Status of Joint Implementation in Russia

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Status of Joint Implementation in Russia

• Helmut SCHREIBER
• The World BankEurope and Central Asia
  RegionInfrastructure and Energy Services
  Department

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Russia necessary to reach Kyoto Targets

• Ratifying OECD cumulative target reductions will
  be 5-5.5 billion tons of carbon dioxide below
  1990 levels
• If half is done domestically the compliance gap
  to be met through Kyoto Mechanisms is 2.5 billion
  tons
• The figures (in million tons of reductions) dont
  add up
• Compliance Gap 2,500
• CDM deals so far 400
• JI deals so far 150
• ? Big volume transactions desperately needed
• Russia could (and should be) the biggest source
  of JI and International Emissions Trading (IET)
  deals Assigned Amount Units (AAUs) are of the
  magnitude of 3 bln.
• Time running out as lead times from project idea
  through construction to implementation and ERs
  are long
• If Kyoto fails, post-Kyoto commitments would be
  jeopardized

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Headroom of Russia and other JI Countries
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History of JI work in Russia (1)

• September 2004 National Action Plan (NAP)
  initiated by government decision
• October 2004 Ratification of Kyoto Protocol by
  Russia
• November 2004 (starting). Participation of 15
  Federal Ministries and Agencies. Agreed by almost
  all of them. The NAP fixes the distribution of
  responsibilities among Russian ministries. The
  NAP
• takes into account the provisions of the draft
  medium-term program of socio-economic development
  (till 2008)
• Draft NAP was presented at the WB workshop in
  January and with EU in March 2005
• February 2005 The Government agrees on the NAP.
• March 2005 Interagency Commission on Kyoto
  Protocol is formed. The Ministry of Economic
  Development and Trade is leading institution in
  this commission

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History of JI work in Russia (2)

• August 2005 Draft of the Regulatory Framework.
• September 2005 March 2006. Different drafts of
  Regulatory Framework discussed within the
  Interministerial Committee.
• March 2006. Government decision on
• National monitoring system of GHG emissions and
  sinks and on inventories Roshydromet is in
  charge and on
• registries Ministry of Natural Resources is in
  charge
• April 2006 until November 2006 Discussion of
  drafts of Regulatory Framework. No agreement
  between Ministry of Economic Development and
  Trade and Ministry of Foreign Affairs.
• December 2006 meeting under the auspices of the
  Deputy Prime Minister Medvedev envisaged to solve
  existing conflicts. If meeting will be
  successful, Regulatory Framework will be
  prepared JI could start perhaps in September
  2007.

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JI Approval Mechanism without State guarantees
Representative of the insurer
Validator
Registry manager
Risk insurance of default from obligations under
the project according to PDD
Conclusion on verification
Conclusion on validation
Translation of ERUs into the account of the
Applicant (on results of verification)
Project sponsor (Applicant)
JI Committee (for Track 2)
Approval of the project
Certificate on modification in the National
register
The application for final approval 1) PDD with
schedule and design parameters 2) The project
3) Acknowledgement of insurance 4) The
conclusion of the Validator
Notice on acceptance of the positive
decision (Letter of approval)
National register
Conclusion on verification
Correlation
Coordination center Focal Point
Cadastre
Notice on acceptance of the positive decision
MoEDT Ministry of Economic development and Trade
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JI Approval Mechanism with State guarantees
Representative of the insurer
Validator
Conclusion on validation
Partial insurance of risks on PDD
JI in Russia
Project budget planning body
Budgetary credit contract
Project sponsor (Applicant)
Collateral, bank guarantee or other security
against the budgetary credit
The application for final approval 1) PDD with
schedule and design parameters 2) The project
3) Acknowledgement of insurance 4) The
conclusion of the Validator
Notice on acceptance of the positive decision
(Letter of Approval)
Coordination center Focal Point
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JI Projects in Russia Status

• 2004 GGFR identified pilot and demonstration
  projects for carbon credit financing under JI and
  started preparation of first projects
• By November 2006 WB has received
• 30 projects proposals,
• 10 of them deal with associated gas use, mainly
  dealing with
• Transporting flared gas for gas sales
• Use of flared gas for onsite power generation
• Total estimated reduction volume from these
  associated gas projects 50million tons of
  reductions for the period 2008-2012.
• Also reduction of methane in gas distribution
  network (reducing leakages) and
• Other projects like land fill gas projects, fuel
  switch etc.
• 7 projects have been endorsed by the Government
• Special emphasis of Gas Flaring, as these
  projects can be implemented generally faster than
  other energy projects
• One PDD has been prepared should be validated in
  January/February.

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Gas flaring in Russia

• Flaring is very common in Russia
• The very low utilization of associated gas is
  primarily because of two reasons
• No cost There are no substantial environmental
  penalties for gas flaring there are penalties,
  but they are either not paid (unreporting) and/or
  too low
• No gain Lack of access to the gas transportation
  system reduces the scope for Russian oil
  producers to extract value from the associated
  gas
• Russia accounts officially for 15 bcm
  inofficially for as much as 60bcm

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Gas Flaring in Russia Western Siberia (1)
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Gas Flaring in Russia Western Siberia (2)
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