Small-Scale Projects Under JI Michiel ten Hoopen - EcoSecurities UNFCCC JI workshop, Bonn,13-14 February 2007

Why SSC JI procedures? Benefits to host country (more opportunity in poor regions). Lower transaction costs: Using simplified baseline methodologies; Reduced fees for first 15,000 CERs. SSC projects are successful in CDM. Good progress already by using CDM SSC meths.

Use of CDM Methodologies Source: UNEP Risoe, CDM Pipeline Overview, 1.2.2007

Use of CDM SSC Meths & CDM Meths under JI Note: Does not include “Own Format” JI Meths Source: UNEP Risoe, CDM Pipeline Overview, 1.2.2007

Use of SSC Methodologies in CDM Source: UNEP Risoe, CDM Pipeline Overview, 1.2.2007

SSC JI – Track 2: Rules & Regulations (1) Separate JI SSC PDD Form is available Definitions (same as CDM): Type I: RE projects up to 15 MW; Type II: EE projects (supply & demand side) up to 60 GWh p.a. (was 15 GWh); Type III: Other projects, less than 60 kt CO2e emission reductions p.a. (was 15kt project emissions). For combination of types in one project: each component may not exceed its type threshold. New categories: initiated & approved by JISC or submission to JISC by project participants. Other option for new categories/meths: use large scale options.

SSC JI – Track 2: Rules & Regulations (2) Baseline setting and monitoring: CDM SSC meths may be used but no obligation (large scale meth or self-developed meth may be used instead); Use of multi-project emission factor is possible (large scale); Leakage is only considered within the boundary of non-Annex I country , if applicable. Additionality: No separate provisions for SSC More options compared to CDM, 5 options: If CDM meth is used: Use prescribed method; Apply CDM EB “Tool for Additionality”; Apply any other CDM EB approved method (e.g. SSC barrier test may be used for LS projects?); Independent transparent and traceable proof that project scenario is not part of the baseline scenario; Use additionality proof that was previously determined and which is comparable to the project (same GHG mitigation measure, same country, similar technology, similar scale).

SSC JI – Track 2: Rules & Regulations (3) Debundling (same as CDM, 4 criteria on de-bundling). Bundling: Applicable projects may be bundled at different stages: PDD; Determination (para. 33); Monitoring; Determination (para. 37). Bundles do not need to consist of same project categories. Projects in bundle must have same crediting period. Projects in bundle must comply with JI SSC provisions (thresholds). Bundle composition may not change over time. Special form to approve different components as part of the bundle. Use same PDD for bundle if technology/ measure and location in the territory of the Host Party are identical; otherwise separate PDDs have to be submitted.

SSC JI – Track 2: Rules & Regulations (4) Determination, para 33 (validation) by AIE, checks: Thresholds; Correspond with category; Not a debundled component; If bundling conditions are satisfied; If a review is requested: determination of all projects in bundle is concerned. Determination, para 37 (verification) by AIE, checks: That bundle component thresholds are not exceeded. No clarity yet on separate AIE for both procedures (for large scale).

Strengths Adopt CDM procedures/ methodologies (existing knowledge). Higher SSC thresholds in CDM also for JI. Flexible rules on bundling.

Weaknesses Prone to same weaknesses as CDM (e.g. some SSC meths are complex). Host country approval process is time consuming (no fast track SSC). Overall time spent and costs on SSC development still comparable to large scale. Buyers look for large volumes (often >50,000 t CO2e/year).

Conclusions / Recommendations Good progress already. More clarity and guidelines on regulatory framework will benefit SSC JI project pipeline. Host countries could simplify SSC project approval. Once CDM rules are finalized: programmatic JI? Once Track 1 is in place: SSC projects may go into GIS. Grant facilities could cover costs to promote JI SSC development.

Thank You! Michiel@EcoSecurities.com Phone: + 31 70 365 4749