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					The Hungarian Green Investment Scheme




                         Gyorgy Lazi
                        THE WORLD BANK
   Energy and Infrastructure Unit, Europe and Central Asia Region
             GIS context

            Eligibility Criteria




National                              Legal
CC Policy                          Framework




            AAU Availability



                                               2
GIS architecture (Greening Framework)


               Priority Areas




  Monitoring                    Verification




                Procedures



                                               3
                  GIS – eligibility criteria

• Party to the Kyoto Protocol;
• AAUs calculated and recorded in accordance with relevant
  guidelines and decisions;
• National system for the estimation of emissions and removals
  of all greenhouse gases in place;
• National registry;
• Most recent required inventory submitted annually;
• Supplementary information concerning adjustments and
  recalculations as required submitted.


                                                                 4
                                 Hungary’s AAU potential
              120
                                                                   •   Total assigned amount units: 542 million
              100                                                  •   Commitment period reserve: 395 million
              80                                                   •   Emission trends (low): 432 million
million AAU




                                                                   •   Emission trends (high): 443 million
              60      available AAU
                      Approved JI projects                         •   JI reserve: 10 million
              40
                      Projected GHG emissions - high case          •   Available AAU: 89 million
              20      Projected GHG emissions - low case           •   GIS pilot phase: 10 million

               0
                                                                   •   GIS 2nd phase: 30-40 million
               2008    2009           2010     2011         2012




                                                                   Source: Feiler, MoEW, Hungary

                                                                                                             5
               National Climate Change Policy

•   National Climate Strategy: determines the objectives, priorities, tasks and
    instruments related to research and measures about domestic impacts,
    mitigation and adaptation
•   National Climate Programme (NCP):
     – main measures to implement Hungary’s commitments under the UNFCCC and
       the Kyoto Protocol
     – necessary adaptation measures to domestic impacts
     – research priorities connected to domestic impacts and to the cost-efficient
       reduction of emissions
•   NCP priority areas on GHG emission reductions:
     – Energy efficiency in the domestic sector
     – Energy efficiency in the public sector
     – Renewable energy use in micro, small and medium scale
     – Emission reduction in the transport sector

                                                                                     6
                               Legal framework
•   Act LX of 2007 on the implementation framework of the UNFCCC and the
    Kyoto Protocol
     – defines the crucial elements of the treasury asset management of Kyoto units;
     – The Kyoto units can be used:
           • to offset GHG emissions occurring in Hungary;
           • to generate ERUs for JI projects implemented in Hungary;
           • to trade under International Emission Trading.
•   Government Decree 323/2007. (XII. 11.) Korm. on the implementation of Act
    LX of 2007
     –   Objecives of the GIS
     –   Conditions for the sale of AAUs
     –   Contract regarding the sale of AAUs
     –   Support conditions and types in the GIS
     –   Conditions for & decisions over applications
     –   Aid contracts
     –   Monitoring and verification
                                                                                       7
                       Project selection

• Hard greening: all activities supported by the Scheme should
  result in emission reduction
• Focus on areas with the highest cost-benefit ratio
• Focus on areas where support can create enabling
  environment
• Climate additionality and legal additionality
• Carbon effectiveness calculation considers post-Kyoto period




                                                                 8
                      CO2 emissions


                      Transformation
                      sector and non-
                       energy users
                                                      Transport
                            4%
Residential                                             21%
  sector
   30%




                                                                  Industry
                                                                    21%
              Commercial                      Agriculture
               services                          4%
                 20%


 CO2 emissions by final energy end-users in Hungary, 2004




                   Source: Novikova, Dr. Ürge-Vorsatz, based on ODYSSEE (2007)   9
                                         Mitigation potential
                      Estimated potential for CO2 mitigation in EITs at a
                      sectoral level in different cost categories in 2030

               1000
                                                                   Cost categories (US$/tCO2eq)
                900
                800                                                <20         <0   0<20          20<100

                700
million tons




                600
                500
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                300
                200
                100
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                                          Source: Novikova, Dr. Ürge-Vorsatz, based on IPCC (2007)         10
        Proposed areas – National CC Policy

• residential and public sectors
• renewable energy use for smaller to larger heating systems;
• Other measures of energy conservation, energy efficiency and
  promotion of the use of renewable energy;
• Biogas production and its utilization for transport;
• Activities for reductions of non-CO2 emissions;
• Development and utilization of environmental technologies that
  promote energy efficiency improvements, energy conservation
  and enhanced use of renewable energy resources.


                                                                11
        Proposed areas – GIS: residential sector

• Retrofit of existing buildings
    –   Exchange of windows and doors
    –   Improvement of the thermal envelope
    –   Condensing boilers
    –   Solar protection
    –   Balanced ventilation systems with heat recovery
    –   Sunspaces – additional glazing of existing loggias and balconies
• Applications of renewable energy sources
    – Solar thermal collectors
    – Biomass burners
    – Heat pumps
• Construction of new low energy buildings

                                                                           12
                               GIS windows
Program window
• emission reduction activities which are easy to execute in large numbers,
   using standard procedures
• emission reductions are easily verifiable
    –   house insulation
    –   public lighting modernization
    –   passive house construction
    –   Renewable energy, energy efficiency and energy saving projects primarily in the
        domestic and public sector
Project window
• large size unique or/and complex GHG reduction projects
• operations similar to those of Joint Implementation, with a streamlined
   procedure
• ISO 14064 based emission reduction verification procedure

                                                                                    13
                     Procedural framework

 GIS contract signature:                              AAU => Buyer
 • Buyer Govt.                                        Purchase price => GIS fund
 • Hungarian Min. of Env. and Water (MoEW)


         Calls for GIS applications           In cooperation with MoEW
         approved and published                Climate and Energy Unit


        Evaluation and contracting



disbursement                   Implementation (post-
                             completion disbursement)               monitoring

  Implementation
(advance payment)                      disbursement



                    verification

                                                                                   14
                     Monitoring & Verification

Verification
•   1. Small projects, easy to establish emission reductions: reporting by the
    beneficiary of the project with documentation and random verification by the
    GIS Management Office
•   2. Large, complex projects: third party verification according to ISO 14064
    standard
Monitoring
•   Internationally renowned auditing firm to audit investments and use of the
    revenues
•   Auditor to prepare annual reports and final report
•   Buyers will have full and unrestricted access to all relevant data, information
    and documentation

                                                                                  15
                               Summary

• Strong governmental commitments
    – Advanced status of legislation
• High standards of transparency and fiscal credibility
    – Monitoring framework
• Operational efficiency
    – Low administrative costs (up to 5%)
• Hard greening
    – Verification of emission reductions
• Buyer tailored approach
    – Priorities of buyers are considered and accomodated

                                                            16
Thank you very much for your attention!

				
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