Article 5 Ozone Depleting Substances Project Protocol

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1 Article 5 Ozone Depleting Substances Project Protocol April 8, 2010

2 The Climate Action Reserve Independent non-profit, chartered by California state legislation in 2001 Mission is to encourage early voluntary actions to reduce emissions and to have such emissions reductions recognized Initially focused on emission reporting and reductions by member organizations Now on emission reduction projects generating offsets

3 What We Do Develop high quality standards Convene stakeholders and lead development of standardized protocols for carbon offset projects Manage independent third-party verification Training and oversight of independent verification bodies Operate a transparent registry system Maintain registry of approved projects Issue and track serialized credits generated by projects (CRT = Climate Reserve Tonne)

4 Listed & Registered Projects

5 ODS Protocol Background In addition to destroying the ozone layer, ozone depleting substances (ODS) are potent greenhouse gases, some greater than 10,000 GWP Production of ODS has been phased out, but extant stocks represent enormous potential GHG emissions ODS destruction makes for an excellent carbon offset: Real Additional Permanent Verifiable Enforceable 5

6 Reserve Protocol Workgroup 3M Appliance Recycling Centers of America Caleb Management Services Ltd. California Air Resources Board Clean Harbors Environmental Services, Inc. Conservation Services Group Coolgas Inc. DuPont Refrigerants Environmental Credit Corp EOS Climate Greenhouse gas Services ICF International NSF-ISR Pew Center on Global Climate Change Refrigeration Service Engineers Society RemTec International Ryerson, Masters & Associates Sims Metal Management U.S. Environmental Protection Agency Verisae Inc Wesco - Halon Management and Banking World Bank Hudson Technologies Company 6

7 Project Protocol Components Project Definition Eligibility Rules Quantification Procedures Monitoring & Operations Requirements Reporting & Verification Requirements

8 Project Definition Any set of activities undertaken by a single project developer resulting in the destruction of eligible ODS at a single qualifying destruction facility over a 12-month period All ODS must be destroyed in the United States at an approved facility U.S. EPA-approved HWC, or facility that meets TEAP guidelines Destroyed ODS must be documented on one or more Certificates of Destruction 8

9 Project Categories * Only refrigerant ODS are eligible under this protocol 1. Privately-held or government stockpiled virgin or used refrigerant that can be sold legally 2. Government stockpiles of seized ODS that cannot be sold legally 3. ODS refrigerant recovered from equipment at servicing or end-of-life 9

10 Eligible ODS Refrigerant (GWP) CFC-11 (4,750) CFC-12 (10,900) CFC-113 (6,130) CFC-114 (10,000) CFC-115 (7,370) Consistent with CFC that have been phased out of production as of January 1, 2010

11 Eligibility Rules Article 5 Protocol 1. Location ODS origin: Article 5 countries ODS destruction: U.S. and its territories 2. Project Start Date Within 6 months prior to project submission* 3. Additionality 4. Regulatory Compliance Exceed legal requirements Meet performance standard Compliance with all applicable laws * Longer window for projects started between February 2008 and February

12 Start Date Special Cases Import of privately-held, saleable virgin refrigerant has time-limited eligibility Must have filed pre-import notification with EPA by April 4, 2010; and Must submit completed Entry Summary to U.S. Customs by June 30, 2010 ODS with export date prior to January 1, 2010 must have letter from Ozone Secretariat to confirm early production phase-out

13 Quantification Emission Reductions = Baseline Emissions Project Emissions Calculated in CO 2 -equivalent metric tonnes Baseline = Emissions that would have occurred over 10 years Protocol specifies default baseline scenarios and project scenarios 13

14 Scenarios Project Baseline Scenario Project Scenario Privately-held refrigerant stockpiles Government refrigerant stockpiles Used refrigerant recovered from end-of-life ODS would have been sold into the refrigerant recharge market. Emissions calculated according to emission rate of 25%/year (94%/10-year) ODS would continue to be stored Emissions calculated according to site specific emission rate at storage facility ODS would have been released to atmosphere Emissions calculated as 100% Substitute refrigerant will be required to meet need Emissions calculated based on HFC-134a No refrigerant emissions No refrigerant emissions All projects must account for project emissions associated with transportation and destruction of ODS. 14

15 Monitoring & Operations Monitoring and Operations Plan required for all projects Specifies operational and practice-based requirements (e.g., who does what and how they do it) Important that projects are implemented as specified in Monitoring and Operations Plan 15

16 ODS Tracking System Reserve has developed publicly accessible, online database to ensure no double-counting of destroyed ODS Project developers enter information from certificate of destruction Project verifiers confirm unique entries Tracking system provides added transparency and security that reductions are real and additional 16

17 Point of Origin and Custody A single project may have dozens of points of origin Tracking ensures eligibility of individual ODS sources and accuracy of baseline Project developers must retain document trail, contracts, bill(s) of lading, etc. to establish Where did the ODS come from, and does that support the chosen baseline and project scenarios? Has ownership of GHG reductions been properly transferred to project developer? 17

18 Point of Origin All destroyed ODS must be tracked to its point of origin Article 5 ODS Source Virgin stockpiles Used ODS stockpiled greater than 12 months Used ODS quantities less than 500 lbs, and collected in the last 12 months Used ODS quantities greater than 500 lbs, and collected in the last 12 months Point of Origin Location of stockpile Location of stockpile Location where ODS is first aggregated to greater than 500 lbs a Site of installation from which ODS is removed 18

19 Reporting & Verification Reporting period is generally 1 year Project may be split into several shorter reporting periods if project developer requests Each reporting period must receive full verification Conformance with the Reserve s protocol must be verified by a Reserve-approved, ANSI accredited third-party verifier 19

20 Three Projects Listed 20

21 QUESTIONS?

Reserve Special Topic: Ozone Depleting Substances Project Protocols

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