1. The Flexible Mechanisms of
the Kyoto Protocol as
Business Opportunity
Aqua Vital International
Dr. Howard Barmil
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2. Table of Contents
 Background on Kyoto Protocol
 Background to Project Development
 Project Development vs. Equipment Sales
 Contact points of the two different sectors (Equipm.Sales&Pro.Dev.)
 Feasibility Study with and without Carbon Credits
 Potentials Equipment Sales/ Potentials Project Development
 Organisation structure to exploit the potentials the Best way
 Financial and Personel needs
 Profit Analysis
 Recapitulation
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3. Background (1): The Kyoto-Protocol
Reference year: 1990 1 st Budget period:
2008 - 2012
- 5,2 %
Russia: USA:
0% -7%
I: -6,5% -8% NL: - 6%
B: -7,5% F: 0%
GB: -12,5% SF: 0%
A: -13% S: +4%
DK: -21% - 21% IRL: +13%
L: -28% E: + 15%
ANNEX-I EUROPEAN
Countries UNION
Germany GR: +25%
P: + 27%
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4. Background (2): Flexible Mechanisms
Joint Implementation: >> project related
(JI) >> Reduction in Guest country will be credited
to Investor country and deducted in the
Guest country
>> Clearing in the Budget period
(Specialty: Early JI)
Business partners are both in an Industrialized Country, or in an Industrialized and
ex socialist country.
Clean Development Mech.: >> project related
(CDM) >> Reduction in Guest country raises
Budget of the Investor country
>> „immediately“ creditable
Business partners are in an Industrialized country and in a Developing Country.
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5. Scheme: Project Mechanisms
Greenhousegas-
Reduction
Certification
Rehabilitation
Investor Carbon Credits
ERU‘s or CER‘s
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6. Business Profile
With Business activities and
projects
Can Greenhouse gases be reduced? 
Is it possible to save primary energy? 
Will renewable energy sources be promoted? 
⇒ Project fits in this business field
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7. Procedure
Execution of a CDM - Project
• An intensive and complex Procedure
has to be worked off in order to fulfil the needs to be
called a Climate Change Project
• The whole procedure includes among other subjects
international contracts, Certifications and authorisations.
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8. Project Cycle
 PIN/PCN
 Letter of Endorsement/of Approval of the Host Government
 PDD
 Validation by independant Entity
 Emission Reduction Purchase Agreement
 Registration and following steps
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9.  PIN
 Letter of Endorsement/of Approval of the Host Government
 PDD
 Validation by independant Entity
 Emission Reduction Purchase Agreement
 Registration and following steps
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10. Example of Specific CO2 Production
~ 52 % Condenser Plant Electrical Output
~ 19 % 0,669 kg CO2/kWh*
100 % Primary Energy Losses ~ 40 % Total 0,963 kg CO2/kWh*
Boiler
~ 48 % ~ 41 % 0,294 kg CO2/kWh*
Thermal Output
Electrical Output
~ 41,9 %
DEUTZ CHP
Losses
100 % Primary Energy ~ 13,3 % Total 0,5 kg
CO2/kWh
~ 44,8 %
Thermal Output
*Source:„Ganzheitliche Bilanzierung der Energiebereitstellung“ FfE-Study; 48 % (0,463 kg CO2/kWh)
CO2 - Saving with CHP
Energy Mix Germany 1996: 0.669 kg CO2/kWhel
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11. Natural Gas - the cleanest Fossil Fuel
CO2 Production of fossil primary Energy at combustion
[kg CO2/kWh Energy input]
0,45 0,4
0,4 0,33
0,35 0,28
0,3 0,26
0,25 0,2
0,2
0,15
0,1
0,05
0
lignite Hard Coal Heavy Fuel Diesel Oil Natural Gas
Oil
Quelle: Third Report of the Parliamentary Comission on „Preventive Measures to
Protect the Earth`s Atmosphere“ published in October 1990
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12. Project Examples
>>> Gathering and Utilization of Waste gases from
- Landfill sites
- Sewage Plants
- Coal Mines
- Biogas devices
>>> Change of the Fuel
(for example Natural Gas instead of Coal)
>>> Cogeneration
1 ton of CH4 equals 21 tons of CO2 
also in the payment!
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13. Cost – Income Analysis: virtual Example
Income and Costs for a Climate
Change Project
Cost Revenues
Transactioncosts of a Climate Change project 60.000 €
Value of a CER Certificate
40.000 t/a x 12 € = annual payment
equals about 10 MW Natural Gas projetct or 1,3
MW Non Natural Gas project if Methanemissions
are avoided 480.000 €
Yearly costs of Verification (starting year 2) 10.000 €
Profit 1st. year 420.000 €
Profit in the following years* 470.000 €
* Projekt running times 1 x 10 Jahre oder 3 x 7 Jahre
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14. 1. Background Project Development
Example: Biogas system
a.) Phases of Project development (major steps)
1. Offer of a raw material or gas (here Biogas, but also Coal Mine Gas, Landfill Gas, etc.)
2. Evaluation of the amount, Quality and time of use
3. Issuing an Investment Plan and Cash Flow Plan
4. Discussion with Investor about the total situation and Investment frame  green Light
5. Contracts about securing the raw material, Permits, Procurement (Tender procedure for
equipment Service and operation)
6. Contracts for the Sales of Energy, Certificates and Fertilizer
7. Operation
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15. 2. Project Development Biogas device Overview
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16. Equipment Sales vs. Project Development
1.Equipment Sales
a.) Tender procedure
b.) Contact with specialized technical personell in that specific technical field
c.) not complex (only supply against money)
d.) specific customer segment
e.) specific profit for specific supply
2. Project Development
a.) complex various specialists in different fields required
b.) many segments, many fields possible
c.) companies like more selling, me with project development like more buying
d.) with „good contracts“ „good profit“ possible
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17. 2. What is needed?
a.) Personel
1.Specialists in the use of Biogas, Coal Mine Gas etc.
(Experts who understands the technical issues of Biogas devices, Coal Mine use,
Landfills etc., somebody who knows the technical criteria of equipment and use of the gas)
2.Specialists in Financing (somebody who knows how to model the financing of such
systems, including the financing with Carbon Credits, somebody who knows about
international subsidies and help of international banks
3.Specialists in CDM and JI (somebody who knows about the whole project cycle, to achieve
the most credits possile but also where to sell or how to use the Credits the best way)
4.Specialists in Marketing and Distribution (somebody who knows international trade,
establishes contacts in many countries, establishes subsidiaries, finds the distribution
channels to many raw materials and gases, contractual expert (a tough fighter)
5. Operation supervisors (somebody who is responsible to supervise and has an overview
over the projects) This person has to manage the projects the others have aquired.
Installation and operation is subcontracted, but sales contracts have to be made up, then
there has to be a responsible in the company, who knows about execution of the project.
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18. b.) Value Chain and where are the values
(where can you earn money)
-Raw material
-Service and Engineering of the whole project
-Equipment (Foreign- and own systems)
-Service of devices
-Energy Sales
-Generation of Certificates
-Trade of Certificates a. Sales of the generated Certificates of own projects
b. Brokerage
-Trading of Coproducts (for example Water, Fertilizer, CO2)
-Sale of the whole project
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19. 3.) Connection Equipment Sales and Project Development
a.) Equipment Sales (when
company just sells equipment)
Client
Company
b.) Project Development
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20. Feasibility Study with and without Cabon Credits (Example study
to show what IRRs can be achieved, to be discussed in person)
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21. Registered Climate Change projects
(01) Energy industries (renewable - / non-renewable sources)
(02) Energy distribution
(03) Energy demand
82
1
(04) Manufacturing industries
(05) Chemical industries
228 (06) Construction
(07) Transport
584 (08) Mining/mineral production
0
(09) Metal production
16
86 (10) Fugitive emissions from fuels (solid, oil and gas)
1
(11) Fugitive emissions from production and consumption of halocarbons and
6 sulphur hexafluoride
66
1 (12) Solvent use
14
0
0 (13) Waste handling and disposal
16
(14) Afforestation and reforestation
(15) Agriculture
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22. Potential
Out of that potential we can do most of the segments shown before
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23. Outlook in the future
New possibilities: Establishment of Programatic CDM in Indonesia
(Fixed preliminary agreements )
Involved Experts:
-Dr. Günther Herdin (International Gas engine Expert)
-Dr. Tamer Turna (International Engineering Expert)
-Dr. Howard Barmil (International Business Development Expert)
-Knowledge of Government officials worldwide for example
-Mr. Franzjosef Schafhausen, Germany
Dr. Dr. Dürr Vienna etc. due to the fact of participation in working groups in
Austrian and German Governments and the COPs/MOPs
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