now totals 19 registered projects, ranking the Philippines 7th globally in terms of the number of registered projects.
World Bank country director said the agreement with Roxol Bioenergy Corp. was the sixth agreement signed by the World Bank in the Philippines, since the bank started supporting carbon finance operation in the country in 2003.
