GreenTech MALAYSIA1

CLEAN DEVELOPMENT CLEAN DEVELOPMENT MECHANISM (CDM) IN MECHANISM (CDM) IN

MALAYSIAMALAYSIA:PROCESS AND :PROCESS AND PROCEDUREPROCEDURE

CDM AWARENESS WORKSHOP 2010CDM AWARENESS WORKSHOP 2010

5 OCTOBER 2010 5 OCTOBER 2010

bybyCDM ENERGY SECRETARIATCDM ENERGY SECRETARIAT

GreenTech MALAYSIA

2

Presentation OutlinePresentation Outline

• Introduction• CDM Institutional Framework• CDM Development in Malaysia

GreenTech MALAYSIA

3

Involvement in Climate Change ProcessInvolvement in Climate Change Process

• United Nations Framework Convention on Climate Change– Signed on 9 June 1993– Ratified on 13 July 1994

• Kyoto Protocol– Signed on 12 March 1999– Ratified on 4 September 2002– Entered into force on 16 February 2005

GreenTech MALAYSIA

4

CDM in MalaysiaCDM in Malaysia

• Institutional Framework and Approval Procedure are in placed

• National CDM Criteria endorsed

GreenTech MALAYSIA

5

CDM Institutional ArrangementCDM Institutional Arrangement

• National Steering Committee on Climate Change (NSCCC) – established in 1994

• National Committee on CDM (NCCDM) established on 31 May 2002

• Designated National Authority (DNA) appointed in May 2003– Ministry of Natural Resources and Environment (NRE)

• Established 3 Technical Committees:– Technical Committee on Energy

(Chaired by Ministry of Energy, Green Technology and Water)– Technical Committee on Forestry (Chaired by Ministry of Natural Resources and Environment)– Technical Committee on Agriculture (Chaired by Ministry of Agriculture)

GreenTech MALAYSIA

6

CDM Institutional FrameworkCDM Institutional Framework

DNA: Designated National Authority

CEMD: Conservation and Environmental Management Division

MEGTW: Ministry of Energy, Green Technology and Water

NRE: Ministry of Natural Resources and Environment

MOA: Ministry of Agriculture

TC: Technical Committee

FRIM: Forest Research Institute Malaysia

MARDI: Malaysian Agricultural Research and Development Institute

RESPECTIVE SECRETARIATENERGY – GREENTECH MALAYSIA

FORESTRY – FRIMAGRICULTURE - MARDI

TCFORESTR

Y(NRE)

TCENERGY(MEGTW)

NATIONAL COMMITTEE ON CDM Chaired by Deputy Secretary General (I), NRE - DNA Members from Government sector and NGOs Secretariat: CEMD

NATIONAL STEERING COMMITTEE ON CLIMATE CHANGE

Set up in 1994 by Cabinet Chaired by Secretary General, NRE Members from Government, private sector and NGOs Secretariat: CEMD

TCAGRICULTUR

E(MOA)

GreenTech MALAYSIA

7

CDM Project CycleCDM Project Cycle

Project Idea Note(PIN)

1

Initial project Idea

Conditional Letter of Approval

2

Carbon Contracting6

Project Design

Document (PDD)

3

Project Validation

4

Host Country Letter of Approval

5

Project Registration

7

Project Monitoring

8

Verification&

Certification9

Issuance of CERs10

Revenuefrom CERs

PROJECT DESIGN PHASE PROJECT REGISTRATION

PHASE

PROJECT IMPLEMENTATIONPHASE

Request for Registration-Small scale

4 weeks-Large scale

8 weeks

GreenTech MALAYSIA

8

22

APPROVAL PROCESS – OPTION 1

Project Proponent

Project Idea Note

FulfillNationalCriteria

Project Design Document

Registration

No

No

Operational Entity (OE)

National Committee on CDM

(NCCDM)

Host Country’s Letter of Approval

CDM Executive Board

Designated National Authority (DNA)

FulfillInternational

CriteriaYes – On condition of OE validation of PDD

Project Proponent

Project Idea Note

Project Proponent

Project Idea Note

Project Proponent

Project Idea Note

Project Proponent

FulfillNationalCriteria

Project Idea Note

Project Proponent

FulfillNationalCriteria

Project Idea Note

Project Proponent

Project Design Document

FulfillNationalCriteria

Project Idea Note

Project Proponent

Project Design Document

FulfillNationalCriteria

Project Idea Note

Project Proponent

FulfillInternational

Criteria

Project Design Document

FulfillNationalCriteria

Project Idea Note

Project Proponent

FulfillInternational

Criteria

Project Design Document

FulfillNationalCriteria

Project Idea Note

Project Proponent

Host Country’s Letter of Approval

FulfillInternational

Criteria

Project Design Document

FulfillNationalCriteria

Project Idea Note

Project Proponent

Host Country’s Letter of Approval

FulfillInternational

Criteria

Project Design Document

FulfillNationalCriteria

Project Idea Note

Project Proponent

Registration

Host Country’s Letter of Approval

FulfillInternational

Criteria

Project Design Document

FulfillNationalCriteria

Project Idea Note

Project Proponent

Registration

Host Country’s Letter of Approval

FulfillInternational

Criteria

Project Design Document

FulfillNationalCriteria

Project Idea Note

Project Proponent

Registration

Host Country’s Letter of Approval

FulfillInternational

Criteria

Project Design Document

FulfillNationalCriteria

Project Idea Note

Project Proponent

GreenTech MALAYSIA

9

12

APPROVAL PROCESS – OPTION 2

Project Proponent

Project Design Document

Registration

No

Operational Entity (OE)

National Committee on CDM

(NCCDM)

Host Country’s Letter of Approval

CDM Executive Board

Designated National Authority (DNA)

FulfillNational & International

CriteriaYes – On condition of OE validation of PDD

GreenTech MALAYSIA

10

Project Idea Note

GreenTech MALAYSIA

11

Additional Information Sheet

GreenTech MALAYSIA

12

Checklist for submission of PIN

GreenTech MALAYSIA

13

Checklist for submission of AIS

GreenTech MALAYSIA

14

Malaysia CDM Administration Fee

Type of Document Administration Fee (RM)

PIN 1,000

PDD 2,500 (Small Scale Project)5,000 (Large Scale Project)

GreenTech MALAYSIA

15

National CDM CriteriaNational CDM Criteria

1. Project must support the sustainable development policies of Malaysia and bring direct benefits towards achieving sustainable development;

2. Project must involve participation of Annex 1 Party/Parties as CER buyer. In addition, they are encouraged to participate as equity or technology providers;

3. Project must provide technology transfer benefits and/or improvement of technology; including enhancement of local technology;

4. Project must fulfill all conditions underlined by the CDM Executive Board; and

5. Project proponent should justify the ability to implement the proposed CDM project activity

* Where flaring is used in methane abatement project, the project developer is required to utilize at least 10 percent of biogas for energy utilization

GreenTech MALAYSIA

16

Further Requirements

CRITERIA 1 Show the Letter of EIA exemption from State Department of Environment

CRITERIA 2 Show the Letter of Intent which signed by both parties (Buyer and Project Developer)

CRITERIA 3 Validation Report

CRITERIA 5 MAA, FORM 9, 24, 49 and MAA

Extra Documentation SREP approval letter

GreenTech MALAYSIA

17

CDM Baseline 2008

Peninsular Malaysia

0.672 tCO2/MWh

Sabah 0.651 tCO2/MWh

Sarawak 0.825 tCO2/MWh

GreenTech MALAYSIA

18

CDM Application (Energy Project)CDM Application (Energy Project)As of September 2010As of September 2010

Year No. of Projects

Estimated ER (tCO2e)

2002 3 124,987

2003 2 62,190

2004 9 918,275

2005 25 2,823,171

2006 21 2,621,098

2007 45 4,404,759

2008 50 4,342,384

20092010

2413

1,632,589286,809

TOTAL (PINs and PDDs) 192 17,216,262 18

GreenTech MALAYSIA

19

CDM Application (Project Type)CDM Application (Project Type)

Project Application by Project Type

Biogas - Palm Oil Mill Eff luent (POME), 3,803,599

Spent Bleaching Earth (SBE), 29,722

Biomass - Kenaf Waste, 30,833

Biomass - Wood Waste, 311,444

Biomass - Palm Kernel Shell (PKS), 135,358

Biomass - Empty Fruit Bunch (EFB), 4,261,709

Manufacturing Industries, 552,545Oil and Gas, 104,800

Chemical Industry, 160,000

Biodiesel - Transportation, 2,042,000

Mini Hydro, 185,852

Hydro, 2,041,948

Agriculture, 370,000

Animal Waste, 158,639

Municipal Waste, 596,254Landfill, 1,561,264Fuel Sw itch, 62,011 Energy Eff iciency (EE), 1,058,839

Biomass - Empty Fruit Bunch (EFB) Biomass - Palm Kernel Shell (PKS) Biomass - Wood Waste Biomass - Kenaf Waste

Spent Bleaching Earth (SBE) Biogas - Palm Oil Mill Effluent (POME) Energy Efficiency (EE) Fuel Switch

Landfill Municipal Waste Animal Waste Agriculture

Hydro Mini Hydro Biodiesel - Transportation Chemical Industry

Oil and Gas Manufacturing Industries

GreenTech MALAYSIA

20

Trend and Analysis of CDM Trend and Analysis of CDM ProjectsProjects

1. Malaysia CDM project associated with RE (70%), EE (7%), Landfill (8%) and others (15%)

2. More on small scale of the CDM projects3. More projects on Methane Avoidance, Methane

Recovery, Off-grid electricity generation, Landfill and little on Energy Efficiency

4. CERs value and prices varies depends on project agreement

20

GreenTech MALAYSIA

21

CDM Application (Energy Project)CDM Application (Energy Project)

57 energy projects with estimated potential emission reduction amounting 4.2 mtCO2e has been successfully registered with CDM EB

Potential of energy generated (89.5 MWe and 300.2 MWth)

5 CDM projects were issued CER, amounting to 708,028 tCO2-eq @ USD7.1 mill (RM 24.1 mill)

GreenTech MALAYSIA

22

CERS IssuedCERS Issued

Project Name CERs Issued (tCO2eq)

Biomass Energy Plant-Lumut 76,716

Replacement of Fossil Fuel by Palm Kernel Shell Biomass in the Production of Portland Cement

366,260

SEO Biomass Steam and Power Plant in Malaysia

130,079

LDEO Biomass Steam and Power Plant in Malaysia

97,059

Sahabat Empty Fruit Bunch Biomass Project

37,914

TOTAL 708,028

22

GreenTech MALAYSIA

23

Bukit Tagar Sanitary Landfill

Heat Recovery Boiler & EnviroCycler in MASB Power Plant

Front view of MASB Power Plant

23

GreenTech MALAYSIA

24

Kina & Seguntor plants

BoilerFront view of the plant

Fuel treatment

GreenTech MALAYSIA

25

Monitoring Of CDM Projects

Issues raised• DOE validation process took longer time• Project monitoring is lengthy

– Calibration of equipment (for some of the equipment no “local calibrator”)

• Registration with CDM EB– Longer process (request for review and so

forth)• Methodology keep on changing every now and

then• More and more requirement or new guideline

from CDM EB• SREP: Agreement on the REPPA • No issues on local CDM process

GreenTech MALAYSIA

26

Potential CDM ProjectsPotential CDM Projects

1. Palm Oil Industry with the highest renewable energy source and potential

- Energy generation from biomass and biogas- More than 400 palm oil mills operating all over

the country which produces 30 million m3 of POME every year

- 85% of the mills use solely open ponds using anaerobic digestion

26

GreenTech MALAYSIA

27

2. Wastewater sector

- Domestic wastewater accounted for a small portion of methane inventory of the waste sector

- Centralized sewerage treatment plants will increase the amount of methane for CDM viability

- At the moment, no application on CDM project related to domestic wastewater

Potential CDM ProjectsPotential CDM Projects

27

GreenTech MALAYSIA

28

3. New focus area/sector for local CDM projects

- Energy intensive sector e.g. iron and steel, cement etc. – utilisation of renewable energy and energy recovery

- High GHG emission contributor e.g. transport sector – NGV vehicles

- Energy efficient in electricity generation e.g. fuel cells power plant and conversion of open cycle gas turbine to combined cycle gas turbine

- Conversion of solid waste to biofuels

Potential CDM ProjectsPotential CDM Projects

28

GreenTech MALAYSIA

29

Conclusion

• Current CDM potential in Malaysia associated with energy – biomass, biogas, hydro and waste management – landfill gas, MSW, Composting

• Future potential – transport sector, biofuel, oil and gas, various industrial sectors and agriculture sector

• CDM : tool to turn economically unattractive projects into attractive investments

• Total of 18 million tonnes CERs/yr estimated in 2010

• Opportunities to develop new markets for innovative, environmental friendly technologies

GreenTech MALAYSIA

30

Contact for Further Information (DNA)

Designated National AuthorityEnvironmental Management & Climate Change Division Ministry of Natural Resources and EnvironmentLevel 6, Tower Block 4G3, Precinct 4Federal Government Administrative Centre62574 PUTRAJAYA

Contact Person: Dr. Lian Kok Fei Tel. No.: 603-8886 1126E-mail: drlian@nre.gov.my

Contact Person: Mr. Sharil Faizal Abdul JaniTel. No.: 603-88861137E-mail: faizal@nre.gov.my

Fax No.: 603-8888 4473Website: www.nre.gov.my

GreenTech MALAYSIA

31

Contact for Further InformationCDM Energy SecretariatMalaysian Green Technology Corporation No. 2, Jalan 9/10, Persiaran Usahawan, Seksyen 943650 Bandar Baru BangiSelangor Darul EhsanMalaysia

Contact person: Cik Sazalina Zakaria Tel. No.: 603-8921 0852E-mail: sazalina@greentechmalaysia.my

Fax No. :603-8921 0801Website: www.greentechmalaysia.my

GreenTech MALAYSIA

32

Contact for Further Information

GreenTech MALAYSIA

33

Thank You

Malaysian Green Technology Corporation

No. 2, Jalan 9/10, Persiaran Usahawan, Seksyen 9

43650 Bandar Baru Bangi, Selangor Darul Ehsan

Website: www.greentechmalaysia.my E-mail: info@greentechmalaysia.my