1. CDM Baseline, additionality, leakage and monitoring plan Executive Training on the CDM, Jakarta 26-01-2006

2. Contents Baseline Definition and principles Where in CDM process? Baseline scenario Baseline methodology Additionality Definition Demonstration of Additionality Leakage Monitoring Methodology

3. Where in CDM Process? Submission of Project Design Document (PDD) including application of Baseline and Monitoring methodology

4. Definition Marrakech accords, modalities and procedures for CDM, article 44: “……. the scenario that reasonably represents the anthropogenic emissions by sources of greenhouse gases that would occur in the absence of the proposed project activity ….”

5. Concept GHG emissions (Ton of CO2 eq) Time (Years) In the absence of the project (baseline) Project Real, long term and measurable emission reductions

6. Baseline Scenario Marrakech accords, modalities and procedures for CDM, article 48: a) Existing actual or historical emissions, as applicable; or b) Emissions from a technology that represents an economically attractive course of action, taking into account barriers to investment; or c) The average emissions of similar project activities undertaken in the previous five years, in similar social, economic, environmental and technological circumstances, and whose performance is among the top 20 per cent of their category Baseline scenario should take into account national and/or policies and circumstances

7. Baseline methodologies Approved and consolidated baseline methodologies (EB) Proposed new methodology

8. Baseline methodologies 28 Approved methodologies 8 Consolidated methodologies Industrial processes HFC incineration, decomposition of N 2 O from adipic acid production plants, use of renewable CO 2 in the production of inorganic compounds, Increased share of additive materials in cement production Waste management Landfill gas capture and recovery, biomethanisation, forced methane extraction, organic waste composting Renewable energy Electricity generation from renewable resources exported to the grid, biomass cogeneration, grid connected electricity generation from biomass residues Agriculture Manure management systems, improved animal waste management Energy efficiency (including fuel switching) Flared gas recovery, switching from coal and petroleum fuels to natural gas, natural gas cogeneration, steam efficiency improvements, steam optimization system, water pumping efficiency improvements, leak reduction from natural gas pipeline

9. Baseline example: Biogas projects Applicability: industrial/agricultural wastewater treatment Typical applications: Palm oil mill effluent Manure management Tapioca/Cassava effluent Pulp and paper mill effluent Anaerobic bacterial processes Approved Methodology: AM0006, AM0013, AM0022

10. Baseline example: Biogas projects 0 5,000 10,000 15,000 20,000 25,000 30,000 05,00010,00015,00020,00025,00030,00035,00040,00045,000 COD (mg/l) SS (mg/l) Pulp & paper effluent Palm Oil Mill Effluent Swine rearing effluent Cassava / tapioca Wastewater characteristics Source: Zakkour P, 2005

11. Baseline example: Biogas projects Technologies Low-rate systems / batch systems Open lagoons (anaerobic/facultative) = biogas to atmosphere Covered lagoons [Sequencing] batch reactors; ASBRs / sludge digesters High-rate systems Continuous stirred tank reactor; CSTR Upflow anaerobic sludge blanket; UASB Anaerobic filters; AF, Anaerobic fixed-film reactors; AFFR Anaerobic fluidised bed reactor; AFBR Floc-based recycle systems (like an ASP) -What is the project technologies? -What was installed prior to the project? -What would happen in the absence of the project?

12. Additionality Marrakech accords, modalities and procedures for CDM, article 43: “A CDM project activity is additional if anthropogenic emissions of greenhouse gases by sources are reduced below those that would have occurred in the absence of the registered CDM project activity”

13. Additionality The definition is not sufficient to guarantee the environmental integrity of a CDM project Tools to demonstrate additionality (EB) COP/MOP Decision: call for input to simplify/improve current additionality tool Provide evidences!

14. Tool to demonstrate additionality Identification of alternatives to the project activity; Investment analysis to determine that the proposed project activity is not the most economically or financially attractive; and/or Barriers analysis; Common practice analysis; and Impact of registration of the proposed project activity as a CDM project activity

15. Leakage Marrakech accords, modalities and procedures for CDM, article 51: “Leakage is defined as the net change of anthropogenic emissions by sources of greenhouse gases which occurs outside the project boundary, and which is measurable and attributable to the CDM project activity”

16. Leakage: example, cement sector Raw Material Preparation Pre-drying, Raw Grinding, Mixing Shipping Bagging, Storage, Transportation Pyro-Processing Pre-heating, CalcinationClinkering, Cooling Additive Material Preparation Crushing, Drying RAW MIXCLINKERCEMENTDISTRIBUTION Fine Grinding Finish Grinding, Blending Fuel Preparation Crushing, Grinding, Drying Raw Material Supply Quarrying, Mining, Crushing On-site electricity Purchased electricity National grid Electricity consumption for other purposes Processes or activities affected by the project Processes or activities unaffected by the project Cirebon electricity line Tarjun electricity line Project Boundary Cirebon Tarjun Citeureup Main electricity line for cement manufacturing Source: Indocement PDD, NM 0047-0048 -Increased GHG emissions associated with the transportation of renewable fuels -Reduced transportation GHG emissions from reduced coal use -Reduction in GHG emissions due to the lower quantity of renewable fuels being dumped and generating methane

17. Leakage In estimating leakage: Clearly define the project boundary In proposing new methodology: Requirement to elaborate leakage in a detailed manner Pay attention to “indirect leakage” Increased fossil fuel consumption at x due to utilisation of renewable energy at y

18. Monitoring Methodology Monitoring plan: Monitor baseline emissions Monitor project emissions Monitor leakages Estimation and calculation of emission reductions Address the uncertainty (data) Quality assurance/Quality control Monitoring management Designated system/human resources Be consistent with the algorithm/methodology used to estimate the Baseline and Project emissions

19. Monitoring Methodology

20. Challenges: Lessons learned It takes time! Developing baseline scenarios Argumentation and evidences to demonstrate additionality Spend time in developing the methodology for leakage Indirect Communication with Meth Panel Use approved methodologies!

21. Thank You Contact: Architrandi Priambodo DP SOLUSI (PT Dwarakarsa Priamarta) Jl. Pondok Labu 1B/11A Jakarta 12450, Indonesia Email:chitra_dpsolusi@cbn.net.id Tel/fax:(+62-21)7696081, 7660789