Introduction to DNA Host Country Approval Process and

Landfill Gas to Energy Projects

Designated National Authority

25 July 2013

1

Overview • Introduction

• Department of Energy’s Mandate, Vision and Mission

• Background of the UNFCCC and Kyoto Protocol

• Basics of Clean Development Mechanism

• The DNA and its Functions

• The DNA and its Functions

• South African Waste Sector

• CDM potential in municipal landfills

• Existing Waste to Energy Projects

• SA CDM Projects Portfolio

• Barriers to CDM Development in SA

• Conclusion

Department of Energy’s Mandate, Vision and Mission

Mandate: • “Ensure secure and sustainable provision of energy for socio-economic

development”

2014 Vision: • “A transformed and sustainable energy sector with universal access to

modern energy carriers for all by 2014”

2025 Vision: • “Improving our energy mix by having 30% of clean energy by 2025”

Mission: • “To regulate and transform the sector for the provision of secure,

sustainable and affordable energy”

Background of the Kyoto Protocol

• Concerned with global climate change implications

• International community came together 1988, IPCC was formed

• 1992 earth summit, Rio de Janeiro, UNFCCC adopted

• Five years later parties agreed to binding targets (Kyoto Protocol), Committed 5%

below 1990 level

• 1997, Kyoto Protocol adopted, Annex I parties, agreed to reduce their overall

emissions of greenhouse gases by an average of 5% below 1990 levels between

2008-2012

• The Kyoto Protocol entered into force on 16 February 2005, 1 January 2008 – 31

December 2012

• The Second commitment period of the Kyoto protocol, 1 January 2013 – 31

December 2020.

Background of the Kyoto Protocol

CDM Basics

Goals:

– Contribute to the Convention

– Assist Annex1 achieve ER targets

• Assist Non-Annex1 achieve sustainable development

• Characteristics:

– Activities must lead to measurable reductions – tradable

– Reductions must be additional (would not have occurred in absence of the

project activity)

– Participation in project activity is voluntary

CDM - Baseline Concept

• A project’s GHG emission reductions need to be judged against some baseline

• The baseline is “what would have happened in the absence of the CDM”

• Additionally needs to be proven

Baseline

Project

Emissions

CO2

Time (yrs)

CERs

Programmatic CDM

• A Programme of Activities (POA) is a voluntary coordinated action by a private or public

entity which coordinates and implements a policy/measure or stated goal (i.e. incentive

schemes and voluntary programmes), which leads to greenhouse gas (GHG) emission

reductions or net GHG removals by sinks that are additional to any that would occur in

the absence of the POA, via an unlimited number of CDM Programme Activities (CPAs).

• The crediting period of a PoA is 28 years

• No Prior Consideration Form is required for a PoA

• CMEs or municipalities can still implement several landfill gas to energy projects (CDM

Project Activities under a Programme of Activity)

Key Role Players in a PoA

Key Role Players in CDM

• Project Developers/Project Participants

- Development of PIN or PDD; Request for Host Country approval;

- Project registration as CDM

• Designated Operational Entities

- Validation; Verification; Certification

• CDM Executive Board

- Project registration; Approval of methodologies; Issuance of CERs; Accreditation of

entities

• Host Country

- Establishment of institutional & legal frameworks; Ensures Projects contribute to SD;

Promotion of CDM

• Project Owners (e.g. municipality)

- Project identification, funding & implementation

• Businesses

- Investment

• NGOs & General Public

- Projects contribute to SD; Promotion of CDM; Watch Dogs!!!

Key Role Players in CDM; cont..

The CDM Development Cycle

Functions of Designated National Authority

Cabinet approved establishment of DNA at DOE to perform the following functions:

Regulation function:

Project evaluation and approval in accordance with section 40(a) of the

Marrakech Accords.

Promotion function:

To promote and facilitate the development of CDM projects in South

Africa

Secure an adequate share of CDM investment in South Africa

To promote CDM projects of a developmental nature

Ensure that the mechanism is in the national interest (Gov. objectives)

Institutional Arrangement to Handle CDM in SA

Designated National

Authority

(Director General of

DoE)

Steering Committee

“Oversight”

1. DoE 2. DTI 3. DWEA 4. DST 5. DoT 6. NT 7. DAFF 8. DPW 9. DIRCO 10.NDoH 11.DMR 12.DHS

DNA Project Approval Process

PDD available for public comment

(website) 30 days

Meets criteria

Project idea

Developer has 2 options

Initial (voluntary) screening

Developer submits Project Identification Note (PIN) &

application form to DNA

Initial screening

Comments from initial screening

Letter of No-Objection

Revise Proposal

Final submission (mandatory)

Developer submits validated Project Design Document & application

form to DNA

Comprehensive review

Approval (with reasons)

Rejection (with reasons)

Appeal to Minister

Time: Submission to results of review - 30 days

Time: Appeal Process (if required) - 60 days

Time: Submission to results of DNA decision - 45 days

Letter of Approval

No

Yes

Re-subm

it PIN

Meets criteriaNo

Yes

PDD available for public comment

(website) 30 days

Meets criteria

Project idea

Developer has 2 options

Initial (voluntary) screening

Developer submits Project Identification Note (PIN) &

application form to DNA

Initial screening

Comments from initial screening

Letter of No-Objection

Revise Proposal

Final submission (mandatory)

Developer submits validated Project Design Document & application

form to DNA

Comprehensive review

Approval (with reasons)

Rejection (with reasons)

Appeal to Minister

Time: Submission to results of review - 30 days

Time: Appeal Process (if required) - 60 days

Time: Submission to results of DNA decision - 45 days

Letter of Approval

No

Yes

Re-subm

it PIN

Meets criteriaNo

Yes

SD Criteria for CDM Project Approval

Economic:

- Attract foreign investment to SA

- Technology and skills transfer: clean energy technologies such as

cogeneration, RE ,EE, methane recovery etc

- Contribute to National EE and RE targets

Social

- Job creation: no. of jobs and types

- Improved quality of life, e.g. Social upliftment through poverty alleviation

- Improved Access to services

Environment

- Improved air quality, water quality, Impact on biodiversity and ecosystems

Waste Sector in SA

• Over 42 million cubic metres of general waste is generated every year

• Four major categories of waste:

-Municipal solid waste, industrial waste, agricultural waste and hazardous waste

• Most of the waste is disposed in municipal landfill sites.

• Landfill gas contains 40-60% methane, with the remainder being mostly carbon

dioxide

• Methane is 21 times more potent than carbon dioxide

CDM Potential in Municipal Landfills

• Possible projects are:

- Methane capture for flaring/heating/power (electricity generation and/or

fuel for other use e.g. transportation)

- Composting of biodegradable portion of municipal solid waste

- Waste to energy through Refuse Derived Fuel (RDF)/ Incineration

- Household digesters

- Solid waste recycling

Existing Waste to Energy CDM Projects

• Seven Registered Projects,

- Durban Landfill-gas-to-electricity project – Marrianhill and La Mercy Landfills

- EnviroServ Chloorkop Landfill Gas Recovery Project

- Durban Landfill gas to Electricity Project – Bisasar Road Landfill

- Ekurhuleni Landfill Gas Recovery Project

- Alton Landfill Gas to Electricity project

- Nelson Mandela Bay Metropolian’s Landfill Gas Project

- Joburg Landfill Gas to Energy Project

• 3 have been issued with CERs (EnviroServ and 2 Durban Landfill Projects)

CDM Project Registration: International vs SA

20

Project No Projects Reviewed

EB Registration ISSUANCE

RE 146 33 -

EE 67 13 1

Fuel Switch 28 4 2

Nitrous oxide abatement 5 5 4

Bio-fuel (vegetable oil) 5 - -

Industrial process (industrial steam to generate energy)

6 1 -

Waste Management / Methane recovery

56 12 3

Cogeneration( Furnace gas ) 23 2 1

Transport 3 - -

Afforestation 1

Total 340 (206 PINs, 134 PDDs) 70 11

SA PROJECT PORTFOLIO

Challenges and Identified Barriers

• Continued uncertainty regarding continuity on the future of Kyoto and the

role of CDM post-2012.

• Perception that the CDM is too much effort for too little reward –

cumbersome processes and a drop/decline in CER price.

• Limited DOEs, high Validation and Verification cost

• Exclusion of CERs in the EU-ETS from developing countries for projects

registered after 2012

• MFMA vs. CDM Landfill Gas to Energy projects

• Proven methodologies are not necessarily applicable in South Africa.

Conclusion/Recommendation

• It is recommended that:

– Need to explore alternative carbon markets, to allow for sale of CERs for

projects registered post 2012.

– Clarity should be provided regarding perception that MFMA is a challenge

when implementing Landfill Gas to Energy project.

– Support advanced DNAs to strengthen other DNAs, DOEs, Potential project

Participants within the same Continent, e.g. African Continent in order to

improve the current status of 2% of CDM projects.

Highlights

South African DNA entered the competition for “UNFCCC Changing Lives Competition,”

• The competition takes place annually

• The theme for 2012 was on promoting and raising awareness on PoAs.

• The South African DNA viewed this as an opportunity to create awareness; enhance interest

and implementation of Programme of Activities (PoAs) within the country.

• The DNA submitted: PoA Communication Plan for South Africa, PoA Brochure, brief

description of the meetings held, workshop reports as well as website linkage to PoAs in

South Africa

• South Africa won the International Competition for the best DNA communicator of the year

show case in the category of Non-Annex 1 countries with 10 or more registered CDM

projects.

Acknowledgement to the SA DNA Team

Useful Links

www.info.gov.za/gazette/regulation/2005/27788a.pdf

http://cdm.unfccc.int

www.pointcarbon.com

www.ipcc.ch

www.un.org/esa/sustdev/csd/policy.htm

www.ieta.org

www.cdmbazaar.net

www.cdmrule.int

Thank You

Contact us:

DNA@energy.gov.za

Tel: +2712 406 7685

www.energy.gov.za