Thailand Greenhouse Gas Management Organization (Public Organization) (TGO)
Development of Carbon Marketin Thailand
Sumon Sumetchoengprachya
Carbon Business Office
2014 Workshop on Capacity Building of Regional Carbon Market in Asia:Experiences from Europe
National Taiwan University, Taipei, Taiwan25 June 2014
Thailand Greenhouse Gas Management Organization (Public Organization) (TGO)2
Historic GHG emissions and Key Emitters
• Net GHG emission from the year 2000 to 2009 has been increased from 229 M tCO2e to 331.4 M tCO2e (Increase at 3.9% per year).
The Energy sector is the largest emitter ~ 70% share , followed by agriculture, industrial process, LULUCF and waste management.
In Energy Sector, energy industries and transport are key drivers, totaling account for almost 70%, of the total emissions.
Source: TGO & JGSEE (2012)
Source: TGO & JGSEE (2012)
Thailand’s GHG emissions in 2000 Thailand’s GHG emissions in 2000-2009
Source: TGO & JGSEE (2012)
Thailand Greenhouse Gas Management Organization (Public Organization) (TGO)3
Projected GHG emissions trends
Future emission projection in the BAU scenario, 2012 – 2050 (M tCO2e)
BAU scenario: considering the annual growth of GDP and population at 4.22% and 0.12% for the period of 2012 – 2050
Total GHG emission in 2050 under BAU: 1,331 M tCO2e (A) Energy sector contributes about 76% of total emissions Upon implementation of policies officially launched including PDP, EEDP and AEDP, total
GHG emissions will be reduced to 883.5 M tCO2e. (B)
Source: TGO & JGSEE (2012)
(A)
(B)
Thailand Greenhouse Gas Management Organization (Public Organization) (TGO)4
Objectives of Establishing VCM in Thailand
1. Support voluntary GHGs reduction activities
2. Encourage private companies, who attempt to reduce their GHG emissions, implement cost-effective GHGs reduction activities
3. Learn how to manage domestic emission trading scheme / carbon offsetting program
Thailand Greenhouse Gas Management Organization (Public Organization) (TGO)5
Voluntary Emission Reduction Projects
(VER)
Type: Project-based
Eligibility: Emission Reduction Projects, Pre-registered CDM
MRV: International standards (VCS, GS, etc.)
Carbon Credit: VERs
Registry: Standard Owners
Buyers: International buyers
Status: Existing
Thailand Voluntary Emission Reduction Program (T-VER)
Type: Project-based
Eligibility: energy efficiency, etc.
MRV: Domestic
Carbon Credit: TVERs
Registry: T-VER
Buyers: Government / CSR companies / Brokers
Status: launched in Oct 2013
Thailand Voluntary Emission Trading
Scheme (Thailand V-ETS)
Type: Cap-and-Trade
Target: Industrial sector
MRV: ISO 14064-1 / 14064-3 / 14065
Carbon Credit: Allowances
Registry: ETS
Buyers: Entities / Traders
Status: launch in Oct 2014
Structure of Voluntary Carbon Market in Thailand
Thailand Greenhouse Gas Management Organization (Public Organization) (TGO)6
Initiatives to Promote Domestic Carbon Market
• Existing initiative instruments
– Thailand Voluntary Emission Reduction Program (T-VER): a domestic GHG crediting mechanism (project-based), using methodologies which derived from CDM and J-VER methodologies. T-VER program has been launched in October 2013. There are 15 demonstration projects from 8 organizations, covering 7 methodologies e.g. RE, EE, WM, Forestry and Agriculture.
– Thailand Voluntary Emission Trading Scheme (Thailand V-ETS): expected to launch a demonstration program in October 2014.
– Thailand Carbon Offsetting Program (T-COP): a carbon offsetting program, launched in March 2013, aiming to use contributions from participants for supporting domestic GHG emission reduction activities, especially for projects under the T-VER program.
• Proposed initiative instruments under the PMR
– Energy Performance Certificate Scheme (EPC): a voluntary target-and-reward scheme aiming to achieve energy efficiency in energy-intensive factories & buildings and to build core market readiness components in order to be a foundation for establishing the future ETS.
– Low Carbon City Program (LCC): a GHG crediting mechanism which will be a part of T-VER program, aiming to achieve GHG emission reductions implemented by municipalities and local communities.
Thailand Greenhouse Gas Management Organization (Public Organization) (TGO)7
Toward Future Domestic Carbon Market
Thailand Greenhouse Gas Management Organization (Public Organization) (TGO)8
Development of Thailand VCM
Thai VCM
MRV System
• Measurement
• Validation
• Reporting
• Verification
Registry System
&
Exchange Platform
Institutional Arrangement
&
Capacity Building
Buyers & Project Developers
• Public Organizations, private sector, Industries
• Carbon Offsetting Program (T-COP)
• Incentives
Thailand Greenhouse Gas Management Organization (Public Organization) (TGO)
Thailand Voluntary Emission Reduction Program
(T-VER)
Thailand Greenhouse Gas Management Organization (Public Organization) (TGO)10
Characteristics of T-VER
• GHG reduction projects– Baseline-and-credit approach
• Size of project– No limitation
– Can be bundled (under development)
• Carbon Credit– TVERs (Thailand Verified Emission Reductions)
• Gas coverage– CO2, CH4, N2O
• Eligible project– New project: GHG reduction project starts after announcement on
the Regulation of T-VER Program by TGO’s Board of Directors.
– Existing project: GHG reduction project starts before announcement on the Regulation of T-VER Program, but not before 2007.
10
Baseline Emission (BE)(Business as usual: BAU)
Project Emission(PE)
GH
G E
mis
sio
n (
tCO
2e
)
Time
ER = BE - PE
Project end
Carbon credit
Thailand Greenhouse Gas Management Organization (Public Organization) (TGO)11
Characteristics of T-VER (2)
• Registered or validated CDM projects can apply for T-VER registration:
– Allow to use CDM methodologies
– Require to use T-VER’s templates (PDD, monitoring, validation, verification)
– Validate and verify in accordance with T-VER’s validation and verification guidelines.
• Crediting period
– 7 years for non-forestry project / 20 years for forestry project
– For new project, the crediting period starts from the date that all required documents are submitted to TGO (for registration as T-VER project).
– For existing project, the crediting period can be started retroactively not later than 1 year before the date that all required documents are submitted to TGO for registration as T-VER project.
• Starting date
– The first date of recording activity data on GHG emission, as indicated in methodology
• Required to submit co-benefit assessment
11
Thailand Greenhouse Gas Management Organization (Public Organization) (TGO)12
Co-benefit Checklist
Environment Support national policies and planning Reduce air pollution Reduce water pollution Reduce noise pollution Have waste management (for energy projects) Have hazardous waste management Reduce soil contamination Reduce ground water contamination Reduce odor Increase efficiency of water consumption Increase GHG sinks
Social Enhance public participation Support social, cultural, environmental, and health care development activities Build capacity for staff and related stakeholders
Environment Increase local economic growth
(increase local employment and income)
Reduce cost and increase revenue Increase renewable energy and
energy efficiency Increase technology development
and utilization of local content
Thailand Greenhouse Gas Management Organization (Public Organization) (TGO)13
Criteria for additionality
Project Type Micro Small Large
RenewableElectricity Generation with installed capacity
≤5 MW
≤15 MW
>15 MW
Energy efficiencyimprovement which reduce energy consumption
≤20
GWh/y
≤60
GWh/y
>60
GWh/y
Other project activitieswhich reduce GHG emission
≤20,000tCO2/y
≤
60,000tCO2/y
>60,000 tCO2/y
Automaticadditional
DemonstrateAdditionality
Is it a micro-scale T-VER project activity?
Is it a small-scale T-VER project activity?
Payback Period
Is it a Large scale T-VER projectactivity?
Demonstrate aditionality
≤ 3 years
Yes
Yes
>3 years
Project activity is not additional
No
No
Project activity is additional
Approved by TGO Board (28 Oct 13)
Positive list is under discussion and will be developed in the near future
Thailand Greenhouse Gas Management Organization (Public Organization) (TGO)14
Approved T-VER Methodologies
Approved Methodology Number
1) Energy Efficiency Improvement from Lightings T-VER-METH-EE-01
2) High Energy Efficiency Lighting Installation in Buildings
T-VER-METH-EE-02
3) On-Grid Renewable Electricity Generation T-VER-METH-RE-01
4) Off-Grid Renewable Electricity Generation T-VER-METH-RE-02
5) Methane Capture from Anaerobic Wastewater Treatment Utilization or Flaring
T-VER-METH-WM-01
6) Sustainable Forestation T-VER-METH-FOR-01
7) Good Fertilization Practice in Agricultural Land T-VER-METH-ARG-01
Thailand Greenhouse Gas Management Organization (Public Organization) (TGO)15
T-VER Scheme Framework
2Submit application, monitoring reports
Submit application, PDD, evidences 2
GHG ReductionSub-committee
Secretariat(TGO)
Project Developer(PD)
3
3
2
Inform PDInform PD 4
4
1
verification reports
validation report
Issue TVERs
TGO Board
Approveregistration
Validation/Verification Body
(VVB)
Submit application1
2Approve VVB registration
2
1
Methodology Sub-committee
Submit monitoring report for verification
Methodology Technical WG
Submit PDD forvalidation
~ Registration Process
~
Certification Process
~
VVB Registration Process
1 4
1 4
1 2
Thailand Greenhouse Gas Management Organization (Public Organization) (TGO)16
Proposed New Methodologies in FY 57
• Under development
Proposed Methodology Number
1) Energy Production from Cogeneration T-VER-METH-EE-03
2) Fossil Fuel Switching or Increasing Share of Renewable Energy for Heat Generation (for selling or internal usage)
T-VER-METH-RE-03
3) Installation of New Equipments for Heat Generation from Renewable Energy (for selling or internal usage)
T-VER-METH-RE-04
4) RED or REDD (to be confirmed) T-VER-METH-FOR-02
5) Sustainable Orchard Management (to be confirmed)
T-VER-METH-ARG-02
Thailand Greenhouse Gas Management Organization (Public Organization) (TGO)17
T-VER Demonstration Project (Energy, Industry, Transportation, Waste Sectors)
Organization name Project title Meth.
Electricity Generation
Authority of Thailand (EGAT)
Hydro Power Project (8MW) at Naresuan Dam,
Pitsanulok
T-VER-METH-RE-01
Electricity Generation from Wind Power 2.5 MW at
Lamtakong Hydro Power Dam, Nakornratchasrima
T-VER-METH-RE-01
Solar Power Project (5MW) at Tab-sakae, Prachuab
Kirikhan
T-VER-METH-RE-01
Ban Klong Rue Community’s Hydro Power Project at
Paksong, Patoh, Chumporn
T-VER-METH-RE-02
Provincial Electricity
Authority (PEA)
ENERGY EFFICIENCY improvement from Lightings
(Fluorescent -> LED)
T-VER-METH-EE-01
Renewable Energy and
Environmental Research
Center, University of Phayao
Methane Capture from Anaerobic Wastewater
Treatment at Ratchasima Flour Industry Co., Ltd.,
Soeng Sang, Nakornratchasrima
T-VER-METH-WM-01
Kasikorn Bank PCL. Energy Efficiency improvement from Lightings T-VER-METH-EE-01
High Energy Efficiency Lighting Installation in Buildings T-VER-METH-EE-02
Electricity Generation from Solar Rooftop T-VER-METH-RE-02
Methane Capture from Anaerobic Wastewater
Treatment Utilization or Flaring
T-VER-METH-WM-01
Delta Electronics (Thailand)
PCL.
Energy Efficiency improvement from Lightings (T8 ->
T5, T8 -> LED, Sodium -> LED)
T-VER-METH-EE-01
Thailand Greenhouse Gas Management Organization (Public Organization) (TGO)18
T-VER Demonstration Project Forestry and Agriculture Sectors
Organization name Project title Meth.
Electricity Generation
Authority of Thailand (EGAT)
Sustainable Forestation at Power
Plant, Chana, Songkla
T-VER-METH-FOR-
01
PTT Exploration and
Production PLC.
Sustainable Forestation T-VER-METH-FOR-
01
Plant Tissue Culture Center,
Chiangrai Rajabhat
University and Connexion
Worldwide Co., Ltd.
Sustainable Forestation T-VER-METH-FOR-
01
Nongchorake Temple, Klang,
Rayong
Sustainable Forestation T-VER-METH-FOR-
01
Renewable Energy and
Environmental Research
Center, University of Phayao
GHG Emission Reduction Project
in Agricultural Sector: Good
Fertilization Practice
T-VER-METH-AGR-
01
Thailand Greenhouse Gas Management Organization (Public Organization) (TGO)19
Web Site - http://tver.tgo.or.th
Thailand Greenhouse Gas Management Organization (Public Organization) (TGO)
Thailand Voluntary Emission Trading Scheme (Thailand V-ETS)
Thailand Greenhouse Gas Management Organization (Public Organization) (TGO)21
Action Plan for Thailand V-ETS
2010• Research
Studies on calculation methodologies for GHG emissions from industries
2011• Research
Studies to Identify target industries and cap-setting
2012• Identify
institutional framework / operating rules/ model for Thailand V-ETS / incentives
2013• Pilot project
to develop MRV system for TVETS
• General guideline
2014• Institutional
Framework
• Target setting
• Revised MRV system
• Launch Thailand V-ETS demonstration program
Thailand Greenhouse Gas Management Organization (Public Organization) (TGO)22
Thailand V-ETS Characteristics
• Emission Trading Scheme– Cap and trade system
• Target group– Allow firms to enter the carbon
market voluntarily without identifying target industries.
• Gas Coverage: CO2
• Carbon credit– Allowances
• Reduction Target: – Absolute reduction target ?
• Base year emission: – Average of 3 years emissions?
• Scope of GHG Reporting: 1 & 2• Allowance Allocation:
– Grandfathering in an initial phase?
Target setting (% of emission reduction)
and Cap setting
Allowances allocation
Allowance trading
Thailand Greenhouse Gas Management Organization (Public Organization) (TGO)23
MRV for Thailand V-ETS
• Developed based on ISO 14064-1, 14064-3, and 14065
• GHG Reporting:
– Gas coverage: CO2 emissions only
– Organizational boundary
• Geographical boundary: Follows Factory Act and Building Control Act (permit for building construction / factory permit)
• operational control approach
– Operational boundary: Scope 1 and 2
• Third party verification
– Registered VBs
• Draft Monitoring and Reporting Guideline (MRG) and Verification Guideline (VG) (under development process)
Thailand Greenhouse Gas Management Organization (Public Organization) (TGO)24
Thailand V-ETS Cycle
Recruit mkt. participants
MRV base year
Set cap
Allocate allowances
Reduce GHG
Prepare GHG emissions report
Verify GHG emissions report
Submit verified GHG emissions report
Surrender
Entities Verifier TGO
Thailand Greenhouse Gas Management Organization (Public Organization) (TGO)25
Thailand V-ETS Pilot Project
• Implement demonstration program (FY2015: Oct 2014 - Sep 2015)
• Objectives
– Test MRV system
– Identify targeted participants
• Focus on power plants and petrochemical industries OR
• 79 companies participated in carbon footprint for organization program (voluntary basis)
– Set cap
• Absolute OR intensity target ?
• Cover..?? ..%f countries emissions
– Identify allocation method
• Grandfathering / benchmarking / auction / mix ?
– Penalty and risk management
• Penalties : No?
• Price control : price ceiling or price floor OR price collar OR none?
• Offset credits: TVERs, CERs/VERs generated in Thailand, LCC credits
• Banking and borrowing : Allow banking, no borrowing
– Set up appropriate model
Thailand Greenhouse Gas Management Organization (Public Organization) (TGO)26
Next Steps
• Establishment of National ETS (from 2020)– Prepare the infrastructure for market mechanism including database, MRV system, registry
system, institutional and regulatory framework via WB PMR– Study on ETS features, e.g. cap-setting, allowance allocation– Study on the feasibility of carbon trading– Study on legislation and institutional arrangements regarding GHG reporting and emissions
trading– Study on impact of ETS to Thai economy and industries– Study on carbon pricing mechanisms (compare ETS, carbon tax, other incentives program)– Enhance information sharing and exchange among industries and public agencies
• Linking and Development of a regional carbon market– Knowledge sharing on carbon markets, emissions trading and other relevant issues with NZ
MOE under Thailand-New Zealand Carbon Markets Working Group– Play an active role in Asia-Pacific Carbon Markets Roundtable - regional cooperation
regarding opportunities for linking market mechanisms in Asia-Pacific region and facilitating the development of a regional carbon market
Thailand Greenhouse Gas Management Organization (Public Organization)
Government Complex, Building B, 9th Floor, 120 Chaengwattana Road, Bangkok 10210
Tel. 02 141 9833 Fax 02 143 8403 www.tgo.or.th [email protected]
Thank you for your attention