Implementation of the Kyoto Protocol 's Clean Development Mechanism in Armenia ”Enabling Activities for the Preparation of Armenia’s Second National Communication to the UNFCCC” Project UNDP/GEF/00035196 Table of contents 1. CDM POLICY FRAMEWORK IN ARMENIA ..................................................................2 1.1 Background ....................................................................................................................2 1.2 Implementation...............................................................................................................2 1.2.1 Capacity building .......................................................................................................................... 2 1.2.2 Legal framework ........................................................................................................................... 4 1.3 Institutional Set up of the Armenian DNA.......................................................................5 1.3.1 Head of the DNA and the DNA Contact Person .......................................................................... 5 1.5 DNA Secretariat .............................................................................................................6 1.5 Expert Group..................................................................................................................6 1.6 Procedure Proposed for CDM Project Approval in Armenia ..........................................7 1.7 Conclusions....................................................................................................................7 2. CDM PROJECT APPROVAL PROCESS ......................................................................7 2.1 Background ....................................................................................................................7 2.2 Procedure Proposed for CDM Project Approval in Armenia ..........................................8 2.3 CDM projects approval criteria .....................................................................................12 2.4 General national requirements to CDM projects ..........................................................13 2.5 Sectors prioritized by the Armenian DNA for CDM project implementation .................13 2.6 CDM projects in Armenia .............................................................................................14 3. LEGAL ISSUES REGARDING CDM IN ARMENIA......................................................15 3.1 Definition of the legal nature of CERs in Armenia ........................................................15 ANNEX I: SAMPLE LETTER OF ENDORSEMENT.............................................................17 ANNEX II: SAMPLE LETTER OF APPROVAL ....................................................................18 ANNEX III: CDM PROJECT ACTIVITIES IN ARMENIA ......................................................19 1. Nubarashen Landfill Gas Capture Project in Yerevan ............................................................... 20 2. Lusakert Biogas Plant (LBP), methane capture and combustion from poultry manure treatment..................................................................................................................................... 22 3. Yeghegis Small-Scale Hydro Project ......................................................................................... 24 4. Argichi Small Hydroelectric CDM Project ................................................................................... 26 5. Jradzor Small Hydro Electric CDM Project................................................................................. 28 6. Eghvard-2 Small Hydropower Project in Armenia...................................................................... 30 7. Hankavan-1 Small Hydroelectric CDM Project........................................................................... 32 8. Energocor Small-Scale Hydro Bundled Project in Armenia ....................................................... 34 9. Saravan and Her-Her Small-Scale Hydroelectric CDM Project ................................................. 36 10. Optimization of Cement Production Technological Processes and Introduction of Power and Resources Saving Technologies at CJSC MICA-CEMENT....................................................... 38 11. Cascade Credit Small Scale Hydro Bundled Project in Armenia ............................................... 40 12. Gegharot Small Hydropower Plant in Armenia........................................................................... 42 13. Community Small Scale Afforestation/Reforestation Project in RA Lori Marz........................... 44 14. Recovery of Biogas from Chicken Manure and Thermal (Electrical) Energy Generation at Araks Poultry Factroy ................................................................................................................. 47 15. Semenovka 14.5 MW Wind Farm Project .................................................................................. 49 16. Restoration of the Heat and Hot Water Supply for the Avan District in Yerevan, Armenia........ 51 ANNEX IV: CDM PROJECT OPPORTUNITIES IN VARIOUS REGIONS OF ARMENIA ...53 ANNEX V: LIST OF CLEAN DEVELOPMENT MECHANISM PROJECTS IN ARMENIA....54 ANNEX VI: ABBREVIATIONS .............................................................................................57 ANNEX VII: GLOSSARY OF CDM TERMS.........................................................................58 Implementation of the Kyoto Protocol’s Clean Development Mechanism in Armenia 1 1. CDM Policy Framework in Armenia 1.1 Background The Republic of Armenia signed the United Nations Framework Convention on Climate Change (UNFCCC) on June 13, 1992 and ratified it as a non-Annex I country on May 14, 1993. On December 26, 2002, the National Assembly of Armenia ratified the Kyoto Protocol, which made the Armenia the 108-th Party to join the Protocol. Thus, Armenia has met one of the main requirements for participation in Clean Development Mechanism (CDM). It is important to mention that Armenia, as a non- Annex I country, does not have any quantitative obligations regarding greenhouse gases emissions reduction or limitation. 1.2 Implementation On September 16, 2003, the Ministry of Foreign Affairs of the Republic of Armenia submitted a notification to the UNFCCC Secretariat on the assignment of the Ministry of Nature Protection (MoNP) of the Republic of Armenia as Designated National Authority (DNA) for CDM in Armenia. On November 9, 2004, the Memorandum of Understanding between the Government of the Republic of Armenia and the Government of the Kingdom of Denmark on co-operation for the implementation of the Kyoto Protocol was signed. The main objective of the Memorandum is to facilitate the development and implementation of project activities in the Republic of Armenia and the transfer to Denmark of the agreed part of the Certified Emission Reductions (CERs) resulting from those project activities in accordance with Article 12 of the Kyoto Protocol. The Memorandum was ratified by Decree of the President of the Republic of Armenia on March 9, 2005 and entered into force on March 17, 2005. Starting from 1998, four year Action Plans were developed for the implementation of commitments of Armenia under UNFCCC. The Action Plans adopted by the Government Decisions set measures, responsible and co-operating national agencies for the implementation of certain activities and measures. The Action Plan adopted in 2004 for the period of 2004-2008 envisaged measures for the implementation of the Kyoto Protocol in Armenia. Particularly it was planned to elaborate and adopt the procedures for national approval and implementation of CDM projects. 1.2.1 Capacity building In 1996, the UNDP/GEF funded project ”Armenia - Country Study on Climate Change” was launched in order to support Armenia in capacity building and developing its First National Communication (FNC). The ultimate objective of this project was building capacity in Armenia to fulfil the country’s commitments to the UNFCCC and respond to the objectives of the Convention on a sustained basis. Within the framework of the implementation of Phase I of the mentioned project, Armenia’s First National Communication was developed and presented in Buenos Aires in 1998, at the fourth Conference of the Parties to UNFCCC. In 1997, the Climate Change Information Center along with its web site (www.nature-ic.am) was established aiming at provision of the information on Implementation of the Kyoto Protocol’s Clean Development Mechanism in Armenia 2 ongoing and envisaged environmental projects targeted to climate change mitigation, as well as development and dissemination of publications and awareness rising materials. In II phase of the project, Armenia received additional funding from UNDP/GEF for incorporating a technology needs assessment in priority areas. The elaborated report also provides the outcomes of a self-assessment of national needs for GHG abatement and adaptation technologies and prioritised them under a set of evaluation criteria agreed by experts and stakeholders consulted. After selection of key technologies, a package of project proposals, addressing each selected technology option was developed. In 2002 GEF supported also the regional project aimed at national capacity building for development of GHG inventories. This project targets 12 countries from Eastern Europe and Newly Independent States (NIS), including Armenia. By strengthening the institutional