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SLOVAKIA:SLOVAKIA:Flexibility Mechanisms ApproachFlexibility Mechanisms Approach
Tokyo, Japan - February 2003
Ivan MojíkAir Protection Department
Ministry of the EnvironmentSLOVAKIA
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• Slovakia within UNFCCC and KP
• Strategy
• Joint Implementation
• Emission Trading
ContentContent
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Status of SlovakiaStatus of Slovakia
• UN FCCC– Annex I
• The Kyoto Protocol– Annex B - 92 %
Slovakia will join the European Union in 2004
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01020304050607080
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
Emis
sion
s [M
t]
0102030405060708090100110
% 1
990
COCO22
GHG Emissions TrendGHG Emissions Trend
Kyoto ProtocolKyoto Protocol
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StrategyStrategy
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Government took note in January 2002
Short-term horizon (until 2003)
• GHG emissions in 2000 not higher than in 1990
• To ratify KP by the end of 2002
Slovakia‘s KP StrategySlovakia‘s KP Strategy1)1)
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Slovakia‘s KP StrategySlovakia‘s KP Strategy2)2)
Mid-term horizon (2004-2007)
• To control GHG emissions so that demonstrable progress in achieving commitments under KP is secured by 2005
• To establish inventory system in accordance with Art.5 of KP
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Slovakia‘s KP StrategySlovakia‘s KP Strategy3)3)
Long-term horizon (2008-2020)
• Compliance with KP: to limit 2008-2012 GHGemissions at 92 % of 1990 (333,6 Mt CO2 eq.)
• To create a base for second commitment period: further 5% reduction below KP
• At least to stabilize GHG emissions from 2015 onwards
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FFlexibilitylexibility MechaniMechanissmmss1)1)
PreferencesPreferences of Sof Slovlovaakkiaia
• Emission trading = HIGHEST SUPPORT
• Joint implementation = MEDIUM SUPPORT
• Clean development mechanism= NOT RELEVANT IN THE TIME BEING
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FFlexibilitylexibility MechaniMechanissmmss2)2)
• Both ERUs and AAUs equally fair
• There is no difference between reduction that started 1990-1997 and after 1997
• ET is institutionally and administratively less demanding than JI
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FFlexibilitylexibility MechaniMechanissmmss3)3)
• Amount for international transfers:
1010 Mt CO2within 2008-2012
• For ET + JI as a sum
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Joint ImplementationJoint Implementation
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Criteria for JI projectsCriteria for JI projects
• Compliance with Nat. Environmental Strategy• Additionality• Only projects not implemented yet• Compliance with Slovak legislation (BAT)• Price preferrably 5 USD/t CO2 and more• No reduction transfers beyond 2012• Max. 80% (90%) ERUs to be transferred• Monitoring + verification costs born by project
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Renewable energy sources• Biomass• Geothermal energy
Energy savings• Production side• Demand side
Sinks enhancement
JI Priority ProjectsJI Priority Projects
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JI ProcessJI Process
MoE does not maintain JI project list
• Implementing company & buyer have to apply for approval at MoE
• MoE considers project• MoE contacts counterpart from buyers’
Government• Both Governments negotiate an agreement
(various forms possible)• Govenment representatives (Ministers) sign
the agreement
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Emission TradingEmission Trading
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Emission quotasEmission quotas
• Direct cap on portion of emissions• Slovak emission quotas scheme allows
for trading• SO2 Cap & Trade scheme is running from
1 January 2002• CO2 Cap & Trade draft design scheme in
advanced stage
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Why Cap Why Cap && TradeTrade
• Ensures compliance with national ceiling
• Reductions less costly -dom/int• Domestic
– allocation is never perfect– allows for choice of measures
• International (CO2 only)– resources for introduction of new BAT
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SOSO22 Cap Cap && Trade Main FeaturesTrade Main Features
• Downstream• Sources > 50 MWth input + tech.• Two-step grandfathering:
1. MoE to District Offices2. District Offices to companies
• No banking allowed
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SOSO22 Quotas To Be AllocatedQuotas To Be Allocated
020406080
100120140160180200
2002
2003
2004
2005
2006
2007
2008
2009
2010
Year
kt S
O2
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COCO22
Two different phases:
• Before introducing domestic Cap & Trade scheme
• Domestic Cap & Trade scheme in place
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Before domestic Cap & TradeBefore domestic Cap & Trade
• International trades backed-up with projects• Criteria different from JI
– CO2 producer directly involved– projects from 1998 onwards– no additionality requirement– reductions due production decrease or termination
are excluded– in case of state assistance given only proportional
volume of reduction is available for trade
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Preferred projectsPreferred projects
• Fuel switch from fossil to renewable• Fossil fuel consumption reduction• Fuel switch to less CO2 intensive fuel• According to buyer’s priority
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Process for TradingProcess for Trading
• Expected seller has to apply at MoE• Application includes baseline study• MoE considers baseline study• MoE selects/approves projects fulfilling criteria
including CO2 volume available for transfer• MoE issues confirmation letter on its future
approval of transfer• After KP entering into force MoE approves
transfer as confirmed earlier• Price is subject of buyer-seller agreement
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During Domestic Cap & TradeDuring Domestic Cap & Trade
• Companies are having emission quotas• Company can sell surplus quotas subject of
availability• Quotas internationaly tradable only allowed
to transfer abroad• No other criteria
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COCO22 Cap Cap && Trade Main FeaturesTrade Main Features
• Downstream• Sources > 20 MWth input + tech.• Grandfathering• Int. tradable + Dom. tradable quotas• Banking within 1st CP allowed
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THE ENDTHE END
THANK YOUTHANK YOU