Evaluation of CDM project proposals by CDM Executive Board by undul848

VIEWS: 50 PAGES: 25

									Evaluation of CDM project proposals
     by CDM Executive Board

        Main issues based on examples
               By Steve Thorne
               SouthSouthNorth
        Addis Ababa 20th October 2003
        Contents of presentation
   Some EB responsibilities;
   Status of EB: DNAs, DOEs;
   Project activity reviews: from where, what type,
    status of methodologies: baseline and M&V
    plans;
   Rejected and approved projects with examples;
   Communication with PPs;
   Evaluation of PDD;
   Conclusions and recommendations (specific to
    Africa).
    EB responsibilities (from Decision 17/CP.7
 Modalities and procedures for a clean development mechanism)

(d) Approve new methodologies related to, inter alia,
    baselines, monitoring plans and project boundaries …
(h) Report to the COP/MOP on the regional and
    subregional distribution of CDM project activities with a
    view to identifying systematic or systemic barriers to their
    equitable distribution;…
(i) Make publicly available relevant information, submitted
    to it for this purpose, on proposed CDM project activities
    in need of funding and on investors seeking
    opportunities, in order to assist in arranging funding of
    CDM project activities, as necessary; …
              Status of EB
 No Kyoto – no COP/MOP mandated by the
  COP currently
 Limited functions
 No DOEs - only Applicant Entities
 No projects under review only methodologies
 Has established panels: accreditation of
  operational entities, small-scale,
  methodology
     DNAs – contact details sent to
             Secretariat
   Antigua and Babados, Argentina, Bhutan,
    Bolivia, Brazil, Columbia, Costa Rica,
    Cuba, El Salvador, Germany, Georgia,
    Malaysia, Morocco, The Netherlands,
    Nicaragua, Panama, Peru, Trinidad and
    Tobago, and Uruguay (19).
                         Applicant Entities
1. Asahi and Co.
2. BVQI Holdings Ltd.

3. Det Norske Veritas Certification Ltd. (DNV Certification Ltd)

4. ChuoAoyama PwC Research Institute Corporation (Formally, Chuo Sustainability Research
    Institute Co. Ltd. (CSRI))

5. Japan Audit and Certification Organisation for Environment and Quality

6. Japan Consulting Institute (JCI)
7. Japan Quality Assurance Organisation (JQA)
8. KPMG Certification B.V.
9. PricewaterhouseCoopers Certification B.V.
10. SGS UK Ltd. (SGS = Société Générale de Surveillance)
11. The Korea Energy Management Corporation (Kemco)

12. Tohmatsu Evaluation and Certification Organization (TECO)

13. TÜV Anlagentechnik GmbH

14. TÜV Süddeutschland Bau und Betrieb GmbH (TÜV Süddeutschland)

15. URS Corporation Limited
Source of projects submitted
                          China, 1
                    Vietnam, 1
           Argentina, 2
      Trinidad and                         India , 6
       Tobago, 1
      Jamaica, 1
     Guatamala, 1



      Thailand, 4
                                                     Brazil, 8

          Korea, 1
      South Africa, 1
                                          Columbia, 1
                    Chile, 2
                                     Costa Rica, 2
                        Mexico, 1
                Project types
                     Wind, 2
           Waste heat
           recovery, 1                 Biomass to
                                        energy, 6
        Sugar, 3
 Solid waste
treatment, 1                                    Biogas , 1
  Refinery                                       Bagasse cogen
efficiency, 1                                         ,1
Oil field gas                                  Gogen, 2
recovery, 1
                                                  Dung
Methanol, 1                                   management, 1
       Landfill, 4                       Fuel switch, 3
                                     HFC, 1
                         Hydro , 4
  Who submitted projects

                           Vietnam
                       VEGA BahiaOils and Gas
       Residuos S.A., TratamentoCompanyAgcert Canada Balrampul Chini Mills
                                 de              Agrosuper
          SCM Salvador,
   Municipio de Sugars Limited                             Limited
   Estado da Bahia, Brazil
    Raghu Rama                                             Cerupt
Renewable Energy LTD
     Quality Tonnes                                              EcoEnergy


                                                                    Ecosecurities


                                                                    Ferrostaal(AG) and
                                                                    Methanol Holdings
            PCF
                                                                   HOLCM,Costa Rica
                                                                       INEOS Flour
                                                                    Japan,Foosung Tech
                                                                   INSTITUTO
                      OSIL                                       COSTARRICENSE
                                                      MGM Internatrional
                       Mitsubishi Securities
 Status of projects

                A, 2
                       B, 5




Under review,
    19
                        C, 8
    Detailed description of a rejected
          project methodology
 Methodologies that have been rejected are
  those where the methodology is not
  transparent and conservative;
 Projects have been referred to PPs for
  modification and/or later resubmission;
 Describe project: 3 rice husk power gen,
  bagasse biomass cogen, 2 hydro, 1
  methanol, 1 fuelswitch rejected so far.
      Example of NM0011 Bagasse/biomass
        based cogeneration power project
1. “No methodology regarding whether the
  project activity is not the baseline scenario
     The simple statement that the technology is less
      carbon intensive and more costly does not
      demonstrate additionality, since it is also stated
      that the technology is more efficient and will
      generate additional revenues when compared to
      the baseline, and no methodology is proposed to
      demonstrate that these additional revenues are
      not sufficient to ensure the attractiveness of the
      investment.”
  Rejected example of NM0011 Bagasse/biomass
     based cogeneration power project (cont.)

2. “Ex-post calculation:
     In the context of supply constrained systems and
      technological change trend on the supply side,
      the methodology should provide additional
      elements to explain why ex-post average
      emissions generated by all other power plants
      operating at the same time than (as) the project
      activity can be considered as a possible estimate
      of what would have occurred in the absence of
      the project activity (baseline emissions)1.”
  “1. For instance the project activity (for e.g. industrial cogeneration may delay the construction of a
      zero emission hydro plant (which would be the baseline) and get CERs on the basis of the on (of)

      the proposed methodology if the rest of the system is partially fossil based.”
Approved project NM0004 rev. Salvador da
        Bahia landfill gas project
 Project to capture and flare landfill gas.
 Methodology: “Contractual amount of
  landfill gas capture and flaring defined
  through public concession.”
 Applicable conditions:
     Contract to capture certain volume of LFG
     Concession stipulates amount of LFG to be
      captured
     No electricity should be generated.
Approved project NM0004 rev. Salvador da
     Bahia landfill gas project (cont.)
   Minor changes
     Removal of repetition
     Estimation/measured of contracted amount of
      methane (not theoretical amount). Assumed
      methane 50% measured amount 57% i.e.
      incorrect calculations in PDD.
  Approved project NM0004 rev. Salvador da
       Bahia landfill gas project (cont.)
 Monitoring Methodology applicable to baseline
  methodology conditions, and:
     Gas flow and analysis equipment appropriate to
      climate and contaminants;
     Periodic equipment calibration.
   Minor changes:
       “The baseline of the contractual amount should
        assume the percentage of methane in the LFG to
        be equal to the estimated/measured amount, in
        the interest of conservative estimates for the
        baseline.”
     Discuss factors contributing to
               approval
   Clear description of how an existing
    methodology is applied/new method can be
    generically applied;
   Conservatism in baseline definition;
   Stringency in application of the methodology
    inclusion of leakage;
   Transparency in application of methodology;
   Incorporation of national regulations/ targets;
   Clear links between baseline, activity emissions
    and monitoring plans;
   Conservative definition of additionality.
Process of notifying the project participants
        and participants response
   The EB notifies project participants of decisions via the
    website; http://cdm.unfccc.int/EB/Meetings/#
   The EB achieves dialogue with PPs via the methodology
    panel and the secretariat;
   The Meth Panel may propose revisions to approved
    methodologies in order to consolidate them in a more
    general methodology - NM0005 and NM0021 may already
    require consolidation once approved;
   Project participants if asked to modify PP’s methodologies
    can do so and resubmit them via the secretariat;
   Much of the communication will be via the DOEs who
    communicate between the secretariat, the Host Party DNA,
    and the PP.
Clearly discuss evaluation process
              of PDD
 PDD can be pre-validated
 Validation process initiated by DOE
 Approval by DNA
 New methodology assessed by EB
 Validation report for public scrutiny
 Validation by OE
 Registration by EB
Slide 7
      Lessons and recommendations
   Without a full mandate for the EB it is difficult to
    know how to extend the lessons to a future fully
    mandated institutions;
   New projects should attempt to be stringent in their
    design;
   Methodologies should strive for simplicity as far as
    possible;
   Baselines methodologies should be calculated on
    ex-ante as opposed to ex-post bases (unless
    properly justified) as far as possible.
      What lessons taking into account
    the African context can be learned?
   As expected the minority of CDM project activities (and no
    AEs) are from Africa – the EB needs to report on barriers to
    regional and sub-regional distribution of projects – African
    negotiators could make a call to this effect based on the
    Marrakech accord:
    “The COP/MOP shall further:
          (b) Review the regional and subregional distribution of designated
          operational entities and take appropriate decisions to promote
          accreditation of such entities from developing country Parties.
          (c) Review the regional and subregional distribution of CDM project
          activities with a view to identifying systematic or systemic barriers to their
          equitable distribution and take appropriate decisions, based, inter alia, on
          a report by the executive board;
          (d) Assist in arranging funding of CDM project activities, as necessary.”
      What lessons taking into account
    the African context can be learned?
   Africa needs to move on DNA establishment;
   Africa needs to consider DOE establishment;
   Africa could consider the possibility of cross-border bundling;
   In Africa the number of projects will not be many and hence
    parties need to consider a “piggy-back” model;
   The para. 46 of M&P that deals with baseline scenarios
    where the emissions are projected to rise, need to be shaped
    to include projects where poverty/lack of infrastructure exists;
   Congratulations of EB, methodology and accreditation panels
    on high degree of stringency, and Secretariat on
    implementing appropriate systems.

								
To top