TÜV SÜD Industrie Service GmbH Workshop on PoA under the CDM: challenges and the road ahead - Bonn 8/9 May 2011 Session 8.1 „Additionality in the context of PoA - DOE perspectives.“ Stephan Hild Head of Sales and Focal Point for PoA Carbon Management Service TÜV SÜD Industrie Service GmbH

TÜV SÜD Industrie Service GmbH additionality demonstration - context  Level and form of additionality demonstration, EB 47, para 73 of the meeting report:  The Board, noting that in the context of PoA that additionality is to be demonstrated either at the PoA level or at CPA level, requested the secretariat to prepare a guideline (…) to be considered at a future meeting.  Was to be adressed at EB 51, 52, … 56, …  Challenge: how to capture additionality through eligibility criteria ? CDM PoA Workshop - Bonn - Stephan Hild - TÜV SÜD2

TÜV SÜD Industrie Service GmbH additionality demonstration – context II  Current discussion on the matter:  demonstration of Additionality on PoA level  Additionality aspects should be translated into eligibility criteria  CPAs only have to demonstrate that they are a consequence of the PoA CDM PoA Workshop - Bonn - Stephan Hild - TÜV SÜD3

TÜV SÜD Industrie Service GmbH additionality demonstration – context III  Sounds good? Making sure that any CPA would not have been realized in the absence of the PoA reminds us of  para 43 of the CDM Modalities and Procedures:  „A CDM project is additional if GHG (…) are reduced below those that would have occured in the absence of the registered project activity“  For DOEs to prove the counterfactual in the context of CPA inclusions is likely to be as complex, tricky, cumbersome and risky as the prove of additionality in normal CDM projects  Potential consequence => full validation of each CPA, including comprehensive additionality assessment CDM PoA Workshop - Bonn - Stephan Hild - TÜV SÜD4

TÜV SÜD Industrie Service GmbH additionality demonstration – examples  „First of its kind“  Demonstration on PoA level  Compliance with Eligibility Criteria (EC) on CPA level => default additionality proof  Real life example: heat retention devices on household level in Africa  Investment Anaylsis  Frame setting on PoA level  Demonstration on CPA level => detailed additionality assessment  Real life example: hydro power in LatAm CDM PoA Workshop - Bonn - Stephan Hild - TÜV SÜD5

TÜV SÜD Industrie Service GmbH additionality demonstration – examples II  Barrier test  Additionality tool or Attachment A to Appendix B  Demonstration on PoA level  Transformation of most important barrier aspect(s) into one or more EC  Compliance with Eligibility Criteria (EC) on CPA level => default additionality proof  Real life example: cook stoves in Africa – additionality tool (barrier analysis at CPA level)  Real life example: CFL in Asia – Attachment A to Appendix B (financial barrier: negative NPV) CDM PoA Workshop - Bonn - Stephan Hild - TÜV SÜD6

TÜV SÜD Industrie Service GmbH additionality demonstration – conclusion  Improvement suggestions: potential solutions  Nature and level of addtionality demonstration for CPAs should be clearly addressed in the PoA section of the very Baseline Methodologies, per project type where applicable  Default additionality alleviations (e.g. renewables in LDC – EB54)  Clearly define scope of expected DOE assessment in the context of pre-inclusion assessments with regards to additionality of CPAs  Clear guidance for Project Participants on the nature of Eligibility Criteria: EC should be measurable and verifyable CDM PoA Workshop - Bonn - Stephan Hild - TÜV SÜD7

TÜV SÜD Industrie Service GmbH the end Thank you very much for your attention! Stephan Hild TÜV SÜD Industrie Service GmbH Carbon Management Service CDM PoA Workshop - Bonn - Stephan Hild - TÜV SÜD8