cdm project developers workshop. boundaries & leakage calculating emissions reductions any...

CDM Project Developers Workshop

Boundaries & Leakage Calculating emissions reductions Any other issues

Session II

Project Boundary: The project boundary shall encompass all anthropogenic emissions by sources of greenhouse gases (GHG) under the control of the project participants that are significant and reasonably attributable to the CDM project activity. (Guidelines for Completing CDM-PDD, CDM-NMB and CDM-NMM)

What is a project boundary?

To date, the CDM Executive Board had not made a uniform ruling on what constitutes “reasonable” and “significant” emissions. Therefore project developers are required to demonstrate their reasoning and justify the choice of project boundary adopted when submitting their PDD.

What is reasonable and significant?

Slide source: IETA

The GHG Protocol (forthcoming) Project Quantification Standard classifies changes in GHGs as a result of the project activity into two categories:

- Upstream and downstream effects: changes in GHGs that occur up- and downstream of the project activity; and

- Market effects:changes in GHG emissions that result when a project activity alters the quantity of goods/services available to other users, causing them to substitute or replace these goods/services in their production processes or consumption.

Provides tools to assess and quantify these effects and draw GHG assessment boundary accordingly. Leaves choice of boundary to project developer.

What is reasonable and significant?

GHG Protocol: GHG assessment boundary

SpaceProject activity

Startup / ConstructionProject Activity

OperationProject activity

End of Life

Downstreameffects

Upstreameffects

Upstreameffects

Downstreameffects

Upstreameffects

Time

Downstreameffects

Source: WBCSD/WRI GHG Protocol Project Quantification Standard (draft).


Construction/preparation (i) Are there any on-site practices or processes that give rise to GHG emissions during the construction/preparatory phase?

(ii) Are there any other off-site inputs or outputs during the construction/preparation phase that give rise to GHG emissions or removals, e.g., transportation of heavy equipment over long distances?

Operation

(iii) Are there any on-site practices or processes that give rise to GHG emissions or removals during the operating phase?

(iv) Are there any off-site inputs to or outputs from the project activity that give rise to GHG emissions or removals during the operating phase?



End of life

(v) Are there any practices or processes that occur on-site during decommissioning or at the end of life that give rise to GHG emissions or removals?

(vi) Are there any off-site inputs to or outputs from the project activity that give rise to GHG emissions or removals during the decommissioning phase, e.g., off-site waste disposal, decommissioned capital equipment?


GHG Protocol: GHG market effects

i. For each project activity, is there an increase in the supply of anygoods or services to others? If yes, is a change in GHG emissionslikely? If not, some explanation of why there is likely to be no changeshould be provided. ii. For each project activity, does the GHG project reduce the availabilityof any goods or services to others outside the site or location of theGHG project? If yes, is there likely to be a change in GHG emissions?If not, some explanation of why there is likely to be no change shouldbe provided. iii. What is the nature of any market effect identified in (i) or (ii) above?Is it a result of displacing the activities of a discrete number ofidentifiable entities? Or is it the result of changes in supply anddemand in broader secondary markets with a large number ofunidentifiable consumers?


What is a project boundary?

Operational Guidelines for Project Design Documents of Joint Implementation Projects.Volume 1: General guidelines Version 2.2., Ministry of Economic affairs of the Netherlands, June 2003

Project Boundary: Which emissions (i.e. emissions at which sources & sinks) will change based on the actions by the project developer own actions.

Examples of Project Boundary Fuel Switch project

Red dotted line represents the project boundary based on the fact that:

emissions related to the fuel supply and grid cannot be influenced by the project participant (excluded)

emission to the end use can not be influenced by the project participant (excluded)

Slide source: IETA

Examples of Project Boundary LFG Recovery project

Dashed line represents the project boundary based on the fact that:

Emission related to the waste collection and transport can not be influenced by the project participant (therefore excluded)

Slide source: IETA

Rule of thumb for “significant”: Any emission larger then 1% of the total baseline emission is to be considered significant.

Rule of thumb for “reasonable”: Draw up a flow diagram of the project activity and then go at least one step before and after the project activities. Then see if emission can be reasonably altered by the project developer.

Reasonable and significant

Slide source: IETA

What is leakage?

Leakage: Is defined as the net change of anthropogenic emissions by sources of greenhouse gas (GHG) which occurs outside the project boundary, and which is measurable and attributed to the CDM project activity. (Guidelines for Completing CDM-PDD, CDM-NMB and CDM-NMM)

Conceptually, seems to constitute both upstream/downstream and market effects.

Approved methodologies normally indicate the type of leakage that should be considered and how it is to be calculated.

Leakage could occur if the project diverts biomass fromother users and thereby increases fossil fuel use.

As per AM004 proposed project activity must demonstrate that:• The project will not deplete the supply of the biomass in question to the

extent that it will affect the construction of planned biomass power plants;

• There is no competition for supply of the biomass that will result in a decrease in the load factor of other biomass-fuelled plants;

• The project will not deplete the supply of biomass to current users.

Example of possible leakage in biomass boiler project

Slide source: IETA

Leakage

Fugitive CH4 emissions from fuel production and CO2 emissionsfrom fuel transportation are categorized as leakage. Emissionsfrom fuel production/transportation is counted only if the fuel isproduced/transported in a non-Annex I country.

Example of possible leakage in an industrial fuel switching project

Slide source: IETA

Calculating emissions reductions

For emissions reductions projects

GHG Reductioni (t CO2e) =

Baseline Emissions i – Project Activity Emissionsi,adjusted for

leakage.

Project Activity Emissionsj =

GHG emissions for the project activity j in year i (in t CO2e)

Baseline Emissionsi, =

GHG emissions for the baseline scenario in year i (in t CO2e)

Leakage: GHG emissions from the relevant upstream, downstream and marketeffects associated with each project activity j and corresponding baseline scenarioin year i (in t CO2e)

Calculating GHG removals

For biological removals:

GHG Reductioni (t CO2e) =

Baseline Carbon Stocks i – Project Activity Carbon Stocks,adjusted for

leakage.

Project Activity Carbon Stocksj =

Carbon stocks from each pool (related to the project activity) in year i (in t CO2e)

Baseline Carbon Stocksi, =

Carbon stocks from each pool for the baseline scenario in year i (in t CO2e)

Leakage: GHG emissions from the relevant upstream, downstream and marketeffects associated with the project activity and corresponding baseline scenarioin year i (in t CO2e)

For more information, contact Alenjandro [email protected] Mahua [email protected]

Some of the slides used in this presentation weredeveloped by IETA. For more information, [email protected]