From PoAs to NAMAsa pilot case

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Agenda

1. Context of discussions

2. Objective and concept for NAMA Pilot Case

3. Introduction to example PoA – EE in SME Steel cluster

The Context

Indian ContextIndia is committed to contribute to the global efforts towards Climate

Change mitigation Mitigation target envisioned in Copenhagen Accord: Reduce emissions

intensity of GDP by 20-25% by 2020 in comparison to the 2005 level.Successful participation in the flexible Kyoto mechanisms; but with

limited impact on EE projectsClimate change policy in India embraces a vision in the form of NAPCC

and related 8 missions and has evolved several measures and actions

International discussions context

On the Agenda since Bali Action Plan 2007 Cancun Agreements differentiates NAMAs into three types (Unilateral

NAMAs; Supported NAMAs; Credited NAMA)

How to come to fast track practical concepts and pilot NAMAs? 3

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Bridging the Gap – PoA to NAMAWhy PoA as starting point?

Various strategies are possible- Top-Down - Bottom-Up- Combination

Bottom-Up strategy for NAMA development can use elements of a PoA - Baseline definition- Monitoring and Verification - Incentive systems

Assumption - Fast track pilot schemes using PoAs

are possible

Scoping study for four case studies

PoA

CPACPA … CPA

NAMA

Low Carbon Development Policy

Bridging the Gap – How to get from PoA to NAMAResearch Study*Module 1: Understand the PoA: scope, eligibility criteria, implementation

arrangements, targeted GHG emission categories

Module 2: Analyse four key technical PoA design elements and their suitability for scaling up:

- eligibility criteria / baseline setting procedure / MRV process and PoA management and

- identify if PoA design is a) already fully applicable, b) needs to be adjusted or c) needs to be developed for NAMA design.

Module 3: Evaluate the domestic policy & institutional framework to assess whether the existing framework is supportive of NAMA implementation or not.

Module 4: Identify follow-up actions for NAMA readiness based on the need for adjustments and new designs as identified

• *Study by South Pole on behalf of German Ministry for Environment and KfW

Case Study India – PoA EE in SME Steel Cluster

PoA Objective: Improve Energy Efficiency of furnaces and burners in Indias SME Steel Industry by 20-50%.

Scope: Nationwide – In Clusters / Jodhpur cluster first CPA

PoA Managing Entity: Small Industries Development Bank (SIDBI) supported by India SME Technology Services (ISTSL)

GHG Emission Source: Reduce fossil fuel use in SME Steel Mills

Methodology: AMS II. D Energy Efficiency and fuel switching measures for industrial facilities.

Module 2: Analyse four key technical PoA design elements and their suitability for scaling up:- eligibility criteria / baseline setting procedure / MRV process and PoA management and- identify if PoA design is a) already fully applicable, b) needs to be adjusted or c) needs to be developed for NAMA design.

Module 3: Evaluate the domestic policy & institutional framework to assess whether the existing framework is supportive of NAMA implementation or not.

Module 4: Identify follow-up actions for NAMA readiness based on the need for adjustments and new designs as identified • *Study by South Pole on behalf of German Ministry for Environment and KfW

Measures of the PoA

1. Controlling supply of excess air

2. Installation/retrofitting Recuperators

3. Insulation of furnace surfaces

4. Retrofitting/Modification of furnace doors

5. Fuel preparation and heating

6. Automation of furnace operation

Advantages and Limitations of the PoA

Advantages National scale of PoA Nationally operating, state owned, privately acting CME PoA goals contribute to Indias political will to reduce GHG Emissions Investments straight forward Target group are bankable SMEs

Limitations No new facilities allowed – only existing No capacity upgrade allowed Only the 6 measures are allowed Changing the fuel type not allowed PoA is limited to steel sector

Draft NAMA Design Sheet (of desk study)

Scope: Energy intensive SME Sector (not covered under Perform, Achieve Trade Scheme) that operates similar equipment

- glass, cement, pulp and paper, textile etc. - allows for measures not permitted under AMS II.D

Management: Under National Mission for Enhanced Energy Efficiency - Nodal Agency: Bureau of Energy Efficiency.- Potential Implementation partner: SIDBI using similar incentive structure

(subsidised loan scheme). Baseline setting: standardisation approaches and benchmark system

must be developed, MRV and eligibility criteria can be adapted.

Link to carbon market: PoA issued CERs should be deducted from NAMA achievements when a NAMA target is defined. Further linkages tbd.

Conclusions and next Steps

Up-scaling is possible, but adaptation work would need to be undertakten

Evaluation of SME to be included needs to be done

Adaptation of MRV Structure

Development of standardised Baseline based on AMS II. D

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Contact

KfW Carbon Fund KfW Bankengruppe

Palmengartenstrasse 5–9 60325 Frankfurt am MainGermany

Tel +49-69-7431-4218Fax +49-69-7431-4775

klimaschutzfonds@kfw.de

Carolyn NeufeldTel +49-69-7431-3233Carolyn.neufeld@kfw.de

Contact us for further information!