The Cement Sustainability Initiative

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The Cement Sustainability Initiative

• BENCHMARK APPROACH TO CDMs
• Marco Bedoya
• Corporate Sustainability Manager - CEMEX

COP11/MOP 1 Montreal, December 2005
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• BACKGROUND
• Initiated in 1999 / Sector project of WBCSD
• Committed to incorporate SD and influence cement
  industry with SD-oriented thinking
• 17 companies
• 25of global cement volume / 50 excl. China
• Operations in more than 80 countries
• Climate Change Task Force 5 TFs
• Commitment to monitor and publish KPIs

CSI is highly representative of global cement
industry
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• THE CDM CHALLENGE FOR CEMENT INDUSTRY
• Major emitter of CO2
• Major companies operating in CO2-regulated
  markets
• Significant potential to reduce emissions in
  non-Annex 1 countries
• Small participation in CDM process

GAP to be bridged with effective CDM
streamline the process
simplifying the additionality assessment using
the current EB tool
using a performance based approach
cement industry benchmarks
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• CEMENT INDUSTRY EXPERIENCE IN USING CDMs /
  LESSONS TO DATE
• 1 to 3 years spent in methodology and project
  development
• no cement CDM project registered
• high transactions costs
• additionality tool unsuitable
• uncertainty of achieving CDM primary objectives
• Migrate towards a system rewarding performance
  instead of intention/motivation

companies discouragement
cement industry benchmarks
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HOW WOULD BENCHMARKS WORK
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• The benchmarks would then determine
• A-priori additionality
• Baseline emissions level
• CI suits well the application of benchmark
  concept
• Single manufacturing process
• Agreed measurement protocol
• Few CO2 reduction drivers

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• Some benefits of benchmarks
• transparency in baseline determination / limit
  gaming/free riders
• reduce transaction costs / increase participation
• accelerate registration
• positive to countries with limited capacity

• Key issues must be addressed to define
  benchmarks
• stringency
• time and geography boundaries
• aggregation
• validation/acceptability
• confidentiality

Multistakeholder Process
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HOW DO BENCHMARKS BASELINES FIT THE CURRENT CDM
FRAMEWORK Generic methodologies not allowed
benchmarks only allowed to set baselines for
individual projects (CDM MP para45,p36) The
baseline is the scenario that would occur in the
absence of the project (MP
para44.p36) A baseline methodology shall (EB08
Rep Anx1 para1-2) explain how the baseline has
been chosen explain the rationale for
algorithms/formulae explain how it addresses the
determination of project additionality specify
type of variables used spacial level of
data project boundary data sources and and
assumptions
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• THE WAY FORWARD
• In-depth analysis of benchmarking concept
  develop recommendations for rules and procedures
• Dialogue with interested stakeholders
• Decisions by COP/MOP and EB to make benchmarks
  with a-priori additionality eligible within CDM
  framework