South Africas Designated National Authority for Clean Development Mechanism

1
South Africas Designated National
Authority for Clean Development Mechanism

• Designated National Authority
• 27 12 317 8309

2
Overview

• Basics for CDM
• Functions institutional arrangement - DNA
• DNA evaluation approval procedure
• Key role players in CDM
• Projects profile
• Conclusion

3
The CDM Basics

• CDM is one of the project based mechanism of
  the Kyoto Protocol on Climate Change.
• CDM Annex1 countries with GHG reduction
  commitment to invest in emission reducing
  projects in developing countries as an
  alternative to what is generally considered more
  costly emission reductions in their own countries
• Goals
• Contribute to the Convention
• Assist Annex1 achieve ER targets
• Assist Non-Annex1 achieve sustainable development
• Characteristics
• Activities must lead to measurable reductions
  tradable
• Reductions must be additional (would not have
  occurred in absence of the project activity)
• Participation in project activity is voluntary

4
CDM Operational Structure
5
CDM the baseline concept

• A projects GHG emission reductions need to be
  judged against some baseline
• The baseline is what would have happened in the
  absence of the CDM
• Additionality

6
(No Transcript)
7
Functions of Designated National Authority for
CDM in South Africa

• Cabinet approved establishment of DNA at DME to
  perform the following functions
• Regulation function
• Project evaluation and approval in accordance
  with section 40(a) of the Marakech Accords.
• Promotion function
• To promote and facilitate the development of CDM
  projects in South Africa
• Secure an adequate share of CDM investment in
  South Africa
• To promote CDM projects of a developmental nature
• Ensure that the mechanism is in the national
  interest (Gov. objectives)

8
Institutional Arrangement to handle CDM in SA

• DTI
• DME
• DEAT
• DST
• DoT
• NT
• DoA
• DWAF
• DoH
• DFA

Oversight

• DTI
• DME
• Parastatals
• Private Sector
• NGOs

Steering Committee
Promotions Sub-Committee
Designated National Authority (Director General
of DME)
9
DNA project approval process
10
CDM Evaluation Approval Procedure

• Evaluation approval of submitted PDD should be
  read in conjunction with
• Project approval procedure of the DNA (DME, 20th
• November 2004)
• SD criteria for approval of CDM projects by the
  DNA
• (DME, 14th October 2004) and,
• Any regulations promulgated with regard to the
  DNA (Regulation Gazette No 8275)

11
SD Criteria for CDM project approval

• Economic
• Attract foreign investment to SA
• Technology and skills transfer clean energy
  technologies such as cogeneration, RE ,EE,
  methane recovery etc
• Contribute to EE and RE targets
• Social
• Job creation
• Improved quality of life
• Access to services
• Environment
• Improved air quality, water quality etc

12
Key Role Players in CDM

• Project Developers
• Development of PIN or PDD Request for Host
  Country approval
• Project registration as CDM
• Designated Operational Entities
• - Validation Verification Certification
• CDM Executive Board
• - Project registration Approval of
  methodologies Issuance of CERs Accreditation of
  entities

13
Key Role Players in CDM.cont..

• Host Country
• - Establishment of institutional legal
  frameworks Ensures Projects contribute to SD
  Promotion of CDM
• Project Owners (e.g. municipality)
• - Project identification, funding
  implementation
• Businesses
• - Investment
• NGOs General Public
• - Projects contribute to SD Promotion of CDM
  Watch Dogs!!!

14
SA emissions by sector
Waste
Total 380 Mt CO2- equivalent
4
Agriculture
Non-energy emissions
9
Industry
Energy industries
8
Fugitive emissions
45
2
Other energy
7
Transport
11
Industrial energy
14
Share of national emissions, CO2, CH4 and N20,
1994 GHG inventory
15
Sectors for potential projects

• Energy supply and demand Energy efficiency
  (EE), renewable energy, cogeneration, cleaner
  coal for generation fuel switch from coal to gas
• Waste sector composting energy (electricity)
  generation
• Mining CH4 reduction from coal mines EE
• Agriculture afforestation reforestation fire
  controls improved management of woodlands
  biofuel production
• Transport and automotive sectors Improved
  public transport, urban planning traffic
  management vehicle fuel switch vehicle
  efficiency, road to rail transport
• Manufacturing industrial EE structural changes
  to less energy emissions-intensive boiler
  conversion to gas
• Residential, public commercial buildings fuel
  switch, solar heating, energy management, EE
  building design (thermal-efficiency), EE
  appliances

16
General Information on Projects

• Cost estimation
• PDD development R150 000
• Validation cost 12000
• Registration 10 000 (but based on type of
  project
• Monitoring (Annual)

17
Coal conversion factor

• 1.2 kg CO2 e per kWh

18
Overview of projects submitted for approval

• 122 projects (27 PDDs and 95 PINs) received to
  date
• Out of 27 PDDs, 15 Registered with the CDM
  Executive Board
• 4 have been issued with Certified Emissions
  Reductions
• These 27 PDDs have emissions reductions
  potential of 4.7 million tCO2e per annum
• The registered 15 PDDs have emission reductions
  potential of 2.8 million tCO2e per annum
• 12 PDDs are at validation and/or request for
  review and have emission potential of 1.9 million
  tCO2e per annum
• Kuyasa Low-Cost Housing Energy Efficient Project
  (Cape Town) July 2005 Gold Standard Award
  reduces 7 000 t eCO2 per annum

19
Overview of projects submitted cont

• Lawley Fuel Switch Project (Lenasia) 03/2006
  19,000 t eCO2/yr (Issued with CERs)
• PetroSA Biogas to Energy Project (Mossel Bay)
  09/2006 29 000 t eCO2/yr
• Rosslyn Fuel Switch Project (North Pretoria)
  09/2006 107,000 t eCO2/yr
• Durban Landfill Gas to Energy Project (Durban)
  12/2006 69,000 t eCO2/yr
• Tugela CFB10 Conversion from Coal to Bark Fired
  (Tugela) 02/2007 70,000 t eCO2/yr
• Mondi Biomass Project (Richards Bay) 05/2007
  222,000 t eCO2/yr

20
Overview of projects submitted cont.

• Omnia N2O Destruction Project (Sasolburg)
  05/2007 576,000 t eCO2/yr (Issued with CERs)
• EnviroServ Chloorkop Landfill Gas Project (East
  Rand) 04/2007 188,000 t eCO2/yr
• N2O abatement project at nitric acid plant No. 11
  at African Explosives Ltd- 08 Feb 08 264,000 t
  eCO2/yr
• N2O abatement project at nitric acid plant No 9
  at AEL 05 Nov 07 250 000 t eCO2/yr

21
Overview of projects submitted cont.

• Sasol N2O abatement project at Sasol Nitro 25 May
  07 610, 000 t eCO2/yr
• Transalloys manganese alloy smelter energy
  efficiency project 19 Oct 07 83 000 t eCO2/yr
• Kanhym Farm manure to energy project, 18 July
  2008 27 000 t eCO2/yr
• Durban Landfill gas to Electricity
  Project-Bisasar Road Landfill, 26 March 2009, 352
  000 t eCO2/yr
• Projects cover the following types
• Fuel switch Cogeneration Energy efficiency
  Hydro power, Energy generation from renewable

22
Possible barriers to CDM development in SA

• Lack of project development capacity
• Lack of financing - project development
  implementation
• High transaction costs - CERs
• Municipal Finance Management Act (MFMA)/Public
  Finance Management Act (PFMA)
• Uncertainties around post 2012 regime
• Tax implications of CERs
• Low electricity cost vs clean/renewable energies

23
Conclusion

• DNA has commissioned two studies
• CERs taxation implications
• Review of SD criteria
• DNA rolling out CDM awareness raising capacity
  building initiatives
• DNA supports establishment of functional DNAs in
  other African countries

24
Useful Links
www.dme.gov.za/cdm www.info.gov.za/gazette/regul
ation/2005/27788a.pdf http//cdm.unfccc.int www.p
ointcarbon.com www.ipcc.ch www.un.org/esa/sustdev/
csd/policy.htm www.ieta.org www.cdmbazaar.net