japan))))s new market mechanismss new market … · implement their mms ... relevant informations...

August 2011

Yuji MIZUNO, Ph.DOffice of Market Mechanisms

Climate Change Policy DivisionMinistry of the Environment, Japan (MOEJ“

JapanJapanJapanJapan s New Market Mechanismss New Market Mechanismss New Market Mechanismss New Market Mechanisms

Methodologies will be developed cooperatively by both Japan and Partner Country

JAPANPartner CountryLow Carbon Technologies,

Products, Services

GHG emission reduction/limi

tation

Offset Credits

Joint Project

Used to achieve Japan’s emission

reduction target

Purposes of the BOCM�Contribute to the ultimate objective of the UNFCCC through promotion of mitigation activities globally.�Facilitate the bilateral cooperation in the field of climate change in such a way that best suits each country’s national circumstances.�Contribute to the sustainable development of developing countries.�Appropriately evaluate the contribution to GHG emission reductions or removals.�Facilitate diffusion of low carbon technologies, products and services and enhance capabilities to utilize them.

Image of Bilateral Offset Credit Mechanism Image of Bilateral Offset Credit Mechanism Image of Bilateral Offset Credit Mechanism Image of Bilateral Offset Credit Mechanism

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JapanJapanJapanJapan s views on new market mechanismss views on new market mechanismss views on new market mechanismss views on new market mechanisms� Individual countries are able to design, establish and

implement their MMs under the UNFCCC, reflecting their own national circumstances.

� Not only centralized governance schemes but also decentralized governance schemes can be implemented.

� Under such governance structure, respective countries that establish their MMs are responsible for securing transparency and environmental integrity of the MMs.

� COP will develop basic principles for such MMs, and respective countries regularly report to the UNFCCC secretariat what MMs the country has developed and how they are actually used.

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CentralizedCentralizedCentralizedCentralized or decentralized? or decentralized? or decentralized? or decentralized?

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It was agreed that the Conference of the Parties (COP“ decides to consider the establishment, at its seventeenth

session, one or more marketone or more marketone or more marketone or more market★★★★based mechanismsbased mechanismsbased mechanismsbased mechanisms .

Progress in International NegotiationsProgress in International NegotiationsProgress in International NegotiationsProgress in International Negotiations

Cancun Agreements (COP 16 Decisions“Cancun Agreements (COP 16 Decisions“Cancun Agreements (COP 16 Decisions“Cancun Agreements (COP 16 Decisions“

Action Plan for "A Decade toward the Green Mekong" Initiative Action Plan for "A Decade toward the Green Mekong" Initiative Action Plan for "A Decade toward the Green Mekong" Initiative Action Plan for "A Decade toward the Green Mekong" Initiative 29 October 201029 October 201029 October 201029 October 2010

Promote measures to identify and formulate emission★cutting projects featuring the use of Japan's advanced technologies and products and the utilization of renewable energy sources. By undertaking feasibility studies on greenhouse gas emissions reduction volumes and measurement methods, Japan and the Mekong region will promote the development of bilateral offset bilateral offset bilateral offset bilateral offset mechanismsmechanismsmechanismsmechanisms.

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(1“ Feasibility Studies for potential BOCM projects/actions(1“ Feasibility Studies for potential BOCM projects/actions(1“ Feasibility Studies for potential BOCM projects/actions(1“ Feasibility Studies for potential BOCM projects/actions•Called for proposals from Japanese entities on for potential BOCM projects/actions, in order to acquire knowledge and experience for designing and implementing the BOCM.•29 projects were selected for FY2011, increased from three in FY2010.

(2“ Information platform for the BOCM(2“ Information platform for the BOCM(2“ Information platform for the BOCM(2“ Information platform for the BOCM•New Mechanisms Information Platform website was established to provide the latest movements and information on the BOCM.•Manage help desk for new market mechanisms, in order to respond inquiries.

(3“ (3“ (3“ (3“ Capacity Building for the BOCMCapacity Building for the BOCMCapacity Building for the BOCMCapacity Building for the BOCM•Consultations with government officials and private firms in developing countries in order to develop capacity to design new market mechanisms. •Capacity building for MRV was launched in Asia, Latin America and Africa, including developing MRV methodology reflecting each national circumstances.

MOE-J’s initiatives to promote the BOCM

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(4“ (4“ (4“ (4“ New registry system for the BOCMNew registry system for the BOCMNew registry system for the BOCMNew registry system for the BOCM•Developing registry for recording and tracking of credits under the BOCM.

• Global Environment Centre Foundation (GEC“ is serving as a secretariat for the FS.�Relevant informations are on http://gec.jp/main.nsf/en/Activities★

Climate_Change_Mitigation★Top�Or serch GEC, FS, Climate

• 29 projects were selected for FY2011.�6 potential CDM projects were also selected, to contribute

developing new methodologies, standardaized baselines and eqiitable geographical distribution of the CDM.

• Taskforces composed of experts for specific sectors were set up and a feasibility study is being performed under the guidance of the taskforces.

• Plan to establish host country committee for some FS projects, composed of government officials and other experts in host country and Japan, in order to share mutual perspectives on the BOCM, by discussing FS projects in the country.

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Feasibility Studies for potential BOCM projects/actionsFeasibility Studies for potential BOCM projects/actionsFeasibility Studies for potential BOCM projects/actionsFeasibility Studies for potential BOCM projects/actions

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BOCM Feasibility Studies in FY2011(1)

Brazil :■ REDD+ in Acre State

Mexico :△ EE Improvement at Households

South Africa :△ Integrated EE Activities at Beer/Beverage Factories

Angola :■ REDD+ through Revegetation & Fuelisation of Woody Biomass Tips

Mongolia:△ Multi-Application of EE at Coal Thermal Power Plants△ Energy Saving at Buildings (Geothermal Heat Pump)

India:△ Utilisation of LED Lights at Office Buildings△ High-Performance Industrial Furnaces to Aluminium Industry

Sri Lanka :○ Development of Castor Seed Industry Cluster▲ Best Grid Electricity Mix Focusing on REs

China :△ Energy Saving through Water-Saving Toilet Systems △ Energy Management and Control Systems at Factories X- CMM Electric Generation and Integrated EE Improvement

Thailand :●Waste Management Activities in Thailand

Development of MRT Network▲Wind Power Generation in Low Wind Speed Condition△ Institutional Development of BEMS with Certificated Carbon CreditsX Utilisation of Off-Peak Power from Storage Batteries & Introduction of Electric Vehicles

Viet Nam■ REDD+ through Revegetation at Denuded Lands & Woody Biomass-based Power Generation in Son La ProvinceX Utilisation of Blast Furnace Slags as Blending Material for Cement

Development of MRT Systems in Hanoi & Ho Chi Minh

Indonesia :● Energy Application of Wastes & Wastewater Originated in Processing of Agricultural Products

REDD+ in Central Kalimantan Province■ REDD+ and Bio-Fuel Production & Utilisation ■ Avoidance of Peat Aerobic Digestion & Rice Husk-based Power Generation★ Development of MRT Systems in Jakarta

Cambodia :■ REDD+ in Prey Long Area

Lao PDR :★ Urban Transport Management

Malaysia :● Energy Generation by Waste Management Activities

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Colombia:▲ Geothermal Power Generation

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Category●--Waste Management○--Biomass Utilisation★--Transportation▲--Renewable Energy (RE)△--Energy Efficiency ■--REDD+X--Others

NOTE : EE= Energy EfficiencyMRT= Mass Rapid TransitBEMS= Building & Energy

Management Systems

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Category Host Country Emission Reduction Project/Activity Research Entity

Waste Management

Thailand Waste Management Activities in Thailand Pacific Consultants

Indonesia Energy Application of Wastes and Wastewater Originated in Processing of Agricultural Products

Chugai Technos Corporation

MalaysiaEnergy Generation by Waste Management Activities, through Anaerobic Digestion as Model Technology

Ichikawa Kankyo Engineering

Biomass Utilisation

Sri Lanka Development of Castor Seed Industry Cluster PEAR Carbon Offset Initiative

Transportation

Thailand Development of Mass Rapid Transit (MRT) Network in Bangkok

Japan Weather Association

Lao PDR Urban Transport Management in Vientiane Katahira & Engineering International

Indonesia, and Viet Nam

Development of Mass Rapid Transit (MRT) Systems in Jakarta, Indonesia, and Hanoi and Ho Chi Minh

Mitsubishi Research Institute

Renewable Energy

Thailand Renewable Energy Development by Wind Power Generation in Low Wind Speed Condition

Yonden Engineering

Sri Lanka Best Grid Electricity Mix Focusing on Renewable Energy Sources

Ex Corporation

Colombia Renewable Energy Development Focusing on Geothermal Power Generation


BOCM Feasibility Studies in FY2011(2“ BOCM Feasibility Studies in FY2011(2“ BOCM Feasibility Studies in FY2011(2“ BOCM Feasibility Studies in FY2011(2“

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Energy Efficiency/

Energy Saving

ChinaEnergy Saving by Reducing Water Consumptions through Diffusion of Water-Saving Toilet Systems to Households in Dalian

Mitsubishi UFJ Morgan Stanley Securities

ChinaEnergy Efficiency Improvement by Introducing Energy Management and Control Systems at Factories in Shaanxi Province

Yaskawa Electric Corporation

Mongolia Multiple Application of Energy Efficiency Improvement Measures at Coal Thermal Power Plants

Suuri-Keikaku

Mongolia Energy Saving at Buildings by Utilising Geothermal Heat Pump and Other Technologies

Shimizu Corporation

Thailand

Promotion of Energy Efficiency Improvement through Institutional Development of Building and Energy Management Systems (BEMS) with Certificated Carbon Credits

Yamatake Corporation

India Energy Savings by Utilising LED Lights at Office Buildings

The Japan Research Institute

IndiaEnergy Efficiency Improvement by Introducing High-Performance Industrial Furnaces to Aluminium Industry

Japan Industrial Furnace Manufacturers Association

MexicoPromotion of Energy Efficiency Improvement at Households through Introduction of Low-CO2 Houses and Diffusion of Energy-Efficient Appliances

The Japan Research Institute

South AfricaIntegrated Energy Efficiency Activities at Beer/Beverage Factories Using Specific Energy Consumption Methods

Recycle One.


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REDD+

Indonesia REDD+ in Central Kalimantan Province Mitsubishi UFJ Research & Consulting

Indonesia REDD+ and Bio-Fuel Production and Utilisation in Gorontalo Province

Kanematsu Corporation

Indonesia

Avoidance of Peat Aerobic Degradation by Peatland Rewetting and Rice Husk-based Power Generation Associated with Rice Production Increase in Jambi Province

Shimizu Corporation

Cambodia REDD+ in Prey Long Area Conservation International Japan

Viet NamREDD+ through Revegetation at Denuded Lands and Woody Biomass-based Power Generation in Son La Province

Sumitomo Forestry

Brazil REDD+ in Acre State Marubeni Corporation

AngolaREDD+ through Revegetation at Derelict Commercial Forested Lands and Fuelisation of Woody Biomass Tips for Cement Plants

PricewaterhouseCoopers Aarata Sustainability

Others

ChinaElectric Generation based on Low-Level Coal Mine Methane and Integrated Energy Efficiency Improvement in Yunnan Province

Tepia Corporation Japan

ThailandCO2 Reduction through Utilising Off-Peak Power from Storage Batteries and Introducing Electric Vehicles

Mizuho Information & Research Institute

Viet Nam CO2 Abatement through Utilisation of Blast Furnace Slags as Blending Material for Cement



A network of Mass Rapid Transit (MRT) systems, with multiple MRT lines, will be introduced in Bangkok. The MRT network will lead to the modal shift from the current road-oriented transport and reduce GHG emissions. In addition, the co-benefits, such as air pollution improvement, will be expected.

2 options of MRV methods should be based on Measurement process: transport demand forecasting model or simplified ACM0016. Both should ensure accuracy enough to be internationally acceptable. In addition, pre-activity and post-activity Reporting and Verification process will be considered and proposed.

→→→→ 780,000 t-CO2/y will be reduced

CO2

Expected GHG ReductionsExpected GHG Reductions

Draft MRV MethodsDraft MRV Methods

Sites of GHG Mitigation ActivitiesSites of GHG Mitigation Activities

Development of Mass Rapid Transit (MRT) Network in BangkokFS Entity: Japan Weather Association

BOCM Feasibility Study (FS) Host Country: Thailand

MRT Network Master Plan in Bangkok Metropolitan Region

→→→→ 6,240,000 t-CO2/y will be reduced between 2013 and 2020 in total

� Option2: simplified ACM0016→→→→ 140,000 t-CO2/y will be reduced

� Option1: transport demand forecasting model

*The following is tentatively calculated according to a transport demand forecasting model with the “Four-Step Estimation Method for Traffic Demands”

Outline of GHG Mitigation ActivitiesOutline of GHG Mitigation Activities

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Promotion of Energy Efficiency Improvement through Institutional Development of Buildingand Energy Management Systems (BEMS) with Certifica ted Carbon Credits

FS Entity: Yamatake Corporation


[a model case] BEMS improves 10% of energy efficiencyBefore: 20GWh/yr � After: 18GWh/yr = 2GWh/yr reduced�2GWh x 0.506tCO2/MWh (conversion factor) = 1,012t-CO2/y [potentials]When its operation continues for 10 years (2016 - 2025), and 10 BEMS project newly be developed each year,� Total Emission Reduction Potentials: 556,600tCO2

Energy efficiency improvements will be promoted through the introduction of Building and Energy Management Systems (BEMS) for office buildings. In addition, a new scheme to issue certified carbon credits with public financial supports will be established in order to further disseminate the BEMS by utilising in particular Japanese high-efficient EE technologies.

Outline of GHG Mitigation ActivityOutline of GHG Mitigation Activity

FS focuses on Bangkok model cases, but the activity will expands to surrounded industrial zones, southern resort areas, and Chiang Mai.

Site of GHG Mitigation ActivitySite of GHG Mitigation Activity

FS Site: Bangkok

BEMS themselves mount automatic measurement systems for energy consumptions in real-time manners. For the automatic systems, the accuracy of long-term measured data and the prevention of data falsification should be ensured through third-party verification. �MRV will be ensured.


Thailand

Technology Transfer & Facilities

Real time monitoring

BEMS

Visualisation of energy

consumptions

High-efficient technology/ operation

Apply

Reduction

Office Buildings

CreditIssue

Expected Emission ReductionExpected Emission Reduction

Certificated byThird Party InstitutionTransfer

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Introducing storage batteries (big stationary batteries as well as mobile batteries mounted on electric vehicles (EVs)) which store nighttime power originated from renewable energy sources such as wind and hydro, and will be utilised for peak-time power in daytime. This leads to the reduction of fossil fuel consumptions to generate power at peak time.

Renewable

energy

CO2 Reduction through Utilising Off-Peak Power from Storage Batteries and Introducing Electric Vehicles FS Entity: Mizuho Information & Research Institute

BOCM Feasibility Study（FS） Host Country: Thailand

Specific site(s) are not identified, but entire Thailand is a target area.

Since no internationally approved methodologies to quantify emissions and their reductions exist, a new methodology should be established. Basically following items should be defined/quantified:•Net power discharged from batteries,•Emission factors for charging and discharging,•Power consumptions or travel distances of EVs, etc.Proposed MRV will be established through the consultations with stakeholders.

The amount of nighttime renewable energy generation is 43,800MWh/yr (50MW with 20% of operation efficiency), and the loss of storage and discharge is 30%:43,800 x 70% = 30,660MWh

30,660MWh will be utilised as peak-time power in daytime:30,660MWh x EF (0.5tCO2/MWh) = 15,330t-CO2/y�Future development of renewable energy will further increase emission reductions.�Rough estimation:

380,000t-CO2/y

Expected Emission ReductionsExpected Emission Reductions


Site of GHG Mitigation Activity Site of GHG Mitigation Activity


EVCharging stations

electric grid

Big stationary batteries

Power plantPower plant

Daytime peak power will be

displaced with stored nighttime

power.

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Install wind power generators as an partial alternative to grid electric power in Thailand, where few wind power generation projects are registered by the CDM EB. The possible reason is wind conditions are not enough. Therefore, this activity will employ Japanese windmills which work in low wind seed condition compare to standard windmills.

Renewable Energy Development by Wind Power Generati on in Low Wind Speed ConditionFS Entity: Yonden Engineering


•Reference scenario (current practice):[Wind power generations to grid] x [Grid EF]

= (50MW x 24h x 365d x 25%) x 0.5980t-CO2/MWh= 65,481t-CO2/y•Project scenario: No GHG emission� GHG emission reductions: 65,481t-CO2/y

If the Thai Alternative Energy Dev. Plan is realised (i.e. 800MW by 2022), GHG reductions could potentially be 7 million t-CO2 in total.

Basically CDM ACM0002 will be applied to the proposed activity.

In addition, this activity attempts to develop the ex-post grid EF annually for accurate reference scenario. Therefore, an objective and transparent MRV method for annual electric mix in grid should be established, based on the study results.



Thailand

Bangkok

Project Sight


Rated Wind 15m/sec

Standard Windmill

Japanese Windmill

Rated Wind12m/sec

Expected Emission ReductionExpected Emission Reduction Power Station by Oil/Gas

Grid

Reduction

Electricity

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Following priority waste management projects will be implemented by utilising Japanese technologies on appropriate waste & wastewater management. The priority projects are identified through the last year’s FS results.

Waste Management Activities in Thailand FS Entity: Pacific Consultants



• A semi-aerobic landfill project will reduce 60,000t-CO2/y .• An aerobic digestion project of solid waste will reduce 120,000t-CO2/y• A forced methane fermentation project will reduce 100,000t-CO2/y• 5 aerobic digestion projects of human excrete will reduce 30,000t-CO2/y

MRV methods will be basicallyalong with streamlining process under the CDM scheme, based on CDM methodologies such as AM0093, AMS-I.D, AMS-III.F, and AMS-III.O, as well as methodological tools such as “Tool to determine methane emissions avoided from disposal of waste at a solid waste disposal site”. In addition, some applicable default values will be considered, as a part of reasonable MRV methods.



Expected Emission ReductionsExpected Emission Reductions

Anaerobic Sanitary Landfill

(CH4 reduction)Semi-aerobic landfill

Aerobic digestion � Composting (+ agricultural application)

・Water pollution improvement of leachate ・Odor abatement

・Prolonging the life of waste disposal siteForced methane fermentation

� Power generation(CH4 redution)

(CH4 reduction) (+ (N2O reduction))

Reservoir treatment・River water

quality improvement ・Odor abatement

Sewage Water

Color legends: Reference scenario Mitigation project Co-benefits

Aerobic digestion � Composting (+ agricultural application)

(CH4 reduction) (+ (N2O reduction))

Municipal solid waste

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• Overseas Environmental Cooperation Center (OECC“ is serving as a secretariat for the platform.

• New Mechanisms Information Platform website was established to provide the latest movements and information on the BOCM�URL is http://www.mmechanisms.org/e/index.html�Or serch OECC, new mechanism�OECC has long experience for operating the Kyoto

Mechanisms Information Platform , and it has received average 290,000 visitors per year.

• Help Desk also accepts and answers inquiries regarding new mechanisms, including those regarding the BOCM.

• Plans to organize seminars on new mechanisms including the BOCM in Tokyo, inviting government officials from a developing countries, in FY2011.

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Information platform for the BOCMInformation platform for the BOCMInformation platform for the BOCMInformation platform for the BOCM

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Information platform for the BOCMInformation platform for the BOCMInformation platform for the BOCMInformation platform for the BOCM

• Starting from FY2003, MOE★J has been supporting CDM capacity building in Asian countries to help the establishment of institutional arrangements and procedures.�Institute for Global Environmental Strategies (IGES“ has

been collaborating with Asian countries for capacity building.• Building on the existing CDM capacity building initiative, MOE★

J launched capacity building for new mechanisms including the BOCM.�Such capacity building may utilize experience of J★VER

(Japan★verified emission reduction“, which have unique features applicable to developing countries.

• MOE★J also started capacity building especially for MRV.�Such capacity building will be conducted in Asia, Latin

America and Africa uniquely, to reflect specific circumstances and capacities of those countries for implementing MRV.

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Capacity Building for the BOCMCapacity Building for the BOCMCapacity Building for the BOCMCapacity Building for the BOCM

•Using a positive listpositive listpositive listpositive list as a criteria for validation�Defining and validating the types of projects that should be

promoted as a government policy, rather than assessing the additionality of each project.

•Judgment based on eligibility criteriaeligibility criteriaeligibility criteriaeligibility criteria�Ensuring environmental integrity by applying designated

eligibility criteria in judging whether or not a proposed project satisfies conditions prescribed in the positive list.

•Reducing monitoring requirementsReducing monitoring requirementsReducing monitoring requirementsReducing monitoring requirements�For example, no need to measure emissions from

transportation of biomass under some conditions.�For example, exclude low emission sources (those

accounting for less than 0.1% of the estimated emission reduction“ from monitoring requirements.

JJJJ★★★★VER VER VER VER (Japan(Japan(Japan(Japan★★★★verified emission reduction“ verified emission reduction“ verified emission reduction“ verified emission reduction“ scheme scheme scheme scheme Features of JFeatures of JFeatures of JFeatures of J★★★★VERVERVERVERFeatures of JFeatures of JFeatures of JFeatures of J★★★★VERVERVERVER

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Partnership for Market Readiness (PMR“Partnership for Market Readiness (PMR“Partnership for Market Readiness (PMR“Partnership for Market Readiness (PMR“•It is the initiatives to support developing countries to prepareand implement market mechanisms for GHG reductions.

•It is expected to play important role for developing international rules for new market mechanisms.

•Japan contributed 600 million yen to the PMR.

�The organizational meeting was held in Bangkok, on April 2011.�The first Partnership Assembly was held in Barcelona, in the

end of May 2011. �Chile, China, Colombia, Costa Rica, Indonesia, Mexico,

Thailand and Turkey were selected to proceed to preparation phase.

�At this moment, Australia, European Commission, Germany, Japan, Netherland, Norway, Spain, Switzerland, United Kingdom, and United States pledged contribution to the PMR

�The organizational meeting was held in Bangkok, on April 2011.�The first Partnership Assembly was held in Barcelona, in the

end of May 2011. �Chile, China, Colombia, Costa Rica, Indonesia, Mexico,

Thailand and Turkey were selected to proceed to preparation phase.

�At this moment, Australia, European Commission, Germany, Japan, Netherland, Norway, Spain, Switzerland, United Kingdom, and United States pledged contribution to the PMR

Funding to the World Bank PMRFunding to the World Bank PMRFunding to the World Bank PMRFunding to the World Bank PMR

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� Japan will take the following steps for the BOCM:�Facilitate mutual understanding with developing

countries through dialogues, exploration of potential projects and capacity building.

�Seek to enter into bilateral arrangements with developing countries after having sufficient understanding on the BOCM so as to ensure credibility of the mechanisms.

� In parallel with the above steps, and drawing on the outcome of such steps, institutional designs for the BOCM will be reviewed for improvements.�Mechanisms that can address issues of the CDM,

bring benefits to developing countries, and promote further emission reductions. 21

JapanJapanJapanJapan s approach to materialize the BOCMs approach to materialize the BOCMs approach to materialize the BOCMs approach to materialize the BOCM

� Japan will communicate and address its position in international negotiations so as to ensure that improvements will be made to the existing mechanisms under the new framework applicable from 2013 onward, and that the BOCM will be consistent with this new framework.

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JapanJapanJapanJapan s approach to materialize the BOCMs approach to materialize the BOCMs approach to materialize the BOCMs approach to materialize the BOCM

japan))))s new market mechanismss new market … · implement their mms ... relevant informations...

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