Neia Gis Presentation For Report 31 Aug09

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Neia Gis Presentation For Report 31 Aug09

  1. 2. Kyoto Protocol <ul><li>Ukraine signed the Kyoto Protocol on March 15, 1999 in New York City. It was ratified by Ukrainian Parliament on February 4, 2004. </li></ul><ul><li>For economic stimulation of GHG emissions reduction the Kyoto Protocol offers flexible mechanisms. Two of them are relevant for Ukraine : </li></ul><ul><li>1. JOINT IMPLEMENTATION PROJECTS ( Article 6 of KP ); </li></ul><ul><li>2. EMISSIONS TRADING ( Article 17 of KP ). </li></ul>National Environmental Investment Agency of Ukraine
  2. 3. Ukraine’s inventories (Mt CO2 eq.) National Environmental Investment Agency of Ukraine Sector 1990 1995 2000 2001 2002 2003 2004 2005 2006 1. Energy generation 685,49 387,79 271,69 268,23 274,76 288,83 285,83 294,41 305,11 2. Industry process 126,92 62,68 81,52 82,43 83,69 88,58 91,39 91,54 97,17 3. Solvents and other products 0,38 0,37 0,35 0,35 0,35 0,35 0,34 0,34 0,34 4. Agriculture 100,80 62,34 32,75 35,05 34,98 30,15 30,44 29,79 30,45 5. LULUCF (net absorption) -66,94 -60,33 -50,91 -42,47 -40,06 -48,98 -35,75 -29,46 -32,63 6. Waste 8,43 8,55 8,68 8,79 8,95 9,06 9,18 9,59 10,12 Total (with net absorption from LULUCF) 855,07 461,41 344,09 352,39 362,67 367,97 381,44 396,21 410,56 Total (without net absorption from LULUCF) 922,01 521,73 395,00 394,85 402,74 416,95 417,19 425,67 443,18
  3. 4. Eligibility criteria compliance <ul><li>Initial report submitted by Ukraine on December 29, 2006, revised according to the revision procedure of UNFCCC Secretariat. </li></ul><ul><li>Total Assigned Amount Units (AAUs) are calculated . Emissions in the base year 1990 were 920,837 Mt of СО 2 - equivalent . </li></ul><ul><li>National system for estimating GHG is in place. </li></ul><ul><li>The Second National communication and the Report on progress achieved are prepared. </li></ul><ul><li>National electronic registry is operational since October 28, 2008 after successful connection with ITL (Go-live process) </li></ul><ul><li>The National Environmental Investment Agency of Ukraine (NEIA) – the only Designated National Authority under Articles 6, 17 of the Kyoto Protocol. </li></ul><ul><li>On April 2 9 , 2008 UKRAINE MET ALL ELIGIBILITY CRITERIA UNDER THE KYOTO PROTOCOL </li></ul>National Environmental Investment Agency of Ukraine
  4. 5. Potential prospects of Ukraine in AAUs trading <ul><li>Assigned amount for the commitment period </li></ul><ul><li>4604,2 Mt CO 2 - eqv . </li></ul><ul><li>Mandatory reserve for the commitment period </li></ul><ul><li>2 216 ,0 Mt CO 2 - eqv . </li></ul><ul><li>National reserve for the commitment period </li></ul><ul><li>1 4 00,0 Mt CO 2 - eqv . </li></ul><ul><li>AAUs surplus in the commitment period </li></ul><ul><li>~ 1000,0 Mt CO 2 - eqv . </li></ul>National Environmental Investment Agency of Ukraine
  5. 6. General legislation <ul><li>The law of Ukraine « On ratification of the UNFCCC »; </li></ul><ul><li>The law of Ukraine « On ratification of the Kyoto Protocol »; </li></ul><ul><li>The order of the Cabinet of Ministers of Ukraine of August 18 , 2005 №346-р « On approval of the National plan of measurements for implementation of the Kyoto Protocol to the United Nations Framework Convention on Climate Change »; </li></ul><ul><li>The decree of the President of Ukraine of 12/09/2005 №1239/2005 « On coordinator of the measures for commitments fulfillment under the United Nations Framework Convention on Climate Change and the Kyoto Protocol to the United Nations Framework Convention on Climate Change »; </li></ul><ul><li>Regulation of the Cabinet of Ministers of Ukraine of 22 February 2006 № 206, as amended on 20 August 2008 by the Decree of the Cabinet of Ministers of Ukraine № 718 « On approval of the procedure of drafting, review, approval and implementation of Projects aimed at reduction of anthropogenic emissions of greenhouse gases » </li></ul><ul><li>Regulations of the Cabinet of Ministers of Ukraine of April 10 , 2006 г. №468 « On procedure of the coordination of the measures for the fulfillment of commitments of Ukraine in accordance with the United Nations Framework Convention on Climate Change and the Kyoto Protocol to it » ; </li></ul>National Environmental Investment Agency of Ukraine
  6. 7. General legislation (continued) <ul><li>Regulations of the Cabinet of Ministers of Ukraine of April 21 , 2006 №554 « On approval of the Procedure of functioning of the national system for estimation of anthropogenic emissions and absorption of greenhouse gases, which are not regulated by the Montreal protocol on substances that deplete the ozone layer»; </li></ul><ul><li>Regulations of the Cabinet of Ministers of Ukraine of July 30 , 2007 №977 « On approval of the Statute on the National Environmental Investment Agency of Ukraine »; </li></ul><ul><li>Regulation of the Cabinet of Ministers of Ukraine of 22 February 2008 № 221 « On approval of the procedure of review, approval and implementation of GIS Projects during the period of commitments under Kyoto Protocol to UNFCCC » ; </li></ul><ul><li>Regulations of the Cabinet of Ministers of Ukraine of April 17, 2008 №392 « On provision of the fulfillment of the international commitments of Ukraine under the United Nations Framework Convention on Climate Change and the Kyoto Protocol to it » ; </li></ul><ul><li>Regulation of the Cabinet of Ministers of Ukraine of 28 May 2008 № 504 « On creation and operation of National Electronic Register of Anthropogenic Emissions and Absorption of Greenhouse Gases » ; </li></ul><ul><li>Regulation of the Cabinet of Ministers of Ukraine of 20 August, 2008 № 718 “On introduction of changes to the Regulations of the Cabinet of Ministers of Ukraine № 206 dated February 22, 2006” “Approve the Order of preparing, review, approval and implementation of projects aimed at reduction of anthropogenic emissions of greenhouse gases”. </li></ul>National Environmental Investment Agency of Ukraine
  7. 8. Coordination of the UNFCCC and KP in Ukraine <ul><li>The National Environmental Investment of Ukraine is the central executive body , established for country-wide coordination of the UNFCCC and the Kyoto Protocol fulfillment in Ukraine by the order of the Cabinet of Ministers of Ukraine of April 4 , 2007 №612 « On creation of the National Environmental Investment Agency of Ukraine » . </li></ul><ul><li>The main responsibilities of the Agency are: </li></ul><ul><li>to participate in establishing and providing for the execution of the state national investment policy in the environmental protection sector area as well as and the state policy in the field of regulation of anthropogenic negative impact on climate change; </li></ul><ul><li>to execute the provisions set in the United Nations Framework Convention on Climate Change (955_044) and implement the mechanisms of the Kyoto Protocol including implementation of greenhouse gases (GHG) mitigation projects, attracting investments to the environmental protection; </li></ul><ul><li>to establish and ensure the operation of the national system for the assessment of the GHG emissions and absorption. </li></ul>National Environmental Investment Agency of Ukraine
  8. 9. International cooperation under UNFCCC and KP <ul><li>Memoranda of Understanding signed with: </li></ul><ul><li>Japan </li></ul><ul><li>Spain </li></ul><ul><li>the Netherlands </li></ul><ul><li>Denmark </li></ul><ul><li>Canada </li></ul><ul><li>France </li></ul><ul><li>Italian </li></ul><ul><li>Austrian, German, Portuguese and Swedish MoUs are on drafting stage </li></ul>National Environmental Investment Agency of Ukraine
  9. 10. Ukraine Position for post-2012 climate regime <ul><li>Climate change consequences are becoming more and more dangerous according to recent scientific research. Thus urgent joint and coordinated actions of all international community are necessary. Therefore all the actions and efforts should be addressed to prevent global temperature rise below 2°С . </li></ul><ul><li>Ukraine has been successively active in adding value to global climate change actions. Ukraine has been actively implementing national adaptation and mitigation measures, as Annex 1 Party, as well as international Kyoto Protocol flexible mechanisms – joint implementation projects and emission trading under Green Investment Scheme. </li></ul><ul><li>Ukraine is taking commitments, by implementing a thesis :“joint but differentiated responsibility”, for the period until year 2020 not to increase the level of green house gases emission above 80% on 1990 base year, under the conditions of international project and market mechanism functioning. We are ready to consider further commitments of emissions reductions under the conditions that our national economy would get an access to other financial resources for low-carbon energy efficiency technologies implementation. </li></ul><ul><li>Taking an active role in intergovernmental climate change negotiation on new climate post-Kyoto agreement , Ukraine has the following positions : </li></ul><ul><li>Legal form the Agreement . Parties have to reach single and unified legally binding agreement for all the Parties. </li></ul>National Environmental Investment Agency of Ukraine
  10. 11. Ukraine Position for post-2012 climate regime (continued) <ul><li>Agreement Terms . New climate agreement should be up to year 2020 with long term global vision and roadmap till 2050 and later on. </li></ul><ul><li>Base Year . Year 1990 has to stay in new agreement as a base year for Parties commitments calculations . </li></ul><ul><li>Carbon Units . Carry - over of carbon units from first commitment period under Kyoto Protocol should be a part of new climate agreement as well as potential for banking and borrowing . </li></ul><ul><li>Economy in transition status . Special status of countries with economies in transition , which is part of Kyoto Protocol and UNFCCC , should be kept in ne agreement . </li></ul><ul><li>Flexible Mechanisms . New agreement should keep time and experience proven projects’ flexible mechanisms of Kyoto Protocol . At the same time , new agreement should allow Parties to have simplified access to project mechanism and potential for operative introduction of new project mechanisms . </li></ul><ul><li>Market Mechanisms . New agreement should create conditions for development of unified financial mechanism , national emission trading systems and relevant actions on mitigations and their interrelations . </li></ul><ul><li>Monitoring , Reporting , Verification ( MRV ). All Parties of new agreement have to take commitments to follow strict international MRV of national communications on green house gas emissions as well as project and market mechanisms implementing on the territory of the country . </li></ul>National Environmental Investment Agency of Ukraine
  11. 12. Legislation under Article 17 (GIS) <ul><li>Regulation of the Cabinet of Ministers of Ukraine of April 17 , 2008 №392 « On provision of the fulfillment of the international commitments of Ukraine under the United Nations Framework Convention on Climate Change and the Kyoto Protocol to it » ; </li></ul><ul><li>Regulation of the Cabinet of Ministers of Ukraine of February 22, 2008 № 221 « On approval of Procedure for consideration, approval and implementation of projects of purpose environmental (green) investment during the commitment period of the parties to the Kyoto Protocol to the United Nations Framework Convention on Climate Change » . </li></ul><ul><li>Regulation of the Cabinet of Ministers of Ukraine of 20 August, 2008 № 718 “On introduction of changes to the Regulations of the Cabinet of Ministers of Ukraine № 206 dated February 22, 2006”- “Approve the Order of preparing, review, approval and implementation of projects aimed at reduction of anthropogenic emissions of greenhouse gases”. </li></ul>National Environmental Investment Agency of Ukraine
  12. 13. Main national criteria of greening <ul><li>International requirements compliance : </li></ul><ul><li>Goals and principles of UNFCCC С compliance ; </li></ul><ul><li>Aiming at : emissions reduction or increasing absorption of GHG ; polluting emissions reduction ; protection or restoration of natural resources . </li></ul>National criteria are the basis of the Green Investment Scheme Compliance of the Ukrainian national economy priorities: energy saving, energy efficiency and water sources recovery. Compliance of managerial and technical requirements . National Environmental Investment Agency of Ukraine
  13. 14. Green Investment Scheme ( GIS ) Classic version – procedure of financing projects under GIS in Ukraine NEIA NEIA Forming budget program Inclusion in the State budget of Ukraine Target financing of projects BUDGET OF UKRAINE/ special foreign currency account Enterprises of Ukraine Target environmental projects Defining the compliance of projects Independent monitoring of projects Tenders-Selection of project executor National Environmental Investment Agency of Ukraine
  14. 15. Three levels of GIS control <ul><li>Budget program </li></ul><ul><li>Independent expert organizations for determination and verification of GIS projects </li></ul><ul><li>Independent surveyor and financial auditor of the AAUs buyers </li></ul>National Environmental Investment Agency of Ukraine
  15. 16. JI procedure under Track 1 <ul><li>Track 1 procedures is regulated by the Regulations of the Cabinet of Ministers of Ukraine No. 206 as amended of November 2008. </li></ul><ul><li>Advantages of the Track 1 procedure: </li></ul><ul><li>Simple and transparent </li></ul><ul><li>Quick and efficient </li></ul><ul><li>7 JI Projects under Track 1 were approved by the Agency as for September 2009 </li></ul>National Environmental Investment Agency of Ukraine
  16. 17. JI procedure under Track 2 <ul><li>Track 2 procedures, adopted by GoU in February 2006 act. </li></ul><ul><li>4 JI Projects under Track 2 – deemed final by JISC as for September 2009 </li></ul>National Environmental Investment Agency of Ukraine
  17. 18. Rating of JI host countries National Environmental Investment Agency of Ukraine Source : Jan 2009 Rank Country Rating (Previous rating) AAU Rating (Previous rating) Climate institutions Investment climate Project potential and status 1 (1) Ukraine BBB+ (BBB+) BBB (BBB) A- BB- A+ 2 (2) Romania BBB (BBB) BB- (BB) A- BBB- BBB 3 (3) Poland BB+ (BB+) BBB- (BB) BB- BBB+ BBB- 4 (4) Russian Federation BB (BB) B (B) BB BBB BB- 5 (8) Hungary BB (BB) BBB- (BBB-) B+ BBB+ BB 6 (6) New Zealand BB (BB) () B AA- B 7 (5) Bulgaria BB (BB) B (B) B BBB- BBB 8 (9) Estonia BB (BB) B- (B-) BB- BBB B 9 (7) Czech Republic BB- (BB) BB (BB+) B BBB+ B+ 10 (10) Belarus CC+ (CC+) CCC- (CCC-) B- CCC C-
  18. 19. JI Projects in Ukraine National Environmental Investment Agency of Ukraine JI Projects Quantity JI Projects submitted to the Agency/Ministry 158 Letters of Endorsement issued 147 Letters of Approval issued 26 JI Projects are deemed final by the Agency under Track 1 7 JI Projects are deemed final by JISC Under Track 2 4 Estimated Emission Reductions in million tonnes CO 2 eq. for 2008-2012 133
  19. 20. Number of JI Projects by Sectors National Environmental Investment Agency of Ukraine
  20. 21. Estimated Emission Reductions by Sectors in Mt. CO2-eq.from JI Projects National Environmental Investment Agency of Ukraine
  21. 22. Incentive mechanisms <ul><li>GoU has been working hard to create favorable conditions for investors. The following incentive mechanisms have been developed: </li></ul><ul><li>1. Early credits (pre-2008) </li></ul><ul><li>2. Late credits (post-2012) </li></ul><ul><li>Secured credits. To insure political risks AAUs are used to secure credits. </li></ul><ul><li>The transfer of 19,733,247 mln. AAUs as collateral for the credits under gas-transport system projects is completed. Due to the AAUs transfer €250 mln.of investments will be attracted to the Ukrainian gas-transport system through JI mechanism . </li></ul><ul><li>All AAUs transfers are supervised and controlled by the Cabinet of Ministers of Ukraine. </li></ul>National Environmental Investment Agency of Ukraine
  22. 23. EARLY CREDITS <ul><li>REGULATIONS of the Cabinet of Ministers of Ukraine No. 206 dated February 22, 2006 “ On Approval of the Procedure of Drafting, Review, A pproval and Implementation of P rojects A imed at Reduction of Anthropogenic Emissions of G reenhouse G ases” as amended of November 2008 </li></ul><ul><li>11. Emission reductions confirmed by an international verifier, achieved by an installation owner before the commencement of the first commitment period of the Kyoto Protocol due to JI project, approved in accordance with the established procedure, may be transferred by an installation owner to a buyer in the way of providing the electronic transfer of assigned amount units (parts) from Ukraine’s account with the National Register to the account of a foreign state or its authorized buyer. </li></ul><ul><li>After adoption of a corresponding decision by the Cabinet of Ministers of Ukraine, the NEIA within 3 days shall provide with the electronic transfer of assigned amount units (parts) to the carbon units register of a foreign state. Transfer of assigned amount units (parts) from the commitment period reserve shall be prohibited. </li></ul>National Environmental Investment Agency of Ukraine
  23. 24. Verified and Transferred Carbon Units under JI Projects National Environmental Investment Agency of Ukraine for the Ukrainian enterprises # JI Project Track Estimated Reductions in tonnes CO2 eq. for 2008-2012 AAUs (Early Credits) in tonnes CO2 eq. ERUs (for 2008) in tonnes CO2 eq. 1 Rehabilitation of the District Heating System of Crimea 1 518672 215 674 148 013 2 Rehabilitation of the District Heating System in Donetsk Region 1 766152 453 358 301 055 3 Rehabilitation of the District Heating System in Kharkiv City 1 1001342 456 963 296 089 4 District Heating System Rehabilitation of Chernihiv Region 1 105 971 52 874 5 Revamping and Modernization of the Alchevsk Steel Mill 1 4671065 1 336 254 643 006 6 Utilization of Coal Mine Methane at the Coal Mine named after A.F. Zasyadko 2 5889522 1 460 517 650 851 7 CMM Utilization on the Joint Stock Company “Coal Company Krasnoarmeyskaya Zapadnaya No. 1 Mine” 2 336 272 Total 4 365 009 1 647 786 Early credits mechanism allowed to attract € 40 mln.of investment
  24. 25. LATE CREDITS CONCEPT <ul><li>National legislation to regulate Late Credits is currently on drafting stage. </li></ul><ul><li>The legislation will have the status of the Regulations of the Cabinet of Ministers. </li></ul><ul><li>The Government of Ukraine is ready to allow transfer of AAUs to the account of the JI Project Owner for further sell to the foreign Buyer/Investor. </li></ul><ul><li>The total amount of AAUs granted (transferred) to the JI Project owner shall be limited up to 75% of the estimated emission reductions generated within project life-cycle post-2012. </li></ul><ul><li>The application (use) of the Late Credits Concept will require fulfillment of certain requirements. </li></ul>National Environmental Investment Agency of Ukraine
  25. 26. LATE CREDITS CONCEPT (continued) <ul><li>The Regulations set the following restrictions to apply Late Credit Concept: </li></ul><ul><li>JI Project Owner generates the volume of emission reductions calculated in PDD, and the DVM procedures are applied to these emission reductions. </li></ul><ul><li>The contract between Project Owner and Buyer/Investor is in place. </li></ul><ul><li>JI Project Owner commits to restricted use of revenues (funds). </li></ul><ul><li>Penalties for non-fulfillment are to be applied. </li></ul><ul><li>JI Project Owner waives his right for generated emission reductions post-2012. </li></ul><ul><li>JI Project Owner publicly discloses information on such JI activity. </li></ul><ul><li>Revenues (funds) generated by the Late Credits may cover only: </li></ul><ul><li>green-field installations or application of latest technologies on the existing installations, which lead to at least 10% of emission reductions of such installations; </li></ul><ul><li>demolition of installation with above the sectoral benchmark emission level; </li></ul><ul><li>bank interest/loan repayment attracted prior to 2009; </li></ul><ul><li>owner’s capital increase exclusively to finance capital expenditures to cut emission level. </li></ul>National Environmental Investment Agency of Ukraine
  26. 27. Basic types of GIS projects <ul><li>The funds will first of all be designated for the projects which are very difficult or impossible to implement through the mechanism of joint implementation, for example for the projects in : </li></ul><ul><li>State (budgetary) entities ; </li></ul><ul><li>Reconstruction of communal heating systems ; </li></ul><ul><li>Renewable energy sources; </li></ul><ul><li>Energy conservation . </li></ul>National Environmental Investment Agency of Ukraine
  27. 28. Basic types of GIS projects (continued) <ul><li>Fuel switching for low environment burden; </li></ul><ul><li>Utilization of Coal Bed Methane; </li></ul><ul><li>Activities for environmental protection (e.g. pollution reduction activity); </li></ul><ul><li>Activities for emission reductions of greenhouse gases other than CO2 . </li></ul><ul><li>Special attention of GoU is on renewable and alternative energy sources to reduce the consumption of natural gas. </li></ul>National Environmental Investment Agency of Ukraine

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