Thailand's GHG mitigation plan

Thailand Greenhouse Gas Management Organization (Public Organization) (TGO)

Thailand's GHG Mitigation Planand Role of Carbon Market

Sarun Pravitrangul

Carbon Business Office

“The Role of Renewable Energy and Energy Efficiency in Climate Change and its

relevance to Construction and Hospitality Industry”

ITCC Convention Hall, 9 June 2016

Thailand Greenhouse Gas Management Organization (Public Organization) (TGO)2

Climate Change

• Global Temperatures have broken the records many times during the last year

• Every months of 2016 are the hottest on the record and by the largest margin ever

Source : Hawkins (2016)


Global Greenhouse Gases Emission

Data excerpted from the World Resource InstituteTotal emission of 2012 are 44,815.54 MtCO2e

Rank Country Total GHG Emissions*

(MtCO₂e) Total (%)

1 China 10,975.50 24%

2 United States 6,235.10 14%

3 European Union (28) 4,399.15 10%

4 European Union (15) 3,519.99 8%

5 India 3,013.77 7%

6 Russian Federation 2,322.22 5%

23 Thailand 375.70 0.8%

* Total GHG Emissions in 2012 Excluding LULUCF Source: World Resource Institute (2016)


Atmospheric CO2 Concentration

April 2016: 404.08 ppmApril 2015: 400.72 ppmLast updated: June 6, 2016

Source : US National Oceanic and Atmospheric Administration (2016)

• If the global target is to limit globaltemperature increase to 2°C over the pre-industrial period, CO2 concentration levelhas to be kept below 450 PPM

Source : IPCC (2007)


UNFCCC & the Kyoto Protocol

United Nations

Framework Convention

on Climate Change

(UNFCCC) entry into force in 1994

Kyoto Protocol

(Legally binding protocol)

Entry into force in 2005

Annex I Parties(developed country)

41 countries

Non-Annex I Parties(developing country)

155 countries

Non-Annex I Parties

Without binding targets

Annex I Parties

With binding targets : reduce GHG 5% of 1990 by 2012

in first commitment period


Pre-2012 Pre-2020 Post-2020

A New Agreement under the UNFCCC

Developed

countries

Developing

countries

UNFCCC &

the Kyoto Protocol

(Voluntary basis)

• Supported

• CDM

• Nationally Appropriate Mitigation Actions in the context of sustainable

development (Voluntary)

• Enabled and supported by

Technology, Finance & Capacity Building

• In a “Measurable, Reportable & Verifiable (MRV)” manner

• GHG Reporting : Biennial Update

Report (BUR) + ICA

• Economy-wide Emission Reduction Targets

• GHG Reporting : Biennial Report

• International Assessment & Review (IAR)

2012 2020

UNFCCC &

the Kyoto Protocol Commitment

KP’s 1st Commitment

Period 2008 – 2012

Paris AgreementTo be applicableto all Parties

from 2020

(Adopted by the Conference of the Parties (COP)

at its 21st session

in 2015,

in Paris)

Kyoto Protocol (KP)2nd Commitment Period


Paris Agreement

• Aims to strengthen the global response to the threat of climate change, in the context of sustainable development and efforts to eradicate poverty, including by:

(a) Holding the increase in the global average temperature to well below 2°C above pre-industrial levels and to pursue efforts to limit the temperature increase to 1.5 °C above pre-industrial levels, recognizing that this would significantly reduce the risks and impacts of climate change;

(b) Increasing the ability to adapt to the adverse impacts of climate change and foster climate resilience and low greenhouse gas emissions development, in a manner that does not threaten food production;

(c) Making finance flows consistent with a pathway towards low GHG emissions and climate resilient development.


Article 6 of the Paris Agreement

National Actions

Implementation of Nationally Determined Contribution (NDC)

Pursuing Voluntary Cooperation

Art.6.1

• To allow for higher ambition in

mitigation & adaptation

• To promote sustainable development &

environmental integrity

Art.6.7-6.8 Define a Framework

for non-market approaches

• Assist in the implementation of NDC

- In the context of sustainable

development & poverty eradication

- In a coordinated and effective

manner through Mitigation,

Adaptation, Finance, Technology

Transfer and Capacity-building, as

appropriate

• Aim to :

- Promote mitigation & adaptation

ambition

- Enhance public & private sector

participation in the implementation

of NDCs

- Enable opportunities for

coordination across instruments and

relevant institutional arrangements

Art.6.2-6.3 Engage on a voluntary

basis in Cooperative Approaches

• Involve the use of Internationally

transferred mitigation outcomes

(ITMOs) towards NDCs

• Promote sustainable development

• Ensure environmental integrity &

transparency including in governance

• Apply robust accounting to ensure

avoidance of double counting

• Consistent with guidance adopted by

the CMA

Art.6.4-6.6 Establish a Mechanism to

contribute the mitigation & support

sustainable development

• Aim to :

- Promote mitigation & foster

sustainable development

- Incentivize & facilitate participation

in mitigation by public & private

entities

- Result in reductions that can also be

used by another Party to fulfill its

NDC (Double Counting to be

avoided)

- Deliver an overall mitigation in

global emissions

• Ensure a share of proceeds to meet

the costs of adaptation


Thailand’s Emission Reduction Pledges

“Thailand will endeavor, on a voluntary basis, to reduce its GHG emissions in the range of 7 to 20 percent below the Business as Usual (BAU) in energy and transportation sectors in 2020, subject to the level of international support provided […]”

“Thailand intends to reduce its greenhouse gas emissions by 20

percent from the projected business-as-usual (BAU) level by 2030.

The level of contribution could increase up to 25 percent, subject to

adequate and enhanced [support] through a balanced and ambitious global

agreement […]”

Nationally Appropriate Mitigation Action (NAMA)

Intended Nationally Determined Contributions (INDC)

RE EE Bio-fuels Transport

Inclusion of LULUCF will be decided later

Coverage:

Coverage: Economy-wide

Pre-2020

Post-2020


Nationally Appropriate Mitigation Action (NAMA)

NAMAs pledge :

Thailand will endeavor, on a voluntary basis, to reduce its GHG emissions

in the range of 7 to 20 % below the Business As Usual (BAU)

in energy and transportation sectors in 2020…

Potential Emission Reduction Plans: AEDP, EEDP, and PDP by Ministry of Energy Environmentally Sustainable Transport System by

Ministry of Transport

Reduction Measures: Renewable Energy: Biomass, Biogas, Hydro, Solar, Wind, Waste-to-Energy Energy Efficiency: EE improvement in Industries, Buildings, Transport Bio-fuels and alternative energy sources Environmentally Sustainable Transport System

RE EE Bio-fuels TransportCoverage:


Thailand INDCs (Post 2020)

“Thailand intends to reduce its greenhouse gas emissions by 20% from the projected business-as-usual (BAU) level by 2030. The level of contribution could increase up to 25%, subject to adequate and enhanced [support] through a balanced and ambitious global agreement […]”

Role of market mechanism: “Thailand recognizes the important role of market-based mechanisms to enhance the cost effectiveness of mitigation actions, and therefore will continue to explore the potentials […]”

Inclusion of LULUCF will be decided laterCoverage: Economy-wide


Thailand Projected BAUand Emission Reduction Pathways

200

300

400

500

600

2010 2015 2020 2025 2030

Gre

en

ho

use

Gas

Em

issi

on

(MtC

O2e

)

Year

555 MtCO2e

343 MtCO2e

445 MtCO2e

Thailand NAMAs - INDCs Target

367 MtCO2e

2013

404 MtCO2e

428 MtCO2e

243 MtCO2e

251 MtCO2e

NAMAs 7- 20%

2020 BAU: Energy and Transportation

INDCs: 20 - 25%

2030 BAU: Economy-Wide

24MtCO2e

110MtCO2e

226 MtCO2e

293 MtCO2e

415 MtCO2e

NAMAs Tracking

14 MtCO2e

354 MtCO2e

Source: TGO


Thailand Emission Reduction Options

GHG Mitigation

Market

International

CDM under Kyoto Protocol

Emission Reduction from other Standards

Emission Trading

Domestic

Project BasedThailand Voluntary

Emission Reductions

(T-VER)

Area BasedThailand Voluntary Emission Trading

Scheme

(Thailand V-ETS)

Non-market

Technology

Tax / Carbon Fund

Other Incentives

Rules and Regulations

Others


How does ETS Work?


Benefits of ETS

• Achieve emission reduction target with lower costs

• Better reflection on carbon price during economic fluctuation

• Promote emission reduction initiatives and sustainable business by exploring the least cost option for emission reduction

• Proven to be effective for dealing with GHG emission reduction

• Possible linking between carbon markets from several countries


Disadvantages of ETS

Source: Jasaon Lee, Global Green Growth Institute (2014)

• Fluctuation of carbon credit price

– Credit price can change occasionally same as interest

rates, foreign exchanges, etc.

– Volatility of carbon price can be solved by using some

kind of safety valves such as price collar, MSR, etc.

• Others

– Trigger relocation of production relocations are decided

based on many reasons such as local tax rate, wages, energy prices, etc.

– Reduce comparative advantage of the firm ETS is a

flexible policy and can be tailored to fit a country’s circumstances


Carbon Pricing Around the World

Source: State and Trends of Carbon Pricing 2015 - World Bank (2015)


Voluntary Carbon Market in Thailand

Foreign VERs

Type: Project-based

Eligibility: GHG reduction project, Pre-registered CDM

MRV: Foreign standards (VCS, GS, etc.)

Credit: VERs

Registry: Standard Owners

Buyer: Foreign/Thai

Status: Active

T-VER

Type: Project-based

Eligibility: energy efficiency, etc.

MRV: ISO 14064-2 / 14064-3 / 14065 / CDM / J-VER / KVER

Credit: TVERs

Registry: T-VER

Buyer: Government / Company CSR / Brokers

Status: Active (Oct 14)

Thailand V-ETS

Type: Cap-and-Trade

Target: Industries

MRV: ISO 14064-1 / 14064-3 / 14065

Credit: Allowances

Registry: ETS

Buyers: Participants/ Traders

Status: Pilot Phase (since 2015) for MRV testing

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Thailand Voluntary Emission Reduction Program: T-VER


T-VER Eligibility Criteria

CDM projects that has been registered can be converted to T-VER:

- It can continue using CDM methodologies

- It shall use T-VER templates (PDD, Monitoring, Validation, Verification forms)

- It shall follow T-VER validation and verification guidelines

Crediting period

(1) The project which has not started

– 7 years for normal project, 20 years for forestry project

– The crediting period shall be started no later than 1 year after submitting the project registration documents

(2) The project which has been implemented

– 7 years for normal project, 20 years for forestry project

– The crediting period can be started 1 year before the date when project owner completely submits project registration documents to TGO.

Additionality and Co-benefits:

– Assess the Additionality and Co-benefits criteria by using TGO’s guideline.


T-VER Approved Methodologies and Registered projects

Approved Methodologies- Energy Efficiency (EE): 7- Renewable Energy (RE): 5- Waste Management (WM): 7- Forestry and Green Area (FOR): 3- Agriculture (AGR): 2

There are 27 registered projects which are expected to reduce GHG 845,502 tCO2e

Project type No. of project

RE, EE, WM, and transport 20

FOR and AGR 7

Total 27


Thailand Voluntary Emission Trading Scheme(Thailand V-ETS)


GHG Emission from Industrial Sectors in 2011

*Data excluded indirect GHG emission from electricity usage

Source: GHG information Center, TGO (2014)


T-VETS Participants

Target Industries:

Electricity Generation, Petrochemical, Cement, Pulp and Paper, Iron and Steel, and other energy-intensive sectors

Implementation Period:

Phase 1 (testing MRV systems): 2015-2017

Phase 2 (testing registry and trading systems): 2018-2020

GHG Coverage: CO2

Base Year: 2012-2013

GHG reporting scope: scope 1 and 2


T-VETS Pilot Projects

Objectives

– To test the MRV systems

– To gather information for designing ETS (Cap setting and allowance allocation)

Participating Industries

– Year 1 (FY2558): Electricity Generation, Petrochemical

– Year 2 (FY2559): Petrochemical, Cement, Pulp and Paper, Iron and Steel

Piloting period

– Nov 2014 – Sep 2017

Outcomes

– MRV Guidelines, Modalities, and Procedures for each sector

– Recommendations for every target industries


T-VETS Operational Boundary


Thank you

Thailand Greenhouse Gas Management Organization (Public Organization)

120 Building B, 9th Floor, The Government Complex,

Chaeng Wattana Road, Laksi, Bangkok. 10210 Tel. 02 141 9829 Fax 02 143 8403

http://www.tgo.or.th or http://carbonmarket.tgo.or.th

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http://www.tgo.or.th/

http://carbonmarket.tgo.or.th/

Thailand's GHG mitigation plan

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