thailand - partnership for market readiness: thailand -...

Thailand - Partnership for Market Readiness: Thailand

Thailand Greenhouse Gas Management Organization

As the global is warming, including severe

climate change is urgently needed.

Readiness (PMR) Programme

the main cause of the current climate change.

developing countries and provides a platform for sharing experience

innovative market-based instruments, and building market readiness capacity for countries to

scale up climate change mitigation efforts.

Thailand Greenhouse Gas Management Organization (Public Organization): TGO

the Ministry of Natural Resources and Environment, the Royal Thai Government

Implementing Country Participant

and then has been approved grant for USD 3.0 millions for implementing four main

activities as;

1) Study and propose legal framework on Emission Trading Scheme (ETS)

2) Prepare readiness for implementation of Energy Performance Certificate (EPC)

Scheme which focuses on Energy

development.

3) Prepare readiness for Low Carbon City (LCC) Programme, study on GHG

mitigation potential and GHG abatement plan for municipalities.

4) Study on carbon pricing for the LCC P

The market-based instruments proposed by TGO comprise

Performance Certificate (EPC) scheme

improvement in Designated Factories and Buildings (DF&Bs)

(LCC) Programme which is the GHG reduction implementation to achieve the Low

Carbon City goal of municipalities and communities.

correspondence with The 11

Partnership for Market Readiness: Thailand

Review and Monitoring Office,

se Gas Management Organization (Public Organization): TGO

including severe natural disasters occur around the world,

climate change is urgently needed. The World Bank established the Partnership for

rogramme in order to support Greenhouse Gas (GHG) mitigation

the main cause of the current climate change. The PMR brings together

provides a platform for sharing experiences

based instruments, and building market readiness capacity for countries to

scale up climate change mitigation efforts.

Greenhouse Gas Management Organization (Public Organization): TGO

the Ministry of Natural Resources and Environment, the Royal Thai Government

mplementing Country Participant, has proposed the Market Readines

een approved grant for USD 3.0 millions for implementing four main

Study and propose legal framework on Emission Trading Scheme (ETS)

Prepare readiness for implementation of Energy Performance Certificate (EPC)

Scheme which focuses on Energy Data Management and MRV system

Prepare readiness for Low Carbon City (LCC) Programme, study on GHG


on carbon pricing for the LCC Programme and incentive for credit buyer

uments proposed by TGO comprise of 2 schemes of 1) Energy

Performance Certificate (EPC) scheme which aims to promote energy efficiency

improvement in Designated Factories and Buildings (DF&Bs) and 2)

which is the GHG reduction implementation to achieve the Low

Carbon City goal of municipalities and communities. The both schemes are in

The 11th National Economic and Social Development Plan (NESDP,

Partnership for Market Readiness: Thailand - PMR

(Public Organization): TGO

natural disasters occur around the world, action on

Partnership for Market

in order to support Greenhouse Gas (GHG) mitigation which is

brings together developed and

s, fostering new &

based instruments, and building market readiness capacity for countries to

Greenhouse Gas Management Organization (Public Organization): TGO - under

the Ministry of Natural Resources and Environment, the Royal Thai Government - as an

rket Readiness Proposal (MRP)

een approved grant for USD 3.0 millions for implementing four main

Study and propose legal framework on Emission Trading Scheme (ETS)

Prepare readiness for implementation of Energy Performance Certificate (EPC)

Data Management and MRV system

Prepare readiness for Low Carbon City (LCC) Programme, study on GHG


rogramme and incentive for credit buyers.

2 schemes of 1) Energy

promote energy efficiency

and 2) Low Carbon City

which is the GHG reduction implementation to achieve the Low

The both schemes are in

Social Development Plan (NESDP,

2012-2016) including suppo

the Energy Conservation Plan,

2011-2030) and the 10-Year Alternative Energy

Development and implementation of the EPC scheme and the LCC programme base on

concept of carbon market system in Thailand for

shown in Figure 1.

Figure 1

and Thailand Domestic

1) Energy Performance Certificate (EPC) Scheme

Principle:

The EPC scheme is a market-

focusing on the sub-sectors of energy sector which consume intensive energy, such as

manufacturing sector, Petrochemical sector and electricity generation sector

commercial building sector.

support the target of the Ministry of Energy (MOE) in relation to

the Energy Conservation Plan, the 20-Year Energy Efficiency Development Plan (EEDP

Year Alternative Energy Development Plan (AEDP, 2012

implementation of the EPC scheme and the LCC programme base on

concept of carbon market system in Thailand for supporting GHG reduction in the future as

Figure 1 Linkage of EPC Scheme, LCC Programme

and Thailand Domestic Carbon Market

Energy Performance Certificate (EPC) Scheme

-based instrument to promote energy efficiency improvement

sectors of energy sector which consume intensive energy, such as

manufacturing sector, Petrochemical sector and electricity generation sector

Ministry of Energy (MOE) in relation to

Year Energy Efficiency Development Plan (EEDP,

Development Plan (AEDP, 2012-2021).

implementation of the EPC scheme and the LCC programme base on

supporting GHG reduction in the future as

EPC Scheme, LCC Programme

based instrument to promote energy efficiency improvement

sectors of energy sector which consume intensive energy, such as

manufacturing sector, Petrochemical sector and electricity generation sector along with

The EPC target groups are DF&Bs registered under

manufacturing sector, there are 6 sub

Cement, 2) Iron and Steel, 3) Pulp and Paper, 4) Ceramic, 5) Food and Beverage and 6)

Petrochemical, plus Thermal Power Plant. For the commercial building sector, the scheme

will cover 4 building types, 1) Hotel, 2) Hospit

Target-and-Reward concept will be applied as a market instrument to en

reduction by energy efficiency improvement

Conceptual Framework:

Conceptual framework of the EPC

EPC participants and Issuance of Energy Allowance Certificate as defined by the target.

Figure 2 shows conceptual framework of the EPC scheme.

Figure 2 Conceptual Framework of the EPC S

- In case of the EPC participants achieve the target of energy reduction

receive Energy Performance Certificate.

allowance, they may sell the margin to other participants who consume energy

over the allowance.

are DF&Bs registered under the ENCON Act B.E. 2535.

there are 6 sub-sectors of designated factories to be considered, 1)



will cover 4 building types, 1) Hotel, 2) Hospital, 3) Department Store

Reward concept will be applied as a market instrument to en

reduction by energy efficiency improvement together with GHG reduction

Conceptual framework of the EPC consists of Energy Consumption Target setting for the


Figure 2 shows conceptual framework of the EPC scheme.

Figure 2 Conceptual Framework of the EPC Scheme.

In case of the EPC participants achieve the target of energy reduction

receive Energy Performance Certificate. In case they consume energy less than


the ENCON Act B.E. 2535. For the

ed factories to be considered, 1)



and 4) Office. The

Reward concept will be applied as a market instrument to encourage energy

GHG reduction.

consists of Energy Consumption Target setting for the


cheme.

In case of the EPC participants achieve the target of energy reduction, they will

In case they consume energy less than


- In case of the EPC participants cannot achieve the target of energy reduction

there is no any penalty and the participa

Target Setting:

Energy reduction target for the EPC scheme will

Year Energy Efficiency Development Plan (EEDP

energy saving potential of technologies in each industrial sector.

Concept of energy target setting bases on Specific Energy Consumption (SEC) baseline

which is a ratio of energy consumption per unit of product for manufacturing industry or

energy consumption per area for the commer

MRV System:

Monitoring, Reporting and Verification (MRV) will be followed up process and definition of

energy management report of the

(DEDE).

Activity

Operate

Baseline Verification Accredited

Auditor

Energy Reduction

Verification

Accredited

Auditor

Operational and Institutional Arrangement:

The DEDE, as a supervisor of

energy data collector of the DF&Bs and then TGO will collaborate with the DEDE to set

baseline energy consumption and energy target. Energy certificate distribution to the

In case of the EPC participants cannot achieve the target of energy reduction

ty and the participants do not need to perform any action.

Energy reduction target for the EPC scheme will be set up in correspondence with

Year Energy Efficiency Development Plan (EEDP, 2011-2030) including consideration of

technologies in each industrial sector.



energy consumption per area for the commercial building.


energy management report of the Department of Energy Development and Efficiency

Operate by Operational

Period Method

Accredited

Auditor

Before Target

Setting 100% verify of DF&Bs

Accredited

Auditor

Annual or

Ending Period

100% verify of DF&Bs

and Institutional Arrangement:

supervisor of the ENCON Act and advisor of the PMR project



In case of the EPC participants cannot achieve the target of energy reduction,

perform any action.

in correspondence with the 20-

) including consideration of




Department of Energy Development and Efficiency

Method



and advisor of the PMR project, will be an



DF&Bs will be conducted by the DEDE.

scheme.

Figure 3 Institutional Arrangement of the EPC Scheme.

Operational Plan:

TGO has planned for the EPC as follows;

1. EPC Preparation Phase (Present

This phase is market readiness preparation for the EPC scheme which will be a voluntary

scheme. Preparedness comprises of several important parts which are data readiness

preparation, data collection and database development,

and target setting for energy consumption, MRV system development, capacity building and

stakeholder consultation.

2. EPC Demonstration Phase (After 2017)

This phase is a pilot period with voluntary scheme which the participants will set up energy

reduction target and will be verified every year.

the DEDE. Figure 3 shows institutional arrangement of the EPC


the EPC as follows;

EPC Preparation Phase (Present – 2017)


Preparedness comprises of several important parts which are data readiness

preparation, data collection and database development, registration development, base


EPC Demonstration Phase (After 2017)


reduction target and will be verified every year.

shows institutional arrangement of the EPC



Preparedness comprises of several important parts which are data readiness

registration development, baseline



Table 1 Conceptual Framework of the EPC scheme

Component

1) Conceptual

framework

� Voluntary target

� Intensity target setting not absolute target setting

� Performance

� No penalty if the targets not met

2) Scope and

Coverage

� Designated Factories and Buildings (DF&Bs)

- 7 Industrial sectors

Petro

- 4 Types of commercial buildings

3) Period 1st phase, 2 years and 3 months, 2015

4) Target setting

Methodology

� Based on Specific Energy Consumption (SEC) with the base year 2010

� Each participant

methodology.

5) Base Year To be announced

6) Target

Achievement

Case 1: Achieve the target

- Record in database

- Trade EPC units to sink fund (in consideration)

Case 2: Cannot achieve target

- No penalty

� Study and analysis on energy database and energy management of DF&Bs

� Study on SEC of industries

� Study on energy reduction potential, including GHG reduction

� Study and development of MRV syst

� Data verification and baseline setting

� Target setting for energy reduction

� Registry system development

� Incentives for EPC participants

EPC Preparation Phase

2015 Q2/2015

Table 1 Conceptual Framework of the EPC scheme

Tentative Description

Voluntary target-and-reward scheme

Intensity target setting not absolute target setting

Performance-based incentive

No penalty if the targets not met

Designated Factories and Buildings (DF&Bs)

7 Industrial sectors (Food & Beverage, Cement, Ceramic, Paper, Iron & Steel ,

Petro-Chemical and Thermal power plants).

4 Types of commercial buildings (Office, Hotel, Hospital and Department store).

phase, 2 years and 3 months, 2015 - 2017

Based on Specific Energy Consumption (SEC) with the base year 2010

Each participant will receive its own SEC target according to an approved

methodology.

announced

Case 1: Achieve the target

Record in database

Trade EPC units to sink fund (in consideration)

Case 2: Cannot achieve target

No penalty

Study and analysis on energy database and energy management of DF&Bs

Study on energy reduction potential, including GHG reduction

Study and development of MRV system

Data verification and baseline setting

Target setting for energy reduction

Registry system development

Incentives for EPC participants

EPC Preparation Phase

2016 2017

(Food & Beverage, Cement, Ceramic, Paper, Iron & Steel ,

(Office, Hotel, Hospital and Department store).

Based on Specific Energy Consumption (SEC) with the base year 2010.

will receive its own SEC target according to an approved

……….

EPC Demonstration

Phase

2) Low Carbon City (LCC) Programme

Principle:

Operational plan of the LCC programme

communities to implement GHG mitigation actions while achieving sustainable

development and low carbon city goals

national policy, the 11th National Economic and

2016), which mentions to a country

and low carbon society together with environmen

programme will support implementation of the ENCON

2021).

Conceptual Framework:

Project implementation will be based on Projected

approach. LCC will be a part of the Thailand Voluntary Emission Reduction Programme or

T-VER which LCC will use T-

programme will focus on GHG reduction in a scope of municipality and support the study

on GHG reduction potential and GHG abatement plan of the municipality.

programme consists of reduction activities of the three main GHG, 1) CO

N2O in energy, waste management, agriculture, forestry and transportation as described in

Table 3. In the initial phase (present

pilot municipalities before expanding to cover others municipalities

shows conceptual framework of the LCC programme.

Low Carbon City (LCC) Programme

the LCC programme aims to promote and support municipalities and


development and low carbon city goals. These goals are in correspondence with the

National Economic and Social Development Plan (NESDP,

a country paradigm shift and driving force to become economy

and low carbon society together with environmentally friendly. Moreover the LCC

implementation of the ENCON Act (2011-2030) and

Project implementation will be based on Projected-based approach as same as CDM


-VER’s methodologies and GHG monitoring. However, the LCC

amme will focus on GHG reduction in a scope of municipality and support the study

on GHG reduction potential and GHG abatement plan of the municipality.

programme consists of reduction activities of the three main GHG, 1) CO

O in energy, waste management, agriculture, forestry and transportation as described in

Table 3. In the initial phase (present – 2017), the project will point to 24 municipalities as

pilot municipalities before expanding to cover others municipalities in the future.

shows conceptual framework of the LCC programme.

aims to promote and support municipalities and


in correspondence with the

Social Development Plan (NESDP, 2012-

to become economy

Moreover the LCC

2030) and AEDP (2012-

based approach as same as CDM


VER’s methodologies and GHG monitoring. However, the LCC

amme will focus on GHG reduction in a scope of municipality and support the study

on GHG reduction potential and GHG abatement plan of the municipality. Scope of the LCC

programme consists of reduction activities of the three main GHG, 1) CO2, 2) CH4 and 3)

O in energy, waste management, agriculture, forestry and transportation as described in

the project will point to 24 municipalities as

in the future. Figure 4

Figure 4 Conceptual Framework of the LCC Programme.

LCC Programme Procedure

The LCC programme comprises of 8 steps as shown in Figure 5.

under the PMR, TGO will support the participated municipalities to study data of GHG

quantity, GHG reduction potential, GHG abatement plan and Project Design Document

(PDD) development.

Figure 5 LCC Programme Procedure

1. Evaluation of GHG mitigation potential

2. Identification

3. Evaluation of GHG

4. Preparation of Project Design Document (PDD)

5. Implementation of GHG emission reduction activities

6. Monitoring of GHG emission reduction

7. Verification of GHG emission reduction

8. Issuance of LCC


ocedure:

The LCC programme comprises of 8 steps as shown in Figure 5. For supported activities



Figure 5 LCC Programme Procedure

Evaluation of GHG mitigation potential

Identification of GHG mitigation activities

Evaluation of GHG emission reduction activities

Preparation of Project Design Document (PDD)

Implementation of GHG emission reduction activities

Monitoring of GHG emission reduction

Verification of GHG emission reduction

Issuance of LCC-VERs


For supported activities



Establishing of MRV System:

The participating municipalities and communities have to monitor their GHG reduction as

proposed activities in the PDD. Verification of GHG reduction will be conducted by the

external verification body.

Operational Plan:

TGO has defined operational framework as following;

1) LCC Preparation Phase

for studying GHG red

municipalities and development of PDD of the GHG activities.

2) LCC Implementation Phase:

and verify quantity of GHG reduction.

Table 2 Conceptual Framework of the LCC programme

Component

1) Type of

mechanism Voluntary-

2) Target group Municipalities and local communities

3) Scope of

activity

- Energy efficiency improvement (Lighting, Air conditioning and

- Renewable energy (Solar energy, waste and waste water)

- Methane reduction or management of landfill and waste water

- Agriculture (Fertilizer usage and Manure management)

2015 Q2/2015

� Study on GHG reduction potential and GHG abatement plan of

municipalities,

� Development of MRV system

� Development of registry system.

LCC Preparation Phase

MRV System:


the PDD. Verification of GHG reduction will be conducted by the

operational framework as following;

LCC Preparation Phase (Present - 2017): development of Manuals and forms

for studying GHG reduction potential, development of GHG abatement plan of

municipalities and development of PDD of the GHG activities.

LCC Implementation Phase: carry out the GHG reduction activities, monitor

and verify quantity of GHG reduction.

Conceptual Framework of the LCC programme


Based Mechanism

Municipalities and local communities

Energy efficiency improvement (Lighting, Air conditioning and

Renewable energy (Solar energy, waste and waste water)

Methane reduction or management of landfill and waste water

Agriculture (Fertilizer usage and Manure management)

2016 2017

on GHG reduction potential and GHG abatement plan of

Development of MRV system,

Development of registry system.

LCC Preparation Phase


the PDD. Verification of GHG reduction will be conducted by the

2017): development of Manuals and forms

uction potential, development of GHG abatement plan of

carry out the GHG reduction activities, monitor

Energy efficiency improvement (Lighting, Air conditioning and refrigeration)

Methane reduction or management of landfill and waste water

……….

LCC Implementation

Phase

Component

- Forestry and reforestation

- Transportation (Biodiesel usage and Ethanol)

4) Type of project Large scale, Small scale and Micro scale

5) Scope

Identification Project-based approach

6) Methodology Based on T

7) Verification By external verify body

8) Incentive for

participation

- Academic support for studying GHG

- Support for developing PDD;

- Carbon trading (if any).

Organization of Thailand’s PMR

TGO has established operational framework of the PMR comprising 5 main

1. PMR Steering Committee

key agencies. Key responsib

with providing recommendations on development of market mechanism to

support GHG mitigation.

2. EPC Working Group

chairperson of the working group committee which comprises of related

organizations from both government and private sectors.

is providing recommendation on technical issues of the scheme including MRV

system.


Forestry and reforestation

Transportation (Biodiesel usage and Ethanol)

Large scale, Small scale and Micro scale

based approach

Based on T-VER’s methodologies

By external verify body

Academic support for studying GHG reduction potential and GHG abatement plan;

Support for developing PDD;

Carbon trading (if any).

Organization of Thailand’s PMR

TGO has established operational framework of the PMR comprising 5 main

PMR Steering Committee: chaired by TGO including representatives from 14

esponsibility role is controlling the PMR operation together


support GHG mitigation.

EPC Working Group: The Deputy Executive Director of TGO acts as

the working group committee which comprises of related

organizations from both government and private sectors. Key responsibility role


reduction potential and GHG abatement plan;

TGO has established operational framework of the PMR comprising 5 main parts as;

including representatives from 14

is controlling the PMR operation together


r of TGO acts as a

the working group committee which comprises of related

Key responsibility role


3. LCC Working Group


organizations from both government and private sectors.

is providing recommendation on technical

including MRV system.

4. Legal Framework Working Group

chairperson of the working group committee which comprises of representatives

from government agencies and officials.

5. Project Management Unit (PMU)

project administrator. Key responsibility role is project management consisting

of activity implementations under the PMR and coordination with stakeholders.

Figure 6 shows structure of the Thailand’s PMR organization, implementation phase.

Figure 6 Organisation of

LCC Working Group: The Deputy Executive Director of TGO acts as a


organizations from both government and private sectors. Key responsibility role

is providing recommendation on technical issues of the scheme and methodology

including MRV system.

Legal Framework Working Group: The Executive Director of TGO acts as a


from government agencies and officials.

Project Management Unit (PMU): The Executive Director of TGO acts as



the Thailand’s PMR organization, implementation phase.

Organisation of Thailand’s PMR, implementation phase.

The Deputy Executive Director of TGO acts as a


Key responsibility role

issues of the scheme and methodology

The Executive Director of TGO acts as a


The Executive Director of TGO acts as



the Thailand’s PMR organization, implementation phase.

Thailand’s PMR, implementation phase.

Incentive for Project Participation;

TGO has planned for participating incentive of both EPC scheme and LCC

EPC Scheme

� Technical support and energy audit

------------------------------------------------

Incentive for Project Participation;

TGO has planned for participating incentive of both EPC scheme and LCC

LCC Program

Technical support and energy audit � Academic support for studying GHG

reduction potential and GHG abatement

plan;

� Support for developing

� Carbon trading (if any)

------------------------------------------------

TGO has planned for participating incentive of both EPC scheme and LCC programme as;

rogramme

Academic support for studying GHG

reduction potential and GHG abatement

for developing PDD;

(if any).

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