Development of Carbon Market in Thailandunfccc.saveoursky.org.tw/2014teccf/uploads/downloads/06_Sumon... · Development of Carbon Market in Thailand Sumon Sumetchoengprachya Carbon

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

Development of Carbon Marketin Thailand

Sumon Sumetchoengprachya

Carbon Business Office

2014 Workshop on Capacity Building of Regional Carbon Market in Asia:Experiences from Europe

National Taiwan University, Taipei, Taiwan25 June 2014

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

Historic GHG emissions and Key Emitters

• Net GHG emission from the year 2000 to 2009 has been increased from 229 M tCO2e to 331.4 M tCO2e (Increase at 3.9% per year).

The Energy sector is the largest emitter ~ 70% share , followed by agriculture, industrial process, LULUCF and waste management.

In Energy Sector, energy industries and transport are key drivers, totaling account for almost 70%, of the total emissions.

Source: TGO & JGSEE (2012)


Thailand’s GHG emissions in 2000 Thailand’s GHG emissions in 2000-2009



Projected GHG emissions trends

Future emission projection in the BAU scenario, 2012 – 2050 (M tCO2e)

BAU scenario: considering the annual growth of GDP and population at 4.22% and 0.12% for the period of 2012 – 2050

Total GHG emission in 2050 under BAU: 1,331 M tCO2e (A) Energy sector contributes about 76% of total emissions Upon implementation of policies officially launched including PDP, EEDP and AEDP, total

GHG emissions will be reduced to 883.5 M tCO2e. (B)


(A)

(B)


Objectives of Establishing VCM in Thailand

1. Support voluntary GHGs reduction activities

2. Encourage private companies, who attempt to reduce their GHG emissions, implement cost-effective GHGs reduction activities

3. Learn how to manage domestic emission trading scheme / carbon offsetting program


Voluntary Emission Reduction Projects

(VER)

Type: Project-based

Eligibility: Emission Reduction Projects, Pre-registered CDM

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

Carbon Credit: VERs

Registry: Standard Owners

Buyers: International buyers

Status: Existing

Thailand Voluntary Emission Reduction Program (T-VER)

Type: Project-based

Eligibility: energy efficiency, etc.

MRV: Domestic

Carbon Credit: TVERs

Registry: T-VER

Buyers: Government / CSR companies / Brokers

Status: launched in Oct 2013

Thailand Voluntary Emission Trading

Scheme (Thailand V-ETS)

Type: Cap-and-Trade

Target: Industrial sector

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

Carbon Credit: Allowances

Registry: ETS

Buyers: Entities / Traders

Status: launch in Oct 2014

Structure of Voluntary Carbon Market in Thailand


Initiatives to Promote Domestic Carbon Market

• Existing initiative instruments

– Thailand Voluntary Emission Reduction Program (T-VER): a domestic GHG crediting mechanism (project-based), using methodologies which derived from CDM and J-VER methodologies. T-VER program has been launched in October 2013. There are 15 demonstration projects from 8 organizations, covering 7 methodologies e.g. RE, EE, WM, Forestry and Agriculture.

– Thailand Voluntary Emission Trading Scheme (Thailand V-ETS): expected to launch a demonstration program in October 2014.

– Thailand Carbon Offsetting Program (T-COP): a carbon offsetting program, launched in March 2013, aiming to use contributions from participants for supporting domestic GHG emission reduction activities, especially for projects under the T-VER program.

• Proposed initiative instruments under the PMR

– Energy Performance Certificate Scheme (EPC): a voluntary target-and-reward scheme aiming to achieve energy efficiency in energy-intensive factories & buildings and to build core market readiness components in order to be a foundation for establishing the future ETS.

– Low Carbon City Program (LCC): a GHG crediting mechanism which will be a part of T-VER program, aiming to achieve GHG emission reductions implemented by municipalities and local communities.


Toward Future Domestic Carbon Market


Development of Thailand VCM

Thai VCM

MRV System

• Measurement

• Validation

• Reporting

• Verification

Registry System

&

Exchange Platform

Institutional Arrangement

&

Capacity Building

Buyers & Project Developers

• Public Organizations, private sector, Industries

• Carbon Offsetting Program (T-COP)

• Incentives


Thailand Voluntary Emission Reduction Program

(T-VER)


Characteristics of T-VER

• GHG reduction projects– Baseline-and-credit approach

• Size of project– No limitation

– Can be bundled (under development)

• Carbon Credit– TVERs (Thailand Verified Emission Reductions)

• Gas coverage– CO2, CH4, N2O

• Eligible project– New project: GHG reduction project starts after announcement on

the Regulation of T-VER Program by TGO’s Board of Directors.

– Existing project: GHG reduction project starts before announcement on the Regulation of T-VER Program, but not before 2007.

10

Baseline Emission (BE)(Business as usual: BAU)

Project Emission(PE)

GH

G E

mis

sio

n (

tCO

2e

)

Time

ER = BE - PE

Project end

Carbon credit


Characteristics of T-VER (2)

• Registered or validated CDM projects can apply for T-VER registration:

– Allow to use CDM methodologies

– Require to use T-VER’s templates (PDD, monitoring, validation, verification)

– Validate and verify in accordance with T-VER’s validation and verification guidelines.

• Crediting period

– 7 years for non-forestry project / 20 years for forestry project

– For new project, the crediting period starts from the date that all required documents are submitted to TGO (for registration as T-VER project).

– For existing project, the crediting period can be started retroactively not later than 1 year before the date that all required documents are submitted to TGO for registration as T-VER project.

• Starting date

– The first date of recording activity data on GHG emission, as indicated in methodology

• Required to submit co-benefit assessment

11


Co-benefit Checklist

Environment Support national policies and planning Reduce air pollution Reduce water pollution Reduce noise pollution Have waste management (for energy projects) Have hazardous waste management Reduce soil contamination Reduce ground water contamination Reduce odor Increase efficiency of water consumption Increase GHG sinks

Social Enhance public participation Support social, cultural, environmental, and health care development activities Build capacity for staff and related stakeholders

Environment Increase local economic growth

(increase local employment and income)

Reduce cost and increase revenue Increase renewable energy and

energy efficiency Increase technology development

and utilization of local content


Criteria for additionality

Project Type Micro Small Large

RenewableElectricity Generation with installed capacity

≤5 MW

≤15 MW

>15 MW

Energy efficiencyimprovement which reduce energy consumption

≤20

GWh/y

≤60

GWh/y

>60

GWh/y

Other project activitieswhich reduce GHG emission

≤20,000tCO2/y

≤

60,000tCO2/y

>60,000 tCO2/y

Automaticadditional

DemonstrateAdditionality

Is it a micro-scale T-VER project activity?

Is it a small-scale T-VER project activity?

Payback Period

Is it a Large scale T-VER projectactivity?

Demonstrate aditionality

≤ 3 years

Yes

Yes

>3 years

Project activity is not additional

No

No

Project activity is additional

Approved by TGO Board (28 Oct 13)

Positive list is under discussion and will be developed in the near future


Approved T-VER Methodologies

Approved Methodology Number

1) Energy Efficiency Improvement from Lightings T-VER-METH-EE-01

2) High Energy Efficiency Lighting Installation in Buildings

T-VER-METH-EE-02

3) On-Grid Renewable Electricity Generation T-VER-METH-RE-01

4) Off-Grid Renewable Electricity Generation T-VER-METH-RE-02

5) Methane Capture from Anaerobic Wastewater Treatment Utilization or Flaring

T-VER-METH-WM-01

6) Sustainable Forestation T-VER-METH-FOR-01

7) Good Fertilization Practice in Agricultural Land T-VER-METH-ARG-01


T-VER Scheme Framework

2Submit application, monitoring reports

Submit application, PDD, evidences 2

GHG ReductionSub-committee

Secretariat(TGO)

Project Developer(PD)

3

3

2

Inform PDInform PD 4

4

1

verification reports

validation report

Issue TVERs

TGO Board

Approveregistration

Validation/Verification Body

(VVB)

Submit application1

2Approve VVB registration

2

1

Methodology Sub-committee

Submit monitoring report for verification

Methodology Technical WG

Submit PDD forvalidation

~ Registration Process

~

Certification Process

~

VVB Registration Process

1 4

1 4

1 2


Proposed New Methodologies in FY 57

• Under development

Proposed Methodology Number

1) Energy Production from Cogeneration T-VER-METH-EE-03

2) Fossil Fuel Switching or Increasing Share of Renewable Energy for Heat Generation (for selling or internal usage)

T-VER-METH-RE-03

3) Installation of New Equipments for Heat Generation from Renewable Energy (for selling or internal usage)

T-VER-METH-RE-04

4) RED or REDD (to be confirmed) T-VER-METH-FOR-02

5) Sustainable Orchard Management (to be confirmed)

T-VER-METH-ARG-02


T-VER Demonstration Project (Energy, Industry, Transportation, Waste Sectors)

Organization name Project title Meth.

Electricity Generation

Authority of Thailand (EGAT)

Hydro Power Project (8MW) at Naresuan Dam,

Pitsanulok

T-VER-METH-RE-01

Electricity Generation from Wind Power 2.5 MW at

Lamtakong Hydro Power Dam, Nakornratchasrima

T-VER-METH-RE-01

Solar Power Project (5MW) at Tab-sakae, Prachuab

Kirikhan

T-VER-METH-RE-01

Ban Klong Rue Community’s Hydro Power Project at

Paksong, Patoh, Chumporn

T-VER-METH-RE-02

Provincial Electricity

Authority (PEA)

ENERGY EFFICIENCY improvement from Lightings

(Fluorescent -> LED)

T-VER-METH-EE-01

Renewable Energy and

Environmental Research

Center, University of Phayao

Methane Capture from Anaerobic Wastewater

Treatment at Ratchasima Flour Industry Co., Ltd.,

Soeng Sang, Nakornratchasrima

T-VER-METH-WM-01

Kasikorn Bank PCL. Energy Efficiency improvement from Lightings T-VER-METH-EE-01

High Energy Efficiency Lighting Installation in Buildings T-VER-METH-EE-02

Electricity Generation from Solar Rooftop T-VER-METH-RE-02

Methane Capture from Anaerobic Wastewater

Treatment Utilization or Flaring

T-VER-METH-WM-01

Delta Electronics (Thailand)

PCL.

Energy Efficiency improvement from Lightings (T8 ->

T5, T8 -> LED, Sodium -> LED)

T-VER-METH-EE-01


T-VER Demonstration Project Forestry and Agriculture Sectors

Organization name Project title Meth.

Electricity Generation

Authority of Thailand (EGAT)

Sustainable Forestation at Power

Plant, Chana, Songkla

T-VER-METH-FOR-

01

PTT Exploration and

Production PLC.

Sustainable Forestation T-VER-METH-FOR-

01

Plant Tissue Culture Center,

Chiangrai Rajabhat

University and Connexion

Worldwide Co., Ltd.


01

Nongchorake Temple, Klang,

Rayong


01

Renewable Energy and

Environmental Research

Center, University of Phayao

GHG Emission Reduction Project

in Agricultural Sector: Good

Fertilization Practice

T-VER-METH-AGR-

01


Web Site - http://tver.tgo.or.th


Thailand Voluntary Emission Trading Scheme (Thailand V-ETS)


Action Plan for Thailand V-ETS

2010• Research

Studies on calculation methodologies for GHG emissions from industries

2011• Research

Studies to Identify target industries and cap-setting

2012• Identify

institutional framework / operating rules/ model for Thailand V-ETS / incentives

2013• Pilot project

to develop MRV system for TVETS

• General guideline

2014• Institutional

Framework

• Target setting

• Revised MRV system

• Launch Thailand V-ETS demonstration program


Thailand V-ETS Characteristics

• Emission Trading Scheme– Cap and trade system

• Target group– Allow firms to enter the carbon

market voluntarily without identifying target industries.

• Gas Coverage: CO2

• Carbon credit– Allowances

• Reduction Target: – Absolute reduction target ?

• Base year emission: – Average of 3 years emissions?

• Scope of GHG Reporting: 1 & 2• Allowance Allocation:

– Grandfathering in an initial phase?

Target setting (% of emission reduction)

and Cap setting

Allowances allocation

Allowance trading


MRV for Thailand V-ETS

• Developed based on ISO 14064-1, 14064-3, and 14065

• GHG Reporting:

– Gas coverage: CO2 emissions only

– Organizational boundary

• Geographical boundary: Follows Factory Act and Building Control Act (permit for building construction / factory permit)

• operational control approach

– Operational boundary: Scope 1 and 2

• Third party verification

– Registered VBs

• Draft Monitoring and Reporting Guideline (MRG) and Verification Guideline (VG) (under development process)


Thailand V-ETS Cycle

Recruit mkt. participants

MRV base year

Set cap

Allocate allowances

Reduce GHG

Prepare GHG emissions report

Verify GHG emissions report

Submit verified GHG emissions report

Surrender

Entities Verifier TGO


Thailand V-ETS Pilot Project

• Implement demonstration program (FY2015: Oct 2014 - Sep 2015)

• Objectives

– Test MRV system

– Identify targeted participants

• Focus on power plants and petrochemical industries OR

• 79 companies participated in carbon footprint for organization program (voluntary basis)

– Set cap

• Absolute OR intensity target ?

• Cover..?? ..%f countries emissions

– Identify allocation method

• Grandfathering / benchmarking / auction / mix ?

– Penalty and risk management

• Penalties : No?

• Price control : price ceiling or price floor OR price collar OR none?

• Offset credits: TVERs, CERs/VERs generated in Thailand, LCC credits

• Banking and borrowing : Allow banking, no borrowing

– Set up appropriate model


Next Steps

• Establishment of National ETS (from 2020)– Prepare the infrastructure for market mechanism including database, MRV system, registry

system, institutional and regulatory framework via WB PMR– Study on ETS features, e.g. cap-setting, allowance allocation– Study on the feasibility of carbon trading– Study on legislation and institutional arrangements regarding GHG reporting and emissions

trading– Study on impact of ETS to Thai economy and industries– Study on carbon pricing mechanisms (compare ETS, carbon tax, other incentives program)– Enhance information sharing and exchange among industries and public agencies

• Linking and Development of a regional carbon market– Knowledge sharing on carbon markets, emissions trading and other relevant issues with NZ

MOE under Thailand-New Zealand Carbon Markets Working Group– Play an active role in Asia-Pacific Carbon Markets Roundtable - regional cooperation

regarding opportunities for linking market mechanisms in Asia-Pacific region and facilitating the development of a regional carbon market

Thailand Greenhouse Gas Management Organization (Public Organization)

Government Complex, Building B, 9th Floor, 120 Chaengwattana Road, Bangkok 10210

Tel. 02 141 9833 Fax 02 143 8403 www.tgo.or.th [email protected]

Thank you for your attention

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

mailto:[email protected]

Documents

Development of Carbon Market in Thailandunfccc.saveoursky.org.tw/2014teccf/uploads/downloads/06_Sumon... · Development of Carbon Market in Thailand Sumon Sumetchoengprachya Carbon