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National Workshop on CD4CDM in VietnamAugust 26 , 2004, Ho-Chi Minh City, Vietnam
AIT
CDM Updates
Sudhir Sharma
AIT Bangkok
2National Workshop on CD4CDM in VietnamAugust 26 , 2004, Ho-Chi Minh City, Vietnam
AITDevelopments in CDM – A&R projects (1)
• Afforestation and Forestation Projects– Approved the modalities & procedures for
Afforestation & Reforestation CDM projects– Proposals submitted for small scale project
baselines• To be finalized at COP 10• Important issue of Leakage – whether to ignore
leakage or prepare a discount mechanism for automatic deduction of emissions reduction based on categorization of projects.
• Bundling – unresolved• Definition of low income communities – whether DOE
should check this or not?• Fee - Exempt the projects from adaptation fee or a
lower fee• Carbon pools to be included – discretion of project
participants or proof that unaccounted pools are not important
3National Workshop on CD4CDM in VietnamAugust 26 , 2004, Ho-Chi Minh City, Vietnam
AITDevelopments in CDM –A&R
projects (2)• Accounting of Non-CO2 gases – only if more than
15% of total sequestration?• Right to land – customary or access rights also
should be acceptable?
– PDD for SS projects available in FCCC/SBSTA/2004/L.9
• The SS project should belong to following category – Grassland to forested land– Cropland to forested land– Wetland to forested land– Settlements to forested land
4National Workshop on CD4CDM in VietnamAugust 26 , 2004, Ho-Chi Minh City, Vietnam
AITProfile of Projects submitted to EB
• 64 Methodologies• 21 Renewable
– 7 Hydro– 3 Wind– 9 Biomass &
Bagasse– 2 Geothermal
• 11 Methane recovery• 9 EE• 3 process change• 5 waste heat
recovery• 2 Non CO2 recovery• 4 Fuel switch• 1 each Transport,
CO2 capture, Flare gas capture
Project distribution by Emission reduction per annum
4.483.75
13.04
47.13
5.31
17.72
2.011.92
3.351.28
Co2 Capture
Energy Efficiency
Fuel Sw itch
Gas Capture - Oil
Methane
Non-CO2 gas destruction
Process Improvement
Renew able
Transport
Waste heat recovery
5National Workshop on CD4CDM in VietnamAugust 26 , 2004, Ho-Chi Minh City, Vietnam
AITApproved Methodologies (1)
– AM0001: Incineration of HFC 23 Waste Streams• Applicable to HCFC producing facility where HFC 23 as waste
stream with no economic value– AM0002:Greenhouse gas emission reductions through landfill
gas capture and flaring where the baseline is established by a public concession contract
• Applicable to landfill gas capture project award under competitive bidding
• Gas capture is greater than that provided under the contract• Electricity generation is not planned
– AM0003: Simplified financial analysis for landfill gas capture projects
• Applicable to Landfill gas capture projects where the only baseline possible continuation of present practice
• Either gas is flared or if electricity produced, no reductions claimed
6National Workshop on CD4CDM in VietnamAugust 26 , 2004, Ho-Chi Minh City, Vietnam
AITApproved Methodologies (2)– AM0004: Grid-connected biomass power generation
that avoids uncontrolled burning of biomass• Use biomass, abundantly available, that would be
dumped or burned in an uncontrolled manner• Not be connected to a grid with suppressed demand
– AM0005: Small grid-connected zero-emissions renewable electricity generation
• Small projects (<60 MW) supplying to grid not dominated by zero emission sources
• Projects not common practice and have barriers– AM0006: GHG emission reductions from manure
management systems• Manure produced from cattle, buffalo and/or swine
managed in confined systems• The baseline and project manure management as
per regulations
7National Workshop on CD4CDM in VietnamAugust 26 , 2004, Ho-Chi Minh City, Vietnam
AITApproved Methodologies (3)
– AM0007: Analysis of the least-cost fuel option for seasonally-operating biomass cogeneration plant
• Use of biomass in existing cogeneration unit where biomass is not available during off-season (e.g., sugar production)
• Biomass used is not used for energy purpose in the baseline
– AM0008: Industrial fuel switching from coal and petroleum fuels to natural gas without extension of capacity and lifetime of the facility
• Switch to gas from coal/petroleum where gas is costly to use than coal/petroleum, which are not banned by regulation
• No change in life of project or major process change– AM0009: Recovery and utilization of gas from oil wells that
would otherwise be flared• Capture of flared gas (baseline) to produce fuel use that
substitutes similar fuel types with higher carbon content• Substitution of fuel is unlikely to increase energy
consumption
8National Workshop on CD4CDM in VietnamAugust 26 , 2004, Ho-Chi Minh City, Vietnam
AITApproved Methodologies (4)
– AM0010: Landfill gas capture and electricity generation projects where landfill gas capture is not mandated by law
• Landfill gas capture and production of electricity where LFG is not mandated but regulation on waste disposal
• Electricity generation capacity not greater than 15 MW– AM0011: Landfill gas recovery with electricity generation
and no capture or destruction of methane in the baseline scenario
• Baseline – flaring of gas as no government regulation• Electricity generated used on site and no credits
generated from it– AM0012: Biomethanation of municipal solid waste in India,
using compliance with MSW rules• Applicable only for projects in India• Project uses MSW to produce CH4 and baseline Landfill
management regulation is not enforced.
9National Workshop on CD4CDM in VietnamAugust 26 , 2004, Ho-Chi Minh City, Vietnam
AITProposed Consolidated Methodologies
• Consolidated baseline methodology for grid-connected electricity generation from renewable sources”
• Consolidated baseline methodology for landfill gas project activities
• Consolidated process for assessment of Additionality
10National Workshop on CD4CDM in VietnamAugust 26 , 2004, Ho-Chi Minh City, Vietnam
AITApproved DOEs - Validation
• Japan Quality Assurance Organization (JQA)– Sectoral scope - 4, 5, 6, 7, 10, 11, 12
• Det Norske Veritas Certification Ltd. (DNVcert)– Sectoral Scope 1, 2, 3, 4, 5, 6, 7, 10, 11, 12, 13
• TUV Industrie Service GmbH TUV SUD GRUPPE (TUV Industrie Service GmbH TUV)– Sectoral Scope 1, 2, 3
• Societe Generale de Surveillance UK Ltd. (SGS)– Sectoral Scope 4, 5, 6, 7, 10, 11, 12
• http://cdm.unfccc.int/DOE/list• 18 more DOE’s which presently have an
applicant status
11National Workshop on CD4CDM in VietnamAugust 26 , 2004, Ho-Chi Minh City, Vietnam
AITSectoral Scope
1. Energy industries (renewable - / non-renewable sources)
2. Energy distribution3. Energy demand4. Manufacturing industries5. Chemical industries6. Construction7. Transport8. Mining/mineral production9. Metal production10.Fugitive emissions from fuels (solid, oil and gas)11.Fugitive emissions from production and consumption
of halocarbons and sulphur hexafluoride12.Solvent use13.Waste handling and disposal14.Afforestation and reforestation15Agriculture
12National Workshop on CD4CDM in VietnamAugust 26 , 2004, Ho-Chi Minh City, Vietnam
AITNew category in Small Scale Projects• New Category - III. E Avoidance of methane
production from biomass decay through controlled combustion– measures that avoid the production of methane
from biomass or other organic matter that would have otherwise been left to decay as a result of anthropogenic activity.
– Due to the project activity, decay is prevented through controlled combustion and less methane is produced and emitted to the atmosphere.
– The project activity does not recover or combust methane (unlike III D).
– Measures shall both reduce anthropogenic emissions by sources, and directly emit less than 15 kilotonnes of carbon dioxide equivalent annually.
13National Workshop on CD4CDM in VietnamAugust 26 , 2004, Ho-Chi Minh City, Vietnam
AIT PDD Update• New Methodology document amended – proponents
have to explain now– Applicability conditions of New Methodology– How does methodology address additionality?– How is national policy and circumstances taken
into account by methodology?– Greater Information on data and assumptions to
be provided
– Both annexes will be submitted separately under a new format to be provided by EB when proposing new methodologies.
14National Workshop on CD4CDM in VietnamAugust 26 , 2004, Ho-Chi Minh City, Vietnam
AIT Emissions Reduction Market - Transactions
Source: PCF
A 10 MW Wind project supplying 25000 MWh electricity to grid with emission intensity of 1 tCO2/MWh will reduce 25,000 tCO2e
15National Workshop on CD4CDM in VietnamAugust 26 , 2004, Ho-Chi Minh City, Vietnam
AITEmissions Transactions
Volu
mes
(mill
ion
tCO
2e)
Source: PCF
16National Workshop on CD4CDM in VietnamAugust 26 , 2004, Ho-Chi Minh City, Vietnam
AITEmissions Transactions – who is buying?
Source: PCF
17National Workshop on CD4CDM in VietnamAugust 26 , 2004, Ho-Chi Minh City, Vietnam
AITCDM Market Update
Only Kyoto Projects / Source: CDMwatch
18National Workshop on CD4CDM in VietnamAugust 26 , 2004, Ho-Chi Minh City, Vietnam
AITCDM market
• Annex I involvement in the CDM market is limited, but growing: – PCF: 21 projects - 32 million CERs24– The Netherlands: 19 projects - 20 million CERs– Japanese companies: 14 projects - 25.5 million CERs– Sweden: 3 projects - 1.5 million CERs– Canadian companies: 2 projects - 1 million CERs– Finland: 2 SS projects - 139,000 CERs– UK companies: 2 projects - 3.5 million CERs– A German company: 1 project - 1.8 million CERs– Denmark: 1 project - 500,000 CERs An Italian
company: 1 project - 200,000 CERs
19National Workshop on CD4CDM in VietnamAugust 26 , 2004, Ho-Chi Minh City, Vietnam
AITCDM Market
Source: CDMwatchSource: CDMwatch
20National Workshop on CD4CDM in VietnamAugust 26 , 2004, Ho-Chi Minh City, Vietnam
AITEmissions Market - PricesProject based non-retail market prices (USD/tCO2e)
Source: PCF
21National Workshop on CD4CDM in VietnamAugust 26 , 2004, Ho-Chi Minh City, Vietnam
AITTotal Volume of Trade
Million US DollarSource: PCF
22National Workshop on CD4CDM in VietnamAugust 26 , 2004, Ho-Chi Minh City, Vietnam
AITInstitutional Buyers
• Prototype Carbon Fund, the World Bank (www.prototypecarbonfund.org)
• The Netherlands CDM Facility• IFC-Netherlands Carbon Facility• Italian Carbon Fund• Austrian Carbon Facility• Finnish Carbon Facility• Sweden Carbon Facility
23National Workshop on CD4CDM in VietnamAugust 26 , 2004, Ho-Chi Minh City, Vietnam
AIT