clean developmen t mechanisms and new market developments
DESCRIPTION
Clean Developmen t Mechanisms and New Market Developments Presentation at the Regional Conference on Gas Flare Reductions Tashkent, 15 th June 2012. Outline. The CDM and Flare Reduction – Current Status Prospects for carbon co-financing of petroleum sector investments - PowerPoint PPT PresentationTRANSCRIPT
Clean Development Mechanisms and New Market Developments
Presentation at the Regional Conference on Gas Flare Reductions
Tashkent, 15th June 2012
Carbon Limits AS 2
1. The CDM and Flare Reduction – Current Status
2. Prospects for carbon co-financing of petroleum sector investments
3. Regional initiative on flare reduction (EBRD & GGFR study)
Outline
• Dramatic decline since summer of 2011• The problem is demand - market rebound not likely by market forces alone• Current price levels insufficient to justify most GHG mitigation investments
8/12/2008 8/12/2009 8/12/2010 8/12/20110
5
10
15
20
25
0
200,000
400,000
600,000
800,000
1,000,000
1,200,000Daily Closing Price (EUR/CER)
Total Volume (CERs/day)
Figure: EU ETS developments – CER prices
Carbon prices have collapsed and outlook is uncertain ..
Source: BlueNext
.. but there is continued growth in the CDM project pipeline ..
• > 4,000 registered CDM projects• «Pre-notification» for > 10,000 projects submitted to the UNFCCC• > 900 million CERs issued (CDM)
Figure: Number of projects and CER issuances (cummulative)
Dec-
03M
ar-0
4Ju
n-04
Sep-
04De
c-04
Mar
-05
Jun-
05Se
p-05
Dec-
05M
ar-0
6Ju
n-06
Sep-
06De
c-06
Mar
-07
Jun-
07Se
p-07
Dec-
07M
ar-0
8Ju
n-08
Sep-
08De
c-08
Mar
-09
Jun-
09Se
p-09
Dec-
09M
ar-1
0Ju
n-10
Sep-
10De
c-10
Mar
-11
Jun-
11Se
p-11
Dec-
11
0
50
100
150
200
250
300
Number of CDM projects starting the public comments period each month, the number of them that have requested registration, and the number of them that have CERs issued.
Number of projects with CERs issued Registration Requested but no issuance Still at validation Rejected validation by DOEs
Num
ber o
f Pro
ject
s eac
h m
onth
Source: UNEP Risøe/CL
Gas flare projectsFew countries (and companies) have more than one CDM project ..
= Countries with at least 1 registered gas flare recovery project
= Countries with at least 1 gas flare recovery project under validation/registration
11
2
1
8
3
3
1
1
1
2
1
1
11
2
1
3
x = # registered projects in country x = # projects under validation/registration in country
2+
14+
1
2
3+
2+
1+
1
1
CDM/JI pipeline:(validation ->)
~50 mill tCO2e/yr~26 BCM/yr
Despite low carbon prices and uncertainty about market access for CERs from non-LDCs, new CDM projects are put forward ..
= Additonal countries with at least 1 project in «pre-notification» stage
3
3
1
2
3
2
5
2
x = # projects in «pre-notifications» stage in country
= Countries with projects under development (validation/registration/issuance)
1
1
3
1
1
2
4
2009 2010 2011 20120.0
1.0
2.0
3.0
• 112 known projects• 77 companies• 28 countries
CDM/JI pipeline:
Source: UNEP Risøe/CL
Submission rate to UNFCCC («Pre-notifications» per month)
Gas flare projectsHigh failure rate for CDM project submissions ..
= Countries with at least 1 gas flare recovery project terminated/rejected/no issuance after >2 years
1
2
1
3
1
13
1
1
Only 3 CDM projects have had CER issued!
The Durban Platform: Towards a new broad agreement
The Durban Platform:
• The Ad Hoc Working Group on the Durban Platform on Enhanced Action to start its work in the first part of 2012
• Work to be completed no later than 2015 in order to adopt a protocol, legal instrument or legal outcome and for it tom come into effect in 2020
Commitments:
• Not clear what the commitments will be:
• Quantitative emission limitations/reductions (QELROs)
• Financial
• Monitoring, Reporting and Verification (MRV)
• Not clear what countries/parties will have what type of commitments from 2020
Scale-up from the CDM
POAProgram of Activities under CDM
CDMClean Development Mechanism
SMPScale-up mitigation programs
ETS ”cap-and-trade”Emissions trading system
Voluntary participation Agreement between authorities and companies
Mandatory based on national (international legislation)
Institutions and regulations at national level
Project owner in charge of project development and documentation. National approval by DNA, otherwise modest requirements
Several actions/activities coordinated by a private or public entity. Can be a “policy/measure or stated goal” but must be voluntary
At the initiative of authorities and/or companies. Negotiations on distribution on carbon credit benefits.
Companies/installations are faced with an emission cap and are allocated allowances that can be traded.
International regulations and institutions
Part of the Kyoto Protocol. Reforms and amendments made by Parties
to the Protocol. UN approves projects and issue credits
Similar to the CDM No legal basis, may be developed under a new international
agreement and/or may emerge as part of bilateral agreements.
Allowances to be traded between countries under new international agreement and/or bilateral agreements.
Existing mechanism New mechanisms
Regional study on flare reduction
• Review and analyze the existing flaring situation• Identify and analyze gas utilization options• Develop bankable investment projects• Disseminate the results of the study
Objectives SEI
Tasks and timeline
Project Team
Review flaring situation in the four countries
Establish collaboration with potential partners
Economic and technical analysis of gas utilization projects
Results dissemination
Project Management
Sustainable Energy Initiative Launched by EBRD in 2006, now at phase 3Focus: energy efficiency and climate changeSEI investments since 2006: €8 billion
ResultsCountry Overview Reports
Review for the 4 countries: • Flaring estimates• Flaring policies, regulation and market conditions• Ongoing gas utilisation projets and future prospect
Next steps Establish cooperation with companies
Focus of the phase 2• Based on the result of phase 1, the activities of phase 2 are focused towards:
• Fields where there are currently some gas utilization challenges • Clusters solutions
17 companies
5
2 1
Both major and smaller players
Central Government
Number of companies contacted per countryCurrent process ongoing• Introduction letter sent• Organization of meetings with
the different companies• Establishment of formal
collaboration (NDA)• Technical collaboration on
specific gas utilization projects