1. From PoAs to NAMAs a pilot case

2. 222 Agenda 1. Context of discussions 2. Objective and concept for NAMA Pilot Case 3. Introduction to example PoA – EE in SME Steel cluster

3. The Context Indian Context  India is committed to contribute to the global efforts towards Climate Change mitigation  Mitigation target envisioned in Copenhagen Accord: Reduce emissions intensity of GDP by 20-25% by 2020 in comparison to the 2005 level.  Successful participation in the flexible Kyoto mechanisms; but with limited impact on EE projects  Climate change policy in India embraces a vision in the form of NAPCC and related 8 missions and has evolved several measures and actions International discussions context  On the Agenda since Bali Action Plan 2007  Cancun Agreements differentiates NAMAs into three types (Unilateral NAMAs; Supported NAMAs; Credited NAMA)  How to come to fast track practical concepts and pilot NAMAs? 3

4. 4 Bridging the Gap – PoA to NAMA Why PoA as starting point?  Various strategies are possible - Top-Down - Bottom-Up - Combination  Bottom-Up strategy for NAMA development can use elements of a PoA - Baseline definition - Monitoring and Verification - Incentive systems  Assumption - Fast track pilot schemes using PoAs are possible  Scoping study for four case studies PoA CPA … NAMA Low Carbon Development Policy

5. Bridging the Gap – How to get from PoA to NAMA Research Study*  Module 1: Understand the PoA: scope, eligibility criteria, implementation arrangements, targeted GHG emission categories  Module 2: Analyse four key technical PoA design elements and their suitability for scaling up: -eligibility criteria / baseline setting procedure / MRV process and PoA management and -identify if PoA design is a) already fully applicable, b) needs to be adjusted or c) needs to be developed for NAMA design.  Module 3: Evaluate the domestic policy & institutional framework to assess whether the existing framework is supportive of NAMA implementation or not.  Module 4: Identify follow-up actions for NAMA readiness based on the need for adjustments and new designs as identified *Study by South Pole on behalf of German Ministry for Environment and KfW

6. Case Study India – PoA EE in SME Steel Cluster PoA Objective: Improve Energy Efficiency of furnaces and burners in Indias SME Steel Industry by 20-50%. Scope: Nationwide – In Clusters / Jodhpur cluster first CPA PoA Managing Entity: Small Industries Development Bank (SIDBI) supported by India SME Technology Services (ISTSL) GHG Emission Source: Reduce fossil fuel use in SME Steel Mills Methodology: AMS II. D Energy Efficiency and fuel switching measures for industrial facilities.  Module 2: Analyse four key technical PoA design elements and their suitability for scaling up: -eligibility criteria / baseline setting procedure / MRV process and PoA management and -identify if PoA design is a) already fully applicable, b) needs to be adjusted or c) needs to be developed for NAMA design.  Module 3: Evaluate the domestic policy & institutional framework to assess whether the existing framework is supportive of NAMA implementation or not.  Module 4: Identify follow-up actions for NAMA readiness based on the need for adjustments and new designs as identified *Study by South Pole on behalf of German Ministry for Environment and KfW

7. Measures of the PoA 1.Controlling supply of excess air 2.Installation/retrofitting Recuperators 3.Insulation of furnace surfaces 4.Retrofitting/Modification of furnace doors 5.Fuel preparation and heating 6.Automation of furnace operation

8. Advantages and Limitations of the PoA Advantages  National scale of PoA  Nationally operating, state owned, privately acting CME  PoA goals contribute to Indias political will to reduce GHG Emissions  Investments straight forward  Target group are bankable SMEs Limitations  No new facilities allowed – only existing  No capacity upgrade allowed  Only the 6 measures are allowed  Changing the fuel type not allowed  PoA is limited to steel sector

9. Draft NAMA Design Sheet (of desk study)  Scope: Energy intensive SME Sector (not covered under Perform, Achieve Trade Scheme) that operates similar equipment - glass, cement, pulp and paper, textile etc. - allows for measures not permitted under AMS II.D  Management: Under National Mission for Enhanced Energy Efficiency - Nodal Agency: Bureau of Energy Efficiency. - Potential Implementation partner: SIDBI using similar incentive structure (subsidised loan scheme).  Baseline setting: standardisation approaches and benchmark system must be developed, MRV and eligibility criteria can be adapted.  Link to carbon market: PoA issued CERs should be deducted from NAMA achievements when a NAMA target is defined. Further linkages tbd.

10. Conclusions and next Steps  Up-scaling is possible, but adaptation work would need to be undertakten  Evaluation of SME to be included needs to be done  Adaptation of MRV Structure  Development of standardised Baseline based on AMS II. D

11. 11 Contact KfW Carbon Fund KfW Bankengruppe Palmengartenstrasse 5–9 60325 Frankfurt am Main Germany Tel +49-69-7431-4218 Fax +49-69-7431-4775 klimaschutzfonds@kfw.de Carolyn Neufeld Tel +49-69-7431-3233 Carolyn.neufeld@kfw.de Contact us for further information!