The Danish JI Program

1
The Danish JI Program

• UNFCCC Workshop on the Implementation of Article
  6 projects under the Kyoto Protocol
  
• Moscow, 26-27 May 2004
• by Ulla Blatt Bendtsen, Chief Programme
  Co-ordinator, DEPA

2
Overview of Presentation

• The Danish Climate Strategy
• Memorandum of Understanding
• The Danish JI Programme
• Project examples
• Facilitating Arrangements (session 2.2)

3
The Danish Climate Strategy

• Reduction Commitment 2008-12 21 compared to
  base year
  
• Excess emissions in relation to reduction
  commitment 20-25 Mt CO2e/yr.
  
• Climate Strategy adopted March 13, 2003 by
  Parliament
  
• Two central instruments
• 1) The EU Emission Trading Scheme, incl. Linking
  Directive
  
• 2) An indicator of DKK 120 (EUR 16) per tonne CO2
  for domestic measures outside the activities
  covered by The EU Emission Trading Scheme

4
Excess emissions in relation to Denmarks
reduction commitments
5
A lot has already been done

• 20 of electricity supply from renewables (wind,
  biomass, biogas)
  
• Danish CO2 quotas even before the EU ETS
• High fuel taxes and CO2 taxes
• Support for energy efficiency schemes
• Waste incineration
• HFC Phase-out plan

6
Using flexible mechanisms is a win-win situation

• Denmark gains economically by using a combination
  of domestic measures and flexible mechanisms
  (estimated economic gain DKK 2-3 billion (EUR
  270-400) per year in 2008-12
• The seller gains economically from the sales of
  AAUs/ERUs/CERs, technology transfer through FDI,
  reduction in local pollutants (SO2, NOx, etc.)

7
Prices and risks

• Prices for JI and CDM are lower than domestic
  abatement costs and lower than EUA, because of
  risks
  
• Kyoto risk
• Host country risks
• Project risks

8
Flexible mechanisms in the Danish Climate
Strategy

• The flexible mechanisms play a central role.
• State funding to facilitate the market
• DKK 130 million for Joint Implementation in 2003
  and DKK 100 mill./yr. in 2004-7 for JI
  
• DKK 100 mill./yr. for CDM in 2004-7 (adm. By
  MoFA)
  
• The main buyer of emission credits will be the
  private sector

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Memoranda of Understanding

• Signed
• Bulgaria, Estonia, Latvia, Moldova, Romania,
  Slovakia, Ukraine
  
• In process
• Czech Republic, Hungary, Kasakhstan, Russia,
  Poland

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The Danish JI Program

• A 3-legged strategy for purchase of carbon
  credits from EECCA countries
  
• a pipeline of projects resulting from targeted
  direct project development over the last few
  years
  
• an indirect pipeline through JI/CDM funds
  administered by selected banks and advisors and
  
• a newly created JI tender window

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New JI Tender

• Project hosts and developers are invited to
  express their interest at 2 levels
  
• Level 1 Expression of Interest (limited
  documentation, may result in an agreement on
  further project development)
  
• Level 2 Full proposal (more extensive
  documentation, may result in the signing of an
  ERPA between the Project Host and Denmark)

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Project examples

• Examples of projects currently being implemented
  or under negotiation with Denmark are
  
• Establishment of 5 biomass fired heat boilers
  based on waste products from wood processing in
  Romania (project running)
  
• District heating based on utilisation of
  geothermal energy in the cities of Oradea and
  Beius in Romania (ERPA signed)
  
• Establishment of a wind farm in Türisalu in
  Estonia (ERPA awaiting final approval by Estonian
  parliament)
  
• Extraction of landfill gas in Chisinau, Moldova
  (PDD has been validated, ERPA is being negotiated)

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Indirect carbon credits

• Two contracts have so far been signed with
  suppliers of indirect carbon credits
  
• NEFCO Testing Ground Facility (DKK 18 mill.)
• Eco Securities and Standard Bank Denmark Carbon
  Facility (DKK 59 mill.) Open for private sector
  investments.

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More information on the Danish JI program

• www.mst.dk
• www.DanishCarbon.dk