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TSM Bio Energy, World Bank Sign Emission Reductions Purchase Agreement

Contacts:
Jitendra J. Shah
jshah@worldbank.org
Anita Gordon
agordon@worldbank.org

BANGKOK, May 28, 2009 – Thailand’s TSM Bio Energy Co. Ltd. and the World Bank signed an agreement today in support of a project to reduce greenhouse gas emissions and produce renewable energy.

Under the Emission Reductions Purchase Agreement (ERPA), the World Bank will purchase Certified Emission Reductions (CERs) in the amount of 500,000 tons of carbon dioxide equivalent from the company during 2010 – 2013. The World Bank will purchase these credits on behalf of the Spanish Government, using capital from the $278.6 million Spanish Carbon Fund it manages. The emission reductions will be gained through better wastewater treatment at the TSM ethanol production plant in Kanchanaburi province, Thailand.

The agreement was signed during the Global Carbon Market Fair and Conference in Barcelona, Spain, which ends May 29. It demonstrates the Bank’s commitment to help developing countries acquire the resources to invest in climate-friendly technology and programs in order to reduce greenhouse gas emissions.

“Developing countries are more vulnerable to the negative impacts of climate change than rich countries, and the impact of climate change could wipe out some of the gains they had made in terms of poverty reduction,” said Annette Dixon, the Thailand Country Director of the World Bank. “Thailand clearly understands this and has been emphasizing mitigation measures in its national climate change strategy. We are pleased to be part of Thailand’s effort to address this global challenge.” 

TSM Bio Energy is a subsidiary of Thai Sugar Ethanol Co. Ltd., which produces ethanol from molasses as an alternative to fossil fuels. The company’s refinery in Kanchanaburi, in central Thailand, is capable of producing 100,000 liters of ethanol a day.
 
Currently, wastewater from the ethanol production is discharged into open anaerobic lagoons after running through an evaporator. Bacteria in the open lagoons then feeds on these organic wastes, generating methane1  and foul odors which can disturb the local community. The company plans to solve this problem by replacing the open lagoons with a new covered anaerobic digestion system. In doing so, it will also be able to capture methane gas produced by the bacteria and use it to generate electricity.

After the installation of the new covered system, TSM Bio Energy will be able to reduce emissions of up to 1.5 million tons of carbon dioxide equivalent over ten years, earning “carbon credits” for sale to developed countries trying to meet commitment under the Kyoto Protocol.

ERPAs make investment in clean technology more affordable and attractive to business operators, who may be interested in protecting the environment but do not have access to the capital to support needed new investment. 

"With support from the Spanish Carbon Fund, we will be able to invest in a proper technology to reduce the emissions of methane gas at our plant,” said Jetsada Wongwatanasin, Managing Director of Thai Sugar Ethanol and TSM Bio Energy. “This project will enable us to improve the local environment and address the global issue of climate change at the same time. It’s a win-win solution for us."

This project also supports Thailand’s policy to increase the consumption of renewable energy nationwide to 22% of total in 2020, from 6.4% at present, said Sirithan Pairoj-Boriboon, Executive Director of the Thailand Greenhouse Gas Management Organization (TGO). Since 2007, the Thai government has approved a total of 75 Clean Development Mechanism (CDM) projects2,  which will help Thailand reduce the emissions of almost five million tons of carbon dioxide equivalent per year.

“The TSM Bio Energy project is another step forward for Thailand,” Sirithan said. “Our goal is to reduce pollution and greenhouse gas emissions while promoting renewable energy as a means to sustainable development. I hope to see many more projects like this one in the future.”


1 Methane is 21 times more potent greenhouse gas than carbon dioxide, making it a significant contributor to the warming of earth’s temperature. However, methane can also provide clean source of energy, making it an attractive alternative to fossil fuels.

2 CDM is a mechanism under the Kyoto Protocol, which allows industrialized countries with a greenhouse gas reduction commitment to invest in projects that reduce emissions in developing countries. 

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For more information about the World Bank’s carbon finance operations in East Asia and Pacific, visit www.worldbank.org/eapcarbonfinance

For more information about the World Bank’s global carbon finance operations, visit www.carbonfinance.org 

To learn more about the World Bank in Thailand, visit www.worldbank.or.th 

For information about greenhouse gas management in Thailand, visit
www.tgo.or.th

For information about TSM Bio Energy and affiliated companies, visit
www.thaisugarmill.com




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