1. T HE W ORLD B ANK C ARBON F INANCE U NIT I MPROVING SMALL SCALE TRANSPORTATION METHODOLOGIES : L ESSONS FROM E GYPTIAN VEHICLE SCRAPPING P O A. P RESENTATION AT UNFCCC T RANSPORT WORKSHOP M ARCH 2011 BY F ELICITY S PORS (F SPORS @ WORLDBANK. ORG )F SPORS @ WORLDBANK. ORG T HANKS TO INPUTS FROM : H OLLY K RAMBECK,H ARIKUMAR G ADDE

2. T HE W ORLD B ANK C ARBON F INANCE U NIT Contents Introduction to the vehicle scrapping program Approach selected and why Challenges of SSC meths for vehicle scrapping Recommendations for improvements in SSC transport meths.

3. T HE W ORLD B ANK C ARBON F INANCE U NIT The Egypt Vehicle Scrapping and Recycling Program

4. T HE W ORLD B ANK C ARBON F INANCE U NIT Methodological approach: AMS-III.C v. 11 Emission Reductions by low-GHG emitting vehicles

5. T HE W ORLD B ANK C ARBON F INANCE U NIT Leakage: – i) DOE suggested need to include emissions arising from the production of new vehicles although methodology only requires leakage calculations for fuel switching. However VVM para 76 states The validation report shall contain information regarding greenhouse gas emissions occurring within the proposed CDM project activity boundary as a result of the implementation of the proposed CDM project activity which are expected to contribute more than 1% of the overall expected average annual emissions. Vehicle production takes place outside of project boundary and exceed 1% threshold – ii) Methodology does not requires that new vehicles are replaced with vehicles of the same capacity. DOE suggested that if larger vehicles are replaced by smaller vehicles there is leakage. i.e. one old 24- seat bus may be replaced by a new 12-seat bus. However, if this triggers a second 12-seat bus to offer its transport service outside the project boundary, corresponding leakage does not appear to be covered by the methodology Submission of recommendation form for SSC methodologies in July 2010 requesting clarification. Decision made October 2010. SSC WG stated a) emissions from manufacture of new vehicles can be neglected. Reference existing SSC methodology AMS-III.U. b) para 47, Decision 3/CMP.1 Modalities and Procedures for CDM the baseline shall be defined in a way that CERs cannot be earned for decreases in activity levels outside the project activity or due to force majeure.. Key methodological challenges with applying AMS.III.C Lessons learnt: Regulations often unclear or inconsistent. Difficult for DOEs and/or PPs to identify all legal requirements in a methodology.

6. T HE W ORLD B ANK C ARBON F INANCE U NIT SSC WG 26 th meeting made a clarification that AMS.III.C covers covers project activities involving the replacement of high GHG emitting vehicles with new electric or hybrid vehicles. Problem – PoA does not replace high GHG vehicles with new electric or hybrid vehicles. The new clarification did not build on previous clarifications but rather revised the methodology. Submission of recommendation form for SSC methodologies in Augst 2010 requesting clarification. Decision made October 2010. Response: AMS-III.C version 11 is not restricted to project electric and hybrid vehicles, although version 12 is restricted. i.e. Projects and programs that utilize AMS.III.C version 11. and are currently under validation may submit for registration under version 11 of AMS.III.C until 12 April 2011. Key methodological challenges with applying AMS.III.C Lessons learnt: clarifications can invoke revisions to previous versions of methodologies. Validity of existing methodology critical to registration success.

7. T HE W ORLD B ANK C ARBON F INANCE U NIT No clear guidance on impact of mandatory law on baseline emissions – The methodology is not clear on how any program that is helping to achieve the greater compliance of the mandatory law should be treated especially for calculating the baseline emissions – Does the program require monitoring the compliance percentage and adjust the emission reductions? – How to calculate the compliance percentage? – What is the threshold for considering that the program has helped the law achieving compliance percentage? 50% or 75% or 100%?? Key methodological challenges with applying AMS.III.C Lessons learnt: As methodology is silent on this very important aspect (should apply to all programs helps mandatory laws for greater enforcement), developers might be forced to adopt too conservative approaches forfeiting the overall benefits envisaged by the program.

8. T HE W ORLD B ANK C ARBON F INANCE U NIT Recommendations to improve AMS.III.C AMS III.C should be again made applicable to broader cases like Egypt VS PoA. Restricting to electric vehicles greatly limits the applicability of this methodology. Methodology should spell out clearly on the following: – Sampling procedures and methods for sampling – Methods to determine fuel economy : Introduce default values (to reduce monitoring costs) and/or allow manufacturer tested values on regular basis adjusting to urban conditions and seasonal factors – Treating cases where project/program is helping mandatory law – How to treat vehicles that would have failed on their own due to end of their life time during crediting period?

9. T HE W ORLD B ANK C ARBON F INANCE U NIT Improving SSC Transport Methodologies in General

10. T HE W ORLD B ANK C ARBON F INANCE U NIT Thanks for listening

11. T HE W ORLD B ANK C ARBON F INANCE U NIT