WP 5 : JI Potential in Eastern Europe TETRIS PROJECT TEAM MEETING Jake Schmidt, International Program Manager Jin Lee, Research Associate ******** 21 June 2006, Amsterdam

Methodology: Emissions in Eastern European Countries in the EU l Reviewed existing data on current and projected emissions in Eastern European countries in the EU »European Environment Agency »DG TREN l Summarized the National Allocation Plans »Phase I final NAPs »Assessments of EU Directive on Phase II NAPs »Summary of proposed Phase II NAPs where available

Almost All New Member States Below Kyoto Target Levels

Most on Path to Meet Their Kyoto Targets l For many of these countries they are also expected to be below their base year levels in 2010 with existing PAMS »Slovenia is exception & is projected to remain above its Kyoto Target w/ additional PAMs under consideration l The total surplus of emissions (difference between emissions and Kyoto target) projected to decline from over 30% in 2003 to 5-9% in 2010 l Implies that these countries will likely have excess AAUS for sale…Not surprising »Czech Republic and Poland are projected to have the greatest excess »Followed by Estonia

Methodology: JI Potential in Eastern Europe l Determined that the GAINS results from IIASA model provided the most comprehensive data on mitigation options and costs in Eastern European countries l Considered eight countries since they are the “big guys” »New EU Member States: Poland, Czech Republic, Slovakia, and Hungary »Accession Countries (or Candidate Countries): Bulgaria and Romania »Russia and Ukraine l Given issues of double-counting for countries in (or likely to be in) the EU ETS, only considered non-CO2 gases from these countries »For Russia and Ukraine included all options

GAINS Results: MAC curve for all Gases and all Countries

GAINS MAC Curve: CO 2 Russia & Ukraine

GAINS MAC Curve: CH 4 All Countries

Methodology: JI Potential in Eastern Europe (2) l Conducted “on-the-ground” case study in Poland to compare GAINS mitigation options with practicalities of JI »e.g., project size, existing methodologies in CDM, diffusion of reductions l The majority of F-gases emission in Poland comes from dispersed sources and does not lend itself easily to JI »To date there are no known JI projects implementing abatement of these gases. For these reasons, the emissions reduction opportunities in F-gases was left out of this consideration. l Of all the N 2 O abatement technical measures considered by the GAINS model, only N 2 O abatement technologies from nitric acid production can be considered as a potential JI project in Poland. l For CH 4 abatement, reduction of methane from coal mining and reduction of methane from landfills involve technologies recognized by approved CDM methodologies.

Methodology: JI Potential in Eastern Europe (3) l Modified GAINS results based upon Poland case study and other realities of JI: »All CO2 emissions reductions from Russia and Ukraine were considered potentially JI eligible. »Only reduction of N2O from nitric acid and adipic acid production was included for all countries. »For CH4, only reductions from coal mining, landfill gas recovery, capture of methane from oil and gas production, flaring instead of venting of gas in refineries, and biogas from manure management was included for all countries »For F-Gas emissions reductions, no options were included »For all feasible options, the full technical potential of GAINS was included »Only emissions reductions at less than €30 per ton CO2e are shown

JI Potential for All Countries l In total, estimated that there is a JI potential in these Eastern European countries of 14,798 million tCO2e available at less than €30 per ton

JI Potential By Country

Conclusion l For most of the Eastern European countries, the JI mitigation options are likely to mostly occur in the non-CO2 gases due to double counting l At less than €10 per tCO2e—close to the current JI price »Total emissions reduction of 14,783 million tCO2e is available as JI projects in these countries. »Approximately 44%—6,452 million tCO2e—of these reductions are available at a net savings through coal bed methane recovery measures. l An additional 7,697 million tCO2e is available at adipic and nitric acid plants at a cost of €0.4 per tCO2e. l Above €10 per tCO2e, the achievable emissions reductions are modest—15 million tCO2e— up to a price of €17 per tCO2e. l In comparison, the JI pipeline as of March 2006 (UNEP Risø Centre, 2006) had projects totaling 11.7 million tCO2e per year in the Eastern European countries in this study. »In reality, the actual JI projects are likely to be less than the technical potential assessed in GAINS and modified in this report since practical aspects will likely limit the amount. l Based upon the approach utilized in this report, the largest amount of JI potential emissions reductions at less than €10 per tCO2e are available in Poland (39%), followed by Czech Republic (19%), Ukraine (12%), and Romania (10%).

Next Steps l First draft of WP5 report delivered to Ecoplan l Revised Draft based upon Ecoplan’s comments provided 16 June l Awaiting additional review and distribution to other project partners l Then WP5 will be complete