UNFCCC Secretariat SDM programme Wrap-up Session: Key Issues Identified and Proposals discussed Practitioners’ workshop on Standardized baselines Bonn, Germany, 09 July 2013

2 Session I: SB Guidelines - Additionality 1.Two-step requirements for additionality: 1)Recognized cases where two-step additionality requirements are needed 2)Pointed out the difficulties/challenges to demonstrate financial attractiveness Proposals 1)Promote barrier analysis by providing more guidelines 2)Improve flexibility, taking into account sector-specific situations and size factor. 3)Investment costs per unit of output may be used under certain conditions instead of levelized costs. 4)Current strict thresholds (90% & 80%) is a safeguard which makes the financial attractiveness redundant 5)One threshold for baseline & additionality may still require two- step requirements while two separate thresholds may not require the secondary step for additionality

3 Session I: SB Guidelines - Additionality 2.Positive list: Recognized the usefulness of positive lists as well as the challenges in defining such lists. Proposals 1)DNAs should define positive lists exhaustively including technologies globally available 2)Secretariat will streamline the process to add new technologies in the already defined positive list (fast track) 3.Comparison of cost: Recognized the need of simplification 1)Compare the levelised cost with technologies only which contribute to 30% (or X%) production of the output of the sector. 2)Technologies should be available for the comparison and also for the future 3)Old technologies may be considered for the comparison but may need extra cautions

4 Session I: SB Guidelines - Level of aggregation/disaggregation 1.Level of aggregation/disaggregation: Recognized the need for further guidance on the level of aggregation highlighting challenges in pre-defining the level of aggregation applicable globally. Proposals 1)How to determine the level of aggregation is open to DNAs 2)Capacity (size), similar circumstances, dissimilarity of performance etc. may be a good factor for consideration 3)The CDM EB to provide guidance e.g. avoid overlapping 2.Definition of sector Keep the definition based on output. Proposals 1)How to define output should be left to DNAs

5 Session I: SB Guidelines - Actual performance vs. design performance data 1.Actual performance vs. design performance data: Recognized the different pros and cons of actual performance data and design values. Proposals 1)Design and performance data sources should be allowed

Session II Challenges for the implementation of Standardized baselines Recognized that templates for data protocols for standardized baselines should be provided; Simplified PDD templates should be also provided for projects applying standardized baselines; Difficulties may be faced when developing/updating the standardized baselines in the absence of support; 6

Session III Guidelines for quality assurance and quality control of data used in the establishment of standardized baselines Issues regarding completeness requirements: Recognized that data gathering is difficult and in many cases data are not available Proposals: To establish partnerships with data providers and to identify sectors where project developers have interest to use standardized baselines Data templates should be developed in cooperation with SB developers in order to ensure data relevance and consistency Relevant plants should report data with the same data vintage Larger administrative support in the data collection should be ensured 7

Session III Guidelines for quality assurance and quality control of data used in the establishment of standardized baselines Primary data versus secondary data: Recognized that secondary data are useful in many cases where the primary data are not available Proposals: For scattered (or distributed) and small emission sources / informal sector actors secondary data may be preferred, whereas primary data may be prioritized for large stationary installations Further clarification to be provided when to use primary and when secondary data in the revision of QA/QC To require from developers to justify the selection of the type of data used in the SB 8

Session III Guidelines for quality assurance and quality control of data used in the establishment of standardized baselines 9 Sampling approach Appropriately addressed in the guidelines. Uncertainty of data Traceability of data should be ensured for cross checks which will address potential human errors. Proxy values from other plants and secondary data may be used if the uncertainty of primary data is high. Uncertainties associated with monitoring equipment – e.g. calibration. Best practice examples To be elaborated in the guidelines. Flow chart and/or check list to be included with main issues to be checked as a part of the QC which the DNA can easily apply and ascertain if those were followed.

Session IV Guidelines to determine data vintage and frequency of update of standardized baselines Size consideration is needed to define data vintage and frequency of update e.g. for small emitters 1 year data should be allowed. Trend identification requires long term data collection. Data coverage should be different per sector. If the update frequency is too often there may be disincentives for the use of primary data. The guidelines should define vintage on primary data and not on secondary data. Variations in the sector should be taken into account including external factors such as seasonal variations. Proposals in the guidelines were generally accepted. 10

Session V Procedure on submission and consideration of standardized baselines Classification of the SB is important and in line with the requirement that an approved methodology should be used. PSB using new/ several approved methodology(ies) to be submitted as SBM by the DNAs as decided by the CMP because it provides further opportunities for standardization. DOEs assessment may be completely excluded from the procedure and performed by the secretariat. LoA for SB to be obtained from all countries to which the SB applies; LoA format should be developed top-down. Shorter time should be required for consideration of submissions. Top-down development of SB should be done in close collaboration with DNAs. 11