The Danish Stateâ€™s JI/CDM Programme JI: Joint Implementation CDM: Clean Development Mechanism
What is JI/CDM? JI projects are climate initiatives in industrialised countries, particularly those in Eastern Europe. CDM projects are corresponding initiatives, but intended for developing countries. Reductions in CO2 emissions achieved from the projects are converted into credits, which can be deducted from the emission reductions accounts of industrialised countries. JI/ CDM will thus make it possible for industrialised countries to supplement their domestic CO2 reductions with foreign climate projects. JI and CDM ensure the transfer of capital and modern technology to promote economic growth and a cleaner environment in Eastern Europe and developing countries. The projects are subject to an extensive approval and control system, managed by the UN. This is intended to ensure that all credits correspond to documented CO2 reductions and that all projects are additional – i.e. only set up due to the extra income from the sale of CO2 credits.
The Danish State’s JI/CDM Programme Denmark’s public JI/CDM programme develops and undertakes climate-related projects in Eastern Europe and developing countries – and has done so since 2003. Climate-related projects make it possible to combine support for CO2 reductions with sustainable industrial development and the transfer of modern technology and capital to foreign countries within the framework of the Kyoto Protocol. The CO2 reductions achieved by the projects are acquired by Denmark as a partner and are credited to our overall emission reductions account, helping to fulfil Denmark’s obligations under the Kyoto Protocol.
Palm oil nuts.
The Danish programme is run by a team of project managers based at the Danish Energy Agency, under the Ministry of Climate and Energy. Work on developing the projects is based on close and trusting partnerships with the project owners. The Energy Agency prioritises taking projects right from the stage of initial idea to delivery of the last CO2 credit many years later. The Agency’s project managers, the Danish embassies, and local project coordinators permanently residing in the project countries advise and assist the projects through every phase of the complicated JI/CDM process.
Biomass fibres from palm oil production.
The purpose of Denmark’s JI/CDM programme • t o contribute to global climate protection through sustainable climate-related projects in Eastern Europe and developing countries • t o promote sustainable development in developing countries and Eastern Europe via transfer of technology and capital, social improvements and capacity building • t o make a cost-effective contribution to Denmark’s Kyoto reduction obligations, through acquisition of CO2 reductions from JI/CDM projects • CO2 compensation for government and COP15 delegate travel • to support Danish industry in the form of facilitating credit purchases by companies covered by the EU Emission Trading Scheme, and to promote the export of Danish technology and know-how to JI/CDM projects. 2
Biomass in the form of rice husks.
The approach of the Danish Energy Agency Experience – Flexibility – Local presence
Site visit at biomass plant in Thailand.
The JI/CDM programme is managed by an experienced team totalling around 20 project managers within the Danish Energy Agency, and local project coordinators in the project countries. Thanks to its experience and know-how, the team offers a unique capability to undertake JI/CDM project development, and to advise project owners and enterprises on all aspects of JI/CDM projects. Team members include specialist economists, legal experts and engineers, who have all been involved with JI/CDM projects from initial idea to final approval from
the UN. The team is permanently represented on the ground in the project countries through local project coordinators and the Danish embassies. This approach ensures that Denmark has the necessary day-to-day contact with project owners, relevant authorities, validators and other stakeholders – maximising the chances of success.
Number of projects 39 CDM - 20 JI
Poland, 6 projects
Bulgaria, 3 projects China, 4 projects
Number of projects
Landfill gas, 6 projects
Geothermal, 1 project
Energy efficiency, 5 projects
Romania, 6 projects
Russia, 4 projects
The Danish Energy Agency stands for: • Extensive project knowledge from the development of 60 JI/CDM projects • experience built up since the beginnings of JI and CDM in 2003 • permanent presence in JI/CDM project countries • the Danish government is a financially-solid and highly professional partner • a flexible partner, which can help with the purchase of CO2 credits, project financing, technological solutions and JI/CDM know-how.
Thailand, 17 projects
Czech Rep., 1 project
Fuel switch, 3 projects N2O, 2 projects
Biomass, biogas, composting, 36 projects
Armenia, 1 project Wind, 4 projects
Egypt, 1 project Bangladesh, 1 project Malaysia, 12 projects
Cyprus, 3 projects
Selected projects from the Danish State’s JI/CDM programme poland ”Poldanor, biogas from pig farms”. A project to reduce methane emis sions from pig farms in the Pomor skie and Zachodnio Pomorskie regions, developed in close col laboration with the local authori ties, and an excellent example of Danish-international collaboration on integrated agricultural solutions.
As of October 2009, the Danish government supports 20 JI projects and 39 CDM projects. We are also in the process of developing a number of new projects. The projects are spread between 5 countries in Eastern Europe – Bulgaria, Poland, Romania, Russia and the Czech Republic – and 7 CDM countries – Armenia, Bangladesh, Cyprus, Egypt, China, Malaysia and Thailand. The Danish government prioritises JI and CDM equally. A decision which, along with the choice of countries, ensures synergy with the priorities for Denmark’s environmental aid for Eastern Europe and developing countries. Approximately three quaters of Denmark’s JI/CDM projects are within renewable energy, such as biogas, biomass and wind. We have focused on promoting technology transfers within sectors in which Danish exporters are international market leaders.
Romania ”Sawdust 2000, heat supplies based on sawdust”. Sawdust 2000 uses surplus sawdust as fuel in a biomass plant supply ing heat to the residents of five Romanian towns. The project was undertaken in collaboration with the Romanian Ministry of the En vironment, five rural municipalities and Danish project developer Grue & Hornstrup A/S.
Egypt ”Zafarana wind farm”. The 142 wind turbines of the Zafarana project have a projected capacity of 120 MW. As such, they represent a major element of sustainable energy production in Egypt and contribute to fulfil ment of the national strategy of supplementing energy supplies with sustainable energy.
Russian federation ”South West, Leningrad Oblast, modernisation of heat supply – switching from heavy fuel oil and coal to natural gas”. The project was established in 2006. It renovates and modernises district heating stations in different towns in the Leningrad Oblast region southwest of St. Pe tersburg. The project secures a green and stable heat supply to the inhabit ants in a cold area.
China ”Shanxian, electricity generation based on agricultural by-products”. Biomass is bought from the farmers of the Shandong province in the form of woodchips, rice husks and cotton stalks, which are incinerated in a boiler. The steam produced is used to generate electricity. Danish experience with biomass and boiler technology was a vital factor for the project, which is a door-opener for modern technology for a market in dynamic growth.
malaysia ”Golden Hope, composting of waste water and organic waste”. Palm oil production leads to waste water with a high organic content. The waste water is normally cleaned in unhygienic lagoons emitting methane. The project introduces a waste water composting process by which the green house gas emissions are reduced, the bad odour is removed from the local area and the plantations get organic fertilizer.
Sustainability A very important aim of the Danish JI/ CDM programme is to ensure longterm environmental, social and financial benefits within the vicinity of project locations. We want to provide all-round solutions in the Danish tradition of social responsibility. That’s why our projects often create a range of positive spin-offs, such as reducing air pollution, new jobs, better landuse, improved water quality, stable and cheap electricity and heat supplies. The Danish Energy Agency takes part in JI/CDM projects in partnership with the project owners and local authorities, to shoulder the responsibility for full completion.
Bangladesh, energy efficiency at brick plant.
The Danish Energy Agency prioritises the long-term sustainability of JI/ CDM projects, which means that activities have to be planned to last longer than the 7-10 year JI/CDM lifespan. What this means in practice is that other forms of income have to be built into a project apart from sales of CO2 credits, and that planning
has to be far-sighted and thorough. The programme has an overall aim of kick-starting the JI/CDM market and contributing to ongoing development and innovation. That’s why the Danish Energy Agency enters into close collaboration with the authorities as part of its project work. For example: Denmark has supported the establishment of national authorities for the approval of CDM projects in several countries, and supports the establishment of a local resource base through training local consultants and experts. New, innovative types of projects and approaches to projects are also encouraged. The Danish Energy Agency is concentrating on the development of CDM projects in the poorest developing countries, to contribute to transfer of capital, technology and know-how, given the overwhelming development challenges such countries face.
Corporate Social Responsibility – CSR An important consideration for the Danish Energy Agency is meeting international standards, and that the projects themselves must of course comply with the laws of the host nation. The Danish Energy Agency and government want to encourage and support progressive environment and climate-related legislation, to which end Danish experience can play a major role. This means that the Danish government’s JI/CDM programme represents credibility and responsibility. The Danish Energy Agency enters into close dialogue with project owners, with regard to fulfilment of the 10 principles of the UN global compact. The Danish Energy Agency believes it is essential that projects receive full support of the local communities. This is ensured by such processes as public hearings during project startup. 6
The 10 principles of the un global compact Human Rights 1. Businesses should support and respect the protection of internationally proclaimed human rights; and 2. make sure that they are not complicit in human rights abuses. Labour Standards 3. Businesses should uphold the freedom of association and the effective recognition of the right to collective bargaining; 4. the elimination of all forms of forced and compulsory labour; 5. the effective abolition of child labour; and 6. the elimination of discrimination in respect of employment and occupation. Environment 7. Businesses should support a precautionary approach to environmental challenges; 8. undertake initiatives to promote greater environmental responsibility; and 9. encourage the development and diffusion of environmentally friendly technologies. Anti-Corruption 10. Businesses should work against corruption in all its forms, including extortion and bribery.
Innovative Danish technology for composting. Simon Moos, Malaysia.
A key concept behind the JI and CDM programmes – and one of the points which has ensured wide-ranging backing from developing countries – is the transfer of modern environmental and energy technology from the most developed countries.
In each instance, the Danish Energy Agency can advise project owners on the most appropriate technological solutions – and has an extensive network to call upon amongst Danish technology vendors. Accordingly, a number of the Agency’s projects have been developed in cooperation with Danish exporters. The use of Danish technology is not compulsory, but where Danish equipment or know-how can make a costeffective difference to a project, the Agency will advise on its use. The expertise and network we can bring to bear ensures that Danish technology can help resolve climate-related issues, even when deployed far from Denmark. The Danish Energy Agency works closely with the Eksport Kredit Fonden and The Trade Council of Denmark. Collaboration with these bodies ensures exporters receive professional advice and partnerships for all aspects of a JI/CDM project, and opens up a wide range of opportunities for JI/CDM project owners and developers for financing the establishment of their projects.
Become a partner Project owner The Danish Energy Agency welcomes proposals for new projects from potential JI/CDM project owners, and we will help with the initial screening process. If a proposal is deemed promising, we will conclude a collaboration agreement together, which will meet the requirements of each project owner. The Danish Energy Agency can offer competitive prices for CO2 reductions generated, and will usually offer to manage and finance the preparation of all documentation and approval procedures, right from idea phase to final registration of the project by the UN.
developing the project further and achieving CO2 reductions. Of vital importance to the Danish Energy Agency is the ability to build a close relationship to those projects which will be facilitated through project developers and intermediates, as the Agency’s high quality standards will also apply to such projects. Technology vendors The Danish Energy Agency prioritises the promotion of Danish vendors of technology for projects in which it invests in.
The Agency can act as a partner for exporters and apart from purchasing CO2 credits on competitive terms, can also: • Assess proposed projects, undertake feasibility studies and draft a formal Project Idea Report. • Pay for the Project Design Document, environmental impact assessment, etc. • Contribute to project financing via advance payment for CO2 credits. • Ensure effective monitoring of JI/ CDM projects by training local personnel, paying for the issuing of CO2 credits, etc.
Whilst the project is underway, the Agency will also help with its monitoring and annual verification of CO2 reductions achieved. Project developer The Danish Energy Agency is always willing to work with Danish and international JI/CDM project developers and brokers. Project developers can propose projects at various stages of development. The Danish Energy Agency will then carefully assess them and propose a collaboration model and terms for 7
This booklet describes the pro gramme of the Danish Energy Agency for investments in inter national climate projects under the Kyoto Protocol. The Dan ish Energy Agency’s experienced team develops climate projects in Eastern Europe and in developing countries with focus on sustain ability, Corporate Social Respon sibility and technology transfer. The booklet provides an overview of the Agency’s projects in 12 countries world wide. The target group is project hosts, project developers and technol ogy suppliers who may wish to work with the Danish Energy Agency. In addition the booklet targets everyone seeking know ledge on the Danish state’s involvement in international climate projects.
Danish Energy Agency Amaliegade 44 DK 1256 Copenhagen K P: +45 33 92 67 00 E: email@example.com www.ens.dk Design and production: Datagraf · 2009 This folder is carbon neutral. The folder’s carbon footprint is calculated using Green House Gas Protocol (GHG Protocol). The standard is publicly available on the webpage www.ghgprotocol.org.
The Danish Energy Agency’s JI/CDM Team Danish Energy Agency projects are featured at www.ens.dk. The Agency holds information seminars every six months for the whole Danish JI/CDM resource base, and anyone is welcome to contact Agency project managers by phone or e-mail.