Private investors eyed for $27.5 million global project on cold chain that boosts pharma, food safety, food security

April 24, 2021

A multilateral cold chain project is looking for private sector investors in a “low carbon” cold chain system that involves a Covid 19 vaccination storage facility and a “hub” of  facilities that will boost Philippines’ food-pharmaceutical safety and food security.

   A project totally costing $27.5 million, the “Global  Partnership for Improving the Food Cold Chain in the Philippines” (GPI-FCCP) is putting up cold chain facilities critical to the country’s food industry. 

   Cold chain has also now become critical to the health of the country’s population in the advent of Covid 19 pandemic .

   A project led by international funder Global Environment Facility (GEF),  the GPI-FCCP primarily involves  establishment of policies advocating use of low carbon and energy-efficient refrigeration facilities for the food system.   

   Stringent policies are important in providing a stable investment environment for investors in “green” cooling technologies.

   Cold chain covers every produce that needs cooling from the “field to the fork (transport, storage, transformation, packaging).

   Policies will involve national standards for flammable refrigerants and revision of energy efficiency standards.

   A total of 200 key stakeholders is targeted to be trained on energy-efficiency and climate-friendly cold chain technologies. 

   There is also a high level training for 50 local engineers, system suppliers and end-users on the use of global innovative cold chain technology.

   Major implementors of the GPI-FCCP are the Department of Environment and Natural Resources (DENR) and UNIDO (United Nations Industrial Development Organization) .

   A co-financier is Germany’s international cooperation agency GIZ (Gesselschaft fur Internationanale Zusammenarbeit).    

   GIZ now looks for private sector companies as part of distributing Covid 19 vaccines in the Philippines.

   “Vaccine cold chains have become a  new and urgent priority in the Philippines. The project also provides an opportunity to help develop integrated cold-chain strategies that build on the existing food cold chain system – ensuring better health and a reliable food supply in the Philippines,” reported the DENR.

Cold chain “hub”

   The global cold chain project is also putting up the Cold Chain Innovation Hub (CCIH).  It will be the project’s “central ecosystem of technical resources, training, knowledge sharing and stakeholder collaboration. “

   The CCIH will guarantee that ”knowledge within the field of energy efficiency, low-Global Warming Potential (GWP) refrigeration technologies, and monitoring of the cold chain will be kept in the Philippines,” according to the GEF.  That is even after project closure in 2022.

The Cold Chain; Source- DGrid Energy

Montreal Protocol

    The cold chain project came about as part of the Philippines’ commitment to the 1987 Montreal Protocol.  It is a global agreement to protect the stratospheric ozone layer by phasing out the production and consumption of ozone-depleting substances (ODS).

   The ozone is the earth’s protective layer, absorbing UV light which reduces human’s exposure to harmful (skin cancer and cataract-causing) ultraviolet radiation.

   ODS includes chlorofluorocarbons, halons, carbontetrachloride, methy chloroform, hydrobromofluorocarbons, hydrochlorofluorocarbons (HCFCs), methyl bromide, and bromochloromethane.

   Refrigeration technologies have come out as top concern to have energy efficiency and low Global Warming Potential (GWP).  It is because refrigerants extensively use  hydrochlorofluorocarbons  (HCFC) that have been found to be ozone-depleting.

   The Montreal Protocol compelled signatory countries to freeze consumption and production of the ODS hydrochloroflouocarbons (HCFCs).  Developing countries should have cut by 100% their HCFC production by  2030.

   Very potent greenhouse gases, HCFCs are used as “refrigerants,   solvents, blowing agents for plastic foam manufacture, and fire extinguishers.”

   Private sector engagement will be crucial in the Philippines’ effort in obtaining knowledge transfer of the most innovative, climate friendly, and energy efficient refrigeration technologies.

How ozone depleting substances affect the atmosphere; Source- DW

Financiers

   Financiers of the GPI-FCCP  include Asian Development Bank, $10 million loan; DENR, $190,000; UNIDO, $199,500; Land Bank, $7 million; Development Bank of the Philippines, $5 million; Shecco, $3 million in supplies; and GIZ, $100,000.

   The vaccine initiative will be financed by the German Federal Ministry for Economic Cooperation and Development (BMZ).  BMZ supports private sector initiatives that “mitigate the economic as well as the health-related impact of the corona pandemic” of countries like the Philippines

   BMZ disclosed that projects related to the Covid 19 vaccine cold chain requirements will receive up to €2,000,000 (US$2,430,710) of funding.  This has a government cost counterpart of 50%.

Emission reduction targets

   The GPI-FCCP targets to cut emission of carbon dioxide (CO2) by up to 5,722 metric tons (MT) directly. It also aims to cut CO2 emission indirectly by up to 479,815 MT.

   The project will also have a forecast of Philippines’ growth in energy demand  and its climate impact.

    Emission of carbon due to refrigerants is estimated to contribute to 20% of total carbon emission. Moreover, energy consumption accounts for the highest 80% in carbon emissions.

   “Worldwide it is estimated that 40% of all foods require refrigeration, and 15% of  electricity consumed is used for refrigeration . With the rising concern over climate change, global warming as well as the insecurity in development and fluctuations in energy costs , there is increasing pressure to make significant reductions in carbon emissions and energy use,” GEF said.

Food exports

   Adequate cold chain facilities are critical to the Philippines with its growing population.  Its current capacity of 300,000 MT  in cold chain threatens the quality of food it feeds to its people. With inadequacy, Philippines will also have difficulty sustaining its export/import potential.

   The GEF report indicated the cold chain project will support the country’s increasing agricultural exports  that reached $1.03 billion as of 2016.

   The country’s cold storage sector was earlier projected to have reached a market value of $1.4 billion by 2020.

   “The sector is highly fragmented, with more than 100 players active in the market.  What’s currently lacking is end-to-end, integrated cold chain management to consistently allow all players on the network to connect,” according to the GEF report.

   Poor practices in cold chain operations in countries like the Philippines has led to the “waste of electricity to feed the cold chain, release of powerful greenhouse gases, and post harvest losses.”

   It is estimated that post harvest losses account for 30% of total production.  The absence of a good cold chain is a major reason for this, among others.

   “Lack of proper maintenance and knowledge very often translates into an inadequate management of the life cycle of refrigerant gases. More refrigerant leakage means less efficient equipment and higher emission of high GWP (global warming potential) gases into the atmosphere,” according to a Global Environment Facility (GEF) report.

Network of experts

   The CCIH is so far eyed to be run by any of the following training institutions—De La Salle University Laguna, TESDA Green Technology Center or the University of the pHIlippines Los Banos Post Harvest Horticulture Training and Research Center.

   The CCIH will maintain the network of experts in the project.  It will run cold chain technology exhibition and training center.   (Melody Mendoza Aguiba)

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