General Carbon Newsletter - February 2011

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In this issues of Monthly Carbon Newsletter:
-Cancun In A Nutshell
-Start of the Indian REC Market
-NAMAS Explained
-Implications of the ban on HFC-23 and N2O Credits
-And many more news & updates

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General Carbon Newsletter - February 2011

  1. 1. General Carbon NewsletterMONTHLY CARBON NEWSLETTER FEBRUARY 2011, ISSUE:01 Point of View PROJECT HIGHLIGHTS The Cancun Agreement was viewed by outsiders to be just January 2011 sees the highest another agreement (along the lines of Copenhagen), but issuance of CERs at 50 Mill insiders see this as the beginning of the formal process to stitch together international climate policy. Significant CERs. resistance to the Kyoto Protocol was evident during the meetings. However, CDM seems to be more alive now The share of projects that were than before, with multiple signs of life over the last month: automatically registered has a. Process improvements and reduction in timelines for increased to 78%. issuance and registration. Five new PoAs were submitted b. EU ban on HFC-23 and N2O credits in the next phase in January raising the number starting 2013. of PoAs to 76. Africa holds a c. Increased buyer activity in the market for credits over the large share of the PoAs (19%). next phase. Cyber theft of carbon credits The Cancun Agreement also marks the first sign of a formal shift towards a fragmented policy regime. The resulted in a freeze imposed by carbon market is likely to shift to the domain of bi-lateral the EU on spot trades for over and multi-lateral frameworks, based on the differing views two weeks in January. of leading countries at Cancun. A number of new jargons have gained popularity post the Cancun meeting, NAMAs Reliance Power’s Sasan UMPP or Nationally Appropriate Mitigation Actions is the new star in town. was registered by the CDM EB. The project is expected to Both, China and India have taken steps to start domestic generate over 22 Mill CERs emission trading schemes. A number of environmental commodities are being launched in India including over 10 years. Renewable Energy Certificates and Energy Efficiency Certificates. Significant regulatory updates on both these A large natural gas project commodities are expected in the coming months. We are (VPGL) from India enters really in the middle of interesting times at the domestic and international levels. request for registration. The project is expected to generate I trust that you will stay connected and find our update over 700,000 CERs annually. interesting. Kind Regards, Satish Kashyap
  2. 2. VCS VER PRICE WATCH Cancun In A NutshellIndia, China: Delegates from over 190 countries met at the 16th UNRenewables, EE climate change negotiation (COP-16) in Cancun, MexicoPre 2008 vintages from 29th Nov - 10th Dec 2010. A set of decisions wereUS$ 0.50- 1.00Post 2008 vintages approved including an agreement on the long term co-US$ 1.00-2.75 operative action (LCA) plan for climate change mitigationRenewables, EE- Pre CDM and adaptation, with emphasis on “common butPre 2008 vintages differentiated responsibilities”. Key take-aways from theUS$ 0.50-2.00Post 2008 vintages meet:US$ 2.00-3.50 • Discussions on post- 2012 commitments underIndustrial gases, others Kyoto will continue; more clarity to come in at thePre 2008 vintages next COP meet in Durban end of this year.US$ 0.25-0.50 • Annex-1 countries are to lead mitigation actionsPost 2008 vintagesUS$ 0.50-1.00 with more stringent reporting of their efforts; they will make the funds and technologies available to non-Annex-1 countries.Rest of Asia, Africa: • Non-Annex-1 countries will attempt to undertakeRenewables, EE supported and non supported NationallyPre 2008 vintagesUS$ 1.00-2.00 Appropriate Mitigation Actions (NAMAs).Post 2008 vintages • Financing options will be explored for projectsUS$ 2.00-4.00 under Reduction in Emission from Deforestation &Renewables, EE- Pre CDM Degradation (REDD).Pre 2008 vintages • By May 2011, a report is expected from developedUS$ 1.50-3.00Post 2008 vintages countries on the status of the USD 30 billion fundUS$ 2.00-5.00 committed at Copenhagen; the action plan onIndustrial gases, others access to the finance by the developing countriesPre 2008 vintages for combating climate change will also beUS$ 0.25-1.00Post 2008 vintages provided.US$ 0.50-1.00 • The Green Climate Fund is to be established as the operating entity for the financial mechanism under the convention. • Cancun Adaptation Framework has been initiated with support from developed countries, for adaption related activities at various levels with specific focus on LDCs. • A technology mechanism would be operational by 2012 for accelerating the development, deployment and diffusion of technology to the developing countries. • Carbon Capture & Storage (CCS) in geological formulations is granted eligibility for inclusion in
  3. 3. CDM; the modalities and procedure are yet to be elaborated. • Several reforms are to be undertaken within CDM, including standardized baseline for new projects,CDM EB NEWS loan schemes for projects from the poorestThe proposed agenda and countries, and establishment of an appeal body.annotations for the fifty-ninth Read More- Carbon Markets Post Cancun:meeting of the CDM Executive Possibilities and ExpectationsBoard, 14-18 February 2011,are available now. Start of the Indian REC MarketThe report of the twenty-ninthmeeting of the CDM Small India launched the Renewable Energy CertificateScale Working Group (SSC Mechanism on 18th November 2010. The mechanismWG) released. allows renewable based power projects to be accredited and registered for receiving Renewable EnergyCall for experts: opportunity for Certificates (RECs) which are then tradable through Powerad-hoc work on CDM. Exchanges. Most states have announced Renewable Purchase Obligation (RPO) targets which is the percentage of renewable based power which is to beEDITORSVinodini Chitrakaran, supplied to the grid. The obligated entities within the statesvinodini.c@general-carbon.com (power distribution companies -DISCOMs and large end- consumers) can cover any shortfall in achieving their RPO target, by purchasing RECs from RE generators. OneRameez Shaikh, REC is equivalent to 1 MWh of renewable energy injectedrameez.shaikh@general-carbon.com into the grid. So far, four projects from Gujarat and Chhattisgarh (3 biomass and 1 wind based power), with an aggregated capacity 28.6 MW, have been accredited under the mechanism. There are 25 State Electricity Regulatory Commissions (SERCs) in India out of which, 11 SERCs have finalized the regulations for accreditation. Everyone now awaits the establishment of the mechanism throughout the country with clearer regulatory environment, price discovery and enforcement. Read More: Renewable Energy Certificates Registry of India
  4. 4. NAMAS ExplainedNationally Appropriate Mitigation Actions or NAMAS are aset of voluntary policies and actions individual countriesundertake as part of their commitment to reducegreenhouse gas emissions. These are long termsustainable development measures such as energyefficiency, afforestation, industrial process efficiency,development of green fuels, etc. NAMAS can be funded bydeveloped countries (supported NAMAS), or by thedeveloping country itself (unilateral NAMAS) or besupported by the carbon markets (credited NAMAS).NAMAS are viewed in the context of the developingcountries’ national and/or regional development prioritiesand circumstances, which are enabled and supported byfinance, technology and capacity building from developedcountries. At Cancun, it was decided to set up a separateregistry for NAMAS. The selection of unilateral andsupported NAMAs as well as the submission of a NAMAproposal to the UNFCCC, requires a close cooperationand coordination of various ministries and institutions at anational, regional and even municipal level. An importantstrength of the NAMA concept when compared to a carbonmarket mechanism is that a comprehensive long-termview can be incorporated.The Copenhagen Accord specifies some importantaspects regarding Measurement, Reporting andVerification of actions (MRV): 1. Mitigation actions by developing countries shall be communicated every two years via National Communications to the UNFCCC. 2. MRV of unilateral NAMAs will be conducted domestically. 3. Supported NAMAs are subject to international MRV according to guidelines by the COP.For more information or questions on NAMAS please writeto gcnews@general-carbon.com.
  5. 5. Implications of the ban on HFC-23 and N2OCreditsThe EU has proposed a ban on credits from HFC-23 andN2O projects for use as compliance units within the EUETS, starting May 2013. HFC-23 and N2O are the mostcommon types of carbon offsets which contribute ~65% ofsupply, mostly from China and India. The ban means thatEU compliance buyers will be able to use these credits for2012 under the EU Emission Trading Scheme (EU ETS)until April 30, 2013, but not thereafter.As the global warming potential of HFC-23 is 11,700 timeshigher than CO2, such projects deliver an exceptionallylarge return to investors. The announcement marks theend of the extraordinary profits from sale of HFC-23 andN2O credits to several project developers in China andIndia. The issuance of credits for these projects wasrecently delayed by the CDM EB for close to nine months.Some EU countries, such as Italy, Germany, France,Britain and Poland, had lobbied hard for the start date tobe pushed back to May 2013 or later. The EuropeanParliament now has three months to comment on theproposal, after which the commission will formally adopt it.For more information or questions please write togcnews@general-carbon.com.Other Carbon NewsEuropean Exchange Launches 2020 CER ContractChongqing Launches China’s first domestic EmissionsTrading PilotSouth Korean Parliament to Debate Carbon-EmissionTrading Bill in FebruaryEmission Permits Theft Estimated at $37.7 Million
  6. 6. European Commission Extends Carbon Market Freeze Indefinitely Offset Ban Will Boost Demand for Africa Carbon Projects, UN Says Low-Carbon Energy Investment Hit a Record $243 Billion in 2010, BNEF Says Extra U.N. Climate Talks Set for April in Bangkok U.N. Panel Says Has Cut Carbon Offset Backlog Indonesia Delays Deforestation Ban Carbon Sequestration: Capture Technology Faces a More Hostile Environment Canada Wont Jump Into Cap-and-Trade Carbon Market On Its Own: KentThis newsletter is brought to you by General Carbon. Contact gcnews@general-carbon.com if you have any queries or comments or wish to contribute news and updates. We welcome your suggestions and contributions. If you wish to unsubscribe from this newsletter please reply to this email with “unsubscribe” in the subject line.General Carbon is a leading emission reduction consulting, sustainability advisory and investment firm with presence across Singapore, India, Sri Lanka, Thailand, Philippines, Indonesia, South Africa, Nigeria, Ethiopia and Kenya. GERERAL CARBON PTE LTD – 16 RAFFLES QUAY, #33-03 HONG LEONG BUILDING, SINGAPORE 048581.

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