Existing CDM Potential and Perspectives for Carbon Finance in RCREEE Member States Beyond 2012

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Existing CDM Potential and Perspectives for Carbon Finance in RCREEE Member States Beyond 2012 Existing CDM Potential and Perspectives for Carbon Finance in RCREEE Member States Beyond 2012 Countries studies: Jordan, Yemen, Syria, Libya, Lebanon, Algeria, Egypt, Tunisia and Morocco Final report November 2011 September 2011 Existing CDM Potential and Perspectives for Carbon Finance in RCREEE Member States Beyond 2012 Contents 1. Abbreviations ............................................................................................................. 2 2. Background................................................................................................................ 3 3. Main conclusions and recommendations ................................................................... 4 4. Summary table of projects and programmes in the countries .................................. 10 Annex 1 – Jordan country study ........................................................................................ 12 Annex 2 – Yemen country study ........................................................................................ 29 Annex 3 – Syria country study ........................................................................................... 47 Annex 4 – Libya country study ........................................................................................... 64 Annex 5 – Lebanon country study ..................................................................................... 70 Annex 6 – Algeria country study ........................................................................................ 96 Annex 7 – Egypt country study ........................................................................................ 103 Annex 8 – Tunisia country study ...................................................................................... 117 Annex 9 – Morocco country study ................................................................................... 131 Perspectives GmbH Hamburg Office: Baumeisterstr. 2 20099 Hamburg, Germany · www.perspectives.cc · [email protected] Page 1 Existing CDM Potential and Perspectives for Carbon Finance in RCREEE Member States Beyond 2012 1. Abbreviations - CDM: Clean Development Mechanism - CER: Certified Emission Reduction - CFL: Compact Fluorescent Lamp - DNA: Designated National Authority - EB:CDM Executive Board - EE: Energy Efficiency - ESCO: Energy Services Company - EU ETS: European Union Emissions Trading Scheme - GHG: Greenhouse Gas - MENA: Middle East and North Africa - MRV: Measurement, Reporting and Verification - MW: Megawatt - NAMA: Nationally Appropriate Mitigation Action - PIN: Project Idea Note - PoA: Programme of Activities - RE: Renewable energy - tCO2e: Ton of carbon dioxide equivalent - UNFCCC: United Nations Framework Convention on Climate Change Perspectives GmbH Hamburg Office: Baumeisterstr. 2 20099 Hamburg, Germany · www.perspectives.cc · [email protected] Page 2 Existing CDM Potential and Perspectives for Carbon Finance in RCREEE Member States Beyond 2012 2. Background The Regional Centre for Renewable Energy and Energy Efficiency (RCREEE) wants to harness the potential of the Clean Development Mechanism (CDM) to mobilize energy efficiency and renewable energy projects in its member states (Algeria, Egypt, Jordan, Lebanon, Libya, Morocco, Palestine Authorities, Syria, Tunisia, and Yemen). Given that CDM has not really taken off in the region, which currently has a share of less than 1% of the total number of CDM projects as well as the volume of certified emission reductions (CER) estimated, RCREEE wants to mobilize a maximum of CDM projects for registration before the end of 2012, because projects registered afterwards can no longer export their CERs into the European Union Emissions Trading Scheme (EU ETS). The technical potential for CDM is quite high in the entire RCREEE region given the natural availability of renewable energy (solar energy in all member states, wind power in many of them), and the region has a strong potential for energy efficiency projects and other potential CDM sectors. This potential for energy savings is found in energy intensive industries (heavy industries, oil and gas sector) as well as in the residential sector. This includes whole series of activities in so-called Programmes of Activities (PoA). However, the revolutions, continuing unrest and civil war in some RCREEE member states make the environment for CDM implementation even more challenging than it has been in the past. Some RCREEE members have had a national CDM authority (DNA) for several years, built capacity of local consultants and project developers and developed project pipelines with the help of international donors (Egypt, Morocco, Tunisia), whereas others have set up DNAs but otherwise only taken fledgling steps (Algeria, Lebanon, Libya, Syria and Yemen). Palestine is a special case as it is not yet a member state of the UN and thus cannot participate directly in the CDM. The present report assesses the CDM potential in Jordan, Yemen, Syria, Libya, Lebanon, Algeria, Egypt, Tunisia and Morocco, and identifies a CDM portfolio for these countries. For projects found to be mature, a tailored implementation plan is to be developed that enables CDM registration before the end of 2012. Given the uncertainty of the international climate policy system after 2012 where the CDM may be replaced by or complemented with new market mechanisms, RCREEE wants in addition to assess the opportunities and risks of utilising these new mechanisms. Given that the EU has stated its willingness to engage in bilateral negotiations with developing countries to set up sectoral crediting, the strategic implications of doing so should be considered. Given that the Cancun Agreements have confirmed the concept of Nationally Appropriate Mitigation Actions (NAMAs), including NAMAs supported through climate finance, RCREEE countries could be pioneers in setting up NAMA pilots. A preliminary study on the strategic considerations of entering into bilateral negotiations on sectoral crediting, and the potential of NAMA opportunities for these countries is included in a separate report. Perspectives GmbH Hamburg Office: Baumeisterstr. 2 20099 Hamburg, Germany · www.perspectives.cc · [email protected] Page 3 Existing CDM Potential and Perspectives for Carbon Finance in RCREEE Member States Beyond 2012 3. Main conclusions and recommendations 2,380tCO2e per year. In addition to the 2 registered projects, 2 projects are submitted for Jordan registration (Amman Ghabawi Landfill Gas to Energy Project and Samra 300 MW combined Jordan is eligible for the CDM since it has signed cycle project) and one project under validation the UNFCCC in 1993, ratified the Kyoto Protocol (Amman East 386.96 MW Combined Cycle Power in 2003 and created the DNA in 2005. Plant). Two PoA were identified among this portfolio. The first is related to the Demand-Side Energy Efficiency for Water Pumping Stations and the second is the CDM city-wide Program of Activities of the Greater Amman Municipality including energy, transportation, waste and urban forestry. Considering, their maturity status, it seems unlikely that they could be registered before 2012. Among the CDM portfolio, 3 projects were identified as priorities to be supported in order to help them register before 2012. The selection has been done based on specific criteria, such as project maturity, quality of the implementer, scale of the project, mitigation potential, additionality criteria, chance to be registered before 2012. Source: data.un.org These 3 projects are Amman East 386.96 MW The second national communication has identified Combined Cycle Power Plant, Wind farm of Fujeij thirty eight GHG mitigation projects covering 5 and Wadi Araba (60 MW) and Al kaider landfill, areas: primary energy switch, renewable energy, gas collection for power generation. The energy efficiency, waste, and agriculture. The estimated cost of the financial requirement for the cumulated GHG mitigation of these projects over supporting activities is around 210,000 €. It is the period 2009-2033 is estimated to around 100 proposed that RCREEE and its cooperation Million tCO2e. Energy efficiency (33%), renewable partners cover about 140,000 €. energy (27%) and fuel switch (21%) are the major part of this mitigation potential. Energy efficiency Yemen and primary energy switch projects can be Despite the early notification of the DNA to implemented through a “no-regrets” approach, UNFCCC Secretariat, even before its ratification since the abatement cost of CO2 is negative, of Kyoto Protocol, the CDM in Yemen has been respectively -90 JD/ tCO2e and -14 JD/ tCO2e. progressing at a very slow pace. Despite this high mitigation potential, Jordan has not fully profited from the CDM. Up to now, only 2 projects, with a potential reduction of 434 tCO2e, were registered: The fuel Switching Project of the Aqaba Thermal Power Station and the Reduction of Methane Emissions from Ruseifeh Landfill. The CDM development in Jordan requires strengthening of the capacity of the DNA towards better responsiveness, sustainability, efficiency and transparency; to carry out the appropriate reform of the legal and institutional framework of the CDM, particularly regarding the bidding procedures of CER selling; to remove the CDM revenues tax (15%) in order to make CDM more attractive for project holders; and to promote the development of energy efficiency and renewable Source: data.un.org strategies so as to encourage CDM expansion. The identified CDM projects portfolio includes 11 projects with
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