The Climate Control Strategies GmbH implements since June 2010 a total of 2 CDM projects in two cement plants in Lao PDR. 75,000 tons of carbon dioxide emissions are saved each year by the partial replacement of mineral coal by biomass/waste in the combustion process of the cement works.
In the context of a CDM project, the emission reduction of one or more of the following green house gases, covered in the Kyoto Protocol, is relevant: Carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), partially halogenated fluorocarbons (Hydrofluorocarbons - HFCs), perfluorocarbons (PFCs) and sulfur hexafluoride (SF6).
These gases contribute in varying degrees to the greenhouse effect. They are weighted according to their global warming potential (GWP), during a time horizon of one hundred years, with regard to CO2. Therefore, the unit for all gases is one t CO2e. That means, for example, 1 t CH4 = 21 t CO2e.
Up to 04 March 2010, around 2,100 CDM projects were registered by the CDM Executive Board.
The following project types are represented (percentage of projects according to the number of projects):
A tabular and daily updated overview of the status of the CDM projects can be found on the website of the UN Climate Secretariat at cdm.unfccc.int/Statistics.
114 JI projects are currently (01 March 2010) registered. Most (98) of these projects of industrialized countries are implemented via the simplified Track 1 procedure. The field of renewable energies, with almost 70 per cent of all registered projects, is the most important category here as well. The significantly increased proportion of the chemical industry (13 percent) compared to the CDM is remarkable.
The UNEP Risoe Centre prepares a good analysis of the registered CDM and JI projects on a monthly basis, which is available on their website.
Depending on the size of the project, different reduction amounts are to be expected in different project types. The analysis of March 2010 by UNEP RISOE shows that despite the high numbers of projects, only about 28 percent of the expected CERs stem from renewable energies. Again, more than 37% of the annual certificate flow is expected to be awarded to the relatively few industrial gas projects (Category 4, 6, 8, 9, 10 and 11) and projects in the chemical industry. This is because HFC and SF6 as well as N2O projects deal with gases with a high to very high global warming potential (see FAQ 10).
Until March 2010, more than 389 million CERs have been issued by UNFCCC to the CDM project initiators; the major part (over 75 percent) stem from reductions in the chemical sector (fugitive emissions from the production and use of HFCs and SF 6 as well as N2O emissions from production processes). The corresponding quantity of certificates from JI projects amounts to 5.5 million ERUs (Emission Reduction Units).
The volume of the annually expected CERs and ERUs from already registered CDM projects amounts to 344.9 million certificates for CDM projects and to 23.4 million certificates for JI projects. By the end of 2012, a total of 1.74 billion CERs and of 106.4 million ERUs 106.4 is expected. Because of the CDM and JI pipeline with over 4,200 CDM projects and 288 JI projects that are planned, the potential number of certificates could grow to 2.9 billion for CDM projects and to 377 million for JI projects by 2012.
Approved methodologies are necessary for the implementation of CDM projects approved, they (as well as the CDM projects themselves) can be found on the website of the UNFCCC:
The European Linking Directive was transposed into the national law of Germany by the adoption of Project Mechanism Act in the summer of 2005. The European Linking Directive and the Project Mechanism Act can be viewed at the website of the Deutschen Emissionshandelstelle (DEHSt-German Emission trading Authority ). It also establishes the bases for the implementation of CDM and JI projects with German participation. This includes not only the procedural rules, but also substantive requirements and a series of statutory authorizations.
The Climate Change Conference COP 15 / CMP 5 of the United Nations was held from 07 to 19 December 2009 was held in Copenhagen. It should have resulted in the completion of a two-year negotiating process, which had been initiated in 2007 under the "Bali Road Map". The main objective of the conference was to develop a successor agreement of the Kyoto Protocol, which expires in 2012. Ultimately, the final document of the conference was a political declaration, the "Copenhagen Accord ". This is not legally binding and its status cannot be compared with the status of the Kyoto Protocol. Its implementation will depend on the next steps the countries will take from there.
Concrete decisions were adopted as regards the CDM concrete decisions, but the expected reforms failed nevertheless to materialize. There were no decisions on the continuation of JI after 2012. Copenhagen resulted in developments towards greater transparency, improved and more standardized work processes and a more balanced regional distribution of CDM projects as well as more harmonized and simplified procedures for small-scale CDM projects, which also facilitates the development of programmatic projects. CCS (Carbon Capture and Storage) and nuclear power remain excluded as potential new project activities under the CDM. There was no political decision regarding the handling of N2O reductions from new adipic and nitric acid plants under the CDM. The issue is further handled by the CDM Executive Board.
As regards CDM carbon sink projects, the permitted activities will be extended to CO 2-enhancing measures in existing forests, agriculture and wetlands, in the absence of a successor agreement to the Kyoto Protocol. The temporary credits would then be replaced by permanent certificates, the non-durability is to be counteracted with alternative risk premiums. In this context, the provision of certificate reserves, insurance systems or price reductions will be discussed.
Generally, it is to be noted that the improvements as regards the CDM, contained in the negotiating text, don't meet the expectations, because the deficiencies that have been discussed in the time leading up to the conference have only been partially resolved. Nevertheless, the CDM is being enhanced and further developed, although very gradually.
The mechanism of Joint Implementation will continue to exist after 2012, if a further obligation period will be decided. The conference urged the developed countries to make appropriate contributions in order to finance the work on JI in the period from 2010 to 2011.
The German Emission trading Authority (DEHSt) within the Federal Environment Agency is responsible for questions about the project-based flexible Kyoto mechanisms JI and CDM. There is a telephone hotline available from Monday until and including Thursday from 9:00h to 17:00h and on Friday from 9:00h to 14:00h, for all inquiries. It is also possible to contact the German Emission Trading Authority by e-mail.
Umweltbundesamt (Federal Environment Agency)
Deutsche Emissionshandelsstelle (German Emission trading Authority) Bismarckplatz 1
14193 Berlin
Telephone 030-89 03 5050
Fax 030-89 03 5010
German.dna.dfp@uba.de www.dehst.de
There are, apart from the utilization by private companies in the European emission trading, other possibilities of utilization of emission reduction credits in Germany and in other EU Member States. The EU Member States may utilize the emission reduction credits on a national scale for their own national emission reduction obligation. Moreover, there is also the possibility to utilize the certificates via a purchase program, such as the KfW Carbon Fund in Germany.
Another possibility is the so-called "free market" for CO2 allowances. Since active dealing with the theme of climate protection has become self-evident for many companies, the CO 2 allowances are in demand on a voluntary basis and are being utilized to compensate for the own emissions. These are compensations for emissions that up until now are not regulated at an international, European or national level. This compensation mechanism (see FAQ 26) is already being utilized by governments, individuals, environmental groups and other organizations.
Even in countries outside the European Union, there are attempts to introduce emission trading systems. Examples are Australia, Japan and the United States, both at national and regional level. New Zealand has an emission trading scheme since 2009, which provides for the use of CERs. The possibility of a future link between the different trading systems is already being considered.
All credits generated from climate protection projects as well as emissions allowances from the European emission trading can be used for the generation of climate neutrality.
Climate neutrality describes a mechanism, whose objective is the offset of emissions. By the purchase of CO2 allowances, it is possible to compensate for emissions of greenhouse gas, whose prevention is not technically possible or economically disproportionate. Via this voluntary purchase and decommissioning of the acquired emission allowances, the so-called "compensation", these emission allowances are taken out of the market and in this way the objective of the reduction of greenhouse gases is being supported.
This mechanism of emission compensation should relate to so-called "unavoidable" emissions. Hereby should be expressed that when neutralizing emissions, the reduction potential should always be investigated in order to include avoidance of emissions in this mechanism as the most effective climate protection.
Apart from the climate protection projects under the Kyoto Protocol (CDM and JI) there are the VER projects, which also generate CO 2-certificates. These credits (VERs) are in demand for compensation purposes and are not creditable under the Kyoto Protocol.
