Sethi 28 August 2009

Clean Development Mechanism Ministry of Environment & Forests Government of India

What is anthropogenic climate change?
Suite of gases (CO2, CH4, N2O, etc,) emitted from various economic activities: Fossil fuel use, wet paddy cultivation, cattle raising, fertilizer use, etc.
Growing (but not mature) forests absorb (“sequester”) CO2, the major GHG
Increasing concentrations of these gases in the atmosphere have same effect as a greenhouse, hence “Greenhouse gases” (GHGs). The resulting increase in temperature may impact many climate parameters

Global Warming Potential (GWP) Above 10,000 (SF 6 ) Sulphur hexa fluoride 140 to 11700 (HFCs) Hydro fluoro carbons 560 ~ 9200 (PFCs) Per fluoro carbons (PFCs) 310 N 2 O Nitrous oxide 21 CH 4 Methane 1 CO 2 Carbon-di-oxide GWP Chemical Formula Green house gas (GHG)

Kyoto Protocol
Parties adopted in COP-3 in 1997
Commits developed countries to reduce GHG emissions by 5.2% below 1990 levels during the first commitment period 2008-12
KP came into force on February 16, 2005. Required ratification by at least 55 Parties and amounting to 55 % emissions
USA major country who has not ratified yet

Kyoto Reduction Commitments – 6.5 % - Italy – 6 % Canada – 6 % Japan – 12.5 % - United Kingdom – 21 % - Germany – 8 % (EU Burden Sharing Agreement) EU Reduction commitment for 2008-2012 [% of base year] Country

Contd..
Three Mechanisms
Clean Development Mechanism
Joint Implementation
Emissions Trading

CDM Project Cycle - Basics Project Performance Monitoring by Project Proponent ONE TIME ACTIVITY RECURRING ACTIVITY Preparation of PIN - DNA Preparation of PDD - UNFCCC Host Country Approval To the Candidate Project Project Validation By UNFCCC Accredited DOE Submission for Registration (UNFCCC – CDM Executive Board) Certification & Issuance of CERs (DOE & UNFCCC)

Additionality tool
Screening for early start projects
Identification of alternatives to the project activity;
Investment analysis to determine that the proposed project activity is not the most economically or financially attractive;
Barriers analysis;
Common practice analysis; and
Impact of registration of the proposed project activity as a CDM project activity

Existing actual or historic emissions
Emissions from Technology___ attractive investment
Average emissions of similar ___ previous 5 years___ performance top 20%
Calculation of GHG emission by sources
Precise transparent, comparable , avoid over estimation
Applicability
System boundaries
Leakages
Baseline

Small Scale CDM Projects
Power projects upto 15 MWe
Energy saving of 60 GWhe
Reduction of 60 kt CO2 eq.
A & R Sequestration of 8 kt CO2
Approved Simplified Methodologies by CDM EB
Same DOE can undertake validation, verification and certification
Bundling of projects feasible

Small Scale CDM Projects (Contd..)
Additionality
Investment barrier
Technological barrier
Barrier due to prevailing practice
Other barriers
Simplified methodologies developed by EB
Same DOE can undertake validation, verification and certification
Bundling of projects feasible

Sectoral Scope Agriculture 15 Afforestation and reforestation 14 Waste handling and disposal 13 Solvent use 12 Fugitive emissions from production and consumption of halocarbons and sulphur hexafluoride 11 Fugitive emissions from fuels (solid, oil and gas) 10 Metal production 9 Mining/mineral production 8 Transport 7 Construction 6 Chemical industries 5 Manufacturing industries 4 Energy demand 3 Energy distribution 2 Energy industries (Renewable / Non-renewable sources) 1 Sectoral Scope No.

Methodologies
127 Meths available for use
67 approved large scale
14 consolidated large scale
46 small scale for small scale projects
10 A/R
5 SSC A/R
20 Meth tools (Including A&R)
CH4 emissions avoided from dumping wastes
Combined baseline selection & additionality

Approved methodologies - - 7 Metal production 1 - - Mining/mineral production - 5 1 Transport - - - Construction - 4 13 Chemical industry 5 10 11 Manufacturing industries - 7 6 Energy demand - 1 1 Energy distribution 7 Small Scale 7 30 Energy industries (renewable/non-renewable sources) Consolidated Methodologies Large Scale Sectoral Scope

Approved methodologies Contd/- 1 3 1 Agriculture 2 6 9 Aforestation and reforestation 3 7 6 Waste handling and disposal. - - - Solvents use - 2 6 Fugitive emissions from production and consumption of halocarbons and sulphur Hexafluoride 1 1 6 Fugitive emissions from fuels (solid, oil and gas)

First Order decay method for estimating methane emissions from waste disposed in landfill sites
Estimation of combined margin factor for an electricity grid
Estimation of methane flare efficiency
Methodological Tools

National CDM Authority
Secretary (E&F) - Chairman
Foreign Secretary
Finance Secretary
Secretary, DST
Secretary, DIPP
Secretary, MNRE
Secretary, MOP
Secretary, Planning Commission
Joint Secretary (CC), MoEF
Director (CC), MoEF - Member Secretary

Single Window Clearance
PCN as per MoEF format
PDD as per UNFCCC format
Project promoter to give a presentation in the DNA meeting
Host Country Approval

Host Country Approval
Emissions Additionality
Sustainable Development
Parties should have ratified Kyoto Protocol
Voluntary participation

Sustainable Development Criteria
Prerogative of the Host Party
Economic well being
Social well being
Environmental well being

Type of projects
Renewable energy (Wind, Biomass, Solar,Hydro)
Switching to Alternate Fuels
Energy Efficiency
Waste Management
Oil & Gas
Agriculture
Carbon Sequestration in Forests

CDM Regulatory Bodies| the basics COP/MOP EB UNFCCC secretariat SSCWG A/RWG MP AP RIT DOE supervises elects accredits supports recommends supports approves supports recommends

Portfolio of Host Country Approved CDM Projects

Portfolio of Host Country Projects approved . Sectors No. of Projects Energy Efficiency 431 Fuel Switching 76 Industrial Process 65 MSW 33 Renewable 474 Renewable (Biomass) 337 Forestry 9 Total 1,425

Sector-wise break-up : CERs expected till 2012 from Host Country Approved projects as of 21 August 2009. Sectors CERs (upto 2012) Energy Efficiency 216,369,909 Fuel Switching 60,314,965 Industrial Process 104,956,443 MSW 11,258,855 Renewable 121,047,877 Renewable (Biomass) 88,731,489 Forestry 8,039,713 Total 610, 719, 251

Investment in CDM Projects

Indian Projects Registered by CDM-EB . 2 Forestry Sectors No. of Projects Energy Efficiency 129 Fuel Switching 16 Industrial Process 22 MSW 9 Renewable 143 Renewable (Biomass) 129 Total 450

Portfolio of Host Country PSU Projects approved 2 Forestry Sectors No. of Projects Energy Efficiency 57 Fuel Switching 8 Industrial Process 20 MSW 2 Renewable 33 Renewable (Biomass) 2 Total 124

International Statistics

Expected Average Annual CERS from Registered Projects till 2012

CERS Issued by Host Party. 69,073,247 India

NATCOM ANALYSIS # Not counted in the national totals (All figures in Million Tonnes) 6 5 4 3 2 1 1228.54 0.178 18.083 817.023 Total (Net) National Emission 3.373 - - 3.373 Emissions from Bunker fuels# 23.233 0.007 1.003 - Waste 14.292 0.00004 0.0065 37.675 Removals-23.533 Land use, Land-use change and Forestry 344.485 0.151 14.175 - Agriculture 102.710 0.009 0.002 99.878 Industrial Processes 743.82 0.0114 2.896 679.47 Energy Including industry, transport residential and mining etc CO 2 eq. emissions N 2 0 CH 4 CO 2 emissions GHG source categories

How far we’ve come | Growing demand Number of projects / Millions of CERs (to 2012)

Typical revenue flow for a 5MW grid connected hydropower project in India
With 0.6 PLF, = 26280 MWh electricity generation
With 0.75 grid emission factor = 19710 t CO2 reduction /year
= 19710 CER/year
With 10 Euro CER price = 197100 Euro/year revenue
(conservative approach considering various transaction costs)
At Rs 53/Euro rate = Rs 10446300/year
= Rs 1.04 Crore /year
For 10 year crediting period = Rs 10.4 Crore CDM revenue
Sample Calculation for CER Revenue

Challenges
CMM, CBM, MSW, SME & CPSUs potential un-tapped
Afforestation and Reforestation offer opportunities for CDM Projects
Active Financial institutions participation in CDM market with innovative financing models
Large CDM projects should be conceived

Programmatic CDM
Developing projects under the programmatic mode of CDM
Guidelines issued by CDM EB
Range of projects possible such as CFLs, MSW, R&M of TPS etc.

CDM Post 2012
Strong signal from Annex-I Parties for continuation of CDM beyond 2012
Deeper emission reduction targets and longer commitment period
Allow non state Parties, MNCs into Kyoto Mechanisms
One Universally acknowledged Carbon Unit i.e. CER

Thank You [email_address]

Sethi 28 August 2009

by equitywatch on Aug 28, 2009

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Sethi 28 August 2009 — Presentation Transcript