Clean Development Mechanism (CDM) Project unter UNFCCC

Short Sumary:

The Clean Development Mechanism (CDM), once part of the Kyoto Protocol, enabled the trading of CO₂ reduction certificates. PT Dayak Eco Carpentry, in partnership with the Eco Hapakat Foundation and supported by SGS Lausanne, developed a CDM-certified project to capture methane gas from landfills in Samarinda, Palu, and Mataram, Indonesia. The goal was to reduce harmful methane emissions, convert the gas into electricity, and sell both power and CO₂ certificates.

Methane, which is about 24 times more harmful than CO₂, would have been collected using PE sheeting and drainage systems, then safely burned to generate power. The project also included extensive social work to support landfill communities, improving health, hygiene, education, and working conditions.

Despite full UN certification in 2012, the project was ultimately abandoned due to the collapse in carbon credit prices—from USD 18 to under USD 1 per ton—making it financially unviable. Consequently, both the technical and social components had to be discontinued.

More Details:

Definition of Terms:

The Clean Development Mechanism (CDM) was one of the key concepts under the Kyoto Protocol. Defined by the United Nations, it aimed to reduce CO₂ emissions and facilitate the trading of CO₂ emission reduction certificates. Following the decision at the 2012 UN Climate Conference in São Paulo, Brazil, to discontinue the Kyoto Protocol, the CDM concept gradually faded into obscurity.

Under the Kyoto Protocol, member states committed to a three-step approach:

1. Prevent CO₂ emissions wherever possible.

2. When prevention was no longer feasible, reduce emissions through technical measures as much as possible.

3. Offset remaining emissions by supporting CO₂-positive projects. This offset was achieved by purchasing CO₂ certificates, measured in tons of CO₂ equivalents.

In short, the Kyoto Protocol required member countries to buy CO₂ certificates on the open market to compensate for their negative carbon footprint.

The Project:

Our former company, PT Dayak Eco Carpentry, was registered for trading in carbon products. In collaboration with the Eco Hapakat Foundation and with the support of Swiss auditor SGS Lausanne, we developed a project to extract methane gas from three urban landfill sites in Samarinda (East Kalimantan), Palu (Central Sulawesi), and Mataram (Lombok) and convert it into electricity.

This process involves covering large landfill areas with PE sheets and using a drainage system to capture methane gas that would otherwise escape into the atmosphere. This methane is produced through the decomposition of organic waste and is about 24 times more harmful than CO₂ in terms of its effect on the ozone layer.

From an environmental standpoint, it makes sense to combust methane industrially, converting it into pure CO₂, and use the resulting heat to generate electricity.

From an economic perspective, the process offers two revenue streams:

1. Selling CO₂ certificates on the emissions market. Before the end of the Kyoto Protocol, one ton of CO₂ equivalent could be sold for about USD 18.

2. Selling the electricity produced to nearby industrial consumers or feeding it into the public power grid.

Unfortunately, after the Kyoto Protocol ended, the price of CO₂ certificates dropped dramatically—from around USD 18 to below USD 1 per ton. Although PT Dayak Eco Carpentry was officially certified by the UN in 2012 as the holder of CO₂ certificates for the three landfill sites, the project had to be terminated before construction of the technical facilities could begin due to the collapse of certificate prices.

As part of this initiative, the Eco Hapakat Foundation was tasked with assessing the social conditions of people living on or near the landfills and developing programs to improve their living standards. Over approximately five years, we worked on these three sites—first gathering data, then implementing concrete support measures in the areas of health, hygiene, education, and waste collector working conditions.

To this end, Eco Hapakat employed a community development expert from the US and several local staff members across the three cities. Sadly, when the business aspect of the project had to be discontinued, the associated social programs were also halted due to a lack of funding.