Matthew Phan, Business Times 1 Dec 07;
THAI pulp and paper company Advance Agro owns no plantations, yet uses 18 million to 20 million trees a year, providing enough pulp for its mill, which has a 600,000-tonne capacity.
Through an arrangement with farmers in a fertile area with a radius of 200 km in central Thailand, Advance Agro plants fast-growing eucalyptus trees between the farmers' plots of land, then buying the mature trees. This supplements the farmers' income, and does not cause the deforestation for which paper companies elsewhere are criticised.
Unfortunately for the group, carbon credits from avoided deforestation or afforestation cannot be traded under the Kyoto Protocol's Clean Development Mechanism.
This is a pity, since forestry was a pilot sector of the CDM when it first started. It is difficult to measure exactly the amount of greenhouse gases reduced by keeping a forest, and negotiators were afraid that dubious credits might flood the market.
Another issue is permanence. A tree captures carbon dioxide but releases it again when uprooted. So is it fair to say that the carbon is permanently removed from the atmosphere?
As Rob Fowler, managing director of Abatement Solutions, says, the concept of permanence is 'very difficult for the legal system to deal with'. For example, is 100 years enough to consider permanent? Who bears the liability if, at the 90-year mark, the carbon is inadvertently released?
By UN estimates, deforestation accounts for a quarter of global emissions. And forests often bring other benefits to a region, like higher income or biodiversity. Officials and negotiators have said that they will raise the issue at their meetings in Bali this month.
At Advance Agro, though, carbon credits were not the driving force behind its business model, says senior vice-president Thirawit Leetavorn.
Rather, it wanted a long-term supply of wood that could supplement the income of local farmers, rather than taking a major income source from them as a plantation would have.
'We're a Thai company, this is our second or third generation in the agri-business, so we're close to the farmers,' he says.
A typical rice farmer earns about US$600 per year, and 'may break even if lucky', says Mr Thirawit. The trees, harvested every three years, bring them in an extra US$100 per year.
By using established road networks, Advance Agro avoids building new ones, although it must transport the wood over longer distances. It is also thinking of converting its trucks to use natural gas.
The firm's environmental efforts go beyond forestry. According to Mr Thirawit, its ISO 14001-certified mill uses only six to seven cubic metres of wood to make a tonne of pulp, compared to ten times that at other mills. And it burns the tree waste for electricity, saving some 200 million litres of diesel per year.
Sounds great, but is the model replicable? Perhaps not in places like America, Mr Thirawit concedes. But there is plenty of fertile farmland left in central and north Thailand, and in other South-east Asian countries like Laos and Vietnam, he says.
