# Eligibility criteria

Project developers shall demonstrate that they meet all eligibility criteria outlined in the Rainbow Standard Rules and described below with a specific focus on biogas from anaerobic digestion.

Eligibility criteria that do not require specific methodology instructions are not described here. This includes:

* Measurability
* Real
* Technology readiness level
* Minimum impact

{% content-ref url="../../rainbow-standard-documents/rainbow-standard-rules" %}
[rainbow-standard-rules](https://docs.rainbowstandard.io/rainbow-standard-documents/rainbow-standard-rules)
{% endcontent-ref %}

## Additionality <a href="#id-5c2h1zk45n99" id="id-5c2h1zk45n99"></a>

To demonstrate additionality, Project Developers shall perform **regulatory surplus analysis, plus either investment or barrier analysis**, using the [Rainbow Additionality Template](https://docs.google.com/document/d/1gahNR_qj9f_QmxHEEBW-pM1EiycINjt7LeO_pcbBFX8/edit?usp=sharing).

{% tabs %}
{% tab title="Regulatory surplus analysis" %}
Regulatory surplus analysis shall demonstrate that there are no regulations that **require or mandate** biogas production from anaerobic digestion. It is acceptable if regulations **promote** or **set targets for biogas production**, because the resulting increase in biogas production shall be accounted for in the baseline scenario (see [GHG reduction quantification](https://docs.rainbowstandard.io/methodologies/ghg-reduction-quantification#m8t0mn694gpw) section).

At the European Union level, projects automatically pass the regulatory surplus analysis, which has been conducted by the Rainbow Climate Team. Although the [Renewable Energy Directive](https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A02018L2001-20220607) promotes biogas production/use, it does not require its production. Project Developers are only required to provide a country-level regulatory surplus analysis.
{% endtab %}

{% tab title="Investment analysis" %}
**Investment analysis** may be used to prove that revenue from carbon finance is necessary to make the new project investment a financially viable and interesting option. The investment may cover:

* the development and launch of a brand new biogas site, or
* an expansion to increase production capacity, such as adding new biogas digesters.

Business plans shall be provided as initial proof for investment analysis. During verification, audited financial statements shall be used to demonstrate that the initial estimates from the business plan were reasonable, and that carbon finance was used as initially described for the expected investment.

Note that for investments in expansion, **only the additional carbon reductions enabled by the expansion shall be eligible for Rainbow Carbon Credits.**
{% endtab %}

{% tab title="Barrier analysis" %}
**Barrier analysis** may be used to prove that the project faces financial, institutional, or technological barriers to ongoing operations that can only be overcome using carbon finance. Examples include but are not limited to:

* Financial barrier: financial analysis proving that the project is operating at a loss, and carbon finance would make it financially viable.
* Financial barrier: financial analysis demonstrating that the project is not financially viable, evidenced by net cash being lower than the working capital requirements, or proof that the project is not meeting the projected financial targets (e.g. IRR) in the business plans and loan documents, and that carbon finance would make it financially viable.
* Institutional barrier: description of new regulation that the project must make costly changes to comply with, financial analysis showing that the project cannot fund the changes on their own, and carbon finance is necessary to make it viable.

For any type of barrier analysis, **audited financial statements must be provided** as proof. These documents should either demonstrate the financial status to prove financial barriers, or show that the project could not independently fund solutions to overcome institutional or technological barriers.
{% endtab %}
{% endtabs %}

## No double counting <a href="#d9hoavm4p30z" id="d9hoavm4p30z"></a>

Project developers shall sign the [Rainbow MRV & Registry Terms & Conditions](https://drive.google.com/file/d/1Ol88SJX7HWGnZ9pxKfn8cekGU-RmCo6v/view?usp=sharing), committing to follow the requirements outlined in the [Rainbow Standard Rules](https://docs.rainbowstandard.io/rainbow-standard-documents/rainbow-standard-rules), including not double using or double issuing carbon credits.

Projects shall comply with the requirements set out in the [Rainbow Double Counting Policy](https://docs.rainbowstandard.io/methodologies/biogas-from-anaerobic-digestion/broken-reference).

{% content-ref url="broken-reference" %}
[Broken link](https://docs.rainbowstandard.io/methodologies/biogas-from-anaerobic-digestion/broken-reference)
{% endcontent-ref %}

No additional measures for double issuance are required under this methodology, because double issuance among actors in the supply chain is unlikely.

## Co-benefits <a href="#j7l12crxdi5d" id="j7l12crxdi5d"></a>

Projects should support at least two **quantifiable and verifiable** environmental or social co-benefits, aligned with the [UN Sustainable Development Goals](https://unstats.un.org/sdgs/indicators/Global-Indicator-Framework-after-2024-refinement-English.pdf) (SDGs) framework. Any co-benefits claimed by the Project Developer shall be quantified, monitored, and audited for each verification and credit issuance.

Common co-benefits under this methodology are detailed in the table below. Project Developers may suggest and prove other co-benefits not mentioned here.

SDG 13 on Climate Action by default is not considered a co-benefit here, since it is implicitly accounted for in the issuance of carbon credits. If the project delivers climate benefits that are not accounted for in the GHG reduction quantifications, then they may be considered as co-benefits.

*Table 1 Common co-benefits that projects under this methodology may provide are detailed, including types of proof that can be used to justify each co-benefit.*

<table data-header-hidden data-full-width="true"><thead><tr><th width="265"></th><th width="469"></th><th></th></tr></thead><tbody><tr><td><strong>UN SDG</strong></td><td><strong>Description</strong></td><td><strong>Proof</strong></td></tr><tr><td>SDG 7.2 Increase substantially the share of renewable energy in the global energy mix</td><td>Promoting renewable energy over fossil fuel energy is important not only for reducing GHG emissions, but also for energy security, diversification, and conservation of finite resources. By definition, producing biogas from anaerobic digestion contributes to increasing the share of renewable energy in energy mixes.</td><td>Energy produced (kWh), from injection receipts from gas network.</td></tr><tr><td>SDG 8.2 Achieve higher levels of economic productivity through diversification, technology upgrading and innovation</td><td>Anaerobic digestion sites, often managed by farmers, provide an opportunity for income diversification, helping small-scale farmers remain viable in a challenging agricultural landscape. This is particularly beneficial given the <a data-footnote-ref href="#user-content-fn-1">decline in the number of small farms and the economic vulnerabilities faced by European farmers</a>.</td><td>Fraction of farmer income from anaerobic digestion site operation.</td></tr><tr><td>SDG 8.4 Improve global resource efficiency in consumption and production</td><td>Almost <a data-footnote-ref href="#user-content-fn-2">11 million tonnes </a>of mineral nitrogen and phosphorus fertilizer are used annually in the EU. Their production requires large amounts of fossil energy consumption and mining of finite resources. Anaerobic digestion recycles nutrients by converting agricultural residues into digestate, which returns nutrients to agricultural soils.</td><td>Amount of digestate applied to soils, calculations and conversions done in Rainbow’s model.</td></tr><tr><td>SDG 12.2 - Achieve the sustainable management and efficient use of natural resources</td><td>The project’s circularity will be measured by the Material Circularity Indicator (MCI), according to the Ellen MacArthur Foundation's methodology.</td><td>Primary data collected from the project for the GHG reduction quantification, which are also used in the Circularity Assessment.</td></tr><tr><td>SDG 12.5 - Reduce waste generation through prevention, reduction, recycling and reuse</td><td>Projects may use waste from agro-industrial processes as feedstock inputs, <a data-footnote-ref href="#user-content-fn-3">preventing other possibly harmful waste disposal or inefficient recycling</a>.</td><td>Records of feedstock inputs showing the amount of waste used.</td></tr><tr><td>SDG 13. Take urgent action to combat climate change and its impacts.</td><td>Anaerobic digestion projects reduce emissions of methane, a GHG with an especially high climate change impact and global warming potential in the short-term. Climate change impacts over 100 years are used as the basis to calculate GHG reductions and issue carbon credits, but reducing climate change impacts in the short-term by reducing methane emissions is an additional climate co-benefit.</td><td>Percent GHG emission reduction compared to the baseline scenario using <a data-footnote-ref href="#user-content-fn-4">IPCC 2021 GWP20</a> values.</td></tr><tr><td>15.1 Ensure the conservation, restoration and sustainable use of terrestrial and inland freshwater ecosystems and their services</td><td>Energy cover crops can be grown and used for biogas production, and replace either bare soil or non-harvested cover crops. Compared to bare soil, energy cover crops can <a data-footnote-ref href="#user-content-fn-5">provide numerous ecosystem services</a> such as reduced nitrogen leaching, improved soil health, and soil carbon sequestration (which is not included in the GHG reduction quantification).</td><td>Records of feedstock inputs showing energy cover crops, plus justification that energy cover crops are managed in a sustainable way.</td></tr></tbody></table>

## Substitution <a href="#dggddzk3w6cy" id="dggddzk3w6cy"></a>

The biomethane generated and injected into the gas grid must be a valid substitute for natural gas, as modeled in the baseline scenario.

This is typically already required by energy companies that manage the gas network that the biomethane is injected into. Project Developers shall provide contracts with the relevant energy company, where clauses require the final product to meet specific characteristics making it substitutable for natural gas.

The co-product of anaerobic digestion, digestate, must be a valid substitute for mineral fertilizer, which digestate is assumed to replace in the baseline scenario. Numerous scientific studies have confirmed that digestate has a high fertilization value, sometimes [comparable with that of mineral fertilizer](#user-content-fn-6)[^6]. Fertilization value is largely dependent on nutrient concentration, which shall be measured via laboratory tests for a sample of digestate from each project.

The amount of mineral fertilizer avoided in the project scenario shall correspond to the nutrient content of the digestate (see the Project avoided mineral fertilizer section for more details). This ensures that digestate is modeled as a realistic substitute for mineral fertilizer based on project-specific data.

{% hint style="info" %}
For example, if the digestate produced by a project has low nutrient concentration and low fertilization value, it will only be credited for avoiding a small amount of mineral fertilizer.
{% endhint %}

## Environmental & social do no harm <a href="#n6ud2rhvauo0" id="n6ud2rhvauo0"></a>

Project Developers shall prove that the **project does not contribute to substantial environmental and social harms.**

Projects must follow all European, national, and local environmental regulations related to, for example, anaerobic digestion management, feedstock storage, feedstock sourcing, digestate storage, and digestate spreading.

To be eligible under this methodology, **projects shall use no more than 10% dedicated crops in their feedstock input mixture in the first year** of the crediting period. This decreases to 5% in the second year, and 3% in the remaining years. This shall be monitored each year during the crediting period.

It is environmentally preferable to use waste, manure, and slurry as feedstocks rather than intermediate energy crops, but this may not be preferable to farmers/biogas producers for financial or productivity reasons. Although this methodology does not impose a strict threshold on intermediate energy crops in the feedstock mix, the example below highlights how biogas producers are incentivized to use waste, manure, and slurry as feedstocks.

{% hint style="info" %}
Projects are incentivized to use manure and slurry as feedstocks because they are issued **credits for avoided emissions** thanks to improved storage conditions (see the Project Scenario Feedstock provisioning, transport and storage section and the Baseline Scenario Manure and slurry storage and spreading section). Different feedstocks lead to, on average:

* 0.065 tCO2eq avoided/tonne of cow manure
* 0.133 tCO2eq avoided/tonne of chicken manure
* 0.128 tCO2eq avoided/tonne of slurry

At the same time, use of intermediate energy crops leads to fewer issued credits because it causes the project to incur GHG emissions (see the Project Scenario Feedstock provisioning, transport and storage section). Across all intermediate energy crop categories considered in the GHG reduction quantification, the average emissions are

* 0.183 tCO2eq emitted/tonne of intermediate energy crop.

For example, if a project replaces 1,000 tonnes of intermediate energy crop by 1,000 tonnes of cow manure in their feedstock mix, this would result in 65 + 183 = 248 more Rainbow Carbon Credits issued.
{% endhint %}

### ESDNH risk evaluation

Project Developers shall fill in the [Biogas from anaerobic digestion risk evaluation](https://docs.rainbowstandard.io/methodologies/biogas-from-anaerobic-digestion/option-1-biogas-risk-evaluation-template-embed), to evaluate the identified environmental and social risks of projects,. The identified risks include:

* Use of dedicated crops, leading to competition for food and agricultural land;
* Reliance on energy crops rather than waste, manure, and/or slurry;
* Distant transport of feedstock inputs (>100 km) leading to increased greenhouse gas emissions from transport;
* Energy intensive processing;
* Methane leaks from digestion process and storage facilities;
* Leaching of runoff from manure, slurry or digestate storage, increasing eutrophication risks;
* Leaching of excess nutrients from digestate spreading, increasing eutrophication risks;
* Air quality, volatile odors from manure, slurry or digestate storage;
* Landscape conversion from rural to industrial;
* Workers health and safety.

{% hint style="info" %}
All risk assessments must also address the [Minimum environmental and social risks ](https://docs.rainbowstandard.io/rainbow-standard-documents/rainbow-standard-rules/principles-and-requirements#environmental-and-social-risk-assessment)defined in the Rainbow Standard Rules.
{% endhint %}

{% content-ref url="option-1-biogas-risk-evaluation-template-embed" %}
[option-1-biogas-risk-evaluation-template-embed](https://docs.rainbowstandard.io/methodologies/biogas-from-anaerobic-digestion/option-1-biogas-risk-evaluation-template-embed)
{% endcontent-ref %}

Project Developers shall assign a likelihood and severity score of each risk, and provide an explanation of their choices. The VVB and Rainbow’s Certification team shall evaluate the assessment and may recommend changes to the assigned scores.

Any identified material risk (defined as issues with a risk score of moderate or higher) shall be subject to a [Risk Mitigation Plan](https://docs.rainbowstandard.io/rainbow-standard-documents/rainbow-standard-rules/principles-and-requirements#environmental-and-social-risk-assessment), which outlines how Project Developers will mitigate, monitor, report, and if necessary, compensate for any environmental and/or social harms.

Additional proof may be required for certain high risk environmental and social problems.

The Project Developer, the Rainbow Certification Team, or the VVB may suggest additional risks to be considered for a specific project.

{% hint style="info" %}
Note that the **life-cycle GHG reduction calculations account for the climate change impacts of most environmental risks**. Nonetheless, Project Developers shall transparently describe any substantial and sensitive GHG emission risks in the risk evaluation template.
{% endhint %}

## Leakage <a href="#g1d4tt1wjh13" id="g1d4tt1wjh13"></a>

{% tabs %}
{% tab title="Activity shifting" %}
There is a risk of activity shifting leakage related to biomass feedstock, potentially causing indirect land-use change (ILUC). This occurs when deforestation or conversion of natural ecosystems happens elsewhere to compensate for agricultural land lost to feedstock cultivation.

Project Developers shall determine and transparently communicate in the PDD the leakage risk from their biomass feedstock (see example below).

The risk level is based on the [European Union’s RED II ](#user-content-fn-7)[^7]criteria for sustainable biomass and the definitions of low and high ILUC risk for biofuels, bioliquids, and biomass fuels.

Projects using less than 90% low ILUC risk feedstock inputs are ineligible for Rainbow Carbon Credits.

Low ILUC risk biomass is defined as biomass that does not cause significant expansion into land with high carbon stock. This includes but is not limited to:

* Wastes and residues
  * Manure, slurry
  * Straw
  * Agri-industry processing residues (e.g. sugar beet pulp)
* Cover crops, catch crops, intermediate crops, and intercrops
  * rye, maize, sunflower, alfalfa, and triticale silage, from crops grown outside the main growing period
* Bioenergy crops on marginal or degraded land
  * energy crops grown at any time of the year, if the Project Developer can prove that the land was unable to be cultivated in the past 5 years.

Feedstock inputs that are high ILUC risk include but are not limited to:

* Whole-crop maize cultivated during the main growing season
* Maize silage cultivated during the main growing season

{% hint style="info" %}
The following examples demonstrate how to interpret a project's leakage risk from activity shifting.

In the first example below, the project demonstrates that 100% of the feedstock mix is categorized as low ILUC risk, so the project is eligible for Rainbow Carbon Credits.

In the second example below, the project demonstrates that only 85% of the feedstock mix is categorized as low ILUC risk. This is below the 90% threshold stated above in, so the project is ineligible for Rainbow Carbon Credits.
{% endhint %}

Example 1

<table data-header-hidden><thead><tr><th width="205"></th><th width="104"></th><th width="144"></th><th></th><th></th></tr></thead><tbody><tr><td><strong>Feedstock input</strong></td><td><strong>Amount (tonnes)</strong></td><td><strong>Percent of feedstock mix</strong></td><td><strong>Growing season</strong></td><td><strong>Low ILUC risk?</strong></td></tr><tr><td>Cow manure</td><td>4,000</td><td>20%</td><td>NA</td><td>Yes</td></tr><tr><td>Sugar beet pulp</td><td>7,000</td><td>35%</td><td>NA</td><td>Yes</td></tr><tr><td>Sunflower silage energy crop</td><td>9,000</td><td>45%</td><td>Summer (intermediate crop)</td><td>Yes</td></tr></tbody></table>

Example 2

<table data-header-hidden><thead><tr><th width="205"></th><th width="104"></th><th width="142"></th><th></th><th></th></tr></thead><tbody><tr><td><strong>Feedstock input</strong></td><td><strong>Amount (tonnes)</strong></td><td><strong>Percent of feedstock mix</strong></td><td><strong>Growing season</strong></td><td><strong>Low ILUC risk?</strong></td></tr><tr><td>Whole-crop maize</td><td>3000</td><td>15%</td><td>Main crop</td><td>No</td></tr><tr><td>Silo juice</td><td>2000</td><td>10%</td><td>NA</td><td>Yes</td></tr><tr><td>Rye silage energy crop</td><td>8000</td><td>40%</td><td>Summer (intermediate crop)</td><td>Yes</td></tr><tr><td>Maize silage energy crop</td><td>7000</td><td>35%</td><td>Late summer/fall (intermediate crop)</td><td>Yes</td></tr></tbody></table>
{% endtab %}

{% tab title="Upstream and downstream emissions" %}
Leakage may occur when emissions are shifted upstream or downstream in the supply chain and outside the project’s direct scope. These emissions shall be included by default in the GHG reduction quantification, as part of the life-cycle approach. The upstream and downstream emissions included in the quantification are detailed in the Baseline scenario and Project scenario sections
{% endtab %}
{% endtabs %}

## Targets alignment <a href="#ekfzu5nkmddm" id="ekfzu5nkmddm"></a>

Biogas from anaerobic digestion projects must prove that they lead to at least a **45% reduction in GHG emissions** compared to the baseline scenario. This is aligned with the [European Union’s 2040 Climate targets](https://climate.ec.europa.eu/eu-action/climate-strategies-targets/2040-climate-target_en), as described in the [Rainbow Standard Rules](https://docs.rainbowstandard.io/rainbow-standard-documents/rainbow-standard-rules#id-359ombk3pgqj).

The scope of the reduction is the system boundary used in GHG quantification, described in the Baseline scenario and Project scenario sections below.

This shall be proven using the GHG reduction quantification method described below.

[^1]: * Waarts, Y., Jans, V., Dengerink, J., van Vliet, J., Arets, E., Sassen, M., Guijt, J., van Vugt, S., 2019. A living income for smallholder commodity farmers and protected forests and biodiversity: how can the private and public sectors contribute? Wageningen Economic Research.
    * Rossi, R., 2022. Small farms’ role in the EU food system (No. PE 733.630). European Parliamentary Research Service. ↑
    * Bordet-Gaudin, R., Logeais, C., Ulrich, A., 2021. Le niveau de vie des ménages agricoles est plus faible dans les territoires d’élevage - Insee Première - 1876 \[WWW Document]. Institut national de la statistique et des études économiques. URL[ https://www.insee.fr/fr/statistiques/5434584](https://www.insee.fr/fr/statistiques/5434584) (accessed 7.16.24).

[^2]: Eurostat 2023. Agri-environmental indicator - mineral fertilizer consumption. [URL](https://ec.europa.eu/eurostat/statistics-explained/index.php?title=Agri-environmental_indicator_-_mineral_fertiliser_consumption#Analysis_at_country_level). Accessed May 2024

[^3]: Buckwell, A. Nadeu, E. 2016. Nutrient Recovery and Reuse (NRR) in European agriculture. A review of the issues, opportunities, and actions. RISE Foundation, Brussels.

[^4]: Intergovernmental Panel on Climate Change 2021. Chapter 7: The Earth’s Energy Budget, Climate Feedbacks, and Climate Sensitivity. In Climate Change 2021: The Physical Science Basis. Contribution of Working Group I to the Sixth Assessment Report of the Intergovernmental Panel on Climate Change. Cambridge University Press, doi:10.1017/9781009157896.009.

[^5]: Launay, C., Houot, S., Frédéric, S. et al., 2022. Incorporating energy cover crops for biogas production into agricultural systems: benefits and environmental impacts. A review. Agron. Sustain. Dev. 42, 57. <https://doi.org/10.1007/s13593-022-00790-8>

[^6]: * Czekała, W., Jasiński, T., Grzelak, M., Witaszek, K., Dach, J., 2022. Biogas Plant Operation: Digestate as the Valuable Product. Energies 15, 8275. <https://doi.org/10.3390/en15218275>
    * Kovačić, Đ., Lončarić, Z., Jović, J., Samac, D., Popović, B., Tišma, M., 2022. Digestate Management and Processing Practices: A Review. Applied Sciences 12, 9216.[ https://doi.org/10.3390/app12189216](https://doi.org/10.3390/app12189216)

[^7]: * Directive (EU) 2018/2001 of the European Parliament and of the Council of 11 December 2018 on the promotion of the use of energy from renewable sources (recast) (Text with EEA relevance.), 2018., OJ L. [URL](https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A32018L2001).
    * Commission Delegated Regulation (EU) 2019/807 of 13 March 2019 supplementing Directive (EU) 2018/2001 of the European Parliament and of the Council as regards the determination of high indirect land-use change-risk feedstock for which a significant expansion of the production area into land with high carbon stock is observed and the certification of low indirect land-use change-risk biofuels, bioliquids and biomass fuels, 2019. , OJ L. [URL](https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=uriserv:OJ.L_.2019.133.01.0001.01.ENG).