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Green Aviation Through CarbonOffset Program
Dicky Edwin HindartoHead of Indonesia JCM Secretariat
Indonesia Joint Crediting Mechanism Secretariat
August 19-20th 2015Market-Based Mechanisms (MBM’s) and ICAO discussions
International Green Aviation Conference 2015
1. Airline industries and carbon credits
2. Market based mechanism for emissions reduction in Indonesia
3. The Joint Crediting Mechanism, a newly fast growing scheme in Indonesia
4. Can demand meet supply?
Presentation structure
From polluted to green aviation, human needs to fly!
Step by Step of Green Aviation Development1. Airlines calculate their emissions, e.g. using carbon calculator.2. Airlines apply green technology: energy efficient aircraft and biofuel.3. Energy efficient technology in the aviation supply chain.4. The priority is reduction by self-efforts by each aviation, and then follow by offsetting.5. Airlines take part in carbon neutral and offsetting program by buying carbon credits from
carbon market.
Some of the airlines offsetting programs
Airlines Name Offsetting Programs Type of scheme Reasons
1. Thai Airways CDM (Clean Development Mechanism)
Mandatory International standards
2. Qantas & Virgin National Carbon Offset Standard
Mandatory Government policy and regulation
3. Garuda Indonesia Forest conservation Voluntary Protection of Indonesia forest
4. United Airlines Renewable energy and forest conservation
Voluntary Passenger choices
5. EU airlines (Lufthansa, Easyjet, Air France, Air Berlin, British Airways)
Credits from EU-ETS (that came from CDM and JI projects)
Mandatory Follow EU law and regulations
6. Singapore Airlines Forest conservation (Harapan) Voluntary Protection of forest and ecosystem
7. Qatar Airlines IATA carbon offset Voluntary Company policy
8. Emirates Renewable energy, energy efficiency, and sustainable forest and tourism
Voluntary Company investment
9. ANA Forest conservation by using J-credit
Voluntary Company policy + protect the forest
How to develop high quality carbon credits?
Project Idea Note and FS
Project implementation
Validation
Verification
Carbon credit issuance
Carbon Trading Scheme• The scheme was intended to develop a climate change
mitigation activities that produce tradable/transferable and high quality carbon units that meet the environmental integrity criteria.
• All of the carbon trading schemes used commonly based international and national standards. The carbon credits that are bought by the airlines must avoid double counting.
A carbon credit is a generic term for any tradable certificate or permit representing the right to emit one tonne of carbon dioxide or the mass of another greenhouse gas with a carbon dioxide equivalent (tCO2e) that equivalent to one tonne of carbon dioxide.Passengers can purchase carbon credits generated by certified renewable energy, energy efficiency, forest conservation, land use change, and REDD+ projects in developing countries that are verified to reduce greenhouse gas emissions.
The project was still in preliminary idea or FS
The project was being implemented with use some international standards
The independent third party entity validate the project based on standards
Number of emission reduction were calculated by using specific methodology
The scheme owner issued the credits as a tradable/transferable and high quality carbon units
Is there any market based mechanism in Indonesia?
Climate Change Mitigation Measures
Market Based Mechanism
Carbon MarketAnother Type of
Market
Government Budget
Central and Local Government
Budget
Private Sector
PPP’s and Private Investments
FDI
Foreign Investment from
Private and Government
Current condition of carbon trade in Indonesia
CDM• Giving very high expectation in the
beginning, very difficult and complex to be implemented, and suddenly everything was stopped due to the lack of demands, now we have no new project in 2014.
• But still we got a lot of experiences from the CDM projects that we have developed.
VCS• Relatively small compare to CDM,
but still growing smoothly.• Indonesia has the biggest REDD+
project under the VCS, this is until now is the only land based project under Indonesia VCS development.
• Some of the CDM projects change to be VCS projects because of the lack of CER’s demand from EU-ETS.
Indonesia Domestic Carbon Scheme
• Still in the preliminary stage.• Some of the methodologies had
been tested, and so far receive positive responses from the business entities.
• We hope someday it will be one of the alternative for the market based mitigation actions.
The JCM Scheme• We need more than three years to develop the agreement, started from 2010 and its finally signed at August 2013.• The Joint Crediting Mechanism is the most progress mechanism now in Indonesia.• It is not only about the bilateral carbon trading, but rather than how to develop and implement the green investment as
well as low emission development and technology transfer between the 2 countries.• Japan and Indonesia have their own national target on emission reduction to be achieved, and it can be done through JCM.• Both countries also need to increase their economic development as well as develop more opportunities for their private
sectors to grow.
CDM carbon credits, can they fulfil the needs?
Source: National Council on Climate Change Indonesia, January 2015
CDM
Title CERsCDM SOLAR COOKER PROJECT Aceh 1 1.077Indocement Blended Cement Project 1.169.797Indocement Alternative Fuels Project 370.372Methane Capture and Combustion from Swine Manure Treatment Project at PT Indotirta Suaka Bulan Farm in
Indonesia42.716
MNA Biomass 9.7 MWe Condensing Steam Turbine Project 29.643Darajat Unit III Geothermal Project 4.375.366PT. BUDI ACID JAYA Tapioca Starch Production Facilities Effluent Methane Extraction And On-site Power
Generation Project in Lampung Province, Republic of Indonesia 312.587Ranteballa Small-Scale Hydroelectric Power Project 19.048“Listrindo Kencana Biomass Power Plant” 40.329Nagamas Biomass Cogeneration Project in Indonesia 81.154Tambun LPG Associated Gas Recovery and Utilization Project 2.107.247Emission reductions through partial substitution of fossil fuel with alternative fuels in the 2 cement plants of PT
Holcim Indonesia Tbk 136.53MEN-Tangerang 13.6MW Natural Gas Co-generation Project 17.154Lahendong II-20 MW Geothermal Project 216.304Gianyar Waste Recovery Project 19.4754MW Biomass Power Plants Using Waste Wood Chips & Sawdust in Central Java Province, Indonesia 10.982Methane Recovery in Wastewater Treatment, Project AIN07-W-01, Sumatera Utara (North Sumatera), Indonesia 81.599Methane Recovery in Wastewater Treatment, Project AIN07-W-04, Sumatera Utara, Indonesia 37.069Methane Recovery in Wastewater Treatment, Project AIN07-W-05, Sumatera Utara, Indonesia 74.963Gikoko-Bekasi-LFG Flaring Project 128.941Kamojang Geothermal 92.691Nubika Jaya Biogas Extraction for Bio-Hydrogen Production 3.05210 MW Tangka/Manipi Hydro Electric Power Plant 86.664PFC Emission Reductions at PT. Indonesia Asahan Aluminium (PT. INALUM) Kuala Tanjung 71.342AIN08-W-03, Methane Recovery in Wastewater Treatment, Sumatera Utara, Indonesia 51.094ID08-WWP-10, Methane Recovery in Wastewater Treatment, West Sumatera, Indonesia 62.096Biogas project, BAJ Unit 6 45.748Biogas project, BAJ Terbanggi 88.856Biogas project, BAJ Way Jepara 124.937ID08-WWP-09, Methane Recovery in Wastewater Treatment, Aceh, Indonesia 30.825ID08-WWP-11, Methane Recovery in Wastewater Treatment, Jambi, Indonesia 33.855BAJ Gunung Agung Factory tapioca starch wastewater biogas extraction and utilization project, Lampung
Province, Republic of Indonesia 37.842Methane Recovery and Utilisation at PT Pinago Utama Sugihwaras Palm Oil Mill, Sumatera, Indonesia. 63.867Wayang Windu Phase 2 Geothermal Power Project 1.555.282Methane Recovery and Utilization at PT. Musim Mas Palm Oil Mill in Pangkalan Lesung, Riau Indonesia 44.609Cakra Methane Capture Project 27.782Perdana Methane Capture Project 10.111
Total CERs 11.703.006 11,703,006 CERs
VCS carbon credits, can they fulfil the needs?
Project ID Project Name Project Proponent Country Sectoral ScopeEstimated Annual Emission Reductions
Additional Certifications
967 Bantargebang Landfill Gas Management & Power Generation
PT Navigat Organic Energy Indonesia
Indonesia 1. Energy (renewable/non-renewable)
708,300
866 METHANE RECOVERY IN WASTEWATER TREATMENT, PROJECT AIN07-W-05, SUMATERA UTARA, INDONESIA
AES AgriVerde Ltd. Indonesia 13. Waste handling and disposal 31,757
688 Wayang Windu Phase 2 Geothermal Power Project
Star Energy Geothermal (Wayang Windu) Limited
Indonesia 1. Energy (renewable/non-renewable)
794,832
674 Rimba Raya Biodiversity Reserve Project
InfiniteEARTH Indonesia 14. Agriculture, Forestry, Land Use 3,527,171 CCBS Second Edition - Gold Level
488 82 MW Lau Renun Hydro Power Plant, North Sumatra
PT. PLN (Persero) Indonesia 1. Energy (renewable/non-renewable)
229,048 Social Carbon
487 210 MW Musi Hydro Power Plant, Bengkulu
PT. PLN (Persero) Indonesia 1. Energy (renewable/non-renewable)
847,020 Social Carbon
486 50 MW Sipansihaporas Hydro Power Plant, North Sumatra
PT. PLN (Persero) Indonesia 1. Energy (renewable/non-renewable)
159,596 Social Carbon
409 MedcoEnergi Associated Gas Recovery and Utilization Project
PT. Medco LPG Kaji (MLK) Indonesia 10. Fugitive emissions from fuels 86,022
243 55.5 MW Natural Gas Power Generation Project at Batu Aji Village, Riau Island, Indonesia, by PT Dalle Energy Batam.
PT Dalle Energy Batam Indonesia 1. Energy (renewable/non-renewable)
50,786
238 Mobuya Mini Hydro Power Plant 3 x 1000 kW North Sulawesi, Indonesia
PT. Cipta Daya Nusantara Indonesia 1. Energy (renewable/non-renewable)
11,637
144 Capacity Upgrade of Gunung Salak Geothermal Power Plant Project, Indonesia
PT Indonesia Power Indonesia 1. Energy (renewable/non-renewable)
112,522
Total 6,558,691
JCM, a new scheme that produce high quality carbon credits
Japan IndonesiaLeading low carbon technologies, etc, and implementation of
mitigation actions
MRV
JCMProjects
GHG emission reductions/removals
MRV Methodologieswill be developed
by the Joint Committee
Used to achieve Japan’s emission reduction target
Credits
Source: GOI
• JCM or Joint Crediting Mechanism, is a relatively new scheme between Japan and Indonesia that aims to reduce GHG emission and enhance low carbon growth development.
• Bilateral agreement on JCM (Joint Crediting Mechanism) between Indonesia and Japan was signed onAugust 2013
• Some of the JCM technical instruments were developed to ensure a high quality carbon credits that meets with environmental integrity.
• The JCM Joint Committee is the highest decision maker in the JCM scheme. They have a duty to develop the JCM scheme instruments as well as issued the emission reduction credits.
• Indonesia as a host country also develop its own rules and regulations in JCM scheme, one of it is the sustainable development guideline implementation.
• Every JCM project not only has to follow the ISO 14064 standards but also must implement sustainable development criteria.
JCM projects: latest development
Registered Project
The 1st JCM registered project:• Collaboration between Ebara
Equipment & Systems and PT Primatexco Indonesia
• Location: Batang, Central Java• Estimated total emissions reduction 799
tCO2 eq. by 2020 • Annual 965 MWh energy saving
The JCM Project Progress• 101 Feasibility Study have been done from 2010-2015
• 3 projects are registered as JCM projects.
• 19 JCM projects are now in our pipeline.
• 19 projects in energy efficiency, 2 projects in renewable energy, and 1 project in REDD+ (registered and pipeline).
• All projects are being developed with the cooperation between Indonesia and Japan participants.
The Registered Projects1. “Energy Saving for Air-Conditioning and Process Cooling by Introducing
High-efficiency Centrifugal Chiller” (first registered project under the JCM worldwide)
2. “Project of Introducing High Efficiency Refrigerator to a Food Industry Cold Storage in Indonesia”
3. “Project of Introducing High Efficiency Refrigerator to a Frozen Food Processing Plant in Indonesia”
List of JCM implementation projects in IndonesiaProjects Name Expected Emission Reduction
Demonstration Project
Remote Auto-Monitoring System for Thin-Film Solar Power Plant in Indonesia 1.433 tCO2/year
Energy Saving by Optimum Operation at Oil Refinery 3.400 tCO2/year
Utility Facility Operation Optimization Technology 58.000 tCO2/year
Model Project
Power generation by waste heat recovery in cement industry 122.000 tCO2/year
Energy Savings at Convenience Stores 372 tCO2/year
Energy saving through introduction of regenerative burners to the aluminum holding furnace of the automotive components manufacturer 856 tCO2/year
Solar power hybrid System installation to existing base transceiver stations in off-grid area 2.786 tCO2/year
Energy saving for textile factory facility cooling by high efficiency centrifugal chiller 118 tCO2/year
Energy saving by double bundle-type heat pump 170 tCO2/year
Introduction of High efficient Old Corrugated Cartons Process at Paper Factory 14.884 tCO2/year
Reducing GHG emission at textile factories by upgrading to air-saving loom 566 tCO2/year
Energy saving for air-conditioning and process cooling at textile factory 117 tCO2/year
Installation of CHP (Combined Heat and Power) system in a hotel 3.200 tCO2/year
Energy-saving Project by Utilizing Waste Heat at Hotel 1.936 tCO2/year
Energy Saving for Shopping Mall with High Efficiency Centrifugal Chiller 925 tCO2/year
Energy Saving for Industrial Park with Smart LED Street Lighting System 900 tCO2/year
Energy Saving for Office Building with High Efficiency Water Cooled Package Air Conditioning Unit 714 tCO2/year
Energy saving by introduction of high efficiency once-through boiler system in a film factory 428,5 tCO2/year
REDD+ Model Project
REDD+ Model Project in Boalemo district 200,000 tCO2/year
Registered Project
Energy saving for air-conditioning and process cooling by Introducing High-efficiency Centrifugal Chiller 114 tCO2/year
Project of Introducing High Efficiency Refrigerators to a Food Industry Cold Storage in Indonesia 120 tCO2/year
Project of Introducing High Efficient Refrigerator to a Frozen Food Processing Plant in Indonesia 21 tCO2/year
22 Projects 413.061 tCO2/year
Which scheme appropriate for green aviation?
CDM• 37 projects have already produced
CER’s, most of them had been dedicated and sold to EU-ETS.
• Some projects CER’s are still free to be utilized as green aviation offsetting programs.
• Compare to other scheme, the CDM has the highest standards.
VCS• Very high involvement of the
business sectors, but the standards that have been used relatively low than CDM.
• VCS credits demands are volatile.• VCS can be alternatives for the
domestic aviation offsets program, but still difficult to be used for the international.
The JCM Scheme• Both of Indonesia and Japan can use their credits for their own purposes, but as long as it will not transferred to other countries, the
credits still can be registered as Indonesia emission reduction achievement. As a new mechanism, JCM credits can be utilized to offset the aviation emission, as long as it will not be traded beyond Indonesia or Japan boundary.
• The international standards that used in JCM scheme and both government support and acknowledgement makes JCM credits also appropriate for the international aviation offsetting programs.
• The JCM will develop registry system in order to facilitate the cancellation and retirement of the credits.• The JCM registry will be linked to the national registry.
Indonesia Domestic Carbon Scheme
• Until now, it is still in the preliminary stage and did not produce any carbon credits yet.
• Will be developed under the Ministry of Environment and Forestry.
• Alternatively, it can be used for domestic aviation or other mode of transportation programs.
Indonesia JCM Secretariat
BUMN Building 18th floor, Jl. Medan Merdeka Selatan 13, Jakarta
Website: www.jcmindonesia.com
Email: [email protected]
Thank you!
Terima kasih!
