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CONFESSIONS OF A CDM PROJECT DEVELOPER . Surrey University 16th December 2010. Images : Araquém Alcântara. Futuro para o meio ambiente. CDM – What and where is it? CDM – The basic process CDM and Brazil Sugar Cane a Case Study Final thoughts. CDM – What and where is it?
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CONFESSIONS OF A CDM PROJECT DEVELOPER Surrey University 16th December 2010 Images: Araquém Alcântara Futuro para o meio ambiente
CDM – Whatandwhere is it? CDM – Thebasicprocess CDM andBrazil Sugar Canea Case Study Final thoughts
CDM – Whatandwhere is it? CDM – Thebasicprocess CDM andBrazil Sugar CaneCase Study Final thoughts
What is the clean development mechanism? The CDM allows emission-reduction projects in developing countries to earn certified emission reduction (CER) credits, each equivalent to one tonne of CO2. These CERs can be traded and sold, and used by industrialized countries to meet part of their emission reduction targets under the Kyoto Protocol. The mechanism stimulates sustainable development and emission reductions, while giving industrialized countries some flexibility in how they meet their emission reduction limitation targets. http://cdm.unfccc.int/about/index.html
FirstStage: MeasurePollutants Calculatetypeandquantityofemissions
THE CAP Establishthereductiontarget
Emissions Trading Kyoto Mechanisms EMISSIONS TRADING 105.000 tCO2e - 10.000tCO2e JOINT IMPLEMENTATION CLEAN DEVELOPMENT MECHANISM 2009
CER Clean Development Mechanism Company Non-Annex Company1 2009 100.000 tCO2e 1,050,000 tCO2e 950.000 EUA ANNEX 1 NON ANNEX 1
CDM – Whatandwhere is it? CDM – Thebasicprocess CDM andBrazil Sugar CaneCase Study Final thoughts
Greenhouse gases and Global Warming Potential
CDM Project Cycle Consultant/ Project Developer LetterofApproval SD Contribution CDM Registration PDD - Project Design Document Baseline, Additonality Validation PDD Audited DOE DNA UNFCCC EmissionsofCERs OperationandMonitoring Verification MoniteredInformationAudited Repeatedduringthecreditedperiod UNFCCC Consultant/ Project Developer DOE http://cdm.unfccc.int/Projects/diagram.html
BaselineandAdditionality CO2 Emissions Baseline Scenario of CO2 Emissions Reduction CO2 in Emissions Actual Monitored Project emissions Years Additionality: Prove that the revenues from the Carbon Credits are essential to the feasibility of the project. Barrier - Financial, Technology, Common Practice etc
CDM – Whatandwhere is it? CDM – Thebasicprocess CDM andBrazil Sugar CaneCase Study Final thoughts
Current status of the projects in the Brazilian Designated National Authority - DNA
CDM – Whatandwhere is it? CDM – Thebasicprocess CDM andBrazil Sugar CaneCase Study Final thoughts
Brazilian Sugar CaneIndustry Ethanol as a Fuel: 30-year-old ethanol fuel program Since July 1, 2007 the mandatory blend is 25% of anhydrous ethanol and 75% gasoline Flex-fuel cars- 92.3% share of all new light vehicles in 2009 50% market share of the gasoline-powered fleet by February 2008 Bagasse as an energy source: 420 registered sugar and ethanol plants in Brazil - has 268 registered thermoelectric stations that utilize bagasse from sugar cane as a primary energy source, installed capacity of 3,832MW 1997 Sugar Cane processing units within Brazil were unable to export surplus energy to the grid Over 25 CDM projects registered between April 2006 and June 2007
BaselineandAdditionality CO2 Emissions Baseline Scenario of CO2 Emissions Reduction CO2 in Emissions Actual Monitored Project emissions Years
BaselineandAdditionality CO2 Emissions Baseline Scenario of CO2 Emissions Reduction CO2 in Emissions Actual Monitored Project emissions Years Additionality: Prove that the revenues from the Carbon Credits are essential to the feasibility of the project. Barrier - Financial, Technology, Common Practice etc
STEP THREE – InvestmentAnalysis INVESTMENT OF US$70million dollars - Are the CER revenuesessential to thedevelomentoftheproject?
STEP THREE – InvestmentAnalysis Does theCompany Business Planlookthesame?
STEP FOUR – CommonPractise NATIONAL: Sugar Cane processing units within Brazil were unable to export surplus energy to the grid up until 1997 Ministry of Agriculture - 420 registered sugar and ethanol plants in Brazil. ANEEL has 268 registered thermoelectric stations that utilize bagasse from sugar cane as a primary energy source, installed capacity of 3,832MW. BUT of the units generating energy 11% only export to the grid. Potential - 75% of Brazilian bagasse (146 millions tones) for energy production in 65 bar pressure boilers, the national potential would be 8,375MW
STEP FOUR – CommonPractise LOCAL: Globally?
Registration DO YOU CONSIDER THE PROJECT ADDITIONAL? Vs.
CDM Project Cycle Consultant/ Project Developer LetterofApproval SD Contribution CDM Registration PDD - Project Design Document Baseline, Additonality Validation PDD Audited DOE DNA UNFCCC EmissionsofCERs OperationandMonitoring Verification MoniteredInformationAudited Repeatedduringthecreditedperiod UNFCCC Consultant/ Project Developer DOE http://cdm.unfccc.int/Projects/diagram.html
CDM – Whatandwhere is it? CDM – Thebasicprocess CDM andBrazil Sugar CaneCase Study Final Thoughts
Final Thoughts – Scaling Up Lack of Demand and Clarity (post 2012) Overly Bureaucratic - project based (2 years, tools etc) Solution? - PoAs, Standardised baselines, NAMAs Sustainable Development vs. Carbon Reductions Delivering Solutions within the present financial systems
Timothy Cowman Geoklock - SoluçõesemCarbono Av. das NaçõesUnidas, 13.797 Bloco 2 – 21° andar 04794-000 São Paulo - Brasil 0055 11 5501 3783 carbono@geoklock.com.br www.geoklock.com.br Uma empresa do Grupo ECOGEO Futuro para o meio ambiente