Sethi 28 August 2009
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Transcript of Sethi 28 August 2009
Clean Development Mechanism
Ministry of Environment & ForestsGovernment 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
Green house gas (GHG)
Chemical Formula
GWP
Carbon-di-oxide CO2 1
Methane CH4 21
Nitrous oxide N2O 310
Per fluoro carbons (PFCs)
(PFCs) 560 ~ 9200
Hydro fluoro carbons
(HFCs) 140 to 11700
Sulphur hexa fluoride
(SF6) Above 10,000
Global Warming Potential (GWP)
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
Country Reduction commitment for 2008-2012 [% of base year]
Japan – 6 %
Canada – 6 %
EU – 8 % (EU Burden Sharing Agreement)
- Germany – 21 %
- United Kingdom – 12.5 %
- Italy – 6.5 %
Contd.. Three Mechanisms
Clean Development Mechanism Joint Implementation Emissions Trading
Project Performance Monitoring by Project Proponent
Preparation of PIN - DNAPreparation of PDD - UNFCCC
Host Country ApprovalTo the Candidate Project
Project Validation By UNFCCC Accredited DOE
Submission for Registration (UNFCCC – CDM Executive Board)
Certification & Issuance of CERs (DOE & UNFCCC)
CDM Project Cycle - Basics
ONE TIME ACTIVITY
RECURRING ACTIVITY
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
No. Sectoral Scope
1 Energy industries (Renewable / Non-renewable sources)
2 Energy distribution
3 Energy demand
4 Manufacturing industries
5 Chemical industries
6 Construction
7 Transport
8 Mining/mineral production
9 Metal production
10 Fugitive emissions from fuels (solid, oil and gas)
11 Fugitive emissions from production and consumption of halocarbons and sulphur hexafluoride
12 Solvent use
13 Waste handling and disposal
14 Afforestation and reforestation
15 Agriculture
Sectoral Scope
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
Sectoral Scope Large Scale
Small Scale
Consolidated Methodologies
Energy industries (renewable/non-renewable sources)
30 7 7
Energy distribution
1 1 -
Energy demand 6 7 -
Manufacturing industries
11 10 5
Chemical industry 13 4 -
Construction - - -
Transport 1 5 -
Mining/mineral production
- - 1
Metal production 7 - -
Fugitive emissions from fuels (solid, oil and gas)
6 1 1
Fugitive emissions from production andconsumption ofhalocarbons and sulphurHexafluoride
6 2 -
Solvents use - - -
Waste handling and disposal.
6 7 3
Aforestation and reforestation
9 6 2
Agriculture 1 3 1
Approved methodologies Contd/-
• 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 Sustainable Development CriteriaCriteria
Prerogative of the Host Party
Economic well being
Social well being
Environmental well being
Type of Type of projectsprojects
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
SSCWGA/RWG
MP APRIT
DOE
superviseselects
accredits supports
recommends
supportsapproves
supports
recommends
Portfolio of Host Country Approved CDM Projects
Portfolio of Host Country Projects approved.
SectorsNo. of
Projects
EnergyEfficiency
431
FuelSwitching
76
IndustrialProcess
65
MSW 33
Renewable 474
Renewable(Biomass)
337
Forestry 9
Total 1,425
431, 30%
76, 5%
65, 5%
33, 2%474, 33%
337, 24%
9, 1%
Energy Efficiency
Fuel Switching
Industrial Process
MSW
Renewable
Renewable (Biomass)
Forestry
Sector-wise break-up : Host Country Approved project as on 21 August 2009.
Sector-wise break-up : CERs expected till 2012 from Host Country Approved projects as of 21
August 2009.
SectorsCERs (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
35%
10%17%
2%
20%
15%1%
Energy Efficiency
Fuel Switching
Industrial Process
MSW
Renewable
Renewable (Biomass)
Forestry
Sector-wise break-up : CERs expected till 2012 in Host Country Approved project as on 21 August 2009.
Investment in CDM Projects
Investment in Rs. Crores Vs Years
358 1,79415,933
36,406
68,584
129,244
188,924
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
160,000
180,000
200,000
2003 2004 2005 2006 2007 2008 2009
Year
Inv
es
tme
nt
in R
s.C
rore
s
SectorsNo. of
Projects
EnergyEfficiency
129
FuelSwitching
16
IndustrialProcess
22
MSW 9
Renewable 143
Renewable(Biomass)
129
Forestry 2
Total 450
Indian Projects Registered by CDM-EB .
Sector-wise break-up : No. of Projects Registered by CDM-EB as on 25 August 2009.
129, 29%
16, 4%
22, 5%
9, 2%
143, 31%
129, 29%
2, 0%
Energy Efficiency
Fuel SwitchingIndustrial Process
MSWRenewable
Renewable BiomassForestry
Portfolio of Host Country PSU Projects approved
SectorsNo. of
Projects
EnergyEfficiency
57
FuelSwitching
8
IndustrialProcess
20
MSW 2
Renewable 33
Renewable(Biomass)
2
Forestry 2
Total 124
Host Country Public Sector Approved Projects as on 25 August 2009.
45%
6%
16%
2%
27%
2%
2%
Energy Efficiency
Fuel Switching
Industrial Process
MSW
Renewable
Renewable (Biomass)
Forestry
International Statistics
Expected Average Annual CERS from Registered Projects till 2012
CERS Issued by Host Party.
India 69,073,247
NATCOM ANALYSIS GHG source categories CO2 emissions CH4 N20 CO2 eq.
emissions
1 Energy
Including industry, transport residential and mining etc
679.47 2.896 0.0114 743.82
2 Industrial Processes 99.878 0.002 0.009 102.710
3 Agriculture - 14.175 0.151 344.485
4 Land use, Land-use change and Forestry
37.675
Removals-23.533
0.0065 0.00004 14.292
5 Waste - 1.003 0.007 23.233
6 Emissions from Bunker fuels#
3.373 - - 3.373
Total (Net) National Emission
817.023 18.083 0.178 1228.54
# Not counted in the national totals (All figures in Million Tonnes)
0
39183
685
945
114
471
750
1,600
3,000
100
530
940
1,900
2,700
0
500
1000
1500
2000
2500
3000
3500
May 2005 (SB22) December 2005(COP/MOP1)
May-06 May-07 Feb-08
Registered project activities Projects in the pipeline Projected CERs
Number of projects / Millions of CERs (to 2012)
How far we’ve come | Growing demand
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 Sample Calculation for CER RevenueRevenue
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