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CDM Updates

CDM Updates. Sudhir Sharma AIT Bangkok. Developments 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

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CDM Updates

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  1. CDM Updates Sudhir Sharma AIT Bangkok

  2. Developments 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

  3. Developments 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

  4. Profile 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

  5. Approved 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

  6. Approved 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

  7. Approved 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

  8. Approved 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.

  9. Proposed 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

  10. Approved 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

  11. Sectoral Scope • Energy industries (renewable - / non-renewable sources) • Energy distribution • Energy demand • Manufacturing industries • Chemical industries • Construction • Transport • Mining/mineral production • Metal production • Fugitive emissions from fuels (solid, oil and gas) • Fugitive emissions from production and consumption of halocarbons and sulphur hexafluoride • Solvent use • Waste handling and disposal • Afforestation and reforestation15Agriculture

  12. New 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.

  13. 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.

  14. 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

  15. Emissions Transactions Volumes (million tCO2e) Source: PCF

  16. Emissions Transactions – who is buying? Source: PCF

  17. CDM Market Update Only Kyoto Projects / Source: CDMwatch

  18. CDM 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

  19. CDM Market Source: CDMwatch Source: CDMwatch

  20. Emissions Market - Prices Project based non-retail market prices (USD/tCO2e) Source: PCF

  21. Total Volume of Trade Source: PCF Million US Dollar

  22. Institutional 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

  23. sudhir@ait.ac.th Thank You

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