LAO PEOPLE’S DEMOCRATIC REPUBLIC
PEACE INDEPENDENCE DEMOCRACY UNITY PROSPERITY
Prime Minister’s Office No. xx/PM
Vientiane Capital, dated xx
DECREE
ON BIOMASS GASIFICATION
Pursuant to the Law on the Government ofLao PDR, No 02/NA, dated 6 May 2003;
Pursuant to electricity Law of Lao PDR, No 03/NA, dated 08 December 2008;
Pursuant to Renewable Energy Development Strategy (hereinafter-REDS);
Based on Letter of Recommendation of the Minister for Energy and Mines, No. xx/MEM, dated XX.
Prime Minister issues the Decree:
Section I
General Provision
Article 1. Objectives
This Decree defines the principles, rules, and measures on the implementation, operation,
regulation and supervision of biomass gasification business, to promote biomass-based power
generation development, including the on-grid and off-grid option and to develop domestic small
and medium size biomass gasification digester, for increasing cleaner energy for self consumption,
effective agro-forestry-livestock wastes treatment aiming at creating economically and technically
viable promotion mechanism for biomass technology in Lao PDR.
Article 2. Definitions
The terms used in this Decree shall have the following meaning:
Biomass: biomass is biological material derived from living, or recently living organisms. In
the context of biomass for energy this is often used to mean plant based material, but biomass can
equally apply to both animal and vegetable derived material.
Type of biomass:
1) vergin wood (fast growing, specially planted trees for energy purposes)
2) energy crop (short rotation energy crops, grasses and non-woody energy crop, agricultural
energy crop, aquatic)
3) Agriculture residues
4) Urban organic wastes
5) Industrial waste and co-products
Biomass conversion technology. There are a number of technological options available to
make use of a wide variety of biomass types as a renewable energy source. Conversion technologies
may release the energy directly, in the form of heat or electricity, or may convert it to another form,
such as liquid biofuel or combustible biomass.
Biomass Thermal conversion technologies.
These are processes in which heat is the dominant mechanism to convert the biomass into
another chemical form. Thermal conversion of biomass basically consists of the following types:
Combustion. Combustion is the process by which flammable materials are allowed to burn in
the presence of air or oxygen with the release of heat. Heat can be used many ways: space
heating, water boiling, steam-raising for electricity generation or motive force.
Gasification is a partial oxidation process whereby a carbon source such as coal, natural gas or
biomass, is broken down into carbon monoxide (CO) and hydrogen (H2), plus carbon dioxide
(CO2) and possibly methane (CH4).
Pyrolysis is the precursor to gasification, and takes place as part of both gasification and
combustion. It consists of thermal decomposition in the absence of oxygen. It is essentially
based on a long established process, being the basis of charcoal burning. The products of
pyrolysis include gas, liquid and a solid char, with the proportions of each depending upon the
parameters of the process. Applications for pyrolysis includes (1) biomass energy densification
for transport or storage; (2) Co-firing heat or power; (3) Feedstock for gasification;
Biomass gasification converts biomass materials into gaseous component. The results of
gasification is the producer gas, containing carbon monoxide, hydrogen, methane and some other
inert gases. Mixed with air, the producer gas can be used in gasoline or diesel engine with little
modifications.
Biomass gasification system classification
Based on the design of gasifiers and type of fuels used, different kinds of gasifiers exist:
Portable gasifiers: mostly are used for running vehicles or small scale energy needs
Stationary gasifiers combined with engines are widely used in rural areas of developing countries
for many purposes including generation of electricity and running irrigation pumps.
Waste disposal gasification. Waste gasification has several principal advantages over
incineration: (1) production of syngas; (2) much cheaper power generation in engines and gas
turbines; (3) chemical process can produce other synthetic fuels; (4) waste gasification can treat
ash from heavy metals
Feedstock for Biomass gasification:
Theoretically, almost all kinds of biomass with moisture content of 5-30% can be gasified,
however, not every biomass fuel can lead to the successful gasification. Most of the development
work is carried out with common fuels such as coal, charcoal and wood.
Applications of Biomass gasification
Gasifier-engine system combined with generator provides electrical energy for lighting, and
other household purposes. Small-scale gasifier system (10-30 kWe) would be appropriate and
suite multitudes of remote rural village applications in Lao PDR
Combined heat and power (CHP): the market potential of biomass CHP is unlimited.
Worldwide however there is an increasing interest in this form of energy supply. One of the
major issues in implementing this as a regular source of energy supplementation or full provision
is making it usable on a smaller scale.
Article 3. Principles for biomass gasification production.
Biomass gasification production shall be based on the following principles:
1. comply with National Renewable Energy Developement Strategy
2. social and rural development interest
3. environmental sustainable development
4. energy diversification
5. economical and business development
6. use of local resources
Article 4. Scope of application
This Decree applies to all individuals and organizations that invest in biomass gasification
system for non-commercial and commercial use within the Lao PDR.
Section II
Types of Biomass Gasification System
Article 5. Types of Biomass Gasification System
Based on supply destinations, biomass gasification systems for energy production consists of
two types as followed:
1. Non commercial biomass gasification system for self-consumption;
2. Commercial Biomass gasification systems are counted from small scale electricity
generation (capacity from 30 kWe) up to large scale combined heat and power generation.
Article 6. Non commercial Biomass Gasification System
Non commercial biomass gasification system is a production of gaseous energy from
biomass material for meeting domestic needs in heat (such as cooking, drying and small scale
process heating), or for electricity generation.
Article 7. Biomass Gasification System for Commercial Purpose
Biomass gasification system for commercial purpose is a system that can generate heat and
electrical power to be sold to the grid system of distribution company or other buyers.
Biomass gasification system for commercial purpose shall be subject to licensing and
regulation procedures as provided for in this Decree.
Section III
Installation, Utilization and Supervision of
Non commercial Biomass Gasification System
Article 8. Declaration of Installation
Individuals or communities willing to install biomass gasification unit for household and on
farm use shall declare the project proposal to District Office of Energy and Mines for registration
and assistance.
Article 9. Approval and Registration of the installation
The installation of a non commercial biomass gasification facility shall be approved and
registered by the District Office for Energy and Mines.
Article 10. Technical Instruction for Installation
The installation of non commercial small scale biomass gasification system from the initial
phase shall be subject to the technical instruction and guidelines provided by the Ministry of Energy
and Mines.
The Ministry of Energy and Mines in collaboration with Ministry of Science and
Technology and other parties concerned shall issue a technical instruction or guidelines for the
installation of non commercial small scale biomass gasification system.
When such technical instruction or guideline exists, all non commercial biomass gasification
systems shall be installed in compliance with these instruction and guidelines.
Article 11. Standard Technical and Safety Requirement
The operation of non commercial biomass gasification unit shall comply with the technical
and safety standards as issued by the Ministry of Energy and Mines. The owner shall be responsible
for the management, operation, maintenance and safety of the system.
When such technical instruction or guideline exists, all non commercial biomass gasification
units shall be operated in compliance with these instruction and guidelines.
Article 12. Technical Supervision
District Office for Energy and Mines may undertake technical supervision of non
commercial biomass gasification unit.
Section IV
Licensing and Regulation
of Biomass Gasification System for Commercial Purpose
Article 13. Approval of biomass gasification facility
Developers, individuals or legal entities, who wish to invest in a biomass gasification unit
with commercial purpose shall first submit an application consisting of a short description of the
proposed installation to the Provincial Department of Planning and Investment for consideration and
approval.
The Provincial Department of Planning and Investment shall issue the approval to the
applicant within fifteen (15) working days starting from the date of submission of the application in
accordance with this Decree.
Article 14. Operation Licensing Authority
The Authority with power and authority to issue license for installation or construction and
operation of biomass gasification projects for commercial purpose shall be:
The Provincial Department of Energy and Mines for facility with treatment capacity of
less or equal to 30 tons per day;
The Ministry of Energy and Mines for facility with a treatment capacity higher than 30
tons per day.
Article 15. Licensing Conditions
Developers who wish to install a biomass gasification system for commercial purpose shall
submit an application to the relevant licensing Authority as specified in Article 14. The application
shall include the following documents:
1. Brief project description; including proposed site location;
2. Business Plan or Feasibility Study;
3. Technical Design
4. Technical and Safety Measures;
5. Environmental Certificate;
6. Operation and Maintenance Plan.
Article 16. License Terms and Conditions
The Ministry of Energy and Mines shall develop a standard license terms and conditions for
licensing, regulation and supervision of biomass gasification system for commercial purpose
including regulation and supervision procedures that shall be implemented and complied with by the
operation licensing authority.
Article 17. Consideration of the Application
The Provincial Department of Energy and Mines shall issue the Operation License to the
applicant within fifteen (15) working days starting from the date of receipt of complete application in
accordance with this Decree.
When the licensing Authority is the Ministry of Energy, the delay to issue the Operation
license to the applicant is extended to thirty (30) working days starting from the date of submission
of complete application in accordance with this Decree.
In case of rejection, the licensing Authority shall provide written reasons for its decision.
Should the licensing Authority fail to reply during the period of consideration and in absence
of a written notification to the applicant that the period of consideration is extended, the
authorization is granted.
Article 18. Technical and Safety Requirement for the Utilization
The biomass gasification facility shall be operated in accordance with the technical and
safety standards issued by the Ministry of Energy and Mines and all other legal requirements.
Article 19. Technical Supervision
After commercial operations have commenced, the operators shall submit quarterly reports
to the Provincial Department of Energy and Mines.
The operator shall provide access to the biomass gasification facility to the staff of the
Provincial Department of Energy and Mines for inspection purpose whenever required, either regular
or risk-based inspection. The inspector’s visits shall take place during normal business hours and
shall be subject to prior notice whenever possible.
Supervision of biomass gasification system shall at least cover the followings:
1. Compliance with the requirements of the relevant laws and regulations;
2. Compliance with terms and conditions of Operation License;
3. Compliance with Technical and Safety Measures;
4. Compliance with terms and conditions of Environmental Certificate or Environmental
Management Plan;
5. Compliance with Business Plan;
6. Compliance with Operation and Maintenance Plan.
Article 20. Principle on Price Determination
Determination of price for biomass gasification product or energy shall be based on market
principles in the Lao PDR. The State will intervene only if there is a need to regulate the price of
product or energy to support the socio- economic development in rural and remote areas where
people have no access to grid system.
Section V
Access to Technical and Financial Assistances
Article 21. Technical Assistance
Ministry of Energy and Mines and its relevant Departments and Offices shall put effort to
develop technical guideline and provide technical assistant to interested parties, both individuals and
legal entities from public and private sectors to promote them to develop systems for biomass
gasification both for household use and commercial use.
Article 22. Conditions for Financial Assistance from the Rural Electrification Fund
Developers and investors in biomass gasification system may apply for financial assistance
from Rural Electrification Fund (REF) when the following conditions are met:
1. Facility located in a remote off grid area with no forecast for connection to the grid in a near
future or other better alternatives of energy supply;
2. The system has a sustainable or reliable operation
3. Availability of fund from the REF;
Article 23. Other Funds likely to be mobilized to support biomass gasification industry
In addition to the fund from REF, developers and investors may apply for financial
assistance from other financial sources such as: Poverty Reduction Fund, SME Development Fund,
Renewable Energy Fund and other financial sources.
Article 24. Application for Investment Incentives under the Law on Investment Promotion
Biomass gasification developers shall be eligible to obtain all investment and other fiscal
incentives defined in the law on investment promotion of the Lao PDR.
Article 25. Additional Incentives defined by the Government
To promote the development of biomass industry, the Government will make
recommendations to the National Assembly or its Standing Committee for consideration of approval
of additional investment incentives under the principles defined in Article 59 of the Law on
Investment Promotion 2009 and such additional investment incentives shall be published and made
available to all developers or investors in renewable energy.
Article 26. Access to carbon finance and issuance of green certificates
The biomass gasification developers are encouraged to access carbon finance through the
intermediation of the Designated National Authority.
MEM shall issue necessary certification required for accessing carbon finance following the
procedure in place.
In addition, green certificates shall be issued by the Ministry of Science and technology upon
request by the developers and in accordance with procedures in place.
Section VI
Supply of Biomass Gasification Product or Energy
Article 27. Supply of Biomass Gasification Product or Energy
Biomass gasification system developers for commercial purpose may supply product or
energy to neighboring users or to a distribution company.
The terms and conditions of such supply shall be negotiated and agreed between the
investors or operators and the distribution company or neighboring users.
Article 28. Conditions for Supply
The conditions for the supply of biomass gasification product or energy are the following:
1. Meeting the demand of the neighboring users or buyers;
2. Be financially competitive;
3. Meeting the neighboring users or the distribution company technical standards and energy
requirements.
Section VII
Administration of Biomass Gasification System
Article 29. Roles of Ministry of Energy and Mines
Ministry of Energy and Mines centrally and uniformly administrates the development and
construction of biomass gasification system throughout the country.
Article 30. Powers and Duties of Ministry of Energy and Mines
In the administration of installation and construction of biomass gasification system, the
Ministry of Energy and Mines has the following powers and duties:
1. To elaborate on the strategic plan relating to the development of biomass gasification system;
2. To draft a master plan regarding the development of biomass gasification, including short term,
medium term and long term plans for the development of biomass gasification;
3. To consider applications and approve the establishment of biomass gasification systems for
commercial purpose for which the Ministry of Energy and Mines is licensing authority;
4. To issue operation license for biomass gasification systems for commercial purpose for which
the Ministry of Energy and Mines is licensing authority,
5. To develop technical instructions and guidelines for installation and construction of biomass
gasification system;
6. To organize provision of technical assistance and training support on installation and
construction of biomass gasification system to its Provincial Departments or District Offices for
Energy and Mines;
7. To coordinate and cooperate with international organizations and foreign authorities for the
development and promotion of biomass gasification system development;
8. To summarize and report the status of the development of biomass gasification system in the
country to the Government;
9. To coordinate with other sectors and concerned local authorities for the management of the
biomass gasification business;
Article 31. Powers and Duties of the Provincial Department of Energy and Mines
In the administration and inspection of biomass gasification system, the Provincial
Department of Energy and Mines has the following powers and duties:
1. To elaborate own biomass gasification industry development in accordance with the Ministry of
Energy and Mines’ master plan;
2. To consider applications and approve the establishment of biomass gasification systems for
commercial purpose for which the Provincial Department of Energy and Mines is licensing
authority;
3. To issue operation license for biomass gasification systems for commercial purpose for which
the Provincial Department of Energy and Mines is licensing authority,
4. To proceed to technical inspections of biomass gasification facilities;
5. To suspend or remove operation license when developers materially breach the license terms and
conditions;
6. To provide technical instruction for biomass gasification investment within its scope of
responsibility;
7. To gather and prepare information on potential and feasibility of biomass gasification project
development in the province;
8. To coordinate with other sectors and concerned local authority for the management of the
biomass gasification business;
9. To gather data on feasible commercial biomass gasification projects and report to MEM
Article 32. Powers and Duties of the District Office for Energy and Mines
In the administration and inspection of biomass gasification system, the District Office of
Energy and Mines has the following powers and duties:
1. To provide technical assistance and support for non commercial biomass gasification system.
2. To disseminate and provide training on technical guidelines or instructions of the Ministry of
Energy and Mines to non commercial biomass gasification system owners.
3. To disseminate strategic policy and plan of the Ministry of Energy and Mines regarding the
development of biomass gasification;
4. To regulate and supervise the non commercial biomass gasification units.
5. To summarize and report the status of development of biomass gasification to the Provincial
Department of Energy and Mines.
6. To exercise other rights and other duties related to biomass gasification system as assigned by
the Provincial Department of Energy and Mines or defined by laws and regulations of the Lao
PDR.
Section VIII
Awards and Sanctions
Article 33. Incentives towards outstanding business operation
Individuals, organizations or legal entities that have had an outstanding performance in
implementing this Decree, mainly in development of biomass gasification system and related
environmental protection shall receive rewards and other incentives accordingly to the laws and
regulations.
Article 34. Measures against the Violators
Individuals, organizations or legal entities that violate this Decree shall be subject to
measures depending on the seriousness of the violation in the form of education, discipline, fine,
damage compensation or penalties accordingly to the laws and regulations.
Section IX
Final Provisions
Article 35. Implementation
The Ministry of Energy and Mines and other relevant ministries, organizations and parties
concerned have the duty to efficiently implement this Decree.
Article 36. Effectiveness
This Decree is effective from the date of its signature.
Any regulations and provisions which are contradicted with the provisions of this Decree
shall be cancelled.
Prime Minister of the Lao PDR