The NAMA seeks to implement strategies towards GHG and pollutant reduction across the sector, focusing on three main technology areas: crop processes, mills technological upgrading and use of sub-products. The expected outcome is to create a transformational effect on the environment while generating positive socio-economic benefits.

The project objectives are:

1. Productive transformation of crop processes

• Plant resettlement and soil renewal through production intensification, increasing vegetation cover, reducing soil instability and increasing uptake of CO2.
• Efficient use of nitrogen fertilizers.
• Planned crop burning prevention.
• Establishment of native binders’ fields.
• Dendroenergy development based on native forests

2. Mills technological upgrading

• Implement Thermal recirculation processes
• Bagasse feeders’ implementation to eliminate residence time and methane emissions
• Replacing internal combustion engines with electric ones
• Wastewater treatment implementation for crop irrigation systems

3. Use of sub-products

Background context:

The panela sector plays a significant role in the Colombian economy. Colombia is the second largest producer of panela in the world, and panela is the second largest agroindustry after coffee in Colombia. The sector provides employment to 350,000 families in 70,000 farms and 22,000 panela mills – making it the main source of job generation in rural areas in Colombia. However, there is significant opportunity to increase the competitiveness of the sector by reducing energy use whilst reducing its environmental impact.

The sector typically uses traditional non-environmentally friendly technologies and approaches across the supply chain, including the use of firewood and (when there is firewood shortage) used tyres to generate heat (creating CO2 and sulphur dioxide in the process resulting in adverse health effects) and very inefficient combustion processes, resulting in only a 30% efficient use of energy and calorific losses of between 60-70%. The panela sector is responsible for the increasing deforestation and catchment area sedimentation in Colombia. These inefficiencies are contributing to a loss of competitiveness in the sector and reduced socio-economic sustainability, which has reduced job opportunities and migration away from rural areas. 

The Ministry of Agriculture and Rural Development (MADR), and the Ministry of Environment and Sustainable (MADS), together with Fedepanela (National Federation of Panela producers), want to reverse this situation, therefore, the Panela's NAMA has been prioritised to be included in the National NAMA's portafolio.

The expected outcome of the proposed work is to produce a NAMA in the panela sector to create a transformational effect on the environment while generating positive economic benefits to the panela farmers. Therefore, the support to be provided will be a catalyser to the untapped economic, environmental and social benefits of a low carbon economy in the panela sector. 

The output will be the catalyser to reduce more than 41,680 MtCO2e from the panela sector whilst improving the business competitiveness of thousands of farmers who are most vulnerable to climate changes. A further outcome of the project will be the contribution to build a more resilient economy that can sustain a reduction in the rate of deforestation with a positive net benefit of reduced flood risk to communities that are vulnerable.

The benefits of improving clean energy technologies and better energy management practices in the panela sector have the potential to increase the efficiency of energy or burners by more than 8% which translates in annual reductions of 38 tCO2e by burner. This saving is attributed to decreasing or eliminating the consumption of wood and diesel, thanks to a superior energy efficiency performance and clean energy technologies.           

This project will net a positive environmental contribution to meeting the Colombian commitments of reducing its GHG by 20% to 2030. Notably the project will also help Colombia reach its goals to reduce poverty, create new jobs, and increase the competitiveness of the industry.

Fedepanela and ECDBC have been working together on the design of the panela NAMA over the last year.

Social, environmental and economic cobenefits of the NAMA:
 

The proposed NAMA will give continuity to the efforts done during the last 8 years of Fedepanela who has been working towards increasing the profitability and reducing the environmental impact of the panela sector.

The desired outcome of the NAMA is expected to bring social, environmental and private sector benefits. More than 300,000 rural households will be benefit from the proposed NAMA. These benefits have been identified but are yet to be quantified in order to comply with the requirements of the NAMA.

The panela sector has significant socioeconomic implications because the majority of production is sourced from small agricultural holdings. These smallholdings are involved in both the plantation of the crops and processing of the panela. Modern crop procedures and industrial processes can increase the profitability of their business by improving the extraction efficiency of the cane in the mills and by generating energy savings from more efficient engines.

It is estimated around 70% of all car tyres used in Bogota are burnt in boilers for the production of panela. This practice has significant negative environmental impacts as the tyres release significant GHG when they are used as a fuel. Poor energy management practices such as using wood with high levels of humidity and wood from non-sustainable forests are common practices in the industrial process of panela.    

It is common practice for the householders that occupy the farms to live in close proximity to the mills and boilers and therefore using tyres as a fuel source has potential significant implications on the health of those families. 

Fedepanela has carried out several studies and summarised the main social, environmental and development benefits as follows:

•  Costs production reduction by 8 % for non-use of additional fuel in the process of panela, e.g. without firewood, tyres or the burners.

• Increased energy efficiency burners in at least 15%.
• Decreased 0.8 kg. of bagasse per kg. of panela produced.
• Reduction of operating times (reduction of working hours by 15%).
• Environmental benefits by reducing the temperature of exhaust gases from the fireplace by operating at less than 500 ° C.
• 60% reduction of CO2e emissions per kg of panela produced.
• Significant decrease of deforestation in areas near to the panela area.
• 100% decrease in the consumption fuels such as wood or wheels, which not only increases the cost of manufacture of panela, but has a very negative impact in terms of GHG. This as a result of using a better quality of bagasse and combustion process.
• Increased profitability per unit of time as it increases the ability to do more grindings per month by using the bagasse as soon as it leaves the mills without waiting 30 days to be dried. This creates space reduction by almost 30% and labor reduction by 20% in the bagasse compared to business as usual (BAU).
• Better hygienic conditions of the farm due to the reduction of the bagasse.
• Deforestation reduction (and with it the deterioration of soils and water sources) associated with firewood consumption.
• Farmers’ competitiveness increased as a result of the points mentioned above.

Project key barriers:

The key barrier to a NAMA focused on the panela sector is a lack of comprehensive information on the costs and benefits of delivering a large-scale and high-impact programme and to have an actionable large-scale programme design. To develop the NAMA we need to perform an in depth identification of activities and analyse the dependency between them as well as the time duration per activity to eliminate the risk of an inaccurate budget, which can jeopardize the impact of the NAMA. Another gap is the lack of tailor-made mechanisms including financial, technology transfer, and knowledge transfer—to deliver the NAMA programme.

One key barrier to design of the NAMA is coordinating and getting the buy-in of key stakeholders –local authorities, private sector, and local institutions—involved in the designed and implementation of the programme. 

Other key gaps to have a panela NAMA include the identification of best practices in sowing of sugar cane to increase the productivity and reduce the environmental impact. Several studies have been done, but it is required to identify and select the actionable opportunities.

All the previous gaps and barriers are solvable but there is a shortfall of resources to fill the gaps and eliminate the barriers.