China s CDM Project Approval Regulations Update and New Developments. by Fang Jin Development Research Centre The State Council, China

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1 Expert Meeting on Trade and Climate Change: Trade and Investment Opportunities and Challenges under the Clean Development Mechanism (CDM) April 2009 China s CDM Project Approval Regulations Update and New Developments by Fang Jin Development Research Centre The State Council, China "The views expressed are those of the author and do not necessarily reflect the views of UNCTAD"

2 China s CDM Project Approval Regulations Update and New Developments Fang Jin Development Research Centre The State Council, China

3 Outlines Progress updates Regulations updates Conclusions 3

4 1. Progress Updates 4

5 More CDM projects approved by DNA By 1 April 2009: 1935 projects approved by DNA, with about 600 new projects in the recent 12 months 5

6 More CDM projects registered Country Number Of Projects China 503 India 411 Brazil 157 Mexico 113 Malaysia 44 Chile 31 Republic of Korea 25 Indonesia 23 Philippines 23 Peru 17 Argentina 15 Thailand 15 Colombia 14 Honduras 14 South Africa 14 6

7 Country Average Annual Reductions China 158,430,570 India 33,953,315 Brazil 20,124,443 Republic of Korea 14,734,467 Mexico 8,593,661 Chile 4,460,774 Argentina 4,131,638 Nigeria 4,123,669 Indonesia 3,256,883 Malaysia 3,063,345 South Africa 2,557,984 Qatar 2,499,649 Peru 1,887,088 Egypt 1,794,907 Colombia 1,401,029 Philippines 1,352,659 Pakistan 1,268,988 Israel 1,189,764 Thailand 1,091,646 7

8 CERs Issued 2012 CERs Registered Projects 2012 CERs Pre-Registration Pipeline Carbon Dioxide Methane HFCs Nitrous Oxide Million t CERs

9 More CERs issued Country CERs China 119,705,085 India 63,083,831 Republic of 37,378,655 Korea Brazil 29,990,042 Mexico 5,748,259 Viet Nam 4,486,500 Egypt 3,107,192 Chile 2,970,691 Pakistan 962,221 Argentina 836,710 Thailand 815,224 Bolivia 725,875 South 675,092 Africa Malaysia 648,718 Guatemala 644,397 Ecuador 500,910 Colombia 449,432 9

10 2. Regulations Updates 10

11 2004: Interim Measures for Operation and Management of Clean Development Mechanism Projects in China 2005: Measures for Operation and Management of Clean Development Mechanism Projects in China Specific rations for the shares of CER revenues between project owners and the national government (Article 24) 11

12 CDM administration framework in China National Lead Group on Climate Change (NLGCC) Headed by Premier Wen Jiabao 20 Member Ministries The DNA National Development and Reform Commission (NDRC) National CDM Board Co-chairs: NDRC/MOST Vice Chair: MFA Members: MOEP, CMA, MOA, MOF China s National CDM Project Management Database System CDM Project Management Center (supervised by the DNA) CDM Fund Management Center (supervised by the CDM Board) 12

13 Application and approval procedures No objection Letter Project Development Apply to DNA 2 4 weeks Expert Review Revision Board Meeting reject decision revise Letter of Rejection Letter of Approval approve 3 4 weeks 13

14 Notice on adding RMB Yuan as an additional price unit to examine CER price Since May 1 st, 2008, project owners are required to adopt the new Application Form for CDM Project Activity Term 4.2 emission reductions transferring information, CER price: $ or, RMB Yuan ( ) 14

15 Updated Baseline Emission Factors for Regional Power Grids in China 15

16 Evidence of project considered to be developed as CDM: submit a notification form for project starts after 2 August 清洁发展机制项目通报表 *( 一式两份 ) 项目业主名称 : 业主联系人及联系方式 : 项目名称 : 项目地点 : 预计开始时间 : ( 重新开工项目需作详细说明 ) 项目活动简要描述 : ( 若描述内容超过此栏, 请附页说明 ) 法人代表签字 : 日期 : 年 月 日 项目业主单位盖章 : 国家发展改革委应对气候变化司备案签章 : 日 日期 : 年 月 * 注 : 此通报表仅适用于开始日期为 2008 年 8 月 2 日 ( 含 8 月 2 日 ) 后的 CDM 项目申报 16

17 Arrangements for the Implementation of Clean Development Mechanism Projects in the Hong Kong Special Administrative Region The Implementation Arrangements take effect from 6 June

18 EIA for small hydropower projects MOEP issued project inventories for EIA MOEP vi Provincial BOEP Pumped-Storage Power Station, wind power 50MW 330/500kV transmission within a province Coal mines 1.5 Mt/a included in the national plan LNG terminals, including storage and transport of imported LNG 18

19 Income tax for enterprises total CERs revenues turn-over to the state costs of enterprises to implement the CDM project = income of enterprises(with regard to CDM) HFCs/PFCs and N 2 O projects Exempt income tax for the first 3 years Exempt 50% income tax for the 4 th 6 th years 19

20 3. Conclusive remarks 20

21 Experiences in CDM project cooperation: As a developing country party to the Kyoto Protocol, China attaches great importance to its corresponding obligations under the Kyoto Protocol and has been promoting proactively the development of CDM cooperation through: establishment of related institutions promulgation of regulatory framework overall capacity building at both central and local levels All these efforts made by China contribute to the sound policy environment created for efficient and transparent implementation of CDM projects. 21

22 Observations/Recommendations DOEs and EB need to speed up procedures to meet the pace of project development; Though the financial crisis has slow down the pace, many projects have long been kept in pipelines; Government of China/DNA has provided more details to the present Measures and issued additional regulations to facilitate the smooth implementation of CDM projects in China. 22

23 Thanks! For more information, please contact: Yang Hongwei, Ph.D. Director, CDM Project Management Center Professor, Energy Research Institute, National Development and Reform Commission Tel: Fax: