The role of CDM in technical change in refrigeration - current CDM regulations - successful CDM projects and methodologies - failed projects and methodologies - Conclusion 1

Modalities and Procedures FCCC/KP/CMP/2005/8/Add.1 p A baseline shall be established: (a)By project participants in accordance with provisions for the use of approved and new methodologies; (b) In a transparent and conservative manner, and taking into account uncertainty; (c) On a project-specific basis; (d) In the case of small-scale CDM in accordance with simplified procedures developed for such activities; (e) Taking into account relevant national and/or sectoral policies 46. The baseline may include a scenario where future anthropogenic emissions by sources are projected to rise above current levels, due to the specific circumstances of the host Party. 47. 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. 48. In choosing a baseline methodology for a project activity, project participants shall select from among: (a) Existing actual or historical emissions, as applicable, or (b) Emissions from a technology that represents an economically attractive course of action, taking into account barriers to investment, or (c) The average emissions of similar project activities undertaken in the previous five years, in similar social, economic, environmental and technological circumstances, and whose performance is among the top 20 per cent of their category. Current regulations in CDM 2

- Bottom-up mode led to 4 selective methodologies - no general guidance on refrigeration has emerged from KP secretariat - HFC-134a accounting decisions are not coherent Carbon accounting resembles EIA in the complexity of boundaries the EB struggles to follow boundary definitions but doesnt escape their variability as in EIA, the results are hard-wired in the boundary definition and so EB decisions are circular, reaffirming and changing boundaries few attempted to make refrigeration boundaries explicit Current regulations in CDM 3

AM 60 replacing 531 CFC chillers with any non-CFC chiller CER pa AMS III.X household refrigerators replacement low-income AM 70/71 manufacture of higher efficiency refrigerators, switch to cyclopentane AMS III.AB Ice-cream cabinets 0.2 kg < 134 < 6 kg ITC Sonar Hotel 0686 reg. 11/06 chiller mod., AMS II.E 355 of 1996 CER in 2008 EIH hotels 5 vapour compression chillers – 0.64 kW/TR, AMS II.E, 10,178 CER pa BKC chiller + building mod 1.17 – 0.7 kW/TR AMS II.E CER pa Kloof Mine replace cold water with ice 134a+NH 3 chiller AMS II.D 1.8 mio 53,624 CER pa Ecospace Kolkata new chiller baseline DOE4.1 AMS II.E 2.1 mio 14,542 CER pa Mindspace Bldg Serene Prop kW/TR AMS II.E 15,063 CER pa Successful CDM projects and methodologies 4

AM60 1st CDM methodology for refrigeration approved 11/2007 accelerated replacement of old CFC chillers financial intermediary ICICI is offering carbon finance + commercial loans GEF, MLF as seed funding for first chiller generation then CDM revenues only CO 2 emission reductions out of power savings are claimed (CFC not) expected number of chiller replacements : > 500 Total investment 91 mio US$ CER revenues 14 mio US$ expected volume of CO 2 ERs up to 2012: > 2.3 m t CO 2 Successful CDM projects and methodologies 5

AMS III.X Efficiency and 134a recovery approved 11/2008 first to use eligibility criteria: EU directive 2002/96 <15 GWP WEEE standard Recycling CER/fridge credits GWP 1,430 Successful CDM projects and methodologies

7 AM 70 Manufacturing refrigerators approved 9/08 10 % annual efficiency increase (600/290 already) 59,915 CER pa 720,000 fridges pa 1.3 mio cost of switch 0.08 CER/fridge 90 % data

Successful CDM projects and methodologies 8 AM 71 HFC-134a to 600a in refrigerators approved 9/08 1 mio annual production 36,072 CER pa 3.3 per DC 7.1 FF 0.03 CER/fridge.

.. Successful CDM projects and methodologies 9

AMS III.AB avoidance of HFC emissions in Commercial Refrigeration Cabinets Avoidance of HFC 134a emissions during the life cycle of refrigeration equipment (0.2kg < HFC usage< 6kg) such as freezer ice cream cabinets. 5,000 pa emissions during manufacture, servicing and disposal is baseline 720 CER pa Project cabinets use refrigerants and foam blowing agents having no ODP and negligible/low GWP propane The cabinets introduced by the project activity are equally efficient or more Retrofit of HFC 134a to use alternative low GWP refrigerants is not eligible PP is using HFC-134a cabinets for at least three years and has not been using refrigerants with a low GWP prior Successful CDM projects and methodologies 10

Refrigerant Assumptions and Impacts AM 60 account for refrigerants only if leakage increases, GWP decrease shortens lifetime AMS III.X only one charge of 134a is saved, excludes maintenance imposes HC AM 70 refrigerant excluded technology leader wants to extend its lead and beats 3.5% ATD AM 71 only refrigerant, and no efficiency changes switch has no quality effects AMS III.AB only refrigerant switch has not quality effects Successful CDM projects and methodologies 11

Refrigeration value chain: components manufacture usage recycling AM 60 AM 70/ AMS III.X AMS III.AB NM0323 Successful CDM projects and methodologies 12

Failed refrigeration CDM Pão de Açúcar supermarket 2007 bundles of 10 stores AMS II.E improved maintenance, replacement of minor system components rejected because baseline used energy data for whole store, changes to store and its operation not documented Automobile AC re-fill with propane NM013 AC Labelling NM0159 Lighting NM0157 Failed CDM projects and methodologies 13

NM0159 Ghana AC Standard enforcement CDM by Ghana Energy Foundation required minimum Energy Efficiency Ratio or EER of 2.8 or higher electricity required per unit of cooling watt/watt or Btu/hr/wat t. any AC units below this standard cannot be sold in the Ghanaian market. a testing laboratory enforces the standard the goal is to stop the dumping in Ghana of inefficient units Reasons for rejection: Ownership of CER, baseline scenario, decisive: signal to noise Failed CDM projects and methodologies 14

NM013 Promotion of natural refrigerants in AC and refrigeration after market for mobile AC, by major national car manufacturer refilled with propane/butane blend HyChill, recovered 134a destroyed 210,000 cars 22,382 CER pa Reasons for rejection: monitoring of converted cars relies on the cars return to the same service station Failed CDM projects and methodologies 15

... Failed CDM projects and methodologies 16

Potential 17 CDM can be designed to support this, build on the Ghana NM159 experience AM70 could be reinforced by labelling

Koizumi 2007 IEA Current LCC at average EER 2.8 Potential 18

Conclusion Ideally new methodologies can: Use operational conditions Replace all F-gases Accelerate replacement periods 19

Potential 20

Payment for fridge & recycling Payment Electricity CO2 Emission Reduction (CERs) 1 yr 2 yr 3 yr 4 yr 5 yr 6 yr 7 yr 8 yr 9 yr 10y r Old refrigerator New refrigerator CDM Utility Exchange Program household Utility manufacturer Recycling Discount CO2 Emission Reduction (CERs) 1 yr 2 yr 3 yr 4 yr 5 yr 6 yr 7 yr 8 yr 9 yr 10y r 21