Peatland rewetting for carbon credits – Experience from Belarus

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Presentation by Zbig Karpowicz at VNN peatland workshop, Leeds 19th January 2012

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Peatland rewetting for carbon credits – Experience from Belarus

  1. 1. Carbon Investment Opportunity: Belarus Peatland Rewetting ProjectElnya Raised Bog – the largest Belarusian natural peatland
  2. 2. Why Belarus? - Belarus is the country of peatlands - Peatlands cover 14.2% of the territory of Belarus (2,9 mio ha)
  3. 3. BPR project – key features• From 2012 onwards• Additional area rewetted 2012-2015 – 9 440 ha• Rewetted area managed: 18 020 ha• TOTAL emission reductions 2011-2028 – 871000 tCO2e• Finances using mechanisms of voluntary carbon market• Total project size: 4,5 mio euro
  4. 4. Map showing the location of Project sites ‘Old’ Project sites – 9 sites rewetted with KfW funds in 2008- 2011 ‘New’ Project Sites – 5 sites to be rewetted with HLG funds starting 2012
  5. 5. Rewetting cycle 5. RESTORED 1. Selection of PEATLAND degraded peatland 2. Scientific justification for4. Construction peatland works restoration 3. Design documents for construction works
  6. 6. Current scenario descriptionFrom the proposed options the following "medium scenario“foresees the following:Additional area rewetted 2011-2015 – 9 440 haAdditional area rewetted 2016-2020 – 0 haEmission reductions 2011 -2015 – 260 000 tCO2eEmission reductions 2016 – 2020 – 365 000 tCO2eEmission reductions 2021-2028 – 246 000 tCO2eTOTAL reductions 2011-2028 – 871 000 tCO2e
  7. 7. National Carbon Project Cycle Conclusion of Initial Memorandum of Understanding (MoU)* between Ministry of Environmental Protection and HLG/KfW Conclusion of Emission Reduction Purchase Agreement (ERPA) between Project Entity and HLG/KfW • Submission of a Project Idea Note (PIN) to the Ministry for Environmental Protection for a Letter of Endorsement. • Submission of full Project Design Document (PDD) to the Ministry. Issuance a * Initial MoU becomes MoU after Letter of Approval is Letter of Approval issued
  8. 8. Implementation Indicators Preparation, Q3 2011-Q4 2011 Carbon, Q3 2011 – Q4 2015 • Letter of Endorsement (PIN) • scientific justification issued by the Ministry of developed and approved Environment Q3 2011 • Letter of Approval (PDD) issued by the Ministry of Environment Q4 2011Contractual Q4 2011-Q3 2012 • PDD registered in VCS Q3 2012 • Positive Validation results Q3 2012• Contracts with Design • Positive Verification results Q2companies signed Q1 2012 2015• Design documents approvedQ2 2012 Physical Q2-Q4 2012• Contracts with Physical Construction • Construction workscompanies signed Q2 2012 performed/Rewetting occurred
  9. 9. Carbon rights and contractsAccording to Belarusian legislation (Presidential Decree #625 and Provision of the Council of Ministers #466) – Project Entity (organization implementing emission reduction project) has the right to the sell emission reductions based on ERPA – Ministry for the Environment based on confirmation from independent verifying organization and MoU transfers VERs to the buyer
  10. 10. Project entity in Belarus: Limited company with foreign investmentsPartners: APB-BirdLife Belarus (APB) - largest environmental NGO in Belarus - partner and/or implementing agency for all main peatland related projects in BY - 28 staff and over 150 service contracts, 1.3 mio euro / year National centre for Biological Resources of National Academy of Sciences of Belarus (NPC) - leading national authority on biodiversity - amalgamation of 4 academic institutes (Botany, Zoology, Forest, Botanical Gardens) - long-term partner in peatland restoration/conservation projects - over 300 staff, over 2 mio euro / year Foreign Investor / Highly preferential - the participation of HLG would properly positions of the Entity within carbon cycle - foreign investment company is the preference for APB and NPC
  11. 11. International carbon standards: Double verification process• World’s leading voluntary carbon - Voluntary Standard applied in additionstandard to VCS• 2011 – amended to allow Peatland - Ascertains that projects:Rewetting and Conservation Projects(PRC) – in frames of KfW funded • minimize climate changeproject • support sustainable development • conserve biodiversity• Approved monitoring and baselinemethodology is under development - inframes of KfW funded projectcompletion in early 2012
  12. 12. International Carbon Project Cycle Starts after finalization of national carbon cycle and receipt a Letter of Approval from the Ministry of Environment Procedure VCS Association (Board and Secretariat) • Registration of the project accredits appoints (PDD) and verification – i.e. the process of auditing theProject developer Validator & Verifier Registry Operator(s) emission reductions achieved. Methodology Additionality Proof of title • Registration involves the Validation existing/new Test preparation of a validation report report and its submission Verification VCS registry VCU (together with other relevant VCS PD Valid. & Verif. report Serial No. Issuance documentation) to the VCS Registry Operator. Certification statement • Verification involves the preparation and submission of a verification report. Once this is approved, the VCS Registry Operator will issue VCUs
  13. 13. Financial flows and ER estimation assumptions• Project starts 2011 with first advance payment in Q2-Q3 of 2011• All rewetting works are finalized at the beginning of 2014• Generation of ERs from the ‘new’ rewetted sites starts 2014
  14. 14. Project development beyond 2028 How much will be available: • Balance at the Project end (2028): c. 1 mio USD Where the funds are to be directed: • National regulation (Decree 466): all income from carbon trade is to be directed to further GHG emission reductions activitiesProject arrangements: MoU/ERPA will stipulate that surplus funds to bedirected to peatlands restoration/conservationBeyond project decision – Project Entity Board will decide which sites tobe further rewetted or managed

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