China s CDM Policy & Progress

Transcription

1 China s CDM Policy & Progress For 2006 Japan Carbon Investors Forum Wang Shu March, 2006 Tokyo

2 Presentation Contents Brief of DNA CDM projects Progress National Approval Process Requirements for Approval CDM Projects Potential Experiences From Successful Project Efforts On Enhancement of CDM Relevant Useful Information

3 Brief of DNA (I) National Development and Reform Commission (NDRC) NDRC is a macroeconomic management agency under the State Council, which studies and formulates policies for economic and social development, maintains a balance of economic aggregates and guides the overall economic system restructuring. NDRC is the chair of the National Coordination Committee on Climate Change (NCCCC) composed of 17 ministries NDRC is China s Designated National Authority for CDM

4 Brief of DNA (II) Responsibilities as a DNA: to accept CDM project application to approve CDM project activities jointly with MOST and MFA, on the basis of the conclusion made by the CDM Board to issue written approval letter on behalf of the Government of China to supervise the implementation of CDM project activities to establish the CDM project management institute referred to in Article 13 above, in consultation with other departments and to deal with other relevant issues.

5 Brief of DNA (III) Executing Agency: Office of National Climate Change Coordination Committee Gao Guangsheng, Director General, Sun Cuihua, Division Director, Li Liyan, Deputy Division Director, Wang Shu, Project Officer, focusing mainly on CDM, Gao Hairan, Project Officer, focusing mainly on multilateral cooperation, Liu Qiang, Project Officer, focusing mainly on bilateral cooperation, Wang Qing, Project Officer, focusing mainly on APP-6,

6 CDM Projects Progress (I): Summary Up to the date of March , three CDM projects in China has been successfully registered in the CDM EB, 22 projects have been approved by CDM Board, 11 projects have acquired the Letters of No-objection, and one project is in the pipeline. The estimated total amount of CERs is about 300 million ton CO2e, the most part of which is produced by 6 HFC-23 projects. The areas mainly focused on wind power, landfill gas recovery and utilization, as well as HFC-23 decomposition.

7 CDM Projects Progress (II): Duration Nov-04 Jan-05 Mar-05 May-05 Jul-05 Sep-05 Nov-05 Jan-06 Mar-06 In 2005, the number of project application the NDA accepted is more than that of 2004, and experts expect that will be far more in 2006.

8 CDM Projects Progress (III): Regions In the eastern region, enterprises accept the idea of CDM more easily than other regions, and so move more quickly.

9 CDM Projects Progress (IV): Areas 26% 4% 13% landfill gas recovery and utilization renewable energy chemical pollutant decomposition energy saving 57% Most of projects the DNA accepted fell in the priority areas of China, the proportion of energy efficiency improvement, however, is encouraged to be increased in CDM market.

10 CDM Projects Progress (V): Buyers unilateral Italy Spain Japan Word Bank Austria UK the Netherlands project number unilateral Italy Spain Japan Word Bank Austria UK the Netherlands 0 20,000,000 40,000,000 60,000,000 80,000, ,000, ,000, ,000, ,000,000 amount of CERs Japan is the second largest buyer considering the amount of CERs, but doesn t keep ahead in terms of project number.

11 CDM Projects Progress (VI): Information Please log on our website ( for more detailed information on CDM projects the DNA accepted.

12 National Approval Process: (I) Flowchart of Approval Procedures Letter of No-objection issued by NDRC just upon request Project Development Submission of CDM Application to NDRC Expert Review May be reconsidered if only further improvements National CDM Board Meeting Letter of Rejection Reject Decision-making Reconsider It takes less than two months to receive the approval letter on the status of approval. Approve Letter of Approval

13 National Approval Process: (II) Regulation Measures for Operation & Management of CDM Projects in China To set up a legal guidance for application, implementation and management of CDM projects in China. It was issued and entered into force on October 12, Related Sectors National CDM Board: 7 ministries To review and make decision on CDM project activities; To report to the Committee on CDM project activities; To design the measures on CDM project activities.

14 National Approval Process: (III) Important Clarifications Priority Areas energy efficiency improvement development and utilization of new and renewable energy, and methane recovery and utilization Percent of Revenue Delivery By the Project Type HFC and PFC decomposition projects: 65% N2O decomposition projects: 30% Other types: 2%

15 Permission Requirements: (I) CDM project activities shall be consistent with China s laws and regulations, sustainable development strategies and policies, and the overall requirements for national economic and social development planning. Funding for CDM projects from the developed country Parties shall be additional to their current official development assistance and their financial obligations under the Convention. CDM project activities should promote the transfer of environmentally sound technology to China. Only are Chinese funded or Chinese-holding joint-venture enterprises within the territory of China eligible to conduct CDM projects with foreign partners as project owners.

16 Permission Requirements: (II) participation eligibility: 100% Chinese enterprises joint-venture enterprises: Chinese partner (s) holding at least 51% of shares, and the largest shareholder is a Chinese enterprise content of PDD: meet the requirements of EB price of CERs: no deviation too much from the market price funding: additional to ODA technology transfer: advanced technology environmental impact: approval of EIA project feasibility: approval of Engineering Feasibility Study sustainable development factors: increase of local income and employment alleviation of local poverty reduction of local environmental pollutants

17 CDM Projects Potential Potential? 115 MtCO 2 e (an ever estimation by researchers of Tsinghua University) A far larger market based on current situation Potential CDM Projects Encouraged by Chinese Government Coal mining methane utilization projects Energy efficiency improvement projects Renewable and new energy projects Afforestation and refforestation projects

18 Experience From Successful Projects High quality of PDD and application documents Satisfied price of CERs Compliance with related regulations Communication with the DNA Strong capacity of project owner Qualified consultant team Double-winning purchase contract

19 Efforts On Enhancement of CDM Active on establishing CDM project management institute Take efforts to make the approval process clearer, simpler, and more efficient Responsible for well-order and stabilization of CDM market Make use of CDM fund to support for responding to climate change Active on multilateral and bilateral cooperation on CDM capacity building and project development Study on the risk and perspective of CDM beyond 2012

20 Please Care For Our Earth! Thanks Wang Shu Office of National Climate Change Coordination Committee National Development and Reform Commission P.R. of China Tel: , Fax: