Indonesia experiences in market based mechanisms...
Transcript of Indonesia experiences in market based mechanisms...
Indonesia experiences in market based mechanisms development
a Joint Crediting Mechanism case study
Dicky Edwin Hindarto
Head of Indonesia JCM Secretariat
Indonesia target on GHG emission reduction pre and post Paris Agreement
0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
3,500,000
1995 2000 2005 2010 2015 2020 2025 2030 2035BAU Baseline Emisi Baseline Emisi Skenario Kebijakan Ambitious
Baseline Emisi Skenario Kebijakan Fair Baseline Emisi Skenario Kebijakan Unilateral
Voluntary emission reduction at362 M.ton CO2e or
20% compared to BAU in 2020
Conditional scenario:Estimated emission reduction
at 1.2 G.ton CO2e or 41 % compared to BAU
In 2030
Unconditional scenario: Estimated emission reduction of
848 M.ton CO2e or 29 % compared to BAU in 2030
BAU Baseline emission
Fair scenario of baseline emission
Ambitious scenario of baseline emission
Unilateral scenario of baseline emission
Source, Bappenas, 2015
What our NDC said on market based mechanism
"Indonesia welcomes bilateral, regional
and international market mechanisms
that facilitate and expedite technology
development and transfer, payment for
performance, technical cooperation,
and access to financial resources to
support Indonesia's climate mitigation
and adaptation efforts towards a
climate resilient future“
How Indonesia finance its GHG emission reduction activities
Non-Market Based
Mechanism
Government Budget
Private Sector
Foreign Direct Investment
Private Investment
Private Sector Public
Local Gov’t Budget Investment
Central Gov’t Budget
Foreign Investment
Private &Gov’t InvestmentMarket Based
Mechanism
Carbon Market
Other Types of Market
Market based mechanism is one of the tools to finance GHG emission reduction activities
Market Based Mechanism (MBM) experiences in Indonesia
• Total of 121 registered projects
• 2% of total global CDM registered projectCDM
• Total of 12 registered projects
• Project registered included forestry project VCS
• Total of 23 projects in forestry, energy efficiency, and renewable energy (in 3 years of its development)JCM
• Total of 26 projects in energy efficiency, renewable energy, forestry, waste handling and disposalGold Standard
• Total of 6 projects in the forestry and ecosystem sectorPlan Vivo
GS and Plan Vivo has lower degree of asurance compare to other schemes
Other Indonesia’s initiatives in market based mechanism
• Indonesia was one of the first countries who join this initiative in 2010.
• Currently still in the implementation preparation stage.PMR
• Indonesia actively involved in Asia Pacific Carbon Market Roundtable initiated by New Zealand.
• The roundtable is intended to seek the possibilities of regional market based cooperation.
APCMR
• The newest international initiatives on market based mechanism dialogue initiated by G7 countries.
• This is a high level dialogue and discussion intended to create common understanding in the MBM implementation.
Carbon Market Platform
How the JCM works
• The Joint Crediting Mechanism as a G-to-G scheme which encourages private sector organizations to investin Low Carbon Development activities in Indonesia through incentive from the Government of Japan.
• JCM cooperation is not only conducted by Japan and Indonesia, but also with other 15 developingcountries.
• Bilateral Cooperation on the Joint Crediting Mechanism for the Low Carbon Growth Partnership betweenthe Republic of Indonesia and Japan has been signed by the Coordinating Minister for Economic Affairs ofIndonesia and Minister for Foreign Affairs of Japan.
• Objectives of the JCM:1. Facillitate diffusion of leading low carbon technologies, products, systems, services, and infrastructure as
well as implementation of mitigation actions, and contributing to sustainable development of developingcountries.
2. Evaluate contributions to GHG emission reductions/removals from developed countries in a quantitativemanner, through mitigation actions implemented in developing countries and use those emissionreductions or removals to achieve emission reduction targets of the developed countries.
3. Contribute to the ultimate objective of the UNFCCC by facilitating global actions for emission reductionsor removals.
List of JCM projectsJCM Implemented Projects (from 108 Feasibility Studies) Emission Reduction
Demonstration Project
Remote Auto-Monitoring System for Thin-Film Solar Power Plant in Indonesia 1.433 tCO2/tahun
Energy Saving by Optimum Operation at Oil Refinery 3.400 tCO2/tahun
Utility Facility Operation Optimization Technology 58.000 tCO2/tahun
The low carbonization of mobile communication’s BTS by the introduction of TRIBRID system in Indonesia163 tCO2/tahun
Model Project
Power generation by waste heat recovery in cement industry 122.000 tCO2/tahun
Energy Savings at Convenience Stores 372 tCO2/tahun
Energy saving through introduction of regenerative burners to the aluminum holding furnace of the automotive components manufacturer856 tCO2/tahun
Solar power hybrid System installation to existing base transceiver stations in off-grid area 2.786 tCO2/tahun
Energy saving by double bundle-type heat pump 170 tCO2/tahun
Introduction of High efficient Old Corrugated Cartons Process at Paper Factory 14.884 tCO2/tahun
Reducing GHG emission at textile factories by upgrading to air-saving loom 566 tCO2/tahun
Installation of Gas Co-generation System for Automobile Manufacturing Plant 20,439 tCO2tahun
Energy Saving for Shopping Mall with High Efficiency Centrifugal Chiller 925 tCO2/tahun
Energy Saving for Industrial Park with Smart LED Street Lighting System 900 tCO2/tahun
Energy saving by introduction of high efficiency once-through boiler system in a film factory 428 tCO2/tahun
Introduction of high efficiency once-through boiler and RO pure water system in golf ball factory 380 tCO2/tahun
Jakabaring Sports City Megasolar Power Plant Project 1.265 tCO2/tahun
REDD+ Model Project
REDD+ Model Project in Boalemo district 100.000 tCO2/tahun
Registered Project
Energy saving for air-conditioning and process cooling by Introducing High-efficiency Centrifugal Chiller114 tCO2/tahun
Project of Introducing High Efficiency Refrigerators to a Food Industry Cold Storage in Indonesia (credit issued) 29 tCO2/tahun
Project of Introducing High Efficient Refrigerator to a Frozen Food Processing Plant in Indonesia (credit issued) 11 tCO2/tahun
Energy saving for textile factory facility cooling by high efficiency centrifugal chiller 118 tCO2/tahun
Energy saving for air-conditioning and process cooling at textile factory 117 tCO2/tahun
Total: 23 Projects 329.382 tCO2/year
MRV’s key component
JCM as a market based mechanism (MBM) follows the key elements in carbon market instrument infrastructure:
M R VMeasurement Reporting Verification
elements to have a robust emission reduction i.e 1 tCO2 is really 1 tCO2
Methodology Registry
MRV in carbon market is project based
Step by step of JCM scheme
*PDD: Project Design Document
Submission of Proposed
Methodology
Approval of Proposed
Methodology
Developmentof PDD
Validation
Registration
Monitoring
Verification
Issuanceof credits
Project Participant / Each GovernmentJoint Committee
Joint Committee
Project Participant
Third Party Entities
Joint Committee
Project Participant
Third Party Entities
Joint Committee decides the amountEach Government issues the creditC
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JCM’s infrastructure as an example of MBM
• As a bilateral scheme, JCM comply to each country’s policy• Decision makers in JCM are related ministries as the representative of each respective
country• According to Indonesia’s NDC, bilateral scheme is recognized as one of the tools to achieve
its conditional target• Article 6 in Paris Agreement recognized market mechanism as part of the effort to achieve
global emission reduction target
Guideline:1. Project Design
Document2. Proposed Methodology3. Third Party Entity4. Validation and
Verification5. Sustainable
Development Implementation Plan and Report
Procedure: Project Cycle Procedure
Rules: 1. Rules of Implementation2. Rules of Procedure for JC
Registry system
Methodologies:12 methodologies of energy efficiencies and renewable
energy have been developed
ISO 1
40
65
base
d
EnvironmentEconomic
Social
Technology
1. One of the JCM purposes is to contribute to sustainable development
2. Indicator is needed to evaluate achievement in JCM.3. Ensure every JCM project will deliver co-benefit for
Indonesia.4. To fulfill global standards for appropriate climate change
mitigation action under the UNFCCC5. Enforcement of sustainable development criteria suitable
for Indonesian conditions
Sustainable Development Implementation Plan (SDIP) must be submitted during request of registration
Sustainable Development Implementation Report (SDIR) is assessed during request of issuance
Sustainable Development Criteria
Parties shall, where engaging on a voluntary basis in cooperative approaches that involve the use of internationally transferred mitigation outcomes towards nationally determined contributions, promote sustainable development and ensure environmental integrity and transparency, including in governance, and shall apply robust accounting to ensure, inter alia, the avoidance of double counting, consistent with guidance adopted by the Conference of the Parties serving as the meeting of the Parties to the Paris Agreement.
Paris Agreement article 6 para 2
• The registry system in Indonesia is developed and maintained to ensure the accurate accounting of the issuance, holding, transfer, acquisition, cancellation and retirement of JCM credits.
• Three (3) basic transactions in JCM registry: transfer, cancellation, and retirement.
• Components in the Indonesia JCM registry:
o “Master Operation sheet” to register JCM
project and new account in the system and to
modify the information which already in the
registry system
o “Credit Related Operation sheet” to manage the
JCM credit in the registry system
o “Master sheets” act as a database that store all
operation and input in the system.
o “Account sheets” is to manage the credit
amount of each account.
And the latest development is our JCM registry system
JCM has issued carbon credits for
its first 2 projects on May 2016!
The JCM registry is the first climate change
registry that developed in Indonesia
Our website: http://jcm.ekon.go.idContact us at [email protected]
Sekretariat JCM IndonesiaGedung Kementerian Koordinator Bidang Perekonomian Lt.2
Jl. Medan Merdeka Barat 7, Jakarta 10110
Thank you! Terima kasih!