low emission capacity building (lecb) project malaysia final

Low Emission Capacity Building (LECB) Project

Malaysia

Final Report June 2016

Low Emission Capacity Building (LECB) Project in Malaysia is part of the UNDP LECB Programme, which is supported through contributions by the European Commission, the German Federal Ministry for the Environment, Nature Conservation and Nuclear Safety, and the Government of Australia.

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Low Emission Capacity Building (LECB) Project Malaysia Final Project Report

Content:

SUMMARY ........................................................................................................................ 4

1. PROJECT BACKGROUND AND RATIONALE ................................................................... 6

1.1 National Policy Framework ........................................................................................ 6

1.2 Institutional Arrangement and Sectoral Policy Framework ......................................... 7

1.3 Status of GHG Inventory, NAMA and MRV before LECB Project ................................... 9

2. SUMMARY OF PROJECT OUTCOMES AND OUTPUTS ................................................. 10

2.1 Outcome 1: National GHG Inventory System ............................................................ 10

2.2 Outcome 2: NAMAs ................................................................................................. 10

2.3 Outcome 3: MRV ...................................................................................................... 11

3. PROJECT ORGANIZATION AND MANAGEMENT ARRANGEMENTS .............................. 13

3.1 National Steering Committee (NSC) .......................................................................... 13

3.2 Technical Working Group (TWG) on GHG Inventory .................................................. 15

3.3 Technical Working Group (TWG) on NAMA............................................................... 16

3.4 Project Management Group ..................................................................................... 18

3.5 National Project Director.......................................................................................... 18

3.6 Project Manager ...................................................................................................... 18

4. RESULTS AND ACHIEVEMENTS .................................................................................. 19

4.1 GHG Inventory ......................................................................................................... 19 4.1.1 Support to GHG Inventory Secretariat .................................................................... 20 4.1.2 Preparation for Biennial Update Report & its International Consultation and

Analysis ................................................................................................................. 20 4.1.3 Quality Management & Improvement of GHG Inventory ........................................ 21

4.2 NAMA ...................................................................................................................... 24 4.2.1 National Implementation Framework and Arrangement for NAMA ......................... 25 4.2.2 NAMA Seeking International Support – NAMA Facility Applications ........................ 26 4.2.3 UNFCCC-NAMA Registry ......................................................................................... 28 4.2.4 Sectoral Assessment for NAMA .............................................................................. 30

4.3 MRV ........................................................................................................................ 34 4.3.1 Measurement and Reporting of Mitigation Actions ................................................ 34 4.3.2 Verification for Domestically Supported NAMAs ..................................................... 36

4.4 Summary of Achievements and Results .................................................................... 37

5. COMMUNICATIONS AND OUTREACH ....................................................................... 39

6. SUSTAINABILITY OF RESULTS .................................................................................... 40

7. LESSONS AND RECOMMENDATIONS ........................................................................ 42

7.1 Contribution to Capacity Development and Institutional Arrangements ................... 42

7.2 Main Project Outputs and Utilisation ....................................................................... 42

7.3 Challenges and Lessons Learned for Future Activities ............................................... 43

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List of Appendices: Appendix 3.1 Minutes of Meetings – National Steering Committee (NSC)

Appendix 3.3 Minutes of Meetings – Technical Working Group on NAMA (TWG-NAMA)

Appendix 3.4 Minutes of Meetings – Project Management Group (PMG)

Appendix 4.1.3a Reports of the Collaboration with USEPA/USAID-LEAD Program on Agriculture Sector

Appendix 4.1.3b Training Materials on GHG Inventory of Solid Waste Disposal Category

Appendix 4.1.3c Report of the Feasibility Study for Development of Emission Factors for the Power Sector

Appendix 4.1.3d Development of QA/QC Plan in the National GHG Inventory System

Appendix 4.1.3e Assessment Report on the Documentation of GHG inventory

Appendix 4.2.2a NAMA Facility Proposal – Towards Energy Efficient Two-Wheelers in Malaysia

Appendix 4.2.2b NAMA Facility Proposal – Support to Integrated E-Waste Management System for State of Sabah

Appendix 4.2.2c NAMA Facility Proposal – Avoided Emissions from Peat Swamp Forest Management and Central Forest Spine Ecological Connectivity in South East Pahang

Appendix 4.2.3a UNFCCC-NAMA Registry – Sustainable NAMA Financing Mechanism for Reactivating Renewable Energy-based CDM Project Activities in Malaysia

Appendix 4.2.3b UNFCCC-NAMA Registry – Support to Integrated E-Waste Management System for State of Sabah

Appendix 4.2.3c UNFCCC-NAMA Registry – Feed-in Tariff (FiT) System

Appendix 4.2.4a Consultancy Report of the Assessment of Initiatives in the Energy Sector for NAMAs

Appendix 4.2.4b Consultancy Report of the Assessment of Initiatives in the Cement and Iron and Steel Sectors for NAMAs

Appendix 4.2.4c Consultancy Report of the Feasibility Study of Low Carbon Model for Langkawi Island

Appendix 4.3.1 Consultancy Report of the Development of GHG Management Tools for Mitigation Programmes and Measures

Appendix 4.3.2 Consultancy Report of the Development of Verification Guideline for Domestically Supported NAMAs

Appendix 5.1 Draft Knowledge Product on NAMAs

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SUMMARY The LECB Project in Malaysia was initiated in 2013 to assist the country in enhancing national GHG inventory systems, promoting the uptake of NAMA and designing MRV framework. GHG Inventory The LECB Project Malaysia (the Project) supports the GHG Inventory Secretariat based in the Environment Management & Climate Change Division of NRE, and implements its activities through the Technical Committee on GHG Inventory. The Technical Committee, during its meeting on 4 July 2013, agreed that all sectoral Working Groups, especially the Waste and Agriculture, will be supported for capacity building. In 2013, the Project held several discussions with the lead agencies of the Working Groups for designing specific support activities. Besides that, the Project also facilitated the deliberation a detailed plan for preparation of GHG inventory in meeting national reporting requirements in 2014-2017. These include the first biennial update report (BUR) in 2015 and third national communication (NC3) in 2017. In 2014, the key roles of LECB Project Malaysia were complementing domestic resources (with the focus on the Agriculture & Waste Sectors) and bridging the preparation towards BUR/NC3 (the BUR/NC3 Project started in June 2014). Appointments of the Department of Environment (DOE, for the Waste Sector) and Malaysian Agriculture Research and Development Institute (MARDI, for the Agriculture Sector) were finalised and disbursement of the project fund was initiated. The four Sectoral Working Group Chairs and other compiling agencies were supported through a number of GHG inventory planning and capacity building workshops, held on 8 April and 18-20 June 2014. Subsequently, sectoral-specific workshops had been organized by respective sectoral coordinating agencies to continue building capacity and preparation of GHG inventory mainly for the purpose of BUR. In 2015, the Project implemented several specific activities for capacity enhancement of the Agriculture and Waste Sector as well as development of the national GHG inventory repository. Collaboration with USEPA/USAID was initiated in February to strengthen capacity and improve quality of the Agriculture Sector GHG inventory through an external QA, identification of local emission factors for rice cultivation category and several training workshops. In August, the Project conducted a training workshop on solid waste disposal category in the Waste Sector GHG inventory. Together with the BUR/NC3 Project, the LECB Project Malaysia supported the national team in enhancing understanding and need for a repository on GHG inventory. The Project will focus on improving documentation and archiving of national GHG inventory system based on sectoral reports. In 2016, several activities on GHG inventory in 2016 were proposed and endorsed by the Project National Steering Committee (NSC) during its meeting on 18 December 2015. These activities, which were planned for implementation using the remaining Project funds, included the organization of sectoral workshops for the Waste and Agriculture Sectors, and Support the participation of Malaysian representatives in the Winter Institute on 2006 IPCC Guidelines on 29 February to 11 March 2016 in Bangkok. The former was a continuation of the capacity building efforts and inventory preparation coordinated by Department of Environment (Waste Sector) and Malaysian Agriculture Research and Development Institute (Agriculture Sector). The latter will support two representatives each from the Waste and Agriculture Sectors to attend the training organized by USAID-LEAD Program. However, these activities were not carried out because Project activities were discontinued.

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NAMA The LECB Project Malaysia initiated its activities on NAMA in 2013 on two aspects: establishment of national arrangement for NAMA and identification of pilot initiatives. Several workshops and focus group discussions were organised to deliberate these matters. A Technical Working Group (TWG) on NAMA was created under the Project in 2014 to continue the discussion and oversee the Project activities on NAMA and MRV. In 2014, the TWG agreed to the establishment of an interim arrangement for the management of NAMA and MRV in Malaysia. The interim arrangement was later endorsed by the Project National Steering Committee. In ensuring the continuity of such arrangement post-LECB, a synergy was also created with the BUR/NC3 Project. While TWG-NAMA under LECB Project will continue its work until 2015, TWG-MRV under BUR/NC3 Project will then take on the responsibility until 2017. Once the national arrangement for climate change has been established, the responsibility will be transferred to the relevant entities. Since 2014, the LECB Project Malaysia is supporting developing several mitigation actions in the country, either as NAMA seeking international support or NAMA for recognition at the UNFCCC-NAMA Registry. Five cases were pursued in the former while three cases are being supported for the latter type of NAMA. The Project also initiated sectoral assessment on the potential and roles of NAMA for several key emission sources. Several final outreach activities on NAMA in 2016, which were approved during the NSC Meeting on 18 December 2015, could not be carried out in the first quarter of 2016. This was because Project activities were discontinued. MRV The LECB Project Malaysia works in synergy with the BUR/NC3 Project in establishment of a domestic MRV system in Malaysia. The main roles of the latter include deliberating institutional arrangements and procedures on MRV. The LECB Project focuses on methodological aspects. Two consultancies were initiated in 2014 for developing domestic guidelines on MRV. The first activity was aimed to prepare and test a tool for measurement and reporting of mitigation programmes and measures, which was completed in early 2016. The second activity focused on a verification guideline for domestically supported NAMAs, and was done by 2015.

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1. PROJECT BACKGROUND AND RATIONALE 1.1 National Policy Framework Malaysia ratified the UN Framework Convention on Climate Change (UNFCCC) on July 13, 1994 and the Kyoto Protocol on 4 September 2002. As part of the obligations assumed as a party of the UNFCCC, the Government of Malaysia submitted its Initial and Second National Communication in 2000 and 2011, respectively, with the help of the UNDP/GEF. In addition, the first Biennial Update Report (BUR) was officially submitted in 2016. The country is currently in the process of preparing the Third National Communication (NC3) that will be submitted by 2017. At COP 15 in Copenhagen, the Prime Minister announced that Malaysia would voluntarily reduce its emissions intensity of GDP by up to 40% based on 2005 levels by 2020, on the basis of technology transfer and financial support from developed countries. The voluntary aspiration sets forward the country’s overarching strategy for development in a low carbon pathway, demonstrating willingness to address GHG emissions in the context of sustainable development. Subsequently, it is further augmented with the National Policy on Climate Change and National Green Technology Policy that together set the foundation for low emission development strategy for the country. The Second National Communication (NC2) has produced several results of significant importance for the development of mitigation actions. Emissions inventory for the year 2000, and estimates, are showing that GHG emissions are continuously increasing. These inventories establish a solid baseline that facilitates the updating of GHG emissions and the analysis of future trends. Increases in emissions in the Energy, Industrial Processes and Waste sectors ranged between 50-184 % between the years 1994 and 2000 resulting in a significant increase in emissions of each GHG considered. At the same time, there was more than two fold increase in net removal in the LULUCF sector largely due to the increase in categories considered and better accuracy in calculations. The agriculture sector showed a reduction in emissions due to the changes in assumptions and guidelines. The NC2 also resulted in guidelines for mitigation which are a first step towards a concrete strategy. The assessments undertaken lay the groundwork for further analysis and help to promote the translation of these into concrete actions. Mitigation actions in Malaysia are guided by national development plans and two key national policies. The national plan that is currently in implementation is the Tenth Malaysia Plan (RMK-10), while the two policies are National Policy on Climate Change and National Green Technology Policy, respectively. RMK-10 will continue efforts on developing a roadmap for climate resilient growth. During the Plan period, Malaysia will adopt a dual strategy in addressing climate change impacts: firstly, adaptation strategies to protect economic growth and development factors from the impact of climate change; and secondly, mitigation strategies to reduce emission of GHGs. On the latter, the Plan recognises that Climate change is a global issue with significant implications for Malaysia despite the country’s contribution of only 0.7% to global CO2 emissions based on the UNDP Human Development Report 2007/2008. Major efforts will be introduced to reduce emissions intensity through several programmes aimed at reducing emission of GHGs. These initiatives include creating stronger incentives for investments in renewable energy (RE); promoting energy efficiency to encourage productive use of energy; improving solid waste management; conserving forests; and reducing emissions to improve air quality. The National Policy on Climate Change was approved by the Cabinet in 2009 with the aim to provide the framework to mobilise and guide all key stakeholders in addressing the challenges of climate change in

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an effective and holistic manner. The objectives of the policy include mainstreaming climate change response through wise resource use and enhanced environmental conservation, integration of these responses into new and existing national plans and programmes, and strengthening institutional capacity, with the collective goals of strengthening economic competitiveness, improving quality of life, strengthening development resilience in the face of the potential impacts of climate change, and reducing its negative impacts. The Policy identifies 43 key actions under 10 strategic thrust areas to facilitate the integration of climate change considerations into planning and implementation of development programmes and decision making processes. The Ministry of Natural Resources and Environment is presently implementing the Policy. The National Green Technology Policy, launched in 2009, seeks to promote low carbon technology and ensure sustainable development while conserving the natural environment and resources. The Policy focuses on four broad sectors (building, energy, waste and transportation) with five strategic thrusts, i.e. to establish a green technology council for high-level coordination amongst key stakeholders; to provide a conducive environment for green technology development; to intensify human capital development by providing training and education programmes, and by introducing financial packages and incentives to students embarking on green technology related subjects; to intensify green technology research and innovation towards commercialisation; and to promote for public awareness on green technology. The Ministry of Energy, Green Technology and Water implements the Policy. 1.2 Institutional Arrangement and Sectoral Policy Framework Both the National Policy on Climate Change and National Green Technology Policy are important in achieving Malaysia’s broader development goals of achieving a high income nation status in a sustainable manner. Strategic implementation of these policies is therefore necessary. Recognising this, a National Green Technology and Climate Change Council, chaired by the Prime Minister, was established in early 2010 to foster greater ties and coordination between these two complementary areas. The Council comprises of several Working Committees that can play key roles on mitigation actions in the country. These Committees include Working Committee on Industry led by the Ministry of International Trade and Industry; Working Committee on Transport led by the Ministry of Transport; Working Committee on Human Capital led by Ministry of Human Resources; Working Committee on Research and Innovation led by Ministry of Science, Technology and Innovation; Working Committee on Promotion and Public Awareness led by Ministry of Information, Communication and Culture; and Working Committee on Green Neighbourhood led by Ministry of Housing and Local Government. Specifically on energy, energy policy in Malaysia is set and overseen by the Economic Planning Unit, with close coordination with the line ministry (Ministry of Energy, Green Technology and Water, MEGTW, on electricity matters) and other agencies (i.e. Energy Commission and Sustainable Energy Development Authority, SEDA). MEGTW regulates the non-oil and electricity sector (and gas energy and security sectors) while EC regulates the energy supply activities and enforces energy supply laws. SEDA, is a newly set up statutory body formed under the Sustainable Energy Development Authority Act 2011 whose role is to administer and manage the implementation of the feed-in tariff mechanism mandated under the Renewable Energy Act 2011. Malaysia Green Technology Corporation (MGTC) from time to time provides promotion, policy research and awareness support to MEGTW related to green technology including RE and EE initiatives.

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Energy efficiency (EE) measures (including demand side management) have been mainstreamed since the 7th Malaysia Plan period (1996-2000) and in 10th Malaysia Plan, it has been further intensified to harness energy savings potential and reduce Malaysia’s carbon emissions and dependence on fossil fuels. Intrinsic barriers to energy efficiency that pose challenges in capturing this opportunity are being addressed. EE covers the efficiency of power generation, transmission and distribution of electricity as well as various end uses of energy such as in the industrial, commercial and residential. Policy on renewable energy (RE) too has been recognised since the year 2000. The advent of the Fifth fuel policy has further reinforced Malaysia’s position in developing the RE industries. It was initially targeted to contribute 5% of the country’s electricity demand by year 2005 and the Small Renewable Energy Program was launched in May 2001 under the initiative of the Special Committee on Renewable Energy aimed to support the government’s strategy in intensifying the development utilization of RE, where by 2005, equal to between 500 and 600 megawatt (MW) of installed capacity to be made available. The 10th Malaysia plan targets for 5.5% of RE generation which is about 985MW in capacity. Solid waste management has traditionally been under the jurisdiction of Local Authorities in Malaysia. However, the Solid Waste and Public Cleansing Management Act 2007 centralised management of solid waste by the Federal Government. The National Solid Waste Management Department was established under the Ministry of Housing and Local Government in 2007. The Solid Waste and Public Cleansing Management Corporation was established to handle the day-to-day operation of solid waste and public cleansing. The waste sector is one of the key sources of emissions after the energy sector. Among others, landfills contributed to nearly half of the total methane emission in the country in 2000. Mitigation strategies for reduction of GHGs from solid wastes therefore focus only on the organic portions of solid wastes, which can be achieved in three stages of solid waste management. From waste generation stage, the potential include reduction of organic waste generation so that the organic wastes that need to be treated or disposed are minimised. During waste treatment stage, emissions reduction can be achieved through proper treatment/recycling of organic waste to minimise the amount disposed. In the waste disposal stage, proper landfill management can ensure that GHG emissions from the site are properly captured for flaring or recovery. In spite of the rapid rate of development, Malaysia continues to retain a highland of natural forests. The national forest policy and National Forestry Act has set aside 14.19 million out of the 33 million hectares of the country as permanent forest reserves, serving as the core forested areas of the country. Of this forested area, 10.53 million and 3.66 million hectares serve as production and protection forest respectively. There are approximately a quarter of a million hectares that have been dedicated to forest plantations and all remaining forests are designated as state land forest. A significant amount of carbon has been sequestered by existing forested areas and managed land use areas as well as through reforestation and replanting programmes, and suburban and urban tree planting. CO2 removal occurred in the LULUCF sector. The net removal from the LULUCF sector amounted to 220.19 Mt CO2. Climate change mitigation in the forestry sector may be accomplished by reducing the rate of forestry-related GHG emissions to the environment and taking advantage of the unique ability of living green plants to remove carbon dioxide from the atmosphere. Emissions reductions in the forestry sector can be accomplished either through harvesting fewer trees and converting less forested land to other land uses, or, alternatively, by harvesting timber or converting land in ways that result in fewer emissions of GHG to the atmosphere. The Third National Agricultural Policy outlines the strategic directions for agricultural development from 1998 to 2010. The policy noted an expected decline in contributions from rubber, cocoa and sawn logs while the contribution from oil palm and food commodities were expected to increase. The main thrust of the policy was to focus on new approaches to increase productivity as well as conserve and utilize

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natural resources in a sustainable manner. Methane from rice production is the main source of emissions of the agriculture sector. Fertiliser usage and livestock management also contribute significant and growing emissions. The future emissions from rice cultivation will probably increase slightly due to production intensity and the small increase in new areas of rice cultivation. Additionally, future emissions from the livestock sector will potentially increase parallel with the government’s plan to increase cattle livestock production from the present 15 to 40 percent self-sufficiency or an increase of about 1.5 million cattle. 1.3 Status of GHG Inventory, NAMA and MRV before LECB Project Prior to the initiation of LECB Project in Malaysia, there were specific activities and arrangement for the activities on GHG inventory. However, there was almost no initiative related to NAMA in the country. Efforts on MRV had not been initiated yet as relevant international negotiations on this matter were still ongoing. Works on GHG inventory was strengthened and institutionalized pursuant to the preparation of the Second National Communication. The institutional arrangement created from the process was retained by the Ministry of Natural Resources and Environment. It composed of a National Committee on GHG Inventory, which provides overall policy guidance, and also a Technical Committee on GHG Inventory that oversees technical implementation of GHG inventory activities. There are 5 sectoral working groups, in accordance to IPCC sectors, which focus on the respective sectoral calculations. There were limited national budget allocated on national GHG inventory activities. Despite the inadequacy of funds, the resources were well coordinated through the Committees and targeted main activities focusing on key sectors. However, capacity building initiatives could only be undertaken sporadically and a challenging endeavor in long term. While the BUR/NC3 Project was expected to kick-start in 2014, the LECB Project was brought in to fill up several gaps, particularly on GHG inventory. Besides being aimed to complement national budget for sectors not fully covered, it was playing a bridging role for the BUR/NC3 Project subsequently. The LECB Project was also meant to initiate national efforts on NAMA and MRV, where limited (if none at all) activities had been undertaken to ensure uptake in the country.

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2. SUMMARY OF PROJECT OUTCOMES AND OUTPUTS The main objective of the Project is to enhance national capacity for GHG inventory system and to prepare the country in the uptake of NAMAs and MRV. The objectives will be achieved through three outcomes and associated outputs. The Project Outcomes are as follows:

Outcome 1: The GHG Inventory System fulfils national sustainable development requirements and international commitments.

Outcome 2: National initiatives on mitigation are enhanced through NAMAs in the main industrial GHG emitting sectors that contribute to voluntary emission reduction aspiration.

Outcome 3: National and Sectoral MRV systems are designed with pilot activities in the main industrial GHG emitting sectors.

2.1 Outcome 1: National GHG Inventory System The development of GHG emission inventories contributes to Malaysia’s existing information and data collection processes and platforms, and is a Convention obligation. A GHG national inventory system will support the development of more periodic GHG inventories and the MRV system to be designed for Malaysia’s NAMAs. The technical and institutional capacity support that the LECB Project will provide under this Outcome will result in the development of systematic and sustainable GHG emission inventory processes as well as build the capacities required for this Project, which will also benefit the country’s National Communication process. Under this Outcome, there were two targeted outputs. The activities of these outputs are summarized as follows: a) Output 1.1 – Institutional framework on GHG inventory is strengthened:

Support the establishment of national GHG data repository.

Build capacity to operationalise the inventory reporting cycle in consultation with key stakeholders.

Identify and support in developing appropriate enabling mechanism to ensure regular compilation of GHG data.

Facilitate institutionalisation of GHG inventory activities for key agencies.

Develop sustainable data collection system from companies contributing to key source in GHG reporting.

Design a periodical review system for continuous improvement of the GHG inventory system. b) Output 1.2 – Relevant tools are identified and training in use of the tools is conducted:

Determine suitable tools for performing uncertainty assessment, key source analysis and QA/QC procedures.

Conduct training for applying the tools.

Develop/adapt training manuals and guidelines.

Undertake awareness raising initiatives with different stakeholders 2.2 Outcome 2: NAMAs Under this outcome, the project will work on the implementation of an enabling framework and mechanism for the design of NAMAs. This includes supporting processes to engage with potential

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implementers of mitigation actions and assessment of feasible emission reductions, particularly the major GHG emission sources as identified in the Second National Communication. Under this Outcome, there were three targeted outputs. The activities of these outputs are summarized as follows: a) Output 2.1 – Implementation framework and mechanism for NAMAs is established.

Review existing initiatives related to NAMA in the country, with a focus on the main industrial GHG emission sources.

Develop national NAMA policy and criteria.

Support the planning and development of NAMA secretariat.

Establish a national NAMA registry.

Formulate sector-specific NAMA Roadmap, with a focus on the main industrial GHG emission sources (such as in palm oil, cement, wood and waste industries), in collaboration with key stakeholders.

Develop framework and guideline for formulating climate change strategy by state and local governments.

Assess technology needs and identify relevant technological options.

Explore approaches for sustaining long-term financing required for mitigation actions in the country and determine financing options for NAMAs.

Conduct a feasibility study on legal and regulatory instruments in support of future climate change mitigation action.

b) Output 2.2 – Pilot NAMAs in the main industrial GHG emission sources are prioritized:

Determine criteria for prioritisation of pilot NAMA.

Prioritise high impact sectors and activities for demonstration as NAMAs.

Adoption of at least three one (3) NAMAs including its associated MRV.

Determine funding strategies. c) Output 2.3 – Approaches and tools to intensify NAMA implementation are developed.

Develop relevant mechanism and tools in support of public and private sectors government agencies to measure and record GHG emission of their mitigation actions.

Assess and explore the potential of relevant activities in national plans and policies for implementation as supported NAMA.

Review CDM projects for possible adoption as NAMAs in order to ensure sustainability in delivering emission reduction.

Mobilise state and local governments’ initiatives on NAMAs.

Develop training manual in collaboration with relevant government training agencies.

Prepare and disseminate relevant outreach materials.

Prepare and circulate policy papers on selected issues (e.g. NAMA, MRV, GHG inventory).

Conduct regular dialogue and workshops in support of continuous interfacing of different stakeholders.

2.3 Outcome 3: MRV An MRV system will give transparency and confidence in the implementation of NAMAs as well as international credibility. It will also support Malaysia to comply with its Biennial Update Report obligation, which is required by the Durban climate change deal. In the absence of specific guidance on

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MRV systems to be implemented for NAMAs in the initial stage, the Project will have to work with the available UNFCCC decisions to develop a credible and functional MRV system. Under this Outcome, there was one targeted outputs. The activities of this output are summarized as follows: a) Output 3.1 – National and sectoral MRV systems are designed with a focus on the main industrial

GHG emitting sectors.

Review available national and international approaches and methodologies on MRV.

Formulate domestic MRV framework in consistency with the UNFCCC decisions.

Develop sectoral-specific MRV guidelines in collaboration with respective industrial association, with a focus on the main industrial GHG emitting sectors (such as in palm oil industry, cement, wood and waste),.

Design MRV elements for the pilot NAMAs in Output 2.2.

Reinforce domestic CDM operational entities and relevant agencies for verification of NAMAs.

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3. PROJECT ORGANIZATION AND MANAGEMENT ARRANGEMENTS

The project was governed by the National Steering Committee (NSC) and supported by 2 Technical Working Groups (TWG). The National Project Director oversaw the implementation of the project. The Project Manager managed the day-to-day operation of the project and ensured delivery of the targeted outputs. 3.1 National Steering Committee (NSC) The National Steering Committee provided guidance and direction to the project implementation process according to the annual work plan. During its first meeting in 2014, the Committee considered its TOR stipulated in the project document. It requested the TOR be streamlined and revised the membership. The revised roles and responsibilities are as follows:

To evaluate project implementation and provide guidance for fulfilment of project objectives;

To review and approve project work plan and budget, including any change of activities and budget, as well as project outputs;

To coordinate and harmonise relevant activities by various organisations involved in the project;

To advice on the long term sustainability strategy of the project. The NSC would be chaired by either the Secretary General or Deputy Secretary General (Environment). The latter chaired all the four meetings held in 2014 to 2015. Dr. Abdul Rahim Nik chaired the first three meetings before he retired in September 2015. Dr. Azimuddin Bahari chaired the fourth meeting. In term of membership, the project document stipulated that Members of the NSC may include Economic Planning Unit, Ministry of Natural Resources and Environment, Ministry of Agriculture, Ministry of Energy, Green Technology and Water, Ministry of Finance, Department of Statistics and other related agencies. The revised members comprised the following agencies:

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Ministry of Natural Resources and Environment, Secretary General / Deputy Secretary General (Chair).

Ministry of Natural Resources and Environment, Environment Management and Climate Change Division (Secretariat).

Economic Planning Unit.

Ministry of Energy, Green Technology and Water.

Ministry of International Trade and Industries.

Ministry of Transport.

Ministry of Agriculture.

Ministry of Plantation Industries and Commodities.

Ministry of Urban Wellbeing, Housing and Local Government.

Ministry of Science, Technology and Innovation.

Ministry of Finance.

Sarawak State Planning Unit.

Sabah Economic Planning Unit.

Department of Environment.

Forest Research Institute Malaysia.

Department of Irrigation and Drainage.

National Hydraulic Research Institute Malaysia.

National Solid Waste Management Department.

Malaysian Meteorological Department.

Department of Statistics.

Malaysian Agriculture Research and Development Institute.

Malaysian Green Technology Corporation.

Centre for Environment, Technology and Development Malaysia.

University of Tenaga National.

BUR/NC3 Project.

UNDP Malaysia. The NSC was scheduled to meet at least twice annually or when necessary. The first meeting in 2013 did not take place due to unavailability of the chair and/or national project director. Two meetings each were held in 2014 and 2015, respectively. The dates of these meetings are 13 January 2014, 17 November 2014, 18 June 2015 and 18 December 2015 (see Appendix 3.1 for minutes of the meetings). The NSC is expected one last time in June 2016. The main outcomes and decisions arising from these meetings are summarized as follows:

Meeting No. 1/2014, 13 January 2014: The NSC reviewed its TOR and requested for a revised be presented in the next meeting. The Committee also reviewed and endorsed the progress and expenditure in 2013 as well as the proposed activities and budget for 2014.

Meeting No. 2/2014, 17 November 2014: The NSC approved its revised TOR. The Committee also reviewed and endorsed the progress and expenditure in 2014 as well as the proposed activities and budget for 2015.

Meeting No. 1/2015, 18 June 2015: The NSC reviewed the progress of activities in 2015 as of June. The Committee requested additional activities be planned and implemented in view of additional fund due to the currency exchange rate. It also agreed to an extension of project for six months from December 2015 to June 2016, and the secretariat to seek approval for the extension.

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Meeting No. 2/2015, 18 December 2015: The Committee approved the project extension for another six months. The Committee also reviewed and endorsed the progress and expenditure in 2015 as well as the proposed activities and budget for 2015.

3.2 Technical Working Group (TWG) on GHG Inventory While establishing the management and institutional arrangements for implementing the Project, the Ministry requested that relevant existing platforms should be considered and used. This is mainly to avoid duplication of similar or relevant committees as well as to enhance mainstreaming, and thus ownership, of the issues by the key agencies. As such, the Project had subsequently discussed and obtained the support to work with the existing Technical Committees on GHG Inventory, as agreed by the Committee during its meeting on 4 July 2013. The Technical Committee reports to a National Committee on GHG Inventory. Membership of the Technical Committee is mainly the agencies coordinating the respective sectoral works. The members are listed as follows:

Forest Research Institute Malaysia (Chair).

Ministry of Natural Resources and Environment, Environment Management and Climate Change Division (Secretariat).



Department of Statistics.

Malaysian Meteorological Department.



Malaysian Green Technology Corporation.

University of Tenaga National.

BUR/NC3 Project. The Committee was chaired by the Deputy Secretary General (Environment), Ministry of Natural Resources and Environment, up until the its second meeting in 2015. Subsequently, a restructuring of relevant committees under the Ministry took place and led to the change of chairmanship. The new chair is Dr. Elizabeth Philips, Forest Research Institute Malaysia, who led the Committee in its first meeting 2016. LECB Project participated in a total of seven meetings of the Technical Committee on GHG Inventory, including two each from 2013 to 2015 and one in 2016. These meetings were held on 4 July 2013, 19 December 2013, 19 June 2014, 29 September 2014, 12 May 2015, 18 September 2015 and 18 January 2016. The main outcomes and decisions arising from these meetings are summarized as follows:

Meeting No. 1/2013, 4 July 2013: The Committee agreed that LECB to work and provide capacity building activities through its platform. While the activities should cover all sectors, the Committee requested focus on the Waste and Agriculture Sector.

Meeting No. 2/2013, 19 December 2013: The Committee reviewed and agreed with the proposed activities to be undertaken in 2014.

Meeting No. 1/2014, 19 June 2014: The Committee reviewed the progress of activities in 2014 as of June and requested new activities for 2015 to be proposed for its consideration in the next meeting.

Meeting No. 2/2014, 29 September 2014: The Committee, after taking stock of the progress in 2014, considered and agreed with the proposed activities for 2015.

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Meeting No. 1/2015, 12 May 2015: The Committee reviewed the progress of activities in 2015 as of May and requested additional activities be planned and undertaken for the remaining period of 2015 in view of the anticipated surplus budget from the currency exchange.

Meeting No. 2/2015, 18 September 2015: The Committee considered the progress of activities in 2015 and discussed activities to be undertaken during the project extended period in 2016.

Meeting No. 1/2016, 18 January 2016: The Committee was informed of the activities to be carried out in 2016. Appreciation was extended to the Committee for the platform provided to the Project.

3.3 Technical Working Group (TWG) on NAMA In 2013, the Technical Working Group on Nationally Appropriate Mitigation Action (TWG-NAMA) was held in the form of focus group discussion, which met twice on 4-6 October 2013 and 13 December 2013. The TWG was officially formed under the Project pursuant to the NSC meeting on 14 January 2014. After considering its TOR in the project document during the first meeting in 2014, the TWG agreed with a streamlined roles and responsibilities as follows:

To propose the institutional arrangement, national criteria, and other guidelines on NAMAs for adoption by NSCCC

To provide technical guidance to the implementation of project annual work plan & budget.

To review the project technical reports on NAMAs and MRV. The TWG was chaired by the Environment Management and Climate Change Division, Ministry of Natural Resources and Environment. The following agencies are the members of the TWG:

Ministry of Natural Resources and Environment, Environment Management and Climate Change Division (Chair).



Ministry of Transport.

Ministry of Plantation Industries and Commodities.

Forestry Department Peninsular Malaysia.


National Solid Waste Management Department.

Department of Standards.

Land Transport Authority.

Sustainable Energy Development Authority.

Forest Research Institute Malaysia.


SIRIM Berhad.

BUR/NC3 Project.

UNDP Malaysia. As a permanent arrangement for NAMAs and MRV could not resolved yet, the members considered and agreed on interim arrangement for managing NAMA and MRV through LECB Project and BUR/NC3 Project (Figure 4.3). While TWG-NAMA under LECB Project will continue its work until 2015, TWG-MRV under BUR/NC3 Project will then take on the responsibility until 2017. Once the national arrangement for climate change has been established, the responsibility will transferred to the relevant entities.

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Figure 4.3: Interim arrangement for NAMA and MRV The TWG also agreed to meet at least twice a year. Besides the two focus group discussions in 2013, the TWG met three times in 2014 (1 April, 17 July and 3 November) and twice in 2015 (9 April and 18 August). The last meeting is tentatively scheduled in May 2016. Minutes of the previous, including notes of the focus group discussions, are enclosed in Appendix 3.3. The main outcomes and decisions arising from these meetings are summarized as follows:

Meeting No. 1/2014, 1 April 2014: The TWG considered and revised its TOR, including the new membership. The members were agreeable that a short-term project level TWG should be formed under the LECB Project while a longer term or permanent arrangement is established. The Group also discussed about the objectives, criteria and potential activities as pilot initiatives of NAMAs.

Meeting No. 2/2014, 17 July 2014: The TWG continued the consideration of national arrangement and framework for NAMAs. Several activities for pursuing as NAMAs for recognition and NAMAs seeking international support were discussed. The TWG also started deliberating activities to be proposed for 2015.

Meeting No. 3/2014, 3 November 2014: The TWG was updated about the status of NAMA activities pursued by the project in 2014, including NAMAs seeking international support and NAMAs for recognition at UNFCCC-NAMA Registry, and challenges faced in facilitating uptake of NAMA in the country, ranging from international political progress and financing limitations. It also considered and agreed with the proposed activities and budget for 2015. As a permanent arrangement for NAMAs and MRV could not be resolved yet, the TWG agreed on an interim arrangement for managing NAMA and MRV through LECB Project and BUR/NC3 Project.

Meeting No. 1/2015, 9 April 2015: The TWG reviewed the progress of activities in 2015 as of April, and agreed with the proposed review in activities and budget for 2015. The Group was also informed that additional fund may be available due to currency exchange rates. The situation was being monitored by the Project and will be utilised for new or additional activities.

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Meeting No. 2/2015, 18 August 2015: The TWG took stock of the progress of activities since its last meeting. It also heard the presentations of four consultancies under the Project (three on NAMA and one on MRV), and provided feedback to the consultants.

3.4 Project Management Group The Project Management Group was not part of the management arrangement in the project document. Pursuant to the suggestion of UNDP Malaysia during the National Steering Committee No. 2/2014, the Group was formed and met in 2015. Prior to its formation, the key members met three times each in 2013 to 2014. Subsequently the Project Manager Group also met three times in 2015. Minutes of these meetings are enclosed in Appendix 3.4. 3.5 National Project Director The National Project Director is the Undersecretary of Environment Management and Climate Change Division, Ministry of Natural Resources and Environment. The main responsibilities were to coordinate project activities among the main parties to the project and provide direction and guidance on project-related issues. Dr. Lian Kok Fei was the National Project Director since the project initiation in June 2013 until he retired in March 2015. Dr. Gary William Theseira, who is the Deputy Undersecretary, was the acting National Project Director from April to June 2015. The new Undersecretary, Mr. Jaya Singam Rajoo, took over since July 2015. 3.6 Project Manager The Project Manager was responsible in running the day-to-day coordination of the project and to ensure the project produces the results specified in the project document and within the specified constraints of time and cost. The Project Manager was recruited and reported administratively and programmatically to both the National Project Director and UNDP Malaysia. Mr. Tan Ching Tiong was appointed as the Project Manager since June 2013. His contract, on an annually basis, was extended twice in June 2014 and June 2015, respectively, and expired by May 2016.

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4. RESULTS AND ACHIEVEMENTS 4.1 GHG Inventory The LECB Project Malaysia supports the GHG Inventory Secretariat based in Environment Management & Climate Change Division of NRE, and implements its activities through the Technical Committee on GHG Inventory. The Technical Committee, during its meeting on 4 July 2013, agreed that all sectoral Working Groups, especially the Waste and Agriculture, will be supported for capacity building. In 2013, the Project held several discussions with the lead agencies of the Working Groups for designing specific support activities. Besides that, the Project also facilitated the deliberation a detailed plan for preparation of GHG inventory in meeting national reporting requirements in 2014-2017. These includes the first biennial update report (BUR) in 2015 and third national communication (NC3) in 2017. In 2014, the key roles of LECB Project Malaysia were complementing domestic resources (with focus on the agriculture & waste sectors) and bridging the preparation towards BUR/NC3 (the BUR/NC3 Project started in June 2014). Appointments of the Department of Environment (DOE, for the Waste Sector) and Malaysian Agriculture Research and Development Institute (MARDI, for the Agriculture Sector) were finalised and disbursement of project fund was initiated. The four Sectoral Working Group Chairs and other compiling agencies were supported through a number of GHG inventory planning and capacity building workshops, held on 8 April and 18-20 June 2014. Subsequently, sectoral-specific workshops had been organized by respective sectoral coordinating agencies to continue building capacity and preparation of GHG inventory mainly for the purpose of BUR.

In 2015, the Project implemented several specific activities for capacity enhancement of the Agriculture and Waste Sector as well as development of national GHG inventory repository. Collaboration with USEPA/USAID was initiated in February to strengthen capacity and improve quality of the Agriculture Sector GHG inventory through an external QA, identification of local emission factors for rice cultivation category and several training workshops. In August, the Project conducted a training workshop on solid waste disposal category in the Waste Sector GHG inventory. Together with the BUR/NC3 Project, the LECB Project Malaysia supported the national team in enhancing understanding and need for a repository on GHG inventory. The Project will focus on improving documentation and archiving of national GHG inventory system based on sectoral reports. In 2016, several activities on GHG inventory in 2016 were proposed and endorsed by the Project National Steering Committee (NSC) during its meeting on 18 December 2015. These activities, which were planned for implementation using the remaining fund, included the organization of sectoral workshops for the Waste and Agriculture Sectors, and Support the participation of Malaysian representatives in the Winter Institute on 2006 IPCC Guidelines on 29 February to 11 March 2016 in Bangkok. The former was a continuation of the capacity building efforts and inventory preparation coordinated by Department of Environment (Waste Sector) and Malaysian Agriculture Research and Development Institute (Agriculture Sector). The latter will support two representatives each from the Waste and Agriculture Sectors to attend the training organized by USAID-LEAD Program. However, these activities were not carried out because the final fund was not provided by the GSU. The activities commissioned or undertaken directly by the Project are as follows: a) Capacity building and support to sectoral the Agriculture and Waste Sectors GHG inventory activities

for national reporting to the UNFCCC: b) Provision of support to GHG Inventory Secretariat and coordination.

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c) Collaboration with USEPA/USAID-LEAD Program on capacity building and quality improvement of the Agriculture Sector GHG inventory.

d) Training workshop on GHG inventory of solid waste disposal category in the Waste Sector. e) Feasibility study for the development of local emission factor for the power sector. f) Development of QA/QC plan in the national GHG inventory system. g) Improvement of documentation and archiving of GHG inventory data and information. h) Capacity building for the preparation of international consultation and analysis (ICA).

4.1.1 Support to GHG Inventory Secretariat The LECB Project Malaysia supported the GHG Inventory Secretariat, which is based in Environment Management & Climate Change Division of NRE. The Division is the national focal point on climate change, and also the Project implementing partner. The Project assisted the Secretariat in several ways, including the organization of meetings by the Technical Committee on GHG Inventory, meetings with sectoral coordinating agencies, and also training and outreach events. Most of these efforts were carried out in 2013 to 2014. Such roles were taken over by the BUR/NC3 Project after its initiation in mid-2014. Meetings of the Technical Committee are elaborated in Section 3.2 above. The Project supported several planning meetings with the four sectoral coordinating agencies. These meetings the GHG Inventory Planning Workshop on 19 December 2013, Technical Meeting on 19 June 2014 and Workshop for the Development of QA/QC Plan in the National GHG Inventory System on 15 January 2015. Relevant materials on these meetings are available in the Project website. Several training and outreach events were also organized by the Project. These events include National Workshop on GHG Inventory on 8 April 2014, Technical Workshop on GHG Inventory for the Agriculture and Waste Sectors on 18-24 June 2014 (with support from USEPA and UNFCCC-SEA Project), National Seminar on GHG Inventory on 5 February 2015, Training Workshop on Agriculture Sector GHG Inventory and ALU Software on 23-24 March 2015, and Training Workshop on GHG Inventory of Solid Waste Disposal Category on 4 August 2015. Relevant materials on these meetings are available in the Project website. 4.1.2 Preparation for Biennial Update Report & its International Consultation and Analysis

a) Capacity Building and Support to the Agriculture and Waste Sectors GHG Inventory Activities Funding was directly provided to the coordinating agencies of the Agriculture and Waste Sectors. The former was led by Malaysian Agriculture Research and Development Institute (MARDI), while the latter was the Department of Environment (DOE). The activities were ultimately aimed for improving national GHG inventory system, with focus in these 2 sectors. The objectives were to continue building capacity and institutionalising GHG inventory activities into the key agencies. The main activities included provision of input to the development of QA/QC plan and support in QA/QC activities, assessment of uncertainty, time series consistency and key source analysis, engagement of local researchers, assessment of needs for developing local emission factors, support to the GHG inventory secretariat and provision of input to external QA of the calculated GHG inventory and in the preparation for international consultation and analysis. The implementation and results obtained by the agencies were documented in the progress and final reporting.

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b) Capacity Building for the Preparation of International Consultation and Analysis (ICA)

Since 2013, while the Project was carrying out activities on GHG inventory, efforts were also initiated to start building capacity of the key stakeholders on international consultation analysis (ICA). These efforts were carried out by way of presentations in several meetings and workshops. The aim was to prepare the stakeholders towards ICA, which was expected to occur in 2016. The Project Manager provided the presentations in a number of events, including GHG Inventory Planning Workshop on 19 December 2013, Technical Committee on GHG Inventory Meeting on 19 June 2014, Waste Sector Group Meetings on 11-13 August 2014 and 11-12 November 2014, respectively. These presentations are available in the Project website. 4.1.3 Quality Management & Improvement of GHG Inventory

a) Collaboration with USEPA/USAID-LEAD Program on Agriculture Sector For the agriculture sector, LECB Project support activities in 2015 were initiated in February through a collaboration with USEPA/USAID. The activities aim to enhance capacity and improve quality of GHG inventory of the sector through an external QA and provision of input to identification of local emission factors for rice cultivation category. An international expert has been engaged to carry out the tasks. The Project undertakes domestic coordination and arrangement as well as funds the costs of all events in relation to these activities. Input of the international expert was through USAID support via the LEAD program and EPA in-kind technical assistance, which are implemented in three missions to Malaysia in February, March and June, respectively. Total support from USEPA/USAID for the international expert, including professional fees, air travels, accommodation, and other expenditures, is approximately USD 28,000. Although the support activities were originally planned to involve a national expert to provide domestic perspective, the targeted expert could not commit to the work due to other emerging duties. Reports of these activities are attached in Appendix 4.1.3a. The following sections provide a summary of the activities undertaken. The first mission took place from 4-6 February 2015. It involved a kick-off meeting and an introductory seminar on GHG inventory for all compiling agencies. The kick-off meeting was held on 4 February with the agriculture sector inventory team led by Malaysian Agricultural Research and Development Institute (MARDI) and other key stakeholders. The status and progress, including challenges and needs, of the sector for BUR and NC3 were discussed. Planning of the second and third missions was then deliberated. On 5 February, a National Seminar on GHG Inventory was organized by the LECB Project. The international expert gave an overview of GHG inventory in the context of UNFCCC and IPCC. The presentations covered fundamental information on how to produce national GHG inventories in accordance with the UNFCCC reporting requirements for BUR and national communication as well as in details the General Guidance and Reporting in Volume 1 of the IPCC 2006 Guidelines, in order to enhance their capacity to perform data collection, uncertainty analysis, key category analysis, time series consistency, quality assurance and quality control, and reporting. The Seminar was attended by 56 participants from all inventory sectors. The international expert also had a specific session with MARDI team on 6 February. The discussion was mainly to review computation of the N2O emissions from Agricultural soils using the ALU Software. The second mission was held from 16-25 March 2015. The first week, from 16-20 March, involved an external QA, while the next half a week from 23-25 March was a specific training for the agriculture sector. During the QA session, an opening meeting was held on 16 March involving the MARDI team and

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other key stakeholders. This was done in an interactive session where a series of presentations were given by MARDI team on how GHG emissions from the agriculture sector were estimated for the international expert to clarify and initial assess the quality of inventory using the TACCC criteria and make recommendations for improvements. The international expert conducted the review in the following three days. A closing meeting was held on 20 March to consider the QA outcome by the international expert. Other sectoral coordinating agencies were invited to the closing meeting for mutual learning. During the second week, a Training Workshop on Agriculture Sector GHG Inventory and ALU Software was conducted on 23-24 March. It was attended by 25 participants who were mostly other data compiling agencies in the sector. The international expert provided an overview of agriculture sector GHG inventory in the context of UNFCCC and IPCC, shared the results of QA, before providing a detailed session on ALU Software covering all categories of the sector. The third mission was held from 8-12 June 2015. The international expert supported by LEAD Program visited Malaysia for the third time in 2015 to support MARDI in initiatives related local emission factor. Relevant materials and publications were reviewed for developing local or country specific emission factor for methane emission from rice cultivation. The IPCC-EFDB criteria (robustness, applicability, and documentation), and the IPCC guidelines requirements for the rice emission factor (that the fluxes are measured from continuously flooded rice field and without organic amendment) were used in the review. Overall, having the pros and cons of the data presented, it was suggested to narrow the choice of potential country specific emission factor from the publication reviewed. It was also recommended that MARDI to publish the study in relevant journal to comply with the documentation requirement.

b) Training on Solid Waste Disposal Category The Training Workshop focused on the Solid Waste Disposal category under Waste Sector in the GHG Inventory. The objective was to provide training about preparing GHG Inventory of the category in Malaysia using IPCC Guidelines and software. Sixteen (16) participants from five (5) agencies attended the workshop. These agencies were Department of National Solid Waste Management (JPSPN), Department of Environment (DOE), Solid Waste Management and Public Cleansing (SWCorp), Natural Resources and Environment Board (NREB) and Forest Research Institute Malaysia (FRIM). The workshop was conducted by Mr. Tan Ching Tiong, LECB Project Manager. Mr. Tan gave three presentations: the first to provide an introduction, the second about previous works done using the Revised 1996 IPCC Guidelines, and the third about future calculations by using 2006 IPCC Guidelines. Key issues in the past works and future activities were highlighted. The materials presented are attached in Appendix 4.1.3b.

c) Feasibility Study for the Development of Emission Factors for the Power Sector According to Malaysia’s Second National Communication, the electricity and heat generation sector (the power sector) accounted for over a quarter of total national greenhouse gas (GHG) emissions in 2000. The sectoral emission is expected to increase in view of the growing electricity demand. As such, a quality and accurate calculation of the emissions is essential. One key factor is availability of local emission factors that are reflective to national circumstances. It is important to ensure accurate estimation of GHG emission for the purpose of developing appropriate mitigation strategy to achieving the voluntary pledge. TNB Research Sdn. Bhd. (TNBR) was appointed in 2014 to conduct the feasibility study and completed its work in early 2015. The study aimed to improve the overall GHG inventory for subsequent use in the formulation of relevant mitigation strategy in the power sector. In order to obtain relevant local data, a session with the power sector was conducted involving power plant operators that are relevant to the

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study scope. Based on literature review and survey conducted, it was found that the majority of the power plant operators did not monitor and measure GHG emissions. This is an important finding that indicated the power plant operators need to be educated in order for them to support national initiatives on GHG emission assessments and mitigation activities. The study also considered methodology of which most power plant operators used to measure their fuel properties before the combustion process. In developing the GHG emission factor, information on fuel properties are crucial as it will be the base data requirement. Data accessibility and analysis are also crucial and is expected to be a daunting task. The study report is attached as Appendix 4.1.3c. Pursuant to the feasibility study, the results obtained were used by TNBR in an application for fund to conduct the study in developing local emission factors of the power plants under its parent company. The application was submitted to Malaysian Energy Supply Industry Trust Fund, managed by the Ministry of Energy, Green Technology and Water, in mid-2015. The study was approved in December 2015 with a total fund amount of MYR 5 million (approximately US$ 1.3 million) for 2-year works. TNBR is currently undertaking the study that is expected to be completed by 2017. In long term, the results will be useful as country specific emission factors for national GHG inventory activities.

d) Development of QA/QC Plan in the National GHG Inventory System. While the country was preparing GHG inventory for BUR in 2014-2015, the Project initiated an activity to identify and implement QA/QC actions in order to manage and improve the quality of GHG inventory calculations. A workshop was held on 15 January 2015 to support each sector in the development of respective QA/QC plan for long-term implementation (Appendix 4.1.3d). Although it was recognised that each sector would have undertaken certain relevant activities that might assure the quality of the GHG inventory indirectly, these efforts were not planned, organised, and done in a systematic manner and without proper records and documentation. The workshop was a first step towards building a systematic QA/QC approach, with a focus on the necessary QC procedures and towards fulfilling IPCC Guidelines. Pursuant to the workshop, each sector had eventually prepared respective sectoral QA/QC plan (based on the materials developed in Appendix 4.1.3d) in the reports submitted for the BUR purpose in 2015.

e) Improvement of Documentation of GHG inventory Data and Information. The preparation of GHG inventory involves multiple steps of planning, preparation, and management activities. Information is collected, collated, analysed and produced in these activities. It is essential, or good practice according to the IPCC guidelines (2000 Good Practice Guidance and 2006 Guidelines), to maintain and archive documentation of the information in such a way that every inventory estimate can be fully documented and reproduced if necessary. This is particularly important for categories that rely on the multi-step development of emissions from a large set of primary data from outside sources. It was in this context that the LECB Project initiated the task of reviewing documentation in the preparation of GHG inventory for the country’s first biennial update report (BUR). The aim of this task is to assist the inventory team in enhancing documentation and archiving system in such a way that the current calculations are reproducible in the future. It is also part of the QC procedures, conducted externally on a sectoral basis. The review considered documentation in the report against the following aspects:

Assumptions and criteria for the selection of activity data and emission factors;

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Emission factors and other estimation parameters used, including references to the IPCC document for default factors or to published references or other documentation for emission factors used in higher tier methods;

Activity data or sufficient information to enable activity data to be traced to the referenced source;

Rationale for choice of methods;

Methods used, and changes in data inputs or methods from previous inventories (recalculations);

Record of the identification of individuals, and their qualifications, and approach for expert judgement.

The basis of this task is each sectoral report submitted to the Ministry of Natural Resources and Environment, together with all references appended with the report. The reports were assessed on the aspects listed above. Potential issues were discussed against the TACCC principle, and followed with recommendation or suggestion to manage the issues. A recommendation is provided if the category is a key source according to the Second National Communication, while a suggestion is provided to those non key source categories. All referred information was marked in respective original source. The marked reference materials were then scanned for electronic storage. The results of these reviews are attached in Appendix 4.1.3e. 4.2 NAMA The LECB Project Malaysia initiated its activities on NAMA in 2013 on two aspects: establishment of national arrangement for NAMA and identification of pilot initiatives. Several workshops and focus group discussions were organised to deliberate these matters. A Technical Working Group (TWG) on NAMA was created under the Project in 2014 to continue the discussion and oversee the Project activities on NAMA and MRV. In 2014, the TWG agreed to the establishment of an interim arrangement for the management of NAMA and MRV in Malaysia. The interim arrangement was later endorsed by the Project National Steering Committee. In ensuring the continuity of such arrangement post-LECB, a synergy was also created with the BUR/NC3 Project. While TWG-NAMA under LECB Project will continue its work until 2015, TWG-MRV under BUR/NC3 Project will then take on the responsibility until 2017. Once the national arrangement for climate change has been established, the responsibility will transferred to the relevant entities. Since 2014, the LECB Project Malaysia is supporting developing several mitigation actions in the country, either as NAMA seeking international support or NAMA for recognition at the UNFCCC-NAMA Registry. Five cases were pursued in the former while three cases are being supported for the latter type of NAMA. The Project also initiated sectoral assessment on the potential and roles of NAMA for several key emission sources. Several final outreach activities on NAMA in 2016, which were approved during the NSC Meeting on 18 December 2015, could not be carried out in the first quarter of 2016 because Project activities were discontinued.

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4.2.1 National Implementation Framework and Arrangement for NAMA LECB Project provided input for the establishment of a permanent national institutional arrangement for climate change. The deliberation on this matter is in progress at the national level, coordinated by NRE. Implementation is expected to take place during the Eleventh Malaysia Plan (2016-2020). While the national deliberation is ongoing, the LECB Project proposed an interim arrangement for managing NAMA and MRV through the LECB Project and BUR/NC3 Project. While TWG-NAMA under LECB Project will continue its work until mid-2016, TWG-MRV under BUR/NC3 Project will then take on the responsibility until 2017. Once the national arrangement for climate change has been established, the responsibility will transferred to the relevant entities. Besides the institutional framework, the TWG also agreed with the interim arrangement on endorsement and submission of NAMA documents. These include:

NAMAs from Malaysia should provide endorsement of the national government, including one letter of support by the ministry that is the national focal point for climate change as well as one letter of support by the responsible sector ministry.

NAMAs for recognition at UNFCCC-NAMA Registry would also be required to go through verification before its acceptance for submission to NAMA Registry.

NAMA documents for international funding (including NAMA Facility) and UNFCCC-NAMA Registry will be submitted through national focal point for climate change.

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The proposed institutional framework and interim arrangement for NAMA and MRV were presented and endorsed by several national and project steering committees. These include National Steering Committee on Climate Change (NSCCC) Meeting No. 1/2014 on 7 November 2014, LECB Project NSC Meeting No.2/ 2014 on 17 November 2014, and BUR/NC3 Project NSC Meeting No. 1/2014 on 19 December 2014. Review of existing initiatives related to NAMA in the country was conducted in 2013. An assessment on the potential of these initiatives as pilots was carried out using a set of prioritization criteria. The preliminary assessment indicated several initiatives that could be prioritized, including Feed-in tariff initiative; Use of fly ash in clinker production in cement manufacturing process; Activities in the palm oil industry, including RE and biogas projects in the ETP; Green Technology Application for the Development of Low Carbon Cities; Green Building Programmes (including GBI and GreenPASS); MRT Project; Bus Rapid Transit (BRT) System; KL-Singapore high speed railway; EV for public transport. Based on these preliminary assessments, the Project pursued detailed discussion with the key agencies and internally within the project group. Other new interests were also gathered during this pursuance. The pilot initiatives were eventually decided after confirming commitment of the key agencies, which are deliberated in the sections below. 4.2.2 NAMA Seeking International Support – NAMA Facility Applications The Project supported the submission of three (3) NAMA proposals to the NAMA Facility during its third call-for-proposal in 2015. These proposals were:

“Towards Energy Efficient Two-Wheelers in Malaysia” by Malaysian Green Technology Corporation (MGTC). The NAMA was prepared in collaboration with GIZ, which was also the delivery organization for both financial and financial components.

“Support to Integrated E-Waste Management System for State of Sabah” by Environment Protection Department Sabah. The NAMA was prepared by the consultant, Eco-Ideal Sdn. Bhd. UNDP Malaysia was the delivery organization for both financial and financial components.

“Avoided Emissions from Peat Swamp Forest Management and Central Forest Spine Ecological Connectivity in South East Pahang” by the Ministry of Natural Resources and Environment. The proposal was prepared by the Project, in collaboration with the Pahang State Government, Forestry Department of Peninsular Malaysia and Pahang State. UNDP was the delivery organization for both financial and financial components.

The proposals were not shortlisted by the NAMA Facility as announced in late November 2015, even though one of them was one of the final shortlist. The Project sought feedback and was informed by the Technical Support Unit of the Facility that one of the proposals, i.e. “Towards Energy Efficient Two-Wheelers in Malaysia”, was pre-shortlisted in the technical assessment and tabled to its Board for consideration. Even though the proposal should have been shortlisted, based on the experience in 2013-2014, it was rejected by the Board of NAMA Facility because Malaysia had not submitted its Initial National Determined Contribution (INDC) to UNFCCC yet (the INDC was subsequently submitted on Jan. 18, 2016).

a) Towards Energy Efficient Two-Wheelers in Malaysia (Appendix 4.2.2a) Motorised two-wheeler (2W) is an omnipresent transport mode in Malaysia. The country has the world’s third highest density of motorcycles, with one motorcycle for every three people, or almost 12 million in total (48% of all vehicles). While 2W are generally more fuel efficient than cars, they

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nonetheless offer considerable potential to reduce GHG emissions and air pollution in Malaysia, where the transport sector was responsible for 26% of GHG emissions in 2008. 85% of these GHG emissions are from the road transport sector, of which 11% come from motorcycles. The NAMA aims to support the government in regulating the fuel efficiency and air pollutant emissions of motorcycles through setting standards, introducing labels and implementing a tax structure that rewards low carbon technology. It shall also promote electric two-wheelers (E2W) through improvements to the enabling environment, consumer awareness and improved access to finance for private and corporate buyers via a government-backed loan scheme and leasing services. The NAMA shall leverage at least EUR 70 million of additional public and private investment, reduce urban air pollution and associated health costs, and stimulate green innovation and industrial development. The project aims at achieving cumulative savings of up to 6 Mt CO2 by 2027.

b) Support to Integrated E-Waste Management System for State of Sabah (Appendix 4.2.2b) The NAMA includes the establishment of a comprehensive process whereby e-waste is systematically collected from major cities and towns in Sabah and transported to the approved full recovery facilities in Peninsular Malaysia. This process will include collection, transportation and recycling system of e-waste for the State of Sabah, Malaysia. In addition to environmental, economic and social benefits, recovery of materials from the e-waste minimizes the amount waste disposal in landfills and results in GHG emissions reduction. Designed based on the 2014 E-Waste Management Strategy and Action Plan in Sabah, the NAMA will support the pilot implementation of an integrated e-waste management strategy in the state. It will address several barriers (requirement of economic instrument to support the cost of recovery, lack of infrastructure, awareness and capacity) in the operationalization of a comprehensive collection, transportation and recycling of E-waste. The mitigation action will lead to direct and indirect reduction of GHG emissions. It is also expected to result in sustainable development benefits, including better waste management, reduced environmental pollution and adverse impact to public health, and job creation and positive contribution to local economies. For five years from 2016 to 2020, the estimated direct emission reductions is 41,853 tCO2e and indirect emission is 105,883 tCO2e. Total estimated emission reduction during the decade after the project (2021-2030) will be 143,074 tCO2e and indirect emission is 361,962 tCO2e. Total emission reductions between 2016 to 2030 are estimated to be 652,845 tCO2e.

c) Avoided Emissions from Peat Swamp Forest Management and Central Forest Spine Ecological Connectivity in South East Pahang (Appendix 4.2.2c)

The South East Pahang peat swamp forest is the targeted area and a critical component of the Central Forest Spine Masterplan for Peninsular Malaysia. The NAMA aims to improve management of peat swamp forests in South East Pahang and enhance ecological connectivity in the Central Forest Spine. It will establish a financing mechanism that combines federal and state resources as well as public and private contribution towards a long-term sustainable management of peat swamp forests in South East Pahang. The Project is expected to incentivise a paradigm shift in forest management in Pahang moving from a commodity-based perspective to that of natural resources management including climate change

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mitigation. The state-level fund, a long-term financing arrangement, will be established within the framework of National Natural Resources Conservation Trust Fund. The proposed State Trust Fund with results-based criteria for funding aims to provide significant support for the establishment of smart partnerships among stakeholders operating in the South East Pahang landscape. The Project will contribute toward mitigation of climate change in two ways: avoided emissions at the targeted landscape of about 12 MT CO2 in the short to medium term, and carbon sequestration in the long-term. Nationally, the approaches would serve as a blueprint for replication by other State governments as an effort to fostering ecological connectivity in Peninsular Malaysia. 4.2.3 UNFCCC-NAMA Registry The Project supported the preparation and submission of 3 NAMA documents to the UNFCCC-NAMA Registry. These NAMAs represents 3 different cases in the Registry, including “Sustainable NAMA Financing Mechanism for Reactivating Renewable Energy-based CDM Project Activities in Malaysia” by the Ministry of Natural Resources and Environment; “Support to Integrated E-Waste Management System for State of Sabah” by Environment Protection Department Sabah; and “Feed-in Tariff (FiT) System” by Sustainable Energy Development Authority.

a) Sustainable NAMA Financing Mechanism for Reactivating Renewable Energy-based CDM Project Activities in Malaysia (Appendix 4.2.3a)

This NAMA is a proposal in seeking support for preparation by the Ministry of Natural Resources and Environment. It was prepared by the consultant, Dr. B.G. Yeoh, and guided and endorsed by the National Committee on Clean Development Mechanism Malaysia. The document is available at the UNFCCC-NAMA Registry website http://www4.unfccc.int/sites/nama/_layouts/un/fccc/nama/Nama SeekingSupportForPreparation.aspx?ID=141&viewOnly=1. The NAMA aims to conduct a detailed study on the proposed NAMA framework, which was developed from a feasibility study supported by the Project, to provide support for reactivating CDM projects whose activities pertain to the generation, application and utilisation of renewable energy (RE) in Malaysia. It will conduct a detailed assessment of the targeted CDM project types, namely biomass energy, hydropower and landfill gas, vis-à-vis the current scenario of the related business sectors in particular, and the development of renewable energy as a fuel source in general. It will identify activities for design of the NAMA framework and formulation of the implementation plan and approaches including MRV system. The project activities will then be prioritized in accordance with a set of eligibility criteria for seeking support under the NAMA to be formulated under the study based on their status in the CDM project cycle and the type of funding support received. This includes registered projects in operation but without CER issuance, registered projects with CER issuances, registered projects yet to be operationalised, length of the remaining crediting period, projects with expired crediting period, and projects still in the validation stage. The proposal will include an activity for estimation of cost for implementation and specific support needs, potential GHG emission reductions achievable, and time frame for the action.

b) Support to Integrated E-Waste Management System for State of Sabah (Appendix 4.2.3b) This is a NAMA seeking support for implementation by Environment Protection Department Sabah. It was prepared by the consultant, Eco-Ideal Sdn. Bhd. The document is available at the UNFCCC-NAMA

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Registry website http://www4.unfccc.int/sites/nama/_layouts/un/fccc/nama/NamaSeekingSupportFor Implementation.aspx?ID=140&viewOnly=1. Improper management of household Electrical and Electronic Waste (hereafter referred to as E-waste) leads to degradation of natural environment and human health. The State of Sabah has identified this area as a threat to its tourism as well as long term environmental damages. On the other hand, the proper recovery and recycling of E-Waste presents an opportunity to conserve resources as well as reducing greenhouse gas emissions. A comprehensive study financed by the State of Sabah was conducted from October 2013 to December 2014 to assess the baseline and come up with integrated management strategies and action plan. The study identified several barriers and gaps (requirement of economic instrument to support the cost of recovery, lack of infrastructure, awareness and capacity) that need to be supported (financially and technically) before a comprehensive collection, transportation and recycling of E-waste can be operationalised. NAMA funding is hereby requested to partially support the implementation of the proposed strategy and action plan mentioned above. The total NAMA funding requested from 2016-2020 is RM 24,691,614 (USD 6,670,705). In addition to the requested NAMA funding requested, co-financing estimated total of RM 111,781,676 (USD 30.2 million) is expected to be borne by various involved stakeholders from government, private sectors and NGOs. The support project will lead to direct and indirect effects on mitigating GHG emissions. The estimated total emission reduction from year 2016 to 2030 (including post project impact) are 467,845 tCO2e, including both direct and indirect emissions reduction.

c) Feed-in Tariff (FiT) System (Appendix 4.2.3c) This is a NAMA for recognition submitted by Sustainable Energy Development Authority (SEDA). The document was prepared by Dr. B.G. Yeoh and verified by SIRIM-QAS International Sdn. Bhd. The document is available at the UNFCCC-NAMA Registry website http:// www4.unfccc.int/sites/nama/ _layouts/un/fccc/nama/NamaForRecognition.aspx?ID=151&viewOnly=1. Pursuant to the official launch of the National Renewable Energy Policy and Action Plan in 2010, the Renewable Energy Act (Act 725) was gazetted in 2011, which ushered the Feed-in Tariff (FiT) scheme. The scheme was aimed at augmenting the share of RE in the power generation fuel mix from indigenous RE sources, so as to enhance national electricity supply security and sustainable socio-economic development. Concomitantly, the Sustainable Energy Development Authority of Malaysia, a statutory body incorporated pursuant to the Sustainable Energy Development Authority Act 2011 (Act 726), was established to administer and manage the implementation of the FiT mechanism. The geographical regions covered by the scheme include Peninsular Malaysia, Sabah and the Federal Territory of Labuan. Sarawak does not participate in the scheme as it has its own system of electricity regulation. The renewable sources eligible under the FiT scheme are as set out in the First Column of the Schedule of Act 725, and they are comprised of biogas (agroindustrial waste and landfill gas), biomass (agrowaste and municipal solid waste), small hydropower, solar photovoltaic and geothermal. It is stipulated that these must be indigenous renewable sources and must not be imported from other countries. Under this mitigation action which provides a legal framework for grid-connected RE generation, Distribution Licensees (licensed electricity distribution entities) are obliged to purchase from Feed-in Approval Holders (individuals or companies who hold feed-in approval certificates issued by SEDA Malaysia) the electricity generated from eligible renewable sources at the respective set FiT rates and for specific durations. The FiT mechanism, financed by the Renewable Energy Fund established under Act 725 and sustained by additional surcharge on electricity tariffs collected by Distribution Licensees, is

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a fixed premium rate payable for each unit of RE sold to the Distribution Licensee, and it differs for different renewable sources and installed capacities. A bonus FiT rate applies when the criteria for the bonus conditions are met. The duration during which the RE electricity can be sold and paid with the FiT rate is based on the characteristics of the renewable sources and the applied technologies. Under the scheme, the duration (FiT Effective Period) is 16 years for biomass and biogas, and 21 years for small hydropower, solar photovoltaic and geothermal technologies. This regulated mitigation action is expected to bring about positive impact not only on the accelerated and sustained growth of RE’s share in the power sector’s fuel mix, but also on the advancement of RE as a viable and sound long-term investment in the energy industry through guaranteeing direct access of RE to the grid and setting a favorable price. The scheme targets to achieve total approved RE capacity for grid connection to reach 2,080 MW generating 11.3 GWh/year, accounting for 11% of total electricity generation in 2020 as stipulated under the National Renewable Energy Policy and Action Plan 2010. 4.2.4 Sectoral Assessment for NAMA Several sectoral assessments were undertaken by the Project to determine other potential NAMAs to be pursued. These assessments focused mostly on those major GHG emitting sectors and sources based on the Second National Communication. Four consultancies were commissioned and covered the sectors of energy, cement, iron and steel, power generation and green technology.

a) Assessment of Initiatives in the Energy Sector for NAMAs According to Malaysia’s Second National Communication, the energy sector accounted for about two-thirds of total national GHG emissions in 2000. The emission is expected to increase in view of the growing energy demand. Many efforts have been implemented to reduce emissions from the sector. Such efforts can be further enhanced through initiatives undertaken as NAMAs that are expected to contribute to the overall national mitigation aspiration. The consultancy services aims to support implementation of initiatives in the energy sector as NAMAs. It assessed the NAMA potential of ongoing initiatives on renewable energy and energy efficiency undertaken by the Ministry of Energy, Green Technology and Water (KeTTHA). The potential should be assessed against a set of criteria. The initial list of criteria should be finalised, along with the assessment method, with KeTTHA before the assessment is conducted. The assessment should result in a ranking of the initiatives for implementation as NAMA seeking international support. The assessment was undertaken on several initiatives determined by KeTTHA. These initiative included the expanded feed in tariff (FiT) system, capacity building on solar energy, financing institution for Green Technology Financing Scheme, monitoring of electricity consumption in government buildings, energy audits and retrofits of buildings, and capacity building on energy management system. An Excel based tool was then developed as the Preliminary Assessment Matrix (PAM) containing the initiatives and a set of criteria. The initiatives were given scores based on the criteria and ranked from the total scores obtained. Details of the assessment are provided in the consultancy report attached as Appendix 4.2.4a. The results can be summarized as follows:

FiT biogas has the highest ranking from the PAM, as it has highest potential of emission reduction. However, it has the lowest score for CO2 avoidance as for the current projects.

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FiT Solar PV and Biomass have high potential of emission reduction of all initiatives. However, the MRVability is relatively difficult.

Small hydro low potential of emission reduction and high environmental SD benefits,

Promotion of energy efficiency in government buildings scored the lowest, as the potential of emission reduction is low and also the SD benefits.

b) Assessment of Initiatives in the Cement and Iron and Steel Sectors for NAMAs

Both the cement production and the iron and steel production are among the key sources of national GHG emissions in 2000 according to Malaysia’s Second National Communication. This consultancy was commissioned to firstly conduct an analysis of opportunities and strategies for mitigation for cement and iron and steel sectors in Malaysia. Mitigation actions and options in both sectors globally and nationally was reviewed. The global review included NAMA activities in other countries. The domestic assessment was carried out in close consultation with the Cement and Concrete Association of Malaysia and Malaysian Iron and Steel Industry Federation in order to compile past, current and future mitigation initiatives. The analysis resulted in an estimation of business-as-usual (BAU) emissions for each sector through 2030, evaluation the emissions reduction potential and implementation costs of a variety of mitigation options, and recommendations for the realisation of important mitigation opportunities. The role of NAMA was then explored in close consultation with the associations. At least one NAMA document was aimed to be developed in accordance to the template of UNFCCC-NAMA Registry. The selected mitigation action can either be a NAMA for recognition or NAMA seeking international support. Other key stakeholders, and their roles, in the NAMA shall also be determined. The above tasks were conducted through close consultation with the key relevant stakeholders. Series of stakeholder workshops and discussions were conducted during the study period. Details of the assessment are given in the consultancy report as attached in Appendix 4.2.4b. The following briefly summarise the various Chapters and sections of the consultancy report. Chapter 2 reviewed the reduction strategies for the cement sector including implementation barriers faced by the cement industries. The study categorised the identified strategies into three main approaches namely (i) Energy Saving and Efficiency; (ii) Utilising Alternative Fuels and Clinker Substitution; and (iii) Carbon Capture and Storage; and their implementation barriers were identified (Benhelal et al., 2013). The findings of the study are summarised in section 2.4. Case studies, covering global as well as Malaysian cases, are compiled from various sources such as sustainability reports, publications, websites, public announcement, past studies and so forth was compiled and presented in section 2.4.5. The case studies are divided into 3 main categories:

Corporate level strategies, goals, actions and achievement in reducing carbon emission;

Specific mitigation case studies;

Mitigation Actions in Cement Industries via Clean Development Mechanism Programme. For iron and steel sectors (Chapter 3), the mitigation strategies in iron and steel sector can be grouped into the following main categories: (i) recycling; (ii) reuse and re-manufacturing; (iii) use of by-products; and (iv) energy efficiency. The carbon capture, utilisation and storage technologies for the sector are not discussed as potential strategies because such technologies are not yet mature and furthermore they will require support from government and public to become viable options (worldsteel, 2015b). The findings of the study are summarised in section 3.4.

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The global and national case studies for the iron and steel industries compiled from various sources such as sustainability report, Corporate Social Responsibility (CSR) Report, company case studies, programme such as CDM, UNIDO Industrial Energy Efficiency for Malaysia Manufacturer project and so forth. The case studies outlined the target, emission reduction strategies, and results and performance was compiled and presented in section 3.4.5. The Business as Usual (BAU) Emission of Cement and Iron/Steel Sectors was calculated in Chapter 4. It included two major components, i.e. industrial processes (CO2 emissions from industrial activities which are not related to energy) and energy consumption (CO2 emissions from fuel combustion such as natural gas, diesel, LPG, etc., and electricity consumption). The BAU baseline calculation is calculated from 2000 to 2030. Chapter 5 covers the analysis on emissions reduction within the 2 sectors respectively Assessment on the mitigation actions was assessed on three (3) criteria of feasibility and readiness. These criteria include feasibility, maturity and level of acceptance. The description is presented in section 5.2. Recommendations for realization of identified mitigation opportunities are outlined in section 5.3. The cost of implementation was compiled and estimated using various sources in section 5.4. An overview of Measurement, Reporting and Verification (MRV) for NAMA proposal was outlined in chapter 6. A general brief on what to measure, how to measure, who and when are proposed. Two (2) NAMA proposals using the NAMA templated by UNFCCC-NAMA Registry were developed from this study. The proposed NAMA proposals were derived through consultation with the key stakeholders representing the respective sectors. A partnership combination of government, industries and business associations are included into the proposed NAMA projects. The proposed NAMA proposals are further described in chapter 7. The two proposals are:

Cement sector – Municipal Solid Waste (MSW) as an alternative fuel in cement plant: MSW currently are mainly landfilled which will produce and emit methane (greenhouse gas). Conversion for MSW to alternative fuel for cement kilns will avoid methane emissions, and at the same time reduce emissions by replacing coal as fuel. The proposed NAMA support activities include technical support in baseline study, research and development, technology review, local adaptation, feasibility study and pilot demonstration projects.

Iron/Steel sector – Utilisation of EAF Slag for Road Construction: The NAMA proposal for Iron/Steel is to develop the potential of using Electric Arc Furnace (EAF) slag for road construction. The EAF slag is produced during the manufacture of crude steel by the EAF route. It is a strong, dense, none porous aggregate that is cubical in shape, has good resistance to polishing and has an excellent affinity to bitumen. This makes it an ideal aggregate for asphalt surface materials and road surface treatments as it produces materials that are resistant to deformation, safe and durable. The proposed NAMA support activities include technical support in baseline study, promotion and awareness, standard and guideline development and pilot demonstration projects.

c) Preliminary Assessment of NAMA Potential in the Power Generation Sector

This assessment was undertaken as part of the consultancy on the Feasibility Study for the Development of Emission Factors in the Power Sector as explained in Section 4.1.3c. The following section briefly summarises the main outcome on NAMA aspects. Appendix 4.1.5 should be referred for further details. A NAMA specifies voluntary activities of GHG emission mitigation in developing countries that are not subject to mitigation commitments and can be supported by industrialized country financing. The

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Feasibility Study presented the potential mitigation measures project for the electricity sector and summarize each measures as well as the research and development for certain technologies. Many of these technologies have higher costs and/or greater operational uncertainties than currently available carbon intensive technologies. Key generation technologies include nuclear power, natural gas/combined cycle, and integrated gasification combined cycle (IGCC), carbon capture and storage. Furthermore, major reductions can result from lower emissions on the generation side and lower usage, via enhanced end use efficiency, on the user side. It was discussed during the workshop that all of the power plants do not have a specific GHG emission projects; however, initiatives were done in order to increase plants efficiency. These initiatives include implementation of best practices on heat recovery, minimizing heat loss, increase distillate boiler efficiency, change design, improve air filters, improve compressor, CSR, reduce NOx pollutant and energy consumption reduction. Even though the initiatives are not directly focusing on GHG emission reductions, the initiatives will decrease GHG emissions due to the increase of plants efficiency. Information gathering was limited as specific questions on cost are considered as confidential by the power plants. Investments and initiatives in the upcoming new technologies for energy-efficient power generation and the loss reduction in the transmission and distribution segment is expected to receive an even greater boost once the sector is subjected to climate change regulatory norms. Furthermore, companies have to be well prepared to deal with the upcoming climate legislations and taxes. The path to transformation from a conventional organization to a climate responsive organization would also bring opportunities to them. Implementation of NAMA for electricity sector may face various challenges. Support to overcome these can derive in the form of financial or technical support or capacity building. Overall, the electricity sector supports the initiatives by the Government in the RE and other mechanism. There are no future plans for overall GHG emission reduction by the each separate power plant. The research projects are not suitable to be submitted as NAMA.

d) Green Technology Application and NAMA Potential The National Green Technology Policy was adopted by Malaysia in 2009 to support accelerating national economy and promoting sustainable development. In order realise its aspiration, the Ministry of Energy, Green Technology and Water (KETTHA) developed the Green Technology Master Plan to translate the objectives and strategic thrusts into implementable actions. Implementation of the Master Plan will contribute to the overall national mitigation aspiration, and could be supported through NAMAs. This activity was initially set out to support KETTHA in developing a tool for tracking implementation of programmes in the National Green Technology Policy, with a focus on water, wastewater and electricity sectors. The tool was designed to enable measurement and reporting of the programmes, including reduction in GHG emissions, from the implementation. Relevant methodologies, tools and approaches nationally and internationally as well as status of the Policy since 2009 will be reviewed. The tool will take into account feedback of stakeholders to be solicited through consultation meetings and/or workshops, to be organised by KETTHA through the LECB Project. Meetings and/or workshops will be conducted to raise awareness and build capacity of the reporting agencies. Furthermore, a NAMA proposal for seeking domestic and international funds in support of implementation of the Green Technology Master Plan was also targeted. Actions in the Master Plan will be examined and relevant initiatives will be identified for potential implementation as NAMAs, while analysis will be undertaken to

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consider barriers and enabling environments, methods, mechanisms and instruments for the preparation and implementation, approaches in leveraging NAMAs for mobilising domestic resources and sustainable contribution to GHG emissions reduction of the sector. However, subsequent communications with the Ministry resulted in different project ideas. One main reason for this was because KeTTHA was working in collaboration with Republic of Korea in exploring low carbon development framework for islands in Malaysia. Experience of Carbon Free Island Jeju would be drawn in the collaboration. Implementation of low carbon development framework in Malaysia islands was expected to contribute to the policy implementation and overall national mitigation aspiration, and can be supported through different international resources including NAMAs. Therefore, a feasibility study was initiated with LECB support on a pilot initiative in Langkawi Island that can later be replicated in other islands in the country. The study, referred to as the Low Carbon Langkawi Study (LCL Study) is to determine the feasibility of translating the Malaysian government’s vision, to transform Langkawi into Malaysia’s and ASEAN’s first ‘low carbon island’ by 2030. The initiative is in line with Malaysia’s green growth strategy under the Eleventh Malaysia Plan 2016-2020 and the subsequent Malaysia Plans i.e. 12th Malaysia Plan 2021-2025 and 13th Malaysia Plan 2026-2030. This is part of Malaysia’s transition to a green economy which has the potential to create enhanced trade opportunities by opening new export markets for environmental goods and services, increasing trade in products certified for sustainability and promoting certification-related services and greening international supply chains. Result of the feasibility study is attached in the consultancy report in Appendix 4.2.4c. 4.3 MRV The LECB Project Malaysia worked in synergy with the BUR/NC3 Project in establishment of a domestic MRV system in Malaysia (Figure 3.3). The main roles of the latter include deliberating institutional arrangement and procedures on MRV. The LECB Project focuses on methodological aspects. Two consultancies were initiated in 2014 for developing domestic guidelines on MRV. The first activity is aimed to prepare and test a tool for measurement and reporting of mitigation programmes and measures. The second activity focused on a verification guideline for domestically supported NAMAs. 4.3.1 Measurement and Reporting of Mitigation Actions SIRIM Berhad was appointed as the consultant to undertake the activity on “Development of GHG Management Tools for Mitigation Programmes and Measures”. The activity was part of Outcome 3 to establish domestic MRV framework. It focused on fostering and systemising quantification and management of GHG emissions and mitigation programmes and measures implemented by the government agencies. The consultant reviewed relevant methodologies, tools and guidelines to measure and report mitigation programmes and measures. A guideline, including templates, was then prepared for tracking GHG impacts of programmes and measures. The guideline shall provide a methodology to measure and report the change in GHG emissions and removals resulting from the implementation of mitigation programmes and measures. It included a generic step-by-step guidance and quantification of GHG effects as well as for monitoring and reporting. The developed guideline was then tested on 3

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demonstration cases in collaboration with relevant agencies. The agencies were supported in identifying a specific mitigation policy or programme, and undertaking the assessment using the guideline. This involved quantifying the expected (future) change in GHG emissions and/ or achieved (historical) change in GHG emission resulting from implementation of the policy or programme. Report of the consultancy is attached as Appendix 4.3.1. The paragraphs that follow briefly summarise the guideline. Development of a guideline for measurement and reporting of GHG emission emissions and their reduction through mitigation actions at the micro- to macro-level in the context of a policy or programme implemented at the national level was the primary aim. While there was no lack of information on the mitigation actions undertaken in different parts of the world and also as disseminated by UNFCCC, this information only served as examples to identify similar initiatives in Malaysia. The methodologies applicable to the quantification of GHG at policy, programme or action level could be publicly accessed and adapted to best suit Malaysia’s scenario. However to ensure wide-acceptance of the GHG quantification results for mitigation actions carried out in Malaysia whether by the public or private sectors, it was necessary that the Measurement and Reporting (MY-MR) Guidelines developed should adhere as much as is feasible to the internationally agreed approaches e.g. those established under the ISO, WRI or IPCC programmes. The Project Team acknowledged that much effort has already been invested by these international initiatives and many of the principles that are fundamental to the quantification methodologies have already been addressed. While it was not overly difficult to develop a systematic methodology for quantifying the GHG removal associated with an action, the Project Team faced an uphill task trying to run pilots on the MY-MR using local projects. During the project period, there was almost no local or international programmes related to carbon trading or any other form of incentives that require the level of detail data or information description as that of an internationally compatible MR format. Aside from Clean Development Mechanism (CDM) projects that are site specific, there are no specific GHG mitigation actions at the national level. There are nationally initiated projects on SAVE program and Feed-in-tariff (FiT) that have as their main aim to promote improved energy management and energy security through renewable energy; these are not specifically GHG mitigation actions. Hence, getting the necessary data and information to complete the proposed MY-MR format for monitoring and reporting mitigation actions for the three pilot projects on FiT, energy efficiency and solid waste management were a challenge for the Project Team. Although the counterparts for each of the pilot project tried their best to provide data and information available through their respective programmes, there were still significant data and information gaps that had to be addressed in completing the proposed MY-MR format. The Project Team had to source for some of the information from outside the project boundary as defined according to their specific programmes, or made estimates to the best of their knowledge. From the experience of the pilot projects, it is evident that the MY-MR Guideline is better suited for actual GHG mitigation actions rather than using it on actions that only include carbon dioxide equivalent reduction as one of the indicators of the achievement of the action. This is particularly pertinent where the MR Guideline begins with developing a causal effect map of a GHG mitigation action that require listing all the possible source, sink and reservoir of GHG that can occur, either directly or indirectly in relation to the implementation of the action. The MY-MR is designed to be applicable to both ex-ante and ex-post actions, it is still more difficult to gather all the necessary information or data for an action that is not targeted at GHG reduction or mitigation as the main focus even though it has already been implemented. For a start, a nationally defined scope, coverage and characteristics of GHG mitigation actions need to be established and widely disseminated to enable active participation from both public and private sectors.

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While the past and current actions (policies or programmes) are not GHG mitigation per se, nevertheless the existence of indicators such as carbon dioxide equivalent reduction showed the importance placed on Malaysia’s commitment at COP 15. Although a voluntary commitment, it did propagate the reporting of GHG inventories especially driven by MNRE’s role to provide nationally representative data to meet international obligations such as the National Communications and the Biennial Update Reporting (BUR) to UNFCCC. Although MNRE had established working groups, technical committees and steering committee, the ownership of much of the reporting still resides with MNRE with minima commitment from most stakeholders. At COP 21, the Government of Malaysia communicated its Intended Nationally Determined Contribution (INDC) to reduce its GHG emissions intensity of GDP by 45% by 2030 relative to the emissions intensity of GDP in 2005. This consists of 35% on an unconditional basis and a further 10% conditional upon receipt of climate finance, technology transfer and capacity building from developed countries. With this recently announced commitment at the international arena, there is high expectation that there will be emerged GHG mitigation actions that will be developed with the primary aim of reducing GHG as the primary focus. Incentives such as tax rebates could be implemented with claims that have to be backed by verifiable reductions. A nationally common MR format would be required to enable measurements and reporting that are comparable among implementers of various actions, and also integration of outputs from different actions to achieve the ultimate commitments made at COP 21. As with all guidelines, capacity building among potential users is a necessity for MY-MR to propagate. 4.3.2 Verification for Domestically Supported NAMAs This consultancy service was part of Outcome 3 that aims to establish domestic MRV framework for domestically supported NAMAs. SIRIM-QAS International Sdn. Bhd. was appointed to develop the verification guidelines for domestically supported NAMAs. The guideline is expected to assist verifiers conducting the verification and NAMA implementers to prepare for the verification. In developing the guidelines, the consultant reviewed international methodology and approach on verification of NAMAs or GHG; took stock of relevant work and experience on verification of GHG in Malaysia; identified lessons learned and best practices that can be applied in the context of Malaysia; estimated costs for conducting the verification; and determined potential challenges and barriers for implementing the guidelines, and recommendation for addressing the challenges and barriers. Report of the consultancy is attached as Appendix 4.3.2. Implementation of the Verification Guidelines is expected to face several barriers. The main challenge is the understanding of what constitutes a domestically supported NAMA among the verifiers and the proposers of NAMAs, the importance of verification, the methodology(ies) used in the estimation of the GHG effect of the proposed NAMA, the Monitoring and Reporting (MR) system requirements, and availability, adequacy and comprehensiveness of data gathering. As such, criteria for NAMAs need to be defined and to be made known to all parties involved in the development and verification of NAMAs. It is also necessary to continuously educate the NAMA’s implementer of the concept of baseline, methodology to estimate the emissions reduction / avoidance and the monitoring requirements. The implementing agencies should be clearly informed what type of NAMAs requires verification. There need to be a MR framework system to provide adequate guidance to proposers of NAMAs as to what is to be included in the NAMAs document. This should include defining the baseline scenario, the NAMA scenario and details of the monitoring plan. The monitoring plan should be designed in such a way that it can be followed by the implementer(s) involved in the implementation of the NAMAs. The calculation of the emission reductions and mitigation costs should

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be based on proven or credible methods using the best available data. In addition, the quantification of the GHG emission reductions needs to be detailed and made transparent to the verifier. Good communication among the agencies / entities involved in the implementation of NAMA is very important to ensure data collection is effective and data collected is reliable. Clear roles and responsibilities among the entities involved in the implementation of NAMAs needs to be established. 4.4 Summary of Achievements and Results Table 4.4 below summarises the achievements and results from the Project activities, assessed against the baseline, indicator and targets in the project document. Table 4.4: Summary of Project Achievements

Project Objectives /Outcome

Indicator Baseline & Target Achievements

Objectives Number of NAMAs undertaken.

Baseline: 0 NAMA

Target: 3 NAMAs prepared for implementation.

Total 8 NAMAs developed:

4 NAMAs seeking support for implementation.

3 NAMAs seeking support for preparation.

1 NAMA for recognition.

Adoption of MRV system.

Baseline: Limited MRV development.

Target: Domestic MRV system established.

Domestic MRV guidelines were developed.

A Technical Working Group on MRV was established under the National Steering Committee on Climate Change.

MRV activities will be carried on by BUR/NC3 Project

Output 1: The GHG Inventory System fulfils national sustainable development requirements and international commitments

Existence of the National GHG Repository

Baseline: Absence of National GHG Repository

Target: National GHG Repository established

Jointly undertaken with BUR/NC3 Project.

LECB supported the Waste, Agriculture and LULUCF sectors, which resulted in sectoral reports for incorporation in BUR 1.

The GHG repository was established at NRE-BPASPI, FRIM & sectoral coordinating agencies.

Output 2: National initiatives on mitigation are enhanced through NAMAs in the industrial sector.

Number of NAMAs.

Baseline: 0 NAMA

Target: 3 NAMAs developed.

Total 8 NAMAs developed:

4 NAMAs seeking support for implementation.

3 NAMAs seeking support for preparation.

1 NAMA for recognition.

Output 3: National and Sectoral MRV systems are designed and piloted in the industrial sector

Domestic MRV guidelines.

Baseline: Inexistence of domestic MRV guidelines.

Target: Domestic MRV guidelines established.

Domestic MRV guidelines were developed.

Sectoral assessment for cement, iron and steel, and power sectors.

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5. COMMUNICATIONS AND OUTREACH The Project used different approaches for communicating and reaching out the key stakeholders based on the key outcomes targeted. For GHG inventory, existing platforms were used to establish understanding, design and implement activities, and disseminate results. These platforms included the National Committee on GHG Inventory, Technical Committee on GHG Inventory, and the respective sectoral groups. The GHG inventory secretariat, which is also the Project implementing agencies, was supported from 2013 to 2015, with more intensive efforts in the first 2 years. Subsequently the roles were mainly taken over by the BUR/NC3 Project. For NAMA and MRV, both were new issues in the country that had not much been implemented with significant activities before the Project started in 2013. Further to the recommendation during a stakeholder meeting, the Project set out in the mode of focus group discussions to raise awareness, communicate information, deliberate approaches and design overall implementation framework and strategy for these 2 themes. Two focus group discussions were held in 2013 before the TWG on NAMA was established and initiated works since 2014. The TWG on NAMA was initially designed to cater for both NAMA and MRV matters. However, pursuant to the initiation of the BUR/NC3 Project in June 2014, a TWG on MRV was established by the BUR/NC3 Project. The separation of roles and tasks have discussed in Section 3.3 above. The TWGs continued the efforts of the focus groups from 2014 to 2015. During the Project NSC meeting in December 2015, it was approved to conduct two final communication activities for dissemination of the Project results, especially on NAMA and MRV. These activities included a Final Dissemination Workshop on NAMA and a knowledge product on NAMAs developed under the Project. However, these activities were not fully undertaken as the Project was discontinued. While the workshop was not organized, some preliminary works were done in drafting material for the knowledge product (Appendix 5.1). The LECB Project website established on the government server is located at the following location: http://www.nre.gov.my/sites/lecbnre/Pages/About-LECB-Project.aspx.

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6. SUSTAINABILITY OF RESULTS The Project activities were designed with sustainability of results taken into consideration. As the activities were implemented, efforts were also taken, either by the consultant or the Project Secretariat, to lay groundwork to ensure any necessary continuity post-implementation. While some activities delivered specific outputs that may not require follow-up, some others were part a process or long-term efforts by the respective agencies. In many cases, the activities were designed and implemented in synergy with the BUR/NC3 Project, which itself will be continuing certain areas or initiatives. On GHG inventory, the Project had focused the efforts on capacity building for preparing the GHG inventory of Waste, Agriculture and LULUCF sectors. The Project provided funding for the organization of meetings and workshops of sectoral group members, which completed the time series calculation for 1990-2011 using the Revised 1996 IPCC Guidelines. Each of the supported sectors had prepared and submitted report to NRE in 2015, which was used for the compilation of Malaysia’s first BUR. Capacity was built for the sectoral group members on the use of the Revised 1996 Guidelines. Since the initiation of BUR/NC3 Project in 2014, both Projects have been collaborating in continuing such efforts for preparing the members in adopting the latest 2006 IPCC Guidelines to prepare the GHG inventory aimed for the Third National Communication (NC3) by 2017. The NAMA activities supported the Project were mostly ended with a study report and NAMA document. Different efforts may be required by the respective mitigation action after the intervention of LECB Project. The following summarises the sustainability issues of these results:

While the national deliberation on a permanent institutional arrangement is ongoing, the LECB Project had developed an interim arrangement for managing NAMA and MRV through the LECB Project and BUR/NC3 Project. The LECB Project would shoulder the burden until it ends by 2016. Subsequently the TWG-MRV under BUR/NC3 Project will take on the responsibility until 2017. Once the national arrangement for climate change has been established, the responsibility will transferred to the relevant entities.

“Towards Energy Efficient Two-Wheelers in Malaysia” by Malaysian Green Technology Corporation (MGTC): The NAMA document, prepared in collaboration with GIZ, should be submitted again to the NAMA Facility if it opens for another round of calling for proposal in 2016. If this is not possible, some activities in the proposal would be taken up by the newly initiated UNIDO/GEF Project on Energy Efficient Low-Carbon Transport in Malaysia and national activities under the 11th Malaysian Plan.

“Support to Integrated E-Waste Management System for State of Sabah” by Environment Protection Department Sabah: The Department will continue its efforts to source for other international resources from different perspective, mostly on waste management and environmental protection aspects. While these efforts are ongoing, some activities are expected to be implemented using national and state budgets.

“Avoided Emissions from Peat Swamp Forest Management and Central Forest Spine Ecological Connectivity in South East Pahang” by the Ministry of Natural Resources and Environment: Some components of this NAMA proposal will be integrated in other national efforts for REDD+. These activities are expected to be undertaken via national and international funds.

Sustainable NAMA Financing Mechanism for Reactivating Renewable Energy-based CDM Project Activities in Malaysia by the Ministry of Natural Resources and Environment: The Ministry will continue monitor the progress in the NAMA Registry. Should offer for funding is made available, this will be deliberated through the existing National Committee on Clean Development

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Mechanism. The National Committee is supported by Energy Secretariat and Agriculture Secretariat, which each operates a technical group.

Feed-in Tariff (FiT) System by Sustainable Energy Development Authority: The NAMA document was already uploaded in the UNFCCC-NAMA Registry. The agency would update relevant information, if and when necessary, through support of the Ministry.

Assessment of Initiatives in the Energy Sector for NAMAs by the Ministry of Energy, Green Technology and Water: The preliminary assessment had identified initiatives as a priority for consideration as NAMA. Should opportunity arise in near future in the context of NAMA, the Ministry is expected pursue such opportunity themselves.

NAMAs in the Cement and Iron and Steel Sectors: The Ministry will continue monitoring the NAMA progress in near future. Any relevant opportunity is expected to be brought for discussion with the respective associations and other relevant agencies.

Low Carbon Model for Langkawi Island by the Ministry of Energy, Green Technology and Water: The Ministry already decided to implement the initiatives identified in the Model using national and local budgets. Since February 2016, the Ministry has been putting in efforts in securing domestic funds for implementation.

On the MRV component, the Project had developed the basic methodological framework for long-term implementation. This framework comprises 2 guidelines, including one for measurement and reporting, and the other on verification aspect. The subsequent efforts will be continued by the BUR/NC3 Project, via its Technical Working Group on MRV.

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7. LESSONS AND RECOMMENDATIONS 7.1 Contribution to Capacity Development and Institutional Arrangements The LECB Project provided input to establishment of a permanent national institutional arrangement for climate change. The deliberation on this matter is in progress at the national level, coordinated by NRE. Implementation is expected to take place during the Eleventh Malaysia Plan (2016-2020). While the national deliberation is ongoing, the LECB Project proposed an interim arrangement for managing NAMA and MRV through the LECB Project and BUR/NC3 Project. While TWG-NAMA under LECB Project will continue its work until mid-2016, TWG-MRV under BUR/NC3 Project will then take on the responsibility until 2017. Once the national arrangement for climate change has been established, the responsibility will transferred to the relevant entities. The Project also assisted the GHG inventory secretariat in coordination of activities, including the Working Committee on GHG Inventory. The Project also conducted two sectoral training workshop (agriculture and solid waste) in strengthening capacity for and systemizing preparation of GHG inventory. On NAMA and MRV, the Project support capacity development of key agencies that play influential roles in managing GHG emissions, especially energy, waste, transport, industry and agriculture sectors. These agencies include KeTTHA, JPSPN, JAS, MOT, SPAD, MITI, MOA, MARDI and others. Development of capacity on NAMA and MRV were undertaken in two approaches. Firstly these agencies are members in the TWG-NAMA, who have been provided with information on NAMA and MRV, and guided in their deliberation on a national framework for both issues. Secondly, some agencies, which expressed interest after consulted by the project, were supported with resources in undertaking studies and conducting training and consultation to ultimately determine respective priority areas especially in pursuing NAMA. 7.2 Main Project Outputs and Utilisation Through the activities commissioned and other actions during implementation, the Project generated a number outputs in terms of report and knowledge product. These outputs have been instrumental in some domestic discourses, either for implementation at national and local levels or meeting international obligations. On GHG inventory, several outputs were achieved in the 3-year implementation. These main outputs and their utilization are summarized as follows:

GHG inventory sectoral report: GHG data in sectoral GHG inventory report (waste, agriculture, and LULUCF) was used to track Malaysia’s voluntary target for reducing GHG emission intensity of GDP and reported in the Eleventh Malaysian Plan that was released on 21 May 2015. In addition, the sectoral reports were also used for the preparation of Malaysia’s first Biennial Update Report (BUR) to the UNFCCC.

Feasibility study report on emission factor for the power sector: Results of the study report was utilised in the application proposal by TNB Research to Malaysian Energy Supply Trust Fund (AAIBE) for developing emission factors of the power sector in Malaysia. The proposal was approved with a funding of RM5 million.

Assessment report on country-specific emission factor for rice cultivation category: The assessment outcome recommended how country-specific emission factor for rice cultivation

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category can be derived from past national studies. Follow-up actions by MARDI are necessary to enable its adoption in national GHG inventory calculation.

Training module on GHG inventory – UNFCCC reporting requirements and IPCC Guidelines: Training material on the background and reporting requirements of GHG inventory preparation and the UNFCCC. The IPCC Guidelines, since its first release in 1996 and especially the latest 2006 version, were summarized in the module.

Training module on GHG inventory for solid waste disposal category: The module summarises Malaysia’s calculations in the past 2 decades using the previous version of 1995/1996 IPCC guidelines. It also outlines actions for using latest 2006 IPCC guidelines in calculating the emissions for future GHG inventory that will be included in the NC3 and future BURs.

The Project also contributed to the development several important outputs on NAMA and MRV. These main outputs and their utilization are as follows:

NAMA management framework & arrangement: An interim management arrangement for NAMA was adopted by NRE and TWG-NAMA while a permanent institutional structure is being pursued by NRE. The arrangement also ensured continuity of post-LECB period by having the BUR/NC3 Project taking over the roles and responsibility.

NAMA application proposals: 3 application proposals were submitted to the international NAMA Facility in 2015. One of these proposals was pre-shortlisted after the technical assessment but was not eventually rejected by the Board of the Facility as Malaysia had not submitted INDC by the time of assessment.

Feasibility study of low carbon model for Langkawi Island: The study results were adopted by KETTHA in its application of RMK11 funding for 2017-2020. The study had also identified other key implementing agencies, both public and private, and gathered commitment in principle, including financially, for the implementation of the model. The model established, and its implementation subsequently, will be a role model for replication to other islands in the country.

MRV Guidelines: The methodological framework for a domestic MRV system by established through 2 consultancies commissioned by the Project. SIRIM Berhad drafted a guideline on measurement and reporting of mitigation actions; whilst SIRIM-QAS International S/B developed a verification guideline for domestically supported NAMAs.

7.3 Challenges and Lessons Learned for Future Activities The Project encountered several challenges during its implementation in 2013 to 2016. These included financial and management risks, certainty in availability of funding and future of certain issues, and awareness and commitment of key stakeholders. Table 7.2 summarises the main challenges and lessons learned in the process of managing and overcoming these risks. Table 7.2: Main challenges and lessons learned from the Project implementation

Issue Challenges and Lessons Learned

Currency fluctuation The exchange rates of US Dollar to Ringgit Malaysia increased significantly in 2015. Although additional activities were implemented, the positive impacts could not be fully capitalized on, resulting in balance of fund by end of project.

Overlap with BUR/NC3 Project

The synergy between LECB and BUR/NC3 Projects posed both opportunities and challenges. The latter mostly surrounded GHG inventory where activities originally planned under LECB had to be ‘handed’ to BUR/NC3. LECB had to re-designed other activities by the end of the second year.

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Support of the implementing agency

NRE-BPASPI was managing many critical issues with a handful of human resources. However, with the placement of project manager at the agency, more discussions could be held and led to better communications and execution of project activities.

Engagement with UNDP-GSU

The communication with UNDP-LECB Global Support Unit (GSU) was mainly concerning progress reporting initially. While the project should be country-driven, the GSU could have informed at a much earlier stage of its need for more active roles and engagement in Project implementation. Such communication might have prevented the situation where GSU did not release the final balance of fund during the extended project duration of 6 months in 2016.

Discourse of NAMA in UNFCCC

International negotiations on NAMA was ongoing at the UNFCCC during the project. Its role in the new international agreement on climate change was expected to be clarified by December 2015 (however, the Paris Agreement does not mention NAMA at all). While international negotiations still took place, the project monitored closely relevant activities with relevant outcomes informed to key stakeholders in order to accelerate uptake of relevant actions.

International financing for NAMA

Available financing opportunity on NAMA was limited and highly uncertain. The scope of financing was also restricting and highly demanding in terms of transformational change and level of maturity (readiness) of the proposed NAMA. From 2013 to 2015, the NAMA Facility was the only available funding opportunity during the project period. The LECB Project supported 2 and 3 applications in 2014 and 2015, respectively. In 2015, one proposal was pre-shortlisted in the technical assessment and ranked fifth. However, when tabled to its Board, it was eventually not shortlisted because Malaysia had not submitted INDC by the time of assessment.

Awareness and uptake of NAMA

NAMA was a new issue to domestic stakeholders. Without a prescriptive definition, scope and approach from the UNFCCC discourse, domestic deliberation and decision on national implementation framework and arrangement for NAMA was undertaken prudently. Engagement of stakeholders was widened through two approaches: (1) enlarging the number of project committee members (NSC and TWG on NAMA); (2) extending the outreach of stakeholder through workshops, group discussions and bilateral meetings held by the Project and in other platforms.

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Appendix 3.1

Minutes of Meetings

National Steering Committee (NSC)

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Appendix 3.3

Minutes of Meetings

Technical Working Group on NAMA

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Appendix 3.4

Minutes of Meetings

Project Management Group (PMG)

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Appendix 4.1.3a

Reports of the Collaboration with

USEPA/USAID-LEAD Program on Agriculture

Sector

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Appendix 4.1.3b

Training Materials on GHG Inventory of Solid

Waste Disposal Category

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Appendix 4.1.3c

Report of the Feasibility Study for

Development of Emission Factors for the

Power Sector

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Appendix 4.1.3d

Development of QA/QC Plan in the National

GHG Inventory System

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Appendix 4.1.3e

Assessment Report on the Documentation of

GHG inventory

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Appendix 4.2.2a

NAMA Facility Proposal

Towards Energy Efficient Two-Wheelers in

Malaysia

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Appendix 4.2.2b


Support to Integrated E-Waste Management

System for State of Sabah

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Appendix 4.2.2c


Avoided Emissions from Peat Swamp Forest

Management and Central Forest Spine

Ecological Connectivity in South East Pahang

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Appendix 4.2.3a

UNFCCC-NAMA Registry

Sustainable NAMA Financing Mechanism for

Reactivating Renewable Energy-based CDM

Project Activities in Malaysia

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Appendix 4.2.3b


Support to Integrated E-Waste Management

System for State of Sabah

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Appendix 4.2.3c


Feed-in Tariff (FiT) System

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Appendix 4.2.4a

Consultancy Report of the Assessment of

Initiatives in the Energy Sector for NAMAs

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Appendix 4.2.4b

Consultancy Report of the Assessment of

Initiatives in the Cement and Iron and Steel

Sectors for NAMAs

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Appendix 4.2.4c

Consultancy Report of the Feasibility Study of

Low Carbon Model for Langkawi Island

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Appendix 4.3.1

Consultancy Report of the Development of

GHG Management Tools for Mitigation

Programmes and Measures

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Appendix 4.3.2

Consultancy Report of the Development of

Verification Guideline for Domestically

Supported NAMAs

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Appendix 5.1

Draft Knowledge Product on NAMAs

low emission capacity building (lecb) project malaysia final

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