UNITED NATIONS DEVELOPMENT PROGRAMME

Global Environment Facility

Proposal for PDF Block B Grant

Identifiers:

PIMS Number / 2837
Project Number: / BGD/03/GXX
Project Title: / Bangladesh: Improving Kiln Efficiency in the Brick Making Industry (IKEBMI)
PDF-B Duration: / 15157 months
Implementation Agency: / UNDP
Executing Agency: / UNOPS
Requesting Country: / Bangladesh
Country Eligibility: / Ratified by the UNFCCC on 15 April 1994.
GEF Focal Area: / Climate Change
GEF Operational Programme: / OP-5: Removal of Barriers to Energy Conservation and Energy Efficiency
Block A Grant Requested: / No

Summary

Brick making is one of the largest sources of greenhouse gas emissions in Bangladesh. Outmoded, inefficient and poorly constructed kilns and the use of substandard fuels such as high sulphur coal, tires and wood energy in the kilns have all contributed to these high levels of kiln emissions. The situation has exacerbated in the last decade due to the rapid expansion of brick production using these same technologies and methods. Unless interventions that will induce change are implemented, greenhouse gas (GHG) emissions will continue to grow unabated. .

The purpose of the proposed GEF-OP5 project is to create an enabling environment to facilitate the adoption of energy efficient and cost effective kiln technologies to reduce GHG emissions. . To this end, the project will undertake activities to remove existing policy, institutional, technical, informational and financial barriers that have inhibited the use of efficient technologies and practices in the past. .

Adoption of proposed energy efficient kiln technologies will also lead to a decline in the emissions of other pollutants and markedly improve the profitability of the small to medium enterprises (SME’s) that form the bulk of the industry. . This will assist in the commercialisation of the technologies and ensure their long-term sustainability. The project is timely in that the government, and the citizens of urban areas who have been severely affected, are urgently seeking ways and means to mitigate the impact of brick making on the environment.

The PDF B activities for which funding is being sought will identify and design the scope and activities of the full project to ensure effective dissemination of energy efficient technologies. . The preparatory activities conceived for this exercise, however, depart from traditional design methodologies in one significant way: it envisages the design and construction of one demonstration kiln, which would normally be a project activity. . This has been proposed to enable early testing of new kilns using local clay materials. . During the PDF B stage, a full package of activities will be undertaken to identify existing barriers and to formulate a critical intervention path to ensure the expected outcomes. It is anticipated that these activities will create the critical mass necessary to develop the GEF Project Brief and the UNDP Draft Project Document and to bring together a large number of potential and existing stakeholders such as the brick industry, commercial lending institutions, government regulators, technology arbiters (the technical academic institutions from China and Bangladesh) and civil society. Considering the number of barriers to be removed and the complex nature of the activities, the PDF B grant being sought is considered reasonable and eminently justifiable. . The project proponents and stakeholders have already undertaken a number of pre-project activities to accelerate the implementation of the project and to ensure its early success.

Burnt bricks are the major source of building materials used in Bangladesh while. A, at the same time, it is also being one of the largest sources of GHG emissions. The main cause for this is the use of outmoded kilns that burn inefficiently and leak through the kiln walls. iIn an industry that is energy-intensive and resource depleting,. Ssuch excessive use of energy has also put increasing pressure on producers as they struggle to maintain profitability, causing them to substitute sub-standard energy resources which. This has led to a worsening situation.

This GEF-OP 5 project intends to introduce clean, efficient and cost effective kiln technologies to reduce greenhouse gasses that are now being emitted by the brick industry. To this end, effective technology diffusion activities will be undertaken to ensure widespread adoption of the proposed technologies through removal of existing policy, institutional, technical, informational and financial barriers that have inhibited the adoption of more energy efficient technologies and practices in the past. In addition to the reduction in GHG emissions, adoption of the proposed energy efficient kilns (EEK) will lead to collateral reductions in local pollution and increase in the profitability of the small to medium brick making enterprises (SME’s) that form the bulk of the industry. This latter consequence is expected to lead to the commercialisation of the technologies, thereby ensuring its long-runterm sustainability. The project is timely in that the government, and the citizens of urban areas who have been severely effected, are urgently seeking ways and means to mitigate the impact of brick making on the environment.

This is a PDF B proposal to identify and design the scope of activities and the steps to be undertaken to ensure implementation of the proposed project. The preparatory activities conceived for this exercise, however, departs from traditional design methodologies in one significant way.: It envisages the design and construction of one demonstration kiln which would normally be a full project activity. This has been proposed to enable early testing of the kilns using local clay materials. During the PDF B stage, a full package of activities will be undertaken to identify the barriers will be undertaken and a critical intervention path will be designed to ensure the expected outcomes. The proposed PDF B activities are expected to create the critical mass necessary to develop the Project Executive Summary and the Project Document and to bring together a large number of potential and existing stakeholders such as the brick industry, commercial lending institutions, government regulators, technology arbiters (the technical academic institutions from China and Bangladesh) and civil society. Considering the number of barriers to be removed and the complex nature of the activities, the PDF B grant being sought is considered reasonable and eminently justifiable. The project proponents and stakeholders have already undertaken a number of pre-project activities to accelerate the implementation of the project and to ensure its early success.

Costs and Financing (US$)

GEF / US$ 350,348,000000 / 64%
Co-financing:
  • UNDP Bangladesh
  • Government of China
  • Bangladesh University of Engineering and Technology (in-kind)
  • Clean Energy Alternatives (in-kind)
  • Private Sector Financial Institutionsgroups (cash)
Private Sector Brick Making EntitiesTechnology Owners (in kind)
  • Bankers (in kind)
/ US$ 2255,000
US$ 15,000$ 10,000
US$ 35,000 11,000
US$ 306,000
US$ 2096,000,000
US$ 1052,000 / 5%
2%
2%
1%
18%
9%
Total / US$ 4855486870,000 / 100 %*

* Percentages may not add up due to rounding

Background and Context

In aggregate starved Bangladesh, fired clay bricks form the bulk of the materials used in the construction industry. . They are the major “building-blocks” in all infrastructure, building, road and highway projects. Studies in the 1990’s show that out of 14.8 million households, 3.7 million or 25% used bricks as wall materials. Growth trends also show that demand for bricks has been steadily increasing at about 10% annually. The growth has come mainly from the construction industry, which has been growing above GDP rates. In the 1980’s and 1990’s while GDP grew at about 4%, the construction industry grew at 5.5%. . There has also been a perceptible increase in its use in non-traditional areas as incomes have risen; bricks are a preferred material for housing since they have superior thermal properties and are visually more pleasing. . The output of bricks has also been quite elastic, growing in response to increases in demand. There are now between 4,000 and 8,000 kilns operating in Bangladesh. . The large discrepancy in estimates is due to unlicensed, informal kilns that operate every brick-making season. .

Brick making is yet to be classified as an industry in Bangladesh. . Characteristically, though, it can be described as a “footloose” industry. . Production is seasonal, confined to the six to seven dry months of the year; technology outdated; labor productivity low; capitalization non-existent, mostly operating on equity capital; and management, informal. . Small and medium enterprises (SMEs) dominate the ownership pattern with little or no cooperative or large-scale operations. . An overriding characteristic of brick makers is the extreme difficulty that they have with working capital; they are able to finance their activities only through informal “banking” channels such as family, friends and moneylenders. . In addition to high lending rates, these channels are cumbersome, time consuming and, mostly, inadequate. . A national standard for building bricks exists, but most of the production does not meet these standards in one or more of the specifications. .

There are several barriers that contribute to the current state of the brick making “industry” (BMI) and its inability to bring about changes:

  • Lack of supporting regulations to encourage more energy-efficient practices and technologies. . There has been little or no activity by the government to assist the brick industry in developing a comprehensive program to make the industry less polluting and more profitable. . Brick makers have been left to develop the industry on their own which they have failed to do. . Some changes, however, have been initiated but these have come not from the traditional brick makers but a few new entrants;
  • Lack of access to energy efficient technologies that can also lower production costs. . Comprehensive technology diffusion programs that demonstrate the potential economic benefits of energy-efficient technologies have yet to be carried out;
  • Lack of access to liquidity to finance modernisation of plant and equipment; and
  • Lack of awareness of energy-environmental issues. The members of the Bangladesh Brick Manufacturing Owners Association (BBMOA) lack understanding of the basic concepts of climate change impacts as it relates to GHG emissions.

It is in this context that a barrier removing, technology market transformation model has been proposed. . This project will be one of Bangladesh’s first climate change projects and will be viewed as a catalyst for such projects in the future.

In aggregate starved Bangladesh, fired clay bricks form the bulk of the materials in used in the construction industry. It is the major “building-block” in all infrastructure, building, road and highway projects. For instance, in the 90’s out of 14.8 million households in the 1990’s, 3.7 million or 25% used bricks as wall materials. In recent years, demand for bricks has grown substantially along with the growth in urban population. There has also been a perceptible increase in its use elsewhere as incomes have risen in semi-rural areas. Bricks are a preferred material for housing since they have superior thermal properties and are visually more pleasing. The output of bricks has also been quite elastic, growing in response to increases in demand. There are now between 4,000 and 8,000 kilns in operation. (The large discrepancy in these estimates is due to the unlicensed, informal kilns that operate every year). Studies indicate that the construction industry has been growing above GDP growth rates. In the 80’s and 90’s whilest GDP grew at about 4%, the construction industry grew at 5.5%. The Bangladesh University of Engineering and Technology (BUET)/ Pembina Report (footnote reference??) and the Bangladesh Brick Manufacturers Owners Association (BBMOA) expect the number of brick kilns to grow by more than 50% in the next decade. A major portion of the capacity expansion and the accompanying growth in emissions is expected to occur along the same lines as the existing “industry” unless effective interventions are carried out.

Brick making is yet to be classified as an industry in Bangladesh. Characteristically, though, it can be described as a “footloose” industry. Production is seasonally confined to five dry months of the year; technology is outdated; labor productivity is low; capitalization is non-existent, mostly dependent on equity capital; and management is informal. Small and medium enterprises (SMEs) dominate the ownership pattern, and; cooperative or large-scale operations are mostly absent. A national standard for building bricks exists, but most of the production does not meet standards in one or more of the specifications.

As observed previously, the technology used in most of the kilns is primitive and energy intensive,. They are predominantly based on the Bull’s Trench Kiln (BTK), a technology that is over 150 years old. These kilns are highly inefficient in terms of fuel use and, being poorly constructed, cause excessive air leakage and heat loss from the system resulting in high GHG emissions. Annual CO2 emissions from brick kilns are estimated to be anywhere between 3.3 to 6.6 million tonnes of CO2. This excessive use of energy has put increasing pressure on profits, causing producers to substitute sub-standard and easily available energy resources. Most alarming is the use of firewood in a country where such resources are scarce. Most studies carried out in the early 1980s identified this as the primary cause of deforestation in Bangladesh. The BBMOA estimates that as much as 25% of the fuel used in brick kilns are is still from firewood. In attempts to regulate the environmental impacts from the BMI, the government (GoB) prohibited the use of firewood in brick kilns in 1989 through the promulgation of a “Brick Burning (Control) Act, 1989, (Act #8 of 1989) and the Brick Burning (Control) Amendment Act, 1992 which controls brick burning through issuance of licenses from the appropriate authorities. The National Environment Management Action Plan (NEMAP) of the early 1990s was an opportunity for civil society inputs into managing the country’s environmental concerns. One of NEMAPs environmental priorities was reducing the pollution from the BMI. GoB’s response to NEMAP was to promulgate the Environmental Conservation Act 1995 and Rules 1997 that included legislation to control brick kiln emissions. A 2001 decision by the Ministry of Environment and Forest (MoEF) in 2001 now only permits new brick kilns to be operational only if 120-foot high chimneys are constructed. There have been reports of compliance to this regulation only in areas where the likelihood of enforcement is higher; in others, BTK’s continue to operate in large numbers. Enforcement has failed primarily because government interventions lack stakeholder “buy-in”; interventions are more protectionist and policing[arp1] and less developmental[arp2]. Moreover, both the Department of Environment (DoE) and the District Commissioners who have been tasked directed to enforce regulations lack the ability to do so. The government has, for a variety of reasons, been unable to assist the BMI too in converting their kilns to clean and cost effective technologies. The BMI too also has been unable, collectively or individually, to develop and adapt [arp3]technological innovations or to access cost-effective and clean technologies on its own because due toof its inherent characteristics.

Some attempts have been made to introduce different types of kilns in Bangladesh, but these have been largely from India where the industry is still in a transitional state. Therefore, the attempts have been mostly based on intermediate technology compriseding of the Fixed Chimney Kiln (FCK) and the Zigzag Kiln, both fuelled by coal or natural gas. The Hoffman Kiln, which uses only natural gas, has also been tried; but this kiln is expensive and hence not suitable for the SME’s. There are a number of other energy efficient kilns (EEKs) that have innovative design features and operating procedures that could readily be adopted for use in Bangladesh. Among them are the VSBK and the Forced Draft Tunnel Kiln (FDTK), technologies. Both of these kilns are widely used in China and are highly efficient in terms of fuel usage and have extremely low emissions. Their design and size also generate scale economies making them low cost operations. In the early 1990s an attempt was made to introduce the Vertical Shaft Brick Kiln (VSBK), but it did not prove to be successful for a variety of reasons.

The VSBK was first introduced in China about 35 years ago in the late 70’s, and is still in use where market size is relatively small. The VSBK kiln is a tall shaft that works like a chimney. The inner kiln lining is usually made from firebricks, while the space between the inner shaft and the outer wall supporting the kiln structure is filled with insulating material such as coal slag or a mix of sawdust and clay. Fireboxes are built into the kiln so that they can be used as observation holes to monitor the different firing zones. The bricks are stacked in the shaft, which measures about 1m x 1m square and 6m in height. Green bricks are loaded from the top in batches of about 200, with four batches being fired at one time, and the firing time is usually about 1.5 hours. Combustion takes place in the middle of the vertical shaft with the air entering from the bottom and moving up the already fired bricks so that when the air reaches the combustion zone it is preheated to about 7500C. As combustion occurs, the hot flue gasses move up over the unfired bricks efficiently. This allows the heat stored in the already fired bricks to be used to fire the next batch of green bricks, creating significant savings in energy usage. The draught can be regulated, if required, by changing the setting density of the green bricks and altering their patterns. This makes it simple and uncomplicated, and hence less susceptible to errors. The fired bricks are unloaded at the bottom of the shaft at about the same rate that they are put in at the top. The unloading device is a chain pulley that is attached to a single iron beam set in the walls of the kiln. The chain pulleys, in turn, are attached to outside gallows made from heavy iron beams.