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UNFCCC Recent Challenges in Implementing PoAs from a Commercial Perspective

UNFCCC Recent Challenges in Implementing PoAs from a Commercial Perspective. 8 th May 2011 Mischa Classen Senior Project Manager Regulatory Affairs and Consulting, First Climate Group. Recent Challenges in Implementing PoA. Promise: PoAs aim at scaling up CDM The Commercial Perspective

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UNFCCC Recent Challenges in Implementing PoAs from a Commercial Perspective

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  1. UNFCCCRecent Challenges in Implementing PoAsfrom a Commercial Perspective 8th May 2011 Mischa Classen Senior Project Manager Regulatory Affairs and Consulting, First Climate Group

  2. Recent Challenges in Implementing PoA Promise: PoAs aim at scaling up CDM • The Commercial Perspective • Key Obstacles for Credit Buyer … • … become Challenges for Project Developer • Building Blocks for a scale up post 2012 Project Developer Forum | UNFCCC PoA Workshop, Bonn

  3. Promise: PoAs aim at scaling up CDM The Commercial Perspective Key Obstacles for Credit Buyer … … become Challenges for Project Developer Building Blocks for a scale up post 2012 Recent Challenges in Implementing PoA Project Developer Forum | UNFCCC PoA Workshop, Bonn

  4. The Commercial Perspective Key features of private carbon investment Upfront Investment Forward Carbon Premium this one moves ... ... this one does not Project Developer Forum | UNFCCC PoA Workshop, Bonn

  5. Recent Challenges in Implementing PoA Promise: PoAs aim at scaling up CDM The Commercial Perspective Key Obstacles for Credit Buyer … … become Challenges for Project Developer Building Blocks for a scale up post 2012 Project Developer Forum | UNFCCC PoA Workshop, Bonn

  6. Key Obstacles for Credit Buyer What is the Value of a CPA-CER? EU Eligibility Criteria Contractual Issues Counterparty Risks Project Developer Forum | UNFCCC PoA Workshop, Bonn

  7. ? Key Obstacles for Credit Buyer EU Eligibility Criteria non LDC • CERs from registered pre-2013 eligible in the EU post-2012 ? • Serious challenge to lock in buyer for post-2012 PoA #1 registered 2011 CER used 2011 CER used 2012 CER used 2013 CER used 2014 CER used 2015 CPA added CER used 2013 CER used 2014 CER used 2015 CER used 2016 CER used 2017 CPA added PoA #2 registered 2014 EU ETS DirectiveArticle 11.a.3) CER used 2019 CER used 2018 CER used 2017 CER used 2016 CPA added 1.1.2013

  8. Key Obstacles for Credit Buyer EU Eligibility Criteria • Uncertainty freightens investors • Ban on Host Countries? • Ban on Scale / Technology? • EC considers to release ruling • Some restrictions expected to remain

  9. Recent Challenges in Implementing PoA Promise: PoAs aim at scaling up CDM The Commercial Perspective Key Obstacles for Credit Buyer … … become Challenges for Project Developer Building Blocks for a scale up post 2012 Project Developer Forum | UNFCCC PoA Workshop, Bonn

  10. Challenges for Project Developer What is the cost of a CPA-CER? No standard product for DOE Counterparty Risks Project Developer Forum | UNFCCC PoA Workshop, Bonn

  11. Challenges for Project Developer No standard product for DOE Quotations for Validation: “Proposed Activity not possible” Cost for Verification? Liability shift to PD? Project Developer Forum | UNFCCC PoA Workshop, Bonn

  12. Challenges for Project Developer Counterparty Risks Project management costs Role & Experience of CME EB 48 Annex 66/67 ? Traditional CDM PoA Project Developer Forum | UNFCCC PoA Workshop, Bonn

  13. Building Blocks for a scale up post 2012 • Firm status of EU eligibility • Scope beyond LDC? • Standardised Products from DOEsincl. managing liability • First delivered issuance • Tested business models • Adopted guidelines Validation / Verification procedures

  14. Thank you

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