Application of Clean Development Mechanism (CDM) for GHGs Emission Reduction in Haft Tappeh Sugarcane Factory

Energy consumption in food industries is high and increasing due to the growing population, inadequacy of cultivating farms, and life condition improvement. This growing consumption is a threat to the environment and human’s health. Sugarcane industries are considered as high consuming industries which have a tangible impact on the environment and emission of greenhouse gases. Sugarcane industrial energy consumption share among other industries is 4.3% and more than 70% in total energy of food industry consumption. The purpose of this study is to investigate the impact of CMD application on the reduction of fossil fuel energy consumption and GHGs emission reduction in Haft Tappeh Sugarcane Factory.
The results of the factory energy auditing indicated that one of the proper methods to benefit from CMD is to replace the old boiler which has low efficiency with a new boiler. Pre-feasibility assessment of the environmental and economical aspects of implementing the project has been calculated using “Proform” software. It ran through three scenarios assuming the investment, installation, and maintenance costs; the new boiler consumption rate with higher efficiency and cost-effectiveness of replacing the new system with the old one having lower efficiency. Calculation was based on carbon credit value in global market.
As results show in case if scenario C is applied, the Net Present Value (NPV) will equal 21,000,000 dollars and Internal Rate of Return (IRR) will become 39.18%. Carbon credit was considered 20 dollars based on the reduction of CO2 equivalent which was calculated by carbon supply and demand market for CERs of CDM projects that are sold and purchased in carbon exchange market. IRR is higher than 16% discount rate; consequently, it proves that implementing such a project is cost-effective. Provided that the new high efficient boiler is used, the emission of CO2 equivalent during implementing the project-25 years- will reduce to 763,353 ton equal to CO2 equivalent; furthermore, 13,607,000 GJ is saved on consumption of natural gas.
Considering the boilers with high energy consumption and low efficiency in this factory, the replacement of old boiler with the new one through CDM project is cost effective