1. UNFCCC Recent Challenges in Implementing PoAs from a Commercial Perspective 8 th May 2011 Mischa Classen Senior Project Manager Regulatory Affairs and Consulting, First Climate Group

2. 9th May 2011 | 2Project Developer Forum | UNFCCC PoA Workshop, Bonn Recent Challenges in Implementing PoA Promise: PoAs aim at scaling up CDM – The Commercial Perspective – Key Obstacles for Credit Buyer … – … become Challenges for Project Developer – Building Blocks for a scale up post 2012

3. 9th May 2011 | 3 Promise: PoAs aim at scaling up CDM – The Commercial Perspective – Key Obstacles for Credit Buyer … – … become Challenges for Project Developer – Building Blocks for a scale up post 2012 Project Developer Forum | UNFCCC PoA Workshop, Bonn Recent Challenges in Implementing PoA

4. 9th May 2011 | 4Project Developer Forum | UNFCCC PoA Workshop, Bonn The Commercial Perspective Key features of private carbon investment – Upfront Investment – Forward Carbon Premium this one moves...... this one does not

5. 9th May 2011 | 5Project Developer Forum | UNFCCC PoA Workshop, Bonn Recent Challenges in Implementing PoA Promise: PoAs aim at scaling up CDM – The Commercial Perspective – Key Obstacles for Credit Buyer … – … become Challenges for Project Developer – Building Blocks for a scale up post 2012

6. 9th May 2011 | 6Project Developer Forum | UNFCCC PoA Workshop, Bonn Key Obstacles for Credit Buyer What is the Value of a CPA-CER? – EU Eligibility Criteria – Contractual Issues – Counterparty Risks

7. 9th May 2011 | 7 Key Obstacles for Credit Buyer EU Eligibility Criteria non LDC – CERs from registered pre-2013 eligible in the EU post-2012 ? Serious challenge to lock in buyer for post-2012 ? 1.1.2013 PoA #1 registered 2011 PoA #2 registered 2014 CER used 2016 CER used 2011 CER used 2012 CER used 2013 CER used 2014 CER used 2015 CER used 2017 CER used 2018 CER used 2013 CER used 2014 CER used 2015 CER used 2016 CER used 2017 CPA added CER used 2019 EU ETS Directive Article 11.a.3)

8. 9th May 2011 | 8 Key Obstacles for Credit Buyer EU Eligibility Criteria – Uncertainty freightens investors Ban on Host Countries? Ban on Scale / Technology? – EC considers to release ruling Some restrictions expected to remain

9. 9th May 2011 | 9Project Developer Forum | UNFCCC PoA Workshop, Bonn Recent Challenges in Implementing PoA Promise: PoAs aim at scaling up CDM – The Commercial Perspective – Key Obstacles for Credit Buyer … – … become Challenges for Project Developer – Building Blocks for a scale up post 2012

10. 9th May 2011 | 10Project Developer Forum | UNFCCC PoA Workshop, Bonn Challenges for Project Developer What is the cost of a CPA-CER? – No standard product for DOE – Counterparty Risks

11. 9th May 2011 | 11Project Developer Forum | UNFCCC PoA Workshop, Bonn Challenges for Project Developer No standard product for DOE – Quotations for Validation: Proposed Activity not possible – Cost for Verification? – Liability shift to PD?

12. 9th May 2011 | 12Project Developer Forum | UNFCCC PoA Workshop, Bonn Challenges for Project Developer Counterparty Risks – Project management costs – Role & Experience of CME – EB 48 Annex 66/67 ? Traditional CDMPoA

13. 9th May 2011 | 13 Building Blocks for a scale up post 2012 – Firm status of EU eligibility – Scope beyond LDC? – Standardised Products from DOEs incl. managing liability – First delivered issuance – Tested business models – Adopted guidelines Validation / Verification procedures

14. 9th May 2011 | 14 Thank you