Green Investment Scheme (GIS) in the Czech Republic

1. Green Investment Scheme (GIS) in the Czech Republic Petr Jan Kalaš Moscow Carbon Market Forum 2008 Moscow, 28 April 2008 Ministry of Environment Vršovická 65 100 10 Praha 10 Czech Republic

2. Last development in the Climate Change Agenda • 14 November 2007 – Czech governmentmade decision aboutthe further GIS implementation steps • 1 January 2008 - Kyoto Commitment Period and thesecond EU ETS period were started • 21 January 2008 - EU Commission published the EU Climate-Energy Packageproposal • 24 February 2008 - Czech Republic is fully eligible under the Kyoto Protocol

3. GHGs Emissions trends GHGs comparison 1990 vs. 2006 – 24%

4. Joint Implementation (JI) overview • About 35 projects – LoA was issued (possibility to choose between Track 1 and Track 2) • Problems with future potential for new JI projects • EU ETS (Linking Directive - limited potential for new JI projects in the current regime in all EU MS) • Question of additionality (feed-in-tariff, Operational Programme Environment, Operational Programme Enterprise and Innovation, etc.) • New JI projects – only heating (biomass, biogas) and non – CO2 projects (landfillgas projects) • Reserve 99 389 allowances per year in NAP2 for indirect linking (only RES projects with LoA) • EU ETS operators can use 10 % (CERs and ERUs) in the second NAP

5. GIS Implementation in the Czech Republic (I) • MoU – Denmark, Austria • (under preparation - Japan, Netherlands, • Spain, Finland, etc. ) • Expected (surplus) amount 100 million AAUs per Kyoto commitment period (2008-2012) • Potential buyers – governments/private sector • Greening facility – State Environmental Fund (www.sfzp.cz) “The resources from the SEF are one of the most important instruments of state environmental policy. Domestic resources(mainly in some kind of measures) are limited“.

6. GIS Implementation in the Czech Republic (II) • In programming goals of the Czech Government till 2010 is mentioned that revenues from IET will be used for financing energy savings in family houses and flats, administrative and public buildings. • Czech government priority – Housing sector • fuel switching from lignite (still approx. 560 000 households is heating directly by coal)to biomass (potential approx. 280 000 households - 2 Mt CO2per year), or/and improvement of thermal insulation, • eventually fuel switching from ligniteto central heating system/gas (additional potential around - 1 Mt CO2 per year ) • Other sectors --- has notbeen decided yet(gaps between various type of funds, avoid „double-counting“ situation)

7. Energy savings need to be improved in the building sector1,2 Mio flats / ~15 PJ / ~ - 35 Mt CO2

8. Organisational scheme of GIS

9. GIS Implementation in the Czech Republic (III) • Ministerial GIS WG was established • Main tasks – on the international/domestic side • Pending issues • Legal/Financial (amendment of law about conditions of trading with allowances etc., preparation of auction, taxes, accounting questions, ERPAs) • Technical/Organizational(preparation of grants, documentation, criteria, validation, reporting, verification, call of proposal)general question – connection of CITL/ITL • Pilot transaction should be done by the end of 2008 • Both, bilateral contracts, auction could be used

10. Thank you for your attention !