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The Cement Sustainability Initiative

The Cement Sustainability Initiative. BENCHMARK APPROACH TO CDMs Marco Bedoya Corporate Sustainability Manager - CEMEX. COP11/MOP 1 Montreal, December 2005. BACKGROUND Initiated in 1999 / Sector project of WBCSD

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The Cement Sustainability Initiative

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  1. The Cement Sustainability Initiative BENCHMARK APPROACH TO CDMs Marco Bedoya Corporate Sustainability Manager - CEMEX COP11/MOP 1 Montreal, December 2005

  2. BACKGROUND • Initiated in 1999 / Sector project of WBCSD • Committed to incorporate SD and influence cement industry with SD-oriented thinking • 17 companies • 25%of global cement volume / 50% excl. China • Operations in more than 80 countries • Climate Change Task Force + 5 TFs • Commitment to monitor and publish KPIs CSI is highly representative of global cement industry

  3. THE CDM CHALLENGE FOR CEMENT INDUSTRY • Major emitter of CO2 • Major companies operating in CO2-regulated markets • Significant potential to reduce emissions in non-Annex 1 countries • Small participation in CDM process GAP to be bridged with effective CDM streamline the process using a performance based approach simplifying the additionality assessment using the current EB tool cement industry benchmarks

  4. CEMENT INDUSTRY EXPERIENCE IN USING CDMs / LESSONS TO DATE • ~1 to 3 years spent in methodology and project development • no cement CDM project registered • high transactions costs • additionality tool unsuitable • uncertainty of achieving CDM primary objectives Migrate towards a system rewarding performance instead of intention/motivation companies discouragement cement industry benchmarks

  5. HOW WOULD BENCHMARKS WORK

  6. The benchmarks would then determine: • A-priori additionality • Baseline emissions level • CI suits well the application of benchmark concept: • Single manufacturing process • Agreed measurement protocol • Few CO2 reduction drivers

  7. Some benefits of benchmarks • transparency in baseline determination / limit gaming/free riders • reduce transaction costs / increase participation • accelerate registration • positive to countries with limited capacity • Key issues must be addressed to define benchmarks: • stringency • time and geography boundaries • aggregation • validation/acceptability • confidentiality Multistakeholder Process

  8. HOW DO BENCHMARKS BASELINES FIT THE CURRENT CDM FRAMEWORK • Generic methodologies not allowed • benchmarks only allowed to set baselines for individual projects(CDM M&P para45,p36) • The baseline is the scenario that would occur in the absence of the project(M&P para44.p36) • A baseline methodology shall (EB08 Rep Anx1 para1-2): • explain how the baseline has been chosen • explain the rationale for algorithms/formulae • explain how it addresses the determination of project additionality • specify type of variables used • spacial level of data • project boundary • data sources and and assumptions

  9. THE WAY FORWARD • In-depth analysis of benchmarking concept; develop recommendations for rules and procedures • Dialogue with interested stakeholders • Decisions by COP/MOP and EB to make benchmarks with a-priori additionality eligible within CDM framework

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