Pilot Project on the Use of Flexible Instruments for Climate Policy in Baden-Wuerttemberg: A Manual to Facilitate Companies Participation Fraunhofer Institute for Systems and Innovation Research EnBW Energie Baden-Württemberg AG -EnBW Kraftwerke AG -EnBW International

 Output: Manual / Workshop Objective of the Project: Gaining experience with Kyoto-Mechanisms (KM): rApplication of the criteria for project related KM - Clean Development Mechanism (CDM) and Joint Implementation (JI) - to existing investments of EnBW rInformation on the current status of negotiations regarding planned emissions trading systems on a national, European (Green Paper) and international level (Kyoto-Protocol)

Structure of the project for CDM / JI: Eligibility Criteria - Thailand - Hungary Results of COP 6 Application to existing EnBW projects - Additionality - Sustainable development - Baseline rules - Positive List (EU) Manual - Checklist for the eligibility criteria - Project cycle: Steps for the successful implementation of a CDM/JI project Electricity production with fossil fuels Baseline

Eligibility Criteria Application to existing EnBW projects - UNFCCC requirements 31. and 32 - Additionality - emissions (baseline) 57. (a) - financial (no ODA/GEF) 57. (b) - investment 57. (c) - technology 57. (d) or- significantly better performance than reference scenario 58. and Sustainable development - Consistency with national policy goals 37. (b) - Environmental benefits/Env. Imp Ass. 44. (e) - Social benefits 44. (e) - Participation by stakeholders 44. (d) - ? Positive list ? : Renewable energy sources, Efficient electricity production, Combined Heat and Power Manual FCCC/SB/2000/10/Add.2:

Eligibility Criteria/ Baselines Application to existing EnBW projects Manual - Thailand: Combined electricity and heat production by new CCGTs (400 MW) based on gas, partly replacing electricity from lignite, partly additional electricity generation additional heat for industrial park - Hungary: Efficiency improvements in lignite-fired power plant (836 MW)

Eligibility Criteria Requirements: Thailand Hungary (CDM) (JI) UNFCCC-requirements e.g. Ratification of KP ? ? Additionality Technology additionality - (?) - (?) Financial additionality + + Investment additionality - Substantial increase in profitability through CERs - (?) - (?) - Project not commercially "viable" without CERs - (?) - (?) Positive List + (?) Sustainable Development Host-Country policy goals ? ? Social Benefits ? n.a. Other environmental Benefits + n.a. Environmental Impact Assessment ? ?

Baselines General Rules Application to existing EnBW projects Manual b) most reasonable economic technology for activity c) better-than-average current industry practice in host or appropriate region d) technology used in existing source in Annex I / II New Source (71) Existing Source (70) a) actual emissions prior to the project

Questionnaire Part AExcel SpreadsheetPotential CERs Part A: Technology: Capacity (MW): Electricity production (kWh): Heat production (MJ): Efficiency (%): CO 2 emission factor (1000mt/MWh): (For project as well as for Baseline case) CERs CO 2 Data processing for Baseline scenario Project AProject B CERs

Eligibility Criteria/ Baselines Application to existing EnBW projects Manual Contents A Joint Implementation (JI) B Clean Development Mechanism (CDM) 1. Introduction 2. Checklist for eligibility criteria 3. Baselines 4. Project cycle 5. Additional information 1. Introduction 2. Checklist for eligibility criteria 3. Baselines 4. Project cycle 5.Additional information + Disc or CD with Excel spreadsheets

- International Level: Kyoto Protocol - EU-Level: Commission Green Paper - National Level: New Climate Protection Programme (IMA) Approach Emissions Trading Status Negotiations Results of COP 6 Manual Framework Conditions / Rules

1.Analysis of existing emission sources 2.Analysis of probable monitoring requirements 3.Which mitigation options exist within the company? 4. Decision making process (“Make-or-buy” the mitigation?) 5. Trading Contracts Status Negotiations Manual Framework Conditions / Rules Analysis of EnBW:

Manual Status Negotiations Manual Framework conditions / Rules Steps for a successful participation of companies in Emissions Trading Contents C Emissions-Trading 1. Introduction 2. Instructions for emission quantification 3. Instructions for the identification of emission reduction potentials 4. Decision-making process