1. Images: Araquém Alcântara CONFESSIONS OF A CDM PROJECT DEVELOPER Futuro para o meio ambiente Surrey University 16th December 2010

2. CDM – What and where is it? CDM – The basic process CDM and Brazil Sugar Cane a Case Study Final thoughts

3. CDM – What and where is it? CDM – The basic process CDM and Brazil Sugar Cane Case Study Final thoughts

4. The CDM allows emission-reduction projects in developing countries to earn certified emission reduction (CER) credits, each equivalent to one tonne of CO2. These CERs can be traded and sold, and used by industrialized countries to meet part of their emission reduction targets under the Kyoto Protocol. The mechanism stimulates sustainable development and emission reductions, while giving industrialized countries some flexibility in how they meet their emission reduction limitation targets. http://cdm.unfccc.int/about/index.html What is the clean development mechanism?

5. www.elementmarkets.com

6. First Stage: Measure Pollutants Calculate type and quantity of emissions

7. THE CAP Establish the reduction target

8. PERMITS

10. THE TRADE

11. OFFSETS

12. 105.000 tCO 2 e 2009 EMISSIONS TRADING JOINT IMPLEMENTATION CLEAN DEVELOPMENT MECHANISM - 10.000 tCO 2 e Emissions Trading Kyoto Mechanisms

13. ANNEX 1 CER NON ANNEX 1 Company 1 2009 100.000 tCO 2 e Company Non-Annex Clean Development Mechanism 950.000 EUA 1,050,000 tCO 2 e

14. CDM – What and where is it? CDM – The basic process CDM and Brazil Sugar Cane Case Study Final thoughts

15. Greenhouse gases and Global Warming Potential

16. CDM Project Cycle Repeated during the credited period PDD - Project Design Document Baseline, Additonality Validation PDD Audited Letter of Approval SD Contribution CDM Registration Operation and Monitoring Verification Monitered Information Audited Emissions of CERs Consultant/ Project Developer DOE DNAUNFCCC DOE UNFCCC http://cdm.unfccc.int/Projects/diagram.html Consultant/ Project Developer

19. Baseline and Additionality Actual Monitored Project emissions Baseline Scenario of CO 2 Emissions Reduction CO 2 in Emissions Years CO 2 Emissions Additionality: Prove that the revenues from the Carbon Credits are essential to the feasibility of the project. Barrier - Financial, Technology, Common Practice etc

20. CDM – What and where is it? CDM – The basic process CDM and Brazil Sugar Cane Case Study Final thoughts

22. Current status of the projects in the Brazilian Designated National Authority - DNA

24. CDM – What and where is it? CDM – The basic process CDM and Brazil Sugar Cane Case Study Final thoughts

25. Brazilian Sugar Cane Industry Ethanol as a Fuel: 30-year-old ethanol fuel program Since July 1, 2007 the mandatory blend is 25% of anhydrous ethanol and 75% gasoline Flex-fuel cars- 92.3% share of all new light vehicles in 2009 50% market share of the gasoline-powered fleet by February 2008 Bagasse as an energy source: 420 registered sugar and ethanol plants in Brazil - has 268 registered thermoelectric stations that utilize bagasse from sugar cane as a primary energy source, installed capacity of 3,832MW 1997 Sugar Cane processing units within Brazil were unable to export surplus energy to the grid Over 25 CDM projects registered between April 2006 and June 2007

27. Baseline and Additionality Actual Monitored Project emissions Baseline Scenario of CO 2 Emissions Reduction CO 2 in Emissions Years CO 2 Emissions

30. Baseline and Additionality Actual Monitored Project emissions Baseline Scenario of CO 2 Emissions Reduction CO 2 in Emissions Years CO 2 Emissions Additionality: Prove that the revenues from the Carbon Credits are essential to the feasibility of the project. Barrier - Financial, Technology, Common Practice etc

32. STEP ONE - Within the Law Vs.

33. STEP TWO- Barrier Analysis

34. INVESTMENT OF US$70million dollars - Are the CER revenues essential to the develoment of the project? STEP THREE – Investment Analysis

35. Does the Company Business Plan look the same?

36. STEP FOUR – Common Practise NATIONAL: Sugar Cane processing units within Brazil were unable to export surplus energy to the grid up until 1997 Ministry of Agriculture - 420 registered sugar and ethanol plants in Brazil. ANEEL has 268 registered thermoelectric stations that utilize bagasse from sugar cane as a primary energy source, installed capacity of 3,832MW. BUT of the units generating energy 11% only export to the grid. Potential - 75% of Brazilian bagasse (146 millions tones) for energy production in 65 bar pressure boilers, the national potential would be 8,375MW

37. STEP FOUR – Common Practise LOCAL: Globally?

38. Registration DO YOU CONSIDER THE PROJECT ADDITIONAL? Vs.

39. CDM Project Cycle Repeated during the credited period PDD - Project Design Document Baseline, Additonality Validation PDD Audited Letter of Approval SD Contribution CDM Registration Operation and Monitoring Verification Monitered Information Audited Emissions of CERs Consultant/ Project Developer DOE DNAUNFCCC DOE UNFCCC http://cdm.unfccc.int/Projects/diagram.html Consultant/ Project Developer

40. CDM – What and where is it? CDM – The basic process CDM and Brazil Sugar Cane Case Study Final Thoughts

41. Final Thoughts – Scaling Up Lack of Demand and Clarity (post 2012) Overly Bureaucratic - project based (2 years, tools etc) Solution? - PoAs, Standardised baselines, NAMAs Sustainable Development vs. Carbon Reductions Delivering Solutions within the present financial systems

42. Timothy Cowman Geoklock - Soluções em Carbono Av. das Na ç ões Unidas, 13.797 Bloco 2 – 21° andar 04794-000 São Paulo - Brasil 0055 11 5501 3783 carbono@geoklock.com.br www.geoklock.com.br Uma empresa do Grupo ECOGEO Futuro para o meio ambiente