financing opportunities of eco-transport through special programme for climate change

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Financing opportunities of eco- transport through Special Programme for Climate Change

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Financing opportunities of eco-transport through Special Programme for Climate Change. Outline. Transport and Climate Change EU R oadmap 2050 to low carbon economy Special P rogramme for Climate Change - PowerPoint PPT Presentation

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Page 1: Financing opportunities of eco-transport through Special Programme for Climate Change

Financing opportunities of

eco-transport through Special Programme for Climate Change

Page 2: Financing opportunities of eco-transport through Special Programme for Climate Change

Outline

• Transport and Climate Change

• EU Roadmap 2050 to low carbon economy

• Special Programme for Climate Change

• Tenders for acquisition of eco-transport under the Special Programme for Climate Change

Page 3: Financing opportunities of eco-transport through Special Programme for Climate Change
Page 4: Financing opportunities of eco-transport through Special Programme for Climate Change

Lithuania’s GHG emissions, 2008

Industry, 922.5Construction,

58.3

Transport, 1847.9

Agriculture, 114.2Fishing, 2.9

Commercial and public

services, 581

Households, 1376.5

Page 5: Financing opportunities of eco-transport through Special Programme for Climate Change

Various transport vehicles used in Lithuania

Page 6: Financing opportunities of eco-transport through Special Programme for Climate Change

EU Roadmap 2050

• The mission of Roadmap 2050 is to provide a practical, independent and objective analysis of pathways to achieve a low-carbon economy in Europe, in line with the energy security, environmental and economic goals of the European Union.

• A new European transport plan aims to increase mobility and further integrate the EU's transport networks - while reducing greenhouse gas emissions and the bloc's dependence on imported oil.

• Measures to encourage major infrastructure investments, change the way freight moves and people travel will boost economic competitiveness and create jobs.

• The plan - with goals to be met by 2050 - focuses on travel within cities and between cities, and on long distance journeys. It includes calls for:

• cities to completely phase out petrol cars• shifting to rail or water 50% of all passenger and freight road transport currently making intercity

journeys of more than 300km• airlines to increase their use of sustainable low-carbon fuels to 40%• shipping to cut 40% off its carbon emissions• Reaching these targets would help the EU achieve a 60% cut in greenhouse gases from all modes

of transport by 2050.

Page 7: Financing opportunities of eco-transport through Special Programme for Climate Change

United Nations Framework Convention on Climate Change

In 1997 in Kyoto, Japan, Conference of the Parties of the United Nations Framework Convention on Climate Change made an agreement to reduce global carbon emissions between the period from 2008-2012, compared to 1990 levels.

The developed countries had a target of a minimum of 5,2 proc., while no requirement for GHG reductions was put on the developing countries.

Lithuania has a target of reducing its GHG emissions by an average of 8% compaired to 1990 levels, and actual reductions are more than 50%.

The surplus of emision allowances, which belong to the country (so called AAUs) may be traded according to the Article 17 of the Kyoto Protocol

Page 8: Financing opportunities of eco-transport through Special Programme for Climate Change

What is a Green Investment Scheme (GIS)?

General definition- it is part of the Kyoto flexible mechanisms, which ensures that the money used for the sale of AAUs is invested in projects that reduce GHG emissions

Lithuania’s Green Investment Scheme is a set of norms and regulations, which creates a financial mechanism where all money generated from AAUs, EUAs, ERUs or any other emission reduction units sales are used solely for greening activities that minimize greenhouse gasses in the atmophere

Its is put in the form of a Special Programme for Climate Change, established by Financial Mechanisms for Climate Change Management Act on 7th of July, 2009

Page 9: Financing opportunities of eco-transport through Special Programme for Climate Change

Ministry of Environment 9

Green Investment Scheme LT

AAUs Buyers

Climate Change Special Programme

Government of Lithuania

$

$

AAUs

Reports on GHG reductions

Grants Soft LoansCapital

Investment

Auctioning of EUAs

Other emissions

$

$

CCSP Investment funds

Energy efficiency40%

Renewable energy

40%

“Soft Greening”*

2012.....2020.

$

Co-financing: Investment fund

Co-financing

AdministrationMinistry of

Environment (MoE)LEIF

Reports on GHG reductions

Verification on Emissions reductions

$$

AAUs Sales

Use of finances under

CCSP

Fines$

Other funds$

*Soft greening- various projects where there are no actual measurable shor term GHG reductions

Page 10: Financing opportunities of eco-transport through Special Programme for Climate Change

Investment areas under Lithuania’s Special Programme

for Climate Change

• At least 40 % of funds must be allocated to projects which increase energy efficiency;

• At least 40% of funds must be allocated to projects which promote use of renewable energy and environmentally friendly technologies;

• The rest of the proceeds may be used for various projects, which can not achieve quantifiable emission reductions, such as various climate change measures that promote awarness, education, aid to developing countries, etc.

Page 11: Financing opportunities of eco-transport through Special Programme for Climate Change

Ministry of Environment 11

Special Programme for Climate Change

Grants Soft loansCapital

investment

Annual Estimates- Greening Plans

Ministry of Environment and LEIF Administration

of CCSP

Disburstment of finances

Types of projects and mainstream directions selected

National Climate change

committee

Environmental Commitee

of the Parliament

Governmental policy priority

areas

Ministry of Environment-

Climate change division

Investment holding

company

Annual estimates

approved

Requirements of the Buyers

Reports to both of institutions

banks

Potencial of GHG

reductions

Page 12: Financing opportunities of eco-transport through Special Programme for Climate Change

Ministry of Environment 12

GrantsSoft loans

Capital investment

Operators not engaged in any

commercial acvitities

Operators, engaged in commercial activities

Business entities and companies

Type

Applicant

Size

Max 5 mln. Lt.

Max 80% total amount

Min GHG reductions – 2kg CO2 per 1 Lt.

Max 1,5 mln. Lt

Max 80% of total amount

Min GHG reductions – 2kg CO2 per 1 Lt.

unlimited

Max 50% of shares

Min GHG reductions – 2kg CO2 per 1 Lt.

Project implementation period

Delivery- 3+years12/18/36 months

Investment period 2.-5 years.

Fund operation period- 7.+2 years.

Financial model of CCSP

Operators, engaged in commercial

activities

Additional costs -max 3% administrative

bank fee max 3% investment holding

company fee

Other considerations

Implementation of governmental policy priorities and financial aid to

non-comercial sector

Financial injection to the soft loan system of

environmental projects

Higher risks

Biggest financial return

Page 13: Financing opportunities of eco-transport through Special Programme for Climate Change

Annual Estimate for 2011

• 80 mln. Lt for financing the acquisition of environmentally friendly public transport, mainly buses

• Greening Plan is currently being drafted, which sets out the requirements for participants in the tender and technical specifications of vehicles

Page 14: Financing opportunities of eco-transport through Special Programme for Climate Change

CNG benefits in transportation - In the urban environment it is possible to achieve maximum reduction of

GHG emissions and air pollution by introducing new advanced buses that operate on alternative fuels.

- In many cities compressed natural gas (CNG) powered buses have proven themselves as reliable and environmentally friendly technology which has lower CO2 emission rates compared to conventional diesel fuel powered buses (around 7% less), specially considering the complete fuel cycle from well-to-wheel.

- CNG buses generate much less other air pollutant residues such as carbon monoxide and solid particles or NOx. If an Internal Combustion Engine running on CNG is combined with a regenerative braking system and an electrical motor together (EV BUS) with a plug-in system to connect it to the grid (EV Plug-in BUS), the bus can achieve fuel consumption reductions up to 35% with equivalent CO2 emission reductions.

Page 15: Financing opportunities of eco-transport through Special Programme for Climate Change

Hybrids Under the Greening Plan with the AAUs buyer, it is specified to also purchase a number of hybrid buses, using compressed natural gas and electricity, to promote the use of such vehicles in the country.

The Expert Group on Transport Fuels, which provides expert advice to the European Commission, has notified:

“Liquid natural gas, or compressed natural gas offers great advantage because of its liquid nature, providing much higher energy density as well as lower price” . Furthermore, according to the Future Transport Fuels report, provided by the expert group on January 2011, it is said that such support schemes as the economic purchase incentives should be encouraged. And both CNG and especially electricity powered vehicles and their infrastructure should become substitution for oil in road transport.

Page 16: Financing opportunities of eco-transport through Special Programme for Climate Change

Thank you

Julija KuklytėChief desk officer of Climate Change and Hidrometeorology Division at

the Ministry of [email protected]

tel.: +37052663504