[Stoves] No subsidies in TLUD char peoduction

Tue Dec 5 10:10:58 CST 2017

Crispins.   see below.              (of interest to some on the Biochar 
Listserv)

Doc  /  Dr TLUD  /  Prof. Paul S. Anderson, PhD
Email:  psanders at ilstu.edu
Skype:   paultlud    Phone: +1-309-452-7072
Website:  www.drtlud.com

On 12/5/2017 1:39 AM, Crispin Pemberton-Pigott wrote:
>
> Dear Paul
>
> There is nothing controversial or toxic about this question. You have 
> a stove project that has a CDM component – apparently the first CDM 
> project approved for stoves – someone said (which I found an amazing 
> claim).
>
"Someone" misinformed you.

I am not all-knowng about carbon credits (CC), so we can work together 
to get full answers.   First, we note that CDM (Clean Development 
Mechanism) is not the same designation as CER (Certified Emission 
Reduction) and VER (Voluntary Emission Reduction).    There are stove 
projects with CC in the form authorized by Gold Standard Foundation (GS) 
for voluntary credits (VERs).  I do not know if there are other stove 
projects for which the CC is registered / verified as CER via the UNFCCC 
which is the only entity that can give the CER designation.  Gold 
Standard can provide either VER and CER forms of CDM.  The TLUD stove 
project in West Bengal is with GS CER status.

So I am sending a copy of this message to Olivier Lefebvre who works in 
this field of stoves and carbon credits.   And maybe my India contacts 
will inform me further.
>
> Anyway:
>
> *>*I repeat:  NOT subsidized.
> >…if you are willing to help, including to help test the website 
> regarding donations or the purchase GS CER fully certified carbon 
> credits.  )
>
> It is a donation. There are beneficiaries. /Something/ is subsidized. 
> I want to know where the CDM money goes. I do not care /where/ it goes 
> , I just want to see the whole financial picture.
>
The donations that go through the NFP that I have established are for 
sponsoring a Champion TLUD woodgas stove in West Bengal, so it 
subsidizes those stoves for appropriately low-income families. (We are 
just getting started.  Apart from my own money, there are now two 
donations that total $90 form persons who have been willing to help us 
test the processing of  donations.  We will also need to test for the 
funds to acquire TLUD-based GS CER carbon credits.  We only deal with 
TLUD-generated carbon credits.   (write to me off line if willing to 
assist.)  )

The donations do not subsidize the char collection business.

Note:  The major TLUD stove projects in West Bengal are managed by the 
Germany-based entity called   atmosfair   You can see their information 
at   https://www.atmosfair.de/en/home       There you can purchase 
carbon credits to offset airline travel.

The specific info about the TLUD projects in India are at:
  https://www.atmosfair.de/en/energieeffizienz/indien_holzvergaserofen_cdm

atmosfair uses it funding to get the stoves from the factories (as 
explained in the Deganga report).  So those stoves are subsidized for 
the households.   But the money is recovered via the sales of carbon 
credits during 7 years.

Question:   Is it a subsidy if the person pays in the form of signing 
away his or her rights to the carbon credits that will be earned by the 
use of the stove?    Or is it a form of "micro-finance" with repayment 
handled by the dealer in the carbon credits?   And if the monetary 
return to the CC dealer is greater than the initial value of the stove, 
is that not basically equivalent to the charging of interest on a 
micro-finance loan?

> This will inform my first question which is: can the [char purchase] 
> project continue if this money source [of carbon credit sales] is cut 
> off.
>
Answer:  Yes.

> I was not thinking of your request for $40 per stove, I was thinking 
> of the CDM money which according to Sujatha, was necessary to buy the 
> char at a viable price and sell it to the foundry.
>
You either misunderstood Sujatha or she was incorrect.
>
> If the value as a coal replacement is adequate to cover the cost of 
> collection and delivery, then it is viable without the CDM money. If 
> it is needed, then it is not.
>
It is viable.
>
> Is this clear? There is external money flowing into the project. I 
> expressed no opinion about whether or not it was good or bad. The 
> question is whether or not it can continue indefinitely without that 
> money.
>
There are two separate business operations.   We are discussing the CHAR 
PURCHASE business, not the overall stove project.
>
> If it can, the next assessment of risk is what change might take place 
> and how that would affect the viability. If the change wrought indeed 
> made it unviable financially, what steps can be take to mitigate the risk?
>
I addressed that in my previous message.   The risk is a weakness of 
operational management if the CC business stops, and I said there seems 
to be sufficient mid-level management to hold the char purchase business 
together.
>
> This is normal due diligence. We are not allowed to take 
> unconscionable risks and risks have to have a mitigation plan. Stove 
> char is a business and needs a business plan.
>
Almost right.   It would be good to have a well layed out business 
plan.   But the plan is not as polished as the Western world might like 
it to be.  Personally, I am glad that things are functional and 
participants know their roles and do them.  To have a great business 
plan (formal sense) would require talent and money.   Volunteers are 
welcome to do the business plan task.

> If it depends on a subsidy, say so, and let us know that it is an 
> essential element, and we will prepare for it. We will justify it to 
> governments or donors if we can.
>
Repeat:  The char purchase program has no subsidy whatsoever and 
employes about 100 people in the Deganga area alone.

And I repeat my comment from above: */Is it a subsidy if the person pays 
in the form of signing away his or her rights to the carbon credits that 
will be earned by the use of the stove? Or is it a form of 
"micro-finance" with repayment handled by the dealer in the carbon 
credits?   And if the monetary return to the CC dealer is greater than 
the initial value of the stove, is that not basically equivalent to the 
charging of interest on a micro-finance loan?
/*
Are we discussing something that is a truly different approach to the 
financing of large numbers of cookstoves?   It seems to be working well 
with the TLUD stoves that are earning 4 carbon credits per year of 
verified usage.

All comments and assistance will be gratefully accepted.

Paul
>
> Regards
>
> Crispin
>
>
>
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