dna of redd+? of redd+.pdf · cdm voluntary carbon market readiness of the government and privates...

National Council on Climate Change of Indonesia

DNA of REDD+?

Dicky E. Hindarto and Doddy S. Sukadri National Council on Climate Change of Indonesia

The Indonesia DNA

Presented at the Workshop “Stakeholders Coordination: Comprehensive Mitigation Action for REDD+”

Bogor, 3 February 2012


2

Outlines

1. Introduction

2. Global and Indonesia carbon market condition

3. NCCC roles in carbon market

4. Status and roles of DNA

5. Future carbon market and REDD+

6. Our preparation for new carbon market


3

Selling CO2 credit

Buying CO2 credit

Is that easy?

Defines a new market-based mechanism for post 2012

Carbon Capture and Storage (CCS) is agreed as a CDM

Possibility to finance REDD+ using the carbon market mechanism.

New decisions on market mechanism in Durban

Transaction costs Organization Methodology Verificator MRV Comformity Registry etc


4

Global carbon market condition

Compliance 99%

Voluntary 1%

64.0

135.1

143.7 141.9

3.0

4.8

8.7 7.8

0

2

4

6

8

10

12

14

16

18

20

0

20

40

60

80

100

120

140

160

2007 2008 2009 2010

Vo

lum

e (b

n.

ton

)

Val

ue

(b

n.

USD

)

Value Volume

110.0

348.0

755.0

415.0 424.0

28.0

68.0

130.0

98.0

131.0

0

50

100

150

200

250

300

0

100

200

300

400

500

600

700

800

2006 2007 2008 2009 2010

Vo

lum

e (m

il. t

on

)

Val

ue

(m

il. U

SD)

Value Volume

Compliance Market Voluntary Carbon Market

• Carbon market can be divided into compliance market and voluntary carbon market

• The carbon market demands are coming from countries and industries that have obligation to reduce their emissions.


5

Current and proposed emissions trading system

Operating Likely (?) Considering © OECD/IEA - 2010

Considering Under preparation Operating


6

NCCC has 5 mandates, one of the most important thing is to develop carbon trading mechanism in Indonesia (Presidential Decree number 46, 2008)

NCCC is the Indonesia’s focal point to UNFCCC, and also the focal point for another carbon market related international forum and negotiation e.g. bilateral initiatives with the Japan and Australia

The Executive Chairman of the NCCC is also the Head of the Designated National Authority for Clean Development Mechanism (CDM) in Indonesia, called “Komite Nasional Mekanisme Pembangunan Bersih/Komnas MPB

The Carbon Trading Mechanism Division also acts as the Secretariat of DNA-CDM in Indonesia.

The Role of NCCC (the DNPI) on carbon market mechanism


7

The Indonesia CDM Projects

2004 - Indonesia ratifies Kyoto Protocol 2005 - Establishment of Indonesian DNA, NC-CDM, hosted in Ministry of

Environment 2008 - Establishment of National Council on Climate Change (NCCC) 2009 - NC-CDM is hosted in NCCC 2011 - total 168 projects received DNA approval (as of Dec. 31st, 2011)

2005 2006 2007 2008 2009 2010 2011

5 6

13

46

34

25

39


8

Biomass energy, 11

Cement, 1

EE households, 0

EE Industry, 2

EE supply side, 2

EE own generation, 0

Fossil fuel switch, 3

Fugitive, 1

Geothermal, 4

Hydro, 5

Landfill gas, 7Coal bed/mine methane, 0

Methane avoidance, 33

N2O, 1

PFCs and SF6, 1

Agriculture, 0

Solar, 1 Afforestation, 0

Reforestation, 0

The Indonesia CDM and voluntary projects

Total CER expected until 2012 : 50,132,380 CER; mostly from methane avoidance Total CER expected until 2012from the registered projects : 27,513,180 CERs; mostly from

geothermal There are more than 20 voluntary carbon markets that being developed in Indonesia Some of the so called “REDD+” projects goes to the voluntary carbon market About 2,5 millions VER are already issuanced for voluntary carbon market projects.

Biomass energy, 28

Cement, 1

EE households, 1

EE Industry, 7

EE supply side, 5

EE own generation, 4

Fossil fuel switch, 10

Fugitive, 4

Geothermal, 10Hydro, 21

Landfill gas, 10

Coal bed/mine methane, 1

Methane avoidance, 77

N2O, 1

PFCs and SF6, 2

Agriculture, 1

Solar, 1 Afforestation, 1

Reforestation, 1


9

The present CER Issuanced (nothing from Forestry)

No. Title Province / State Type Sub-type CERsExpected

CERs

Issuance

success

1 CDM SOLAR COOKER PROJECT Aceh 1 Aceh Solar Solar cooking 1,077 6,060 18%

2 Methane Capture and Combustion from

Swine Manure Treatment Project at PT

Indotirta Suaka Bulan Farm in Indonesia

Riau Methane

avoidance

Manure 42,716 221,485 19%

3 Indocement Alternative Fuels Project West Java & South

Kalimantan

Biomass energy Agricultural

residues: other

kinds

80,967 258,308 31%

4 Indocement Blended Cement Project West Java & South

Kalimantan

Cement Clinker replacement 93,973 859,707 11%

5 Darajat Unit III Geothermal Project West Java Geothermal Geothermal

electricity

1,329,960 1,390,111 96%

6 Tambun LPG Associated Gas Recovery and

Utilization Project

West Java Fugitive Oil field flaring

reduction

1,400,377 975,626 144%

7 MEN-Tangerang 13.6MW Natural Gas Co-

generation Project

Banten EE supply side Cogeneration 17,154 21,836 79%

8 Emission reductions through partial

substitution of fossil fuel with alternative fuels

in the 2 cement plants of PT Holcim

Indonesia Tbk

West Java &

Central Java

Biomass energy Agricultural

residues: other

kinds

12,335 106,284 12%

9 4MW Biomass Power Plants Using Waste

Wood Chips & Sawdust in Central Java

Province, Indonesia

Central Java Biomass energy Forest residues:

sawmill waste

10,982 14,322 77%

10 Gianyar Waste Recovery Project Bali Methane

avoidance

Composting 2,110 6,713 31%

11 Methane Recovery in Wastewater

Treatment, Project AIN07-W-01, Sumatera

Utara (North Sumatera), Indonesia

South Sumatra Methane

avoidance

Waste water 14,472 41,349 35%

12 Methane Recovery in Wastewater

Treatment, Project AIN07-W-05, Sumatera

Utara, Indonesia

North Sumatra Methane

avoidance

Waste water 30,235 42,206 72%

13 BAJ Gunung Agung Factory tapioca starch

wastewater biogas extraction and utilization

project, Lampung Province, Republic of

Lampung Methane

avoidance

Waste water 6,858 30,779 22%

14 Kamojang Geothermal West Java Geothermal Geothermal

electricity

92,691 81,660 114%

Total 3,135,907 4,056,445 77%


10

Designated National Authority The designated national authority (DNA) is the body granted responsibility by

a Party to authorize and approve participation in CDM projects. The CDM rules provide only limited guidance on the role of the DNA or the requirements for establishing a DNA. These issues are instead left to the Party to determine.

The CDM rules do provide, however, that each Party is required to establish a DNA:

Parties participating in the CDM shall designate a national authority for the CDM (3/CMP.1, Annex, paragraph 29).

Establishment of a DNA is one of the requirements for participation by a Party in the CDM.

The role of the DNA is to provide the letter of approval to project participants in CDM projects. In the case of the host Party DNA, this letter of approval must confirm that the project activity contributes to sustainable development in the country.

One country only need one DNA.

What is DNA in CDM?


11

How to apply a project to DNA? (Indonesia case)

DNA Procedures for LoA Issuance

Application documents

Completeness check by

Secretariat

Technical Committee evaluation

Steering Committee evaluation

Decision on Host Country

Approval

National Committee on CDM

(comprises representatives of 14 ministries/agencies including

Ministry of Forestry; chaired by NCCC Executive Chair)

Technical Committee

(comprises representatives of 14 ministries, including Ministry

of Forestry/agencies plus experts)

Stakeholder Forum and/or

External experts

(optional)

NC-CDM Secretariat

(NCCC Carbon Trade Mechanism Div.)

DNA Organization Chart

•DNA evaluate all of the sustainable development criteria: economic, social, technology transfer, human resources, and environment

•In Indonesia, it takes 10 weeks on average for the LoA issuance


12

REDD+ as part of mitigation, and carbon market

Reducing Emisions from Deforestation and forest Degradation in Developing Countries

Reducing Deforestation = Reduce the EMISSION

…. And opening the oppportunity of developing country Parties

Operating Likely (?)

CO2 captured

Financing support


13

Inside the DNA

Carbon Market Mechanism

Standard

Procedure Guidance Tools

Organizational

Human Resources

Financing

Operational Management

Registry Technical Capacity


DNA, current and future

Designated National Authority

• To ensure the implementation of sustainable development criteria and

environment integrity.

• To avoid the international and national double accounting possibilities.

• Monitoring and registry of the carbon projects.

CD

M

pro

ject

s

Pre 2012 Post 2012

New

car

bo

n

mar

ket

Sust

ain

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Dev

elo

pm

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CER

Emis

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Fin

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sup

po

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olu

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ry m

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Vo

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15

New carbon market possibilities

CDM Voluntary

Carbon Market

Readiness of the government and privates to prepare legal, organizational, and technical structures of market.

• New CDM • REDD+ • Crediting NAMAs • Regional market • Domestic market • Bilateral offset

credit mechanism

• Others

• Reformed CDM post-2012

• Programmatic CDM (we have issued 5 LoAs)

• REDD+

• Creditable NAMAs

• Bilateral offset mechanism (Japan proposal, 32 FS have been done)

• Voluntary market and domestic market

• Regional market (with Australia and New Zealand)


16

Technical

Policy

Institutional/legal

Next Possible Carbon Markets Implementation

Current Indonesia

Carbon Market

With PMR support, Indonesia continues to prepare building blocks to develop readiness for next possible carbon markets.

P M R

Focus on energy, industry, and transportation sectors with an objective to prepare and strengthen carbon market fundamentals.

Indonesia market readiness for the new carbon market preparation

The proposal will comprise a series of activities covering readiness on technical, policy, and institutional/legal elements

The next possible carbon markets include domestic, regional, and global market under or outside UNFCCC mechanisms.

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Terima kasih Thank you Hatur nuhun

dna of redd+? of redd+.pdf · cdm voluntary carbon market readiness of the government and privates...

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