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- Landfill Gas Utilization and the Clean Development Workshop - 6 September 2005

Japan ’ s Financial Schemes for Promoting CDM Projects. - Landfill Gas Utilization and the Clean Development Workshop - 6 September 2005 Bali Hilton International Nusa Dua, Bali Presented by Ms. Yamada Fumiko Expert Staff

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- Landfill Gas Utilization and the Clean Development Workshop - 6 September 2005

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  1. Japan’s Financial Schemesfor Promoting CDM Projects - Landfill Gas Utilization and the Clean Development Workshop- 6 September 2005 Bali Hilton International Nusa Dua, Bali Presented by Ms. Yamada Fumiko Expert Staff New Energy and Industrial Technology Development Organization (NEDO) Jakarta Office

  2. Contents 1. Japan Kyoto Mechanisms Acceleration Programme (JKAP): A Facilitator for CDM Project Development 2. Feasibility Studies 3. Upfront Payment * Cont. by Mr. Matsushita’s presentation

  3. Japan Kyoto Mechanisms Acceleration Programme (JKAP) Objective: Facilitating cooperative CDM/JI projects between Japan and host countries. MOFA, METI, MOE JETRO Business Matching Support GEC/NEDO CDM/JI Project F/S JBIC SAPROF PDD Assistance, etc. JCF Development of CDM/JI Procurement of Credits MOE/NEDO Uprfront Payment Programme for CDM/JI Projects NEXI Export Insurance JBIC Financing

  4. Feasibility StudiesProject Development Assistance Organization: NEDO & GEC Requirement: Any International consortium must include a Japanese partner to be eligible Financial assistance for a Feasibility Study (F/S) covers: PDD development and Study Implementation Cost up to JPY25M Budget： JFY 2004: 1.7 Billion yen (US$16M) JFY 2005: 1.8 Billion yen (US$17M) JAPAN Financial assistance for F/S costs Project Developers Incl. Japanese partner Potential Project In host country

  5. Upfront Payment Financial assistance for project development with up-front payment covers either one of the following: Requirements: Program Administrators: METI, NEDO, MOE • A portion of credits generated from emission reduction project that is proportional to the amount of the financial assistance should be transferred to Japan. • Any international consortium must include a Japanese partner to be eligible. Type A: Preliminary costs (PDD development, validation and registration costs, etc.) Type B: Project expenses (equipment costs, etc.) Type C: Post project review costs (monitoring, verification and certification costs, etc.) JAPANESE GOV. Budget for FY 2005: 5.7-8.0 Billion yen (US$54-76M) CER Up to 50 % up-front payment of total project cost CDM EB Credit price: Certification Report Fair price to be determined on a project-by-project basis according to project risk, delivery risk, market price trends, etc. CER Project Developer Incl. Japanese partner CDM/JI project in host country

  6. Feasibility Studies & Upfront Payment (Supplementary Explanation) • Project Type: Energy Efficiency, Renewable Energy, GHG Reduction, incl. Methane Capture and Utilization, HFC decomposition, N2O reduction, etc. (Sink projects are excluded.) • Acceptance of Applications in 2005: Feasibility Studies: (1) May (Closed) (2) September Upfront Payment: (1) April-May (Closed) (2) July-August (3) November (4) TBA (Additional program details are available upon request.)

  7. Upfront Payment- Scenario I: Energy Efficiency Project ・ Equipment and construction costs＝ US$30M 　　　　→Maximum amount of upfront payment: US$30M×50% ＝ US$15M 　　　・ERs = 0.4 Mt-CO2/Year 　・Starting year of the crediting period: 2007 　　　・Estimate of credits for the 1st commitment period: 0.4 Mt-CO2×6 years＝2.4 Mt-CO2 If an applicant requests the maximum upfront payment (50%): ① If credit price ＝US$4／t-CO2 → Available “Upfront payment” = US$4×2.4 Mt-CO2 = US$9.6M (32%) ② If credit price ＝US$７／t-CO2 → Available “Upfront payment” = US$7×2.14 Mt-CO2 ＝US$15M (50%)

  8. Upfront Payment- Energy Efficiency Project (cont.) Order Equipment Manufacturing and installation completed SCENARIO 1-②: 200520062007 2008～2012 The 1st commitment period Design and partial manufacturing of equipment US$10M Manufacturing and installation of equipment US$20M Issuance of credits Applicants Upfront payments: US$5M US$10M Japanese Government

  9. Upfront Payment- Scenario II: Decomposition of N2O Project ・ Equipment and construction costs＝ US$12M 　　　　→ Maximum amount of upfront payment: US$12M×50% ＝ US$6M 　　　・ERs 1.5 Mt-CO2/Year 　　　・Starting year of the crediting period: 2007 　　　・Estimate of credits for the 1st commitment period: 1.5Mt-CO2×6 years ＝ 9 Mt-CO2 If an applicant requests the maximum upfront payment (50%): ① If credit price ＝US$4／t-CO2 　　→Available “Upfront payment” = US$4×1.5 Mt-CO2 ＝ US$6M (50%) ② If credit price ＝US$7／t-CO2 　　→ Available “Upfront payment” = US$7×0.86Mt-CO2 ＝ US$6M (50%)

  10. Upfront Payment: Decomposition of N2O Project (cont.) Order Equipment Manufacturing and installation completed SCENARIO 2-②: 200520062007 2008～2012 Design and partial manufacturing of equipment US$6M The 1st commitment period Manufacturing and installation of equipment US$6M Issuance of credits Applicants Upfront payments: US$3M US$3M Japanese Government

  11. Thank you http://www.kyomecha.org/e/index.html Comments and inquiries should be forwarded to: cdmji@nedo.go.jp in Energy & Environment Policy Department, NEDO Japan or kobayashi@nedo.or.id, yamada@nedojakarta.org in NEDO Jakarta

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