CDM Updates

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CDM Updates

• Sudhir Sharma
• AIT Bangkok

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Developments in CDM AR projects (1)

• Afforestation and Forestation Projects
• Approved the modalities procedures for
  Afforestation Reforestation CDM projects
• Proposals submitted for small scale project
  baselines
• To be finalized at COP 10
• Important issue of Leakage whether to ignore
  leakage or prepare a discount mechanism for
  automatic deduction of emissions reduction based
  on categorization of projects.
• Bundling unresolved
• Definition of low income communities whether
  DOE should check this or not?
• Fee - Exempt the projects from adaptation fee or
  a lower fee
• Carbon pools to be included discretion of
  project participants or proof that unaccounted
  pools are not important

3
Developments in CDM AR projects (2)

• Accounting of Non-CO2 gases only if more than
  15 of total sequestration?
• Right to land customary or access rights also
  should be acceptable?
• PDD for SS projects available in
  FCCC/SBSTA/2004/L.9
• The SS project should belong to following
  category
• Grassland to forested land
• Cropland to forested land
• Wetland to forested land
• Settlements to forested land

4
Profile of Projects submitted to EB

• 64 Methodologies
• 21 Renewable
• 7 Hydro
• 3 Wind
• 9 Biomass Bagasse
• 2 Geothermal
• 11 Methane recovery
• 9 EE
• 3 process change
• 5 waste heat recovery
• 2 Non CO2 recovery
• 4 Fuel switch
• 1 each Transport, CO2 capture, Flare gas capture

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Approved Methodologies (1)

• AM0001 Incineration of HFC 23 Waste Streams
• Applicable to HCFC producing facility where HFC
  23 as waste stream with no economic value
• AM0002Greenhouse gas emission reductions through
  landfill gas capture and flaring where the
  baseline is established by a public concession
  contract
• Applicable to landfill gas capture project award
  under competitive bidding
• Gas capture is greater than that provided under
  the contract
• Electricity generation is not planned
• AM0003 Simplified financial analysis for
  landfill gas capture projects
• Applicable to Landfill gas capture projects where
  the only baseline possible continuation of
  present practice
• Either gas is flared or if electricity produced,
  no reductions claimed

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Approved Methodologies (2)

• AM0004 Grid-connected biomass power generation
  that avoids uncontrolled burning of biomass
• Use biomass, abundantly available, that would be
  dumped or burned in an uncontrolled manner
• Not be connected to a grid with suppressed demand
• AM0005 Small grid-connected zero-emissions
  renewable electricity generation
• Small projects (lt60 MW) supplying to grid not
  dominated by zero emission sources
• Projects not common practice and have barriers
• AM0006 GHG emission reductions from manure
  management systems
• Manure produced from cattle, buffalo and/or swine
  managed in confined systems
• The baseline and project manure management as per
  regulations

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Approved Methodologies (3)

• AM0007 Analysis of the least-cost fuel option
  for seasonally-operating biomass cogeneration
  plant
• Use of biomass in existing cogeneration unit
  where biomass is not available during off-season
  (e.g., sugar production)
• Biomass used is not used for energy purpose in
  the baseline
• AM0008 Industrial fuel switching from coal and
  petroleum fuels to natural gas without extension
  of capacity and lifetime of the facility
• Switch to gas from coal/petroleum where gas is
  costly to use than coal/petroleum, which are not
  banned by regulation
• No change in life of project or major process
  change
• AM0009 Recovery and utilization of gas from oil
  wells that would otherwise be flared
• Capture of flared gas (baseline) to produce fuel
  use that substitutes similar fuel types with
  higher carbon content
• Substitution of fuel is unlikely to increase
  energy consumption

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Approved Methodologies (4)

• AM0010 Landfill gas capture and electricity
  generation projects where landfill gas capture is
  not mandated by law
• Landfill gas capture and production of
  electricity where LFG is not mandated but
  regulation on waste disposal
• Electricity generation capacity not greater than
  15 MW
• AM0011 Landfill gas recovery with electricity
  generation and no capture or destruction of
  methane in the baseline scenario
• Baseline flaring of gas as no government
  regulation
• Electricity generated used on site and no credits
  generated from it
• AM0012 Biomethanation of municipal solid waste
  in India, using compliance with MSW rules
• Applicable only for projects in India
• Project uses MSW to produce CH4 and baseline
  Landfill management regulation is not enforced.

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Proposed Consolidated Methodologies

• Consolidated baseline methodology for
  grid-connected electricity generation from
  renewable sources
• Consolidated baseline methodology for landfill
  gas project activities
• Consolidated process for assessment of
  Additionality

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Approved DOEs - Validation

• Japan Quality Assurance Organization (JQA)
• Sectoral scope - 4, 5, 6, 7, 10, 11, 12
• Det Norske Veritas Certification Ltd. (DNVcert)
• Sectoral Scope 1, 2, 3, 4, 5, 6, 7, 10, 11, 12,
  13
• TUV Industrie Service GmbH TUV SUD GRUPPE (TUV
  Industrie Service GmbH TUV)
• Sectoral Scope 1, 2, 3
• Societe Generale de Surveillance UK Ltd. (SGS)
• Sectoral Scope 4, 5, 6, 7, 10, 11, 12
• http//cdm.unfccc.int/DOE/list
• 18 more DOEs which presently have an applicant
  status

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Sectoral Scope

• Energy industries (renewable - / non-renewable
  sources)
• Energy distribution
• Energy demand
• Manufacturing industries
• Chemical industries
• Construction
• Transport
• Mining/mineral production
• Metal production
• Fugitive emissions from fuels (solid, oil and
  gas)
• Fugitive emissions from production and
  consumption of halocarbons and sulphur
  hexafluoride
• Solvent use
• Waste handling and disposal
• Afforestation and reforestation15Agriculture

12
New category in Small Scale Projects

• New Category - III. E Avoidance of methane
  production from biomass decay through controlled
  combustion
• measures that avoid the production of methane
  from biomass or other organic matter that would
  have otherwise been left to decay as a result of
  anthropogenic activity.
• Due to the project activity, decay is prevented
  through controlled combustion and less methane is
  produced and emitted to the atmosphere.
• The project activity does not recover or combust
  methane (unlike III D).
• Measures shall both reduce anthropogenic
  emissions by sources, and directly emit less than
  15 kilotonnes of carbon dioxide equivalent
  annually.

13
PDD Update

• New Methodology document amended proponents
  have to explain now
• Applicability conditions of New Methodology
• How does methodology address additionality?
• How is national policy and circumstances taken
  into account by methodology?
• Greater Information on data and assumptions to be
  provided
• Both annexes will be submitted separately under a
  new format to be provided by EB when proposing
  new methodologies.

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Emissions Reduction Market - Transactions
Source PCF
A 10 MW Wind project supplying 25000 MWh
electricity to grid with emission intensity of 1
tCO2/MWh will reduce 25,000 tCO2e
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Emissions Transactions
Volumes (million tCO2e)
Source PCF
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Emissions Transactions who is buying?
Source PCF
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CDM Market Update
Only Kyoto Projects / Source CDMwatch
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CDM market

• Annex I involvement in the CDM market is limited,
  but growing
• PCF 21 projects - 32 million CERs24
• The Netherlands 19 projects - 20 million CERs
• Japanese companies 14 projects - 25.5 million
  CERs
• Sweden 3 projects - 1.5 million CERs
• Canadian companies 2 projects - 1 million CERs
• Finland 2 SS projects - 139,000 CERs
• UK companies 2 projects - 3.5 million CERs
• A German company 1 project - 1.8 million CERs
• Denmark 1 project - 500,000 CERs An Italian
  company 1 project - 200,000 CERs

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CDM Market
Source CDMwatch
Source CDMwatch
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Emissions Market - Prices
Project based non-retail market prices (USD/tCO2e)
Source PCF
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Total Volume of Trade
Source PCF
Million US Dollar
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Institutional Buyers

• Prototype Carbon Fund, the World Bank
  (www.prototypecarbonfund.org)
• The Netherlands CDM Facility
• IFC-Netherlands Carbon Facility
• Italian Carbon Fund
• Austrian Carbon Facility
• Finnish Carbon Facility
• Sweden Carbon Facility

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sudhir_at_ait.ac.th
Thank You