1. Status of Joint Implementation and Green Investment Scheme Vlad Trusca Ministry of Environment and Sustainable Development Romania - Annual meeting of the Host Country Committee - Cologne, 30 April-1 May 2007

2. Overview Joint Implementation Status JI Supervisory Committee Green Investment Scheme Status JI & GIS Questions

3. Joint Implementation Status Reported volumes and values (PointCarbon, March 2007): 2005 - 28 Mt CO2 - 96 M Euro 2006 - 21 Mt CO2 - 95 M Euro 2007 - 45 Mt CO2 - 277 M Euro (forecasted) JI projects - 156 (UNEP Risoe Centre, April 2007) Most attractive sellers - Ro, Ukr, Bg (PointCarbon-Apr. 2007) Most active buyers - the Netherlands, Denmark, Austria, WB Most active sellers in the future - Russia and Ukraine EU ETS (linking) - effect on the ERU price (increase) EU ETS double counting issue - impossibility of developing JI projects at the installations covered by EU ETS - expected low number of projects in the new EU member states Average price in 2006-6.5 Euro/ERU (4.5-12.5) (PointCarbon)

4. Type of JI projects TypeNumber Volume 2008 – 2012 (thou. ERUs) Afforestation 10,6%4100,3% Biogas 42,6%22721,6% Biomass energy 1811,5%101837,0% Coal bed/mine methane 53,2%131549,0% Energy distribution 95,8%87746,0% EE households 10,6%3500,2% EE industry 127,7%141399,7% EE supply side 95,8%76555,3% Fossil fuel switch 85,1%118388,1% Fugitive 127,7%4341729,8% Geothermal 42,6%16391,1% Hydro 2616,7%54863,8% Landfill gas 2012,8%88236,1% N2O 31,9%89906,2% Wind 2415,4%85035,8% Total 156100%145633100% Source: UNEP Risoe Centre, April 2007

5. JI projects host countries Host countries All JI tracksJI Track 2 Number thou. ERUs annually Number thou. ERUs annually Russia & Ukraine 45193382816953 Russia 31144682312879 Ukraine 14487054074 Eastern Europe 1039204181360 Bulgaria 2233825466 Czech Republic 2181400 Romania 1515902223 Poland 148793192 Hungary 1114371141 Estonia 116023212 Lithuania 62164126 Slovakia 328500 Others 8705157 Germany 3194157 New Zealand 551100 Total JI countries 156292474718370 Source: UNEP Risoe Centre, April 2007

6. JI Supervisory Committee (JISC) JISC established at COP/MOP 1 Montreal JISC - process development and supervisory roles Development of project design document(s) Guidance on baseline setting and monitoring Recommendations to MOP on revisions of JI guidelines Supervision of Track 2 procedure Accreditation of independent entities JISC - 6 meetings (5 in 2006), JISC 7 - 2-4 May JI-Accreditation Panel (AP) - 4 meetings (3 in 2006) 2 JI technical workshops (1 in 2006) 2 Q&A sessions (SBs and MoP) and 1 side-event at MoP2

7. 26 Oct. - launch of JI Track 2 process, only in 9 months! 50 JI PDDs submitted for comments (April 2007) 6 Oct. - opening of application process for entities wishing to become AIEs under JI 13 independent entities (AIE) have applied for accreditation by the JISC (April 2007) 25 Annex I Parties informed the UNFCCC about their designated JI NFP, from which 14 submitted also their procedures for approving JI projects 27 Mar.-determination of the first JI project (“Switch from wet-to-dry process at Podilsky Cement, Ukraine”) was deemed final as neither party involved nor 3 members of the JISC requested a review – 1 st registered JI project JI Supervisory Committee (JISC) - 2

8. Green Investment Scheme Status No reported volumes and values Only one IET (KP Article 17) transaction (Slovakia) Only GIS studies: Ro, Bg, Ru, Uk, Lv Potential sellers - new EU MS (Lv, Bg, Ro, Po) + Ru and Uk Potential buyers - EU MS, Japan, Canada More demand for JI than GIS due to lack of market interest yet and EU ETS (AAUs not allowed); AAU price - very important for further development of GIS GIS good for projects unlikely to become JI Environmental and social integrity of GIS needed Transparency to be handled properly

9. Green Investment Scheme Status - 2  Potential AAU supply - 7-8 Gt  Potential CER/ERU supply - 1-3 Gt  Limited private demand for AAUs  Uncertainties: Canada, Japan

10. JI & GIS - Questions How will JI continue to exist in the EU Member States considering EU ETS implications? Will JI exist after 2012? How will it be shaped? In what sectors and activities? What will be the JISC implications for Track I JI? Is there a market for AAUs, with or without GIS? What should be the price per AAU? Are the AAUs taxable? How simple/complicated should a GIS be? What should be the legal background for GIS? What are the conditions for AAUs transactions between KP Parties and private entities?