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Status and overview of POAs and CDM development and trends

17. October 2012Todd Ngara,

UNEP Risoe CentreGisenyi, Rwanda

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Project types

TypeWind 2597 29% 307740 12%Hydro 2317 26% 407007 16%Biomass energy 906 10% 153587 6%Methane avoidance 776 9% 94781 4%EE own generation 476 5% 178514 7%Landfill gas 430 5% 187813 7%Solar 372 4.1% 5845 0.2%EE Industry 164 1.8% 15766 1%Fossil fuel switch 149 1.7% 162389 6%Coal bed/mine methane 112 1.2% 102943 4%EE Supply side (power plants) 119 1.3% 42301 2%EE Households 117 1.3% 4768 0.2%N2O 109 1.2% 251382 10%Afforestation & Reforestation 71 0.8% 21233 0.8%Fugitive 65 0.7% 82742 3%Cement 43 0.5% 25298 1%Transport 43 0.5% 6774 0.3%EE Service 38 0.4% 1003 0.04%Geothermal 35 0.4% 13242 1%Energy distrib. 27 0.3% 8596 0%HFCs 23 0.3% 473654 18%PFCs and SF6 18 0.2% 11581 0.5%Mixed renewables 7 0.08% 129 0.01%CO2 usage 4 0.0% 240 0.01%Tidal 1 0.01% 1104 0.04%Agriculture 2 0.02% 25 0%Total 9021 100% 2560460 100%HFCs, PFCs, SF& & N2O reduction 150 1.7% 736617 29%Renewables 6235 69% 888655 35%CH4 reduction & Cement & Coal mine/bed 1432 16% 493843 19%Supply-side EE 622 7% 229412 9%Fuel switch 149 1.7% 162389 6.3%Demand-side EE 319 3.5% 21538 0.8%Afforestation & Reforestation 71 0.8% 21233 0.8%Transport 43 0.5% 6774 0.3%

number 2012 CERs (000)

Status of CDM projects NumberAt validation 4107Request for registration 201Request for review 26Correction requested 2Under review Total in the process of registration 229Withdrawn 58Rejected by EB 225Validation negative by DOE 223Validation terminated by DOE 1291Registered, no issuance of CERs 2929Registered, CER issued 1756Total registered 4685Total number of projects (incl. rejected & withdrawn). Replaced projects are not included.

10818

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The big 4 host about 80% of the CDM projects

Region Asia & Pacific Latin America Africa Middle-East Europe and Central Asia

Number of projects

7333 1230 261 98 99

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All CDM Projects in the Pipeline in Brazil + Mexico + India + Chinais a fraction of all projects

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The monthly number of new CDM projects is around 120

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Number of projects with CERs issued Registration Requested but no issuance Still at validation Rejected validation by DOEs

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Growth of total expected accumulated 2012 CERs

Afforestation & Re-forestation

Fuel switch

Energy Efficiency

CH4 reduction & Ce-ment & Coal mine/bed

Renewables

HFC & N2O reduction

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CERs

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There are now 372 programmatic projects in the CDM-PoA Pipeline

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% comparison of regional distribution of pCDM and CDM

pCDM CDM

Host country PoAs (part I)

Albania 1 Hydro

Argentina 1 Wind, 1 Landfill gas

Armenia 1 small hydro

Bangladesh 1 Solar PV, 1 EE households stoves, 1 EE Households lighting, 2 Methane avoidance, 1 Wtare purification

Brazil 3 Methane avoidance, 2 Landfill gas, 4 Hydro, 3 Wind, 1 MSW incineration

Burkina Faso 1 eff. stoves

Chile 3 Hydro, 2 Wind, 2 renewables, 2 Landfill composting, 2 Solar PV, 1 Biomass energy, 1 Landfill gas

China 1 Agricultural irrigation, 8 Methane avoidance domestic manure, 10 Methane avoidance manure, 1 Methane avoidance waste water, 1 Eff. electricity distribution, 15 Eff. lighting, 3 CMM, 1 Geothermal, 3 Hydro, 2 Micro hydro, 1 Higher efficiency coal power, 2 Landfill power,21 EE industry, 4 Solar PV, 1 EE stoves, 1 EE Public buildings, 1 solar thermal, 1 transport

Colombia 1 EE commercial & residential buildigs, 1 Landfill gas, 1 Methane avoidance palm oil waste, 1 Methane avaoidance composting, 1 Small hydro; 2 oil field flaring reduction

Congo DR 2 EE Household stoves

Côte d'Ivoire 2 EE Household stoves

Ecuador 1 Methane avoidance

Egypt 1 Transport scrapping old vehicles, 1 Fuel switch, 1 Renewables, 1 EE water pumping

El Salvador 2 EE Household stoves

Ethiopia 1 EE Household stoves

Ghana 2 EE Household stoves, 1 Renewables, 1 composting

Guatamala 1 EE households stoves, 1 Hydro

Haiti 1 Stoves

Honduras 2 Hydro, 1 EE Household stoves

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There are now 372 programmatic projects in the CDM-PoA Pipeline

Host country PoAs (part III) South Africa 8 Solar water heating, 3 EE households stoves, 1 EE lighting, 2 EE service,

6 Solar PV, 2 solar technologies, 2 solar heat, 1 Methane avoidance manure, 3 Wind, 2 Landfill, 1 Gasification of biomass, 1 Solar and wind, 2 EE industry, 3 Biomass energy, 3 Solar PV, 1 Coal mine methane, 1 EE industry, 1 Hybrid renewables, 1 Methane avoidance waste water

South Korea 1 EE Food industry, 1 EE own generation, 2 EE household lighting, 1 EE service lighting, 5 Solar, 1 Mixed renewable, 1 Cogeneration, 2 Methane avoidance, 2 Wind, 1 Solar PV

Sri Lanka 1 Biomas energy, 1 Landfill compost Tanzania 1 Solar lamps, Solar PV water disinfection, 1 Solar PV, 1 Renewable

energy Thailand 1 Methane avoidance manure, 1 Methane avoidance waste water, 2

Biomass energy, 1 Gasification of biomass, 1 EE street lighting, 2 Solar PV

Togo 1 EE household stoves Trinidad & Tobago 1 oil field flaring reduction

Tunesia 1 Solar water heating, 1 EE supply side Uganda 1 Landfill composting, 3 EE stoves, 1 water purification United Arab Emirates

2 Solar

Vietnam 1 Solar water heating, 5 Hydro, 1 Methane avoidance domestic manure, 1 EE industry, 1 Biomass briquette, 1 Solar water heating, 1 Landfill gas, 1 Wind

Yemen 1 Eff. electricity distribution Zambia 3 EE household Stoves Many countries 1 Water purification, 2 EE household stoves, 2 LED household lighting Central America 2 Run-of-river Hydro Middle East 2 Renewables, 1 Solar & wind Southern Africa 1 solar PV, 1 Solar LED, 1 Run of river hydro Sub-Sahara Africa 1 Solar LED lighting, 1 Hydro 1 Landfill power Africa 1 EE Lighting Western Africa 2 EE Household stoves East Africa 2 Renewable, 2 Stoves, 1 LED lighting, 1 Domestic manure

Total 372

Host country PoAs (part II) India 3 EE householdes lighting, 1 EE household appliances, 1 Biomass briquittes, 1

EE chemicals industry, 1 EE Iron & Steel, 1 EE SME industry, 1 Eff. electricity distribution, 1 EE service eff. chillers, 1 landfill composting, 1 combustion of MSW, 3 Solar water heating, 4 solar PV, 2 Methane avoidance, 2 EE lighting in service, 1 Renewable energy, 3 EE Cookstoves, 3 Wind, 1 Fuel switch to n-gas commercial buildings, 1 Solar LED, 1 Solar & wind, 1 Biomass energy, 1 Water purification, 1 EE street lighting

Indonesia 4 Methane avoidance palm oil waste, 2 Methane avoidance composting, 2 Methane avoidance waste water, 3 Hydro, 2 biogas, 1 Water purification, 1 Landfill gas, 1 Biomass energy

Israel 1 Solar PV Kenya 4 EE households stoves, 1 small hydro, 1 Solar, 3 EE Household lighting, 1

Domestic manure, 4 Wind, 1 Efficient electricity distribution, 1 solar lamps

Lebanon 1 EE household stoves Macedonia 1 Hydro, 1 Micro hydro Malaysia 1 Methane avoidance waste water, 5 Methane avoidance palm oil waste, 1

Biomass energy, 1 EE public buildings, 1 EE vehicles

Malawi 2 EE households stoves Mexico 1 Households lighting, 1 EE households stoves,1 EE household appliances, 1

New households, 1 EE Service, 3 Methane avoidance manure, 1 Hydro, 1 Renewables, 1 Waste water

Mongolia 1 EE household energy Morocco 1 Landfill gas, 1 Solar, 1Wind Nepal 1 Methane avoidance domestic manure, 1 Stoves, 1 Small hydro Nicaragua 1 Reforestation, 1 Waste water, 1 Domestic manure, 1 Wind Nigeria 3 Stoves, 1 EE households lighting North Korea 1 Coal mine methane, 1 Methane avoidance waste water, 1 Methane

avoidance manure, 1 Eff. lighting

Pakistan 1 Domestic Manure, 1 Eff lighting, 1 EE industry, 1 Solar PV Papua New Guinea 1 mixed renewable Peru 2 Fossil fuel switch, 3 hydro Philippines 2 Methane avoidance manure, 1 EE Household lighting, 1 EE commercial

buildings, 1 Landfill gas, 1 Service air condition, 2 Small hydro, 2 Renewables, 1 Electric vehicles

Rwanda 3 EE households stoves, 1 Water purification Saudi Arabia 1 EE commercial buildigs Senegal 1 EE Households lighting, 2 EE stoves, 1 Reforestation Singapore 2 EE service cooling, 1 EE household lighting, 1 EE Commercial buildings

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60.0%14.8%

11.4%

7.1%

4.9% 1.4%

Global supply of CERs

China

India

Rest of Asia

Brazil

Rest of Latin America

Africa

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Positive impact on the CER price:•New sectors (aviation)•New participants (U.S., Australia, New Zealand….)•Post 2012 agreement (30% reduction in EU?)•UN executive board, faster registration of projects and CERs issuance•Exclusion of industrial gases post 2012 (51% of all CERs issued come from HFC destructions projects)

Negative impact on the CER price:•Oversupply•No international Agreement post 2012•US excludes CDM linkage•Economic slowdown

Future CER price

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• EU ETS to date has provided regular annual demand for CDM creditspotentially up to the annual import limit of 270Mt per year (95%)

• Projects that are registered before the end of post 2012 are eligible for ETS III

• Projects registered post-2012 are only eligible if they are in a Least Developed Country (LDC).

EU is the only area in the world to have legislation in place that provides for significant CDM demand

beyond 2012

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Registration time – around 500 days to get a project registered

Types of CDM projects by status (rejected projects excluded)

Days

Start to requestRequest to registration Start to registration

Afforestation 422 98 520 Agriculture 236 110 339 Biomass energy 411 121 530 Cement 279 131 396 CO2 usage 322 208 530 Coal bed/mine methane 465 199 669 Energy distribution 555 89 668 EE households 409 98 505 EE industry 362 102 464 EE own generation 446 184 622 EE service 252 110 302 EE supply side 484 137 622 Fossil fuel switch 415 170 588 Fugitive 357 133 501 Geothermal 438 150 589 HFCs 262 98 361 Hydro 434 123 558 Landfill gas 450 125 539 Methane avoidance 403 122 520 N2O 268 125 396 PFCs and SF6 366 107 472 Reforestation 645 97 742 Solar 300 53 366 Tidal 194 81 275 Transport 456 60 564 Wind 363 90 459 Average 384 120 504

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Main features of African PoAs

• Predominance of small-scale methodology applications Explanation: In general PoAs in Africa are mostly developed using small-scale emission reduction methodologies.

• Geographical distribution: scarce activities in Western Africa Explanation: Most of the PoAs in Africa currently on the pipeline are concentrated in Maghreb countries, Eastern African and South Africa. Western and Central Africa are absent from PoA development.

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• Large role of public institutions/international donor engagement Explanation: Barriers to accessing up-front finance at the start of the project make public funds and international donor support crucial for the success of POA in Africa.

• Predominance of renewable energy and energy efficiency Explanation: Most of the POA projects in Africa target decentralized renewable energy (i.e. installation of solar panels) or energy efficiency (cooking stoves).

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Main features of African PoAs

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• Public PoA linked to public policy strategies Explanation: Most of the public PoAs in Africa are implemented under the framework of adopted public policies. This is the case of the Landfill PoA in Morocco, adopted as an instrument to implement the Moroccan Solid Waste Management Strategy. Another example of a PoA linked to public policies is the PoA Rural Electrification in Senegal that intends to execute the Senegal Rural Electrification strategy

Main features of African PoAs

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Multinational cook stove PoA in East AfricaThe ‘Improved Cook Stoves for East Africa’ (ICSEA) program is one regional example. The PoA aims to promote the use of improved cook stoves in Uganda, Kenya, Tanzania, Rwanda, Burundi, and Sudan. The Uganda Carbon Bureau is the CME of the programme. ICSEA has been liaising and coordinating in open dialogue with the different DNAs to obtain the necessary Letter of Approval.

An interesting feature of this PoA is the fact that the CME has been predominantly sponsored through donor funding. While theCME charges annual commercial fees to each CPA developer, these are low as the programme had good access to concessionalfinance.

Examples

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Uganda Municipal Waste Compost ProgrammeThe two most challenging aspects in structuring and developing the Uganda Municipal Waste Compost PoA are: a) elaborating the CDM PoA documentation, and b) the uniformity established in the PoA does not reflect the reality of the diverse nature of the municipalities (CPAs) included in the PoA. Challenges: - no sufficient capabilities to thoroughly elaborate the documentation and most of the data was not readily available and had to be gathered - Delays in validation also occurred as DOEs are still reluctant to engage in African PoAs. - Different municipalities have different conditions and CPAs and are not uniform. Therefore, additional capital has been necessary to enable them to adjust to the POA requirements

Examples(Cont'd)

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African Development Bank: The African Carbon Support Programme provides technical assistance designed to promote access to carbon finance.PDD preparation assistance, support for grid emission factor development and supporting the commercial carbon potential of projects are key objectives of the programme.World Bank: Offers both technical and financial support to PoA developers. Ensuing carbon credits can be purchased by the Community Development Carbon Fund.KfW:Through its PoA Support Centre, KfW offers advisory, structuring and assessment services for programme proposals as well as financing and grants to cover the preparation of concepts, PDDs and monitoring plans.

Some international organisations involved in supporting African PoAs

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Thank you for listening!!