1. Clean Development Mechanism in China Song Yanqin National Coordinator NDRC/UNDP/UNF/ NORAD/IMET Supported Building Capacity for CDM in China Feb 22, 2007

2. Outlines 1.Administrative Structure of CDM in China (Who approve) 2.Project Application Requirements (What to submit) 2. Project Approval Status (Which approved) 3. Project Development (Who develop) 4.Market Potential (Where to go) 5.Bring the Private Sector in

3. Administrative Structure of CDM in China Designated National Authority (DNA) Focal Point: National Development and Reform Commission (NDRC) Contact: Gao Guangsheng, Director General, Office of National Coordination Committee for Climate Change, NDRC Email: gaogs@ndrc.gov.cn or lily@ccchina.gov.cngaogs@ndrc.gov.cnlily@ccchina.gov.cn Official Website: http://cdm.ccchina.gov.cnhttp://cdm.ccchina.gov.cn

4. National CDM Board: Main Responsibilities: Review and approval CDM application submitted by the project owner Board Members: National Development and Reform Commission (NDRC, Co-Chair) Ministry of Science and Technology (MOST, Co-Chair) Ministry of Foreign Affairs (MoFA, Vice Chair) State Environmental Protection Administration (SEPA) China Meteorological Administration (CMA) Ministry of Finance (MoF) Ministry of Agriculture (MoA) National CDM Board

5. Project Approval Procedures

6.  Project activity should promote the transfer of environmentally sound technology  Project developer shall be wholly China-owned or China- controlled enterprises  CDM project developer shall submit to the Designated National CDM Authority 1. CDM PDD, 2. certificate of enterprise status, 3. as well as general information of the construction project and descriptions of project financing Admission Requirements

7. Participation requirements 1. PDD 2. CERs price 3. Issues related to funds and technology 4. transfer Sustainable development effects of the project Review CDM project activities

8. Project Approval Status Till the January 31, 2007  279 projects were approved

9. Distribution of the Projects Approved by Numbers Till January 31, 2007

10. Distribution of Projects Approved by CERs Till January 31, 07

11. Distribution of the Projects by Buyers Till January 31, 07

12. Distribution of the Projects by Provinces Till January 31, 07

13. Project Approval Trend

14. CER Price Development Trend

15. Project Development Intermediaries  CAMCO  Chinese Renewable Energy Industries Association  CDM Office of CWEME  Easy Carbon Consultancy Co. ltd  Eco-security  Ecofys  Green Capital  It Power  Ningxia CDM Service Center  Qinghua University Climate Change Research Institute

16. Incentive for private sector To balance the CER revenue from different sector, the government set up rule Government fee HFC23: 65% N20:30% Others from priority areas: 2% If only the company is Chinese company, no matter state owned or private owned or holding companies with a Chinese party holds the majority. In fact many project owners of renewable energy projects are private companies

17. Incentive for private sector CDM Fund was established Source of the fund: CER revenue fee Purpose of the fund: supporting climate change policy and science research activities; assisting small scale companies to prepare PDD documents, and etc. NDRC requested through regulation that the service fee should not exceed Yuan 1 million RMB, no matter what kind of CDM project. By this to protect the project owners who are usually in the weaker position in negotiation with the consultancies, some time associated with the buyers. In this way also protect the country’s interests, since the CER is by nature asset of the country.

18. Activities for Capacity Building main subcontracts Policy - CDM policy building (measures for CDM Project Operation and Management) Training - Training package development and training course (8 training courses to train 800 people, mainly from industries and consultancies) Prepare CDM pre-feasibility studies and pilot project facilitation (one project from each priority sector registered) Develop CDM Project Website and provide on-going technical support and maintenance (an official government website)

19. Problems Addressed （ 1 ）  Industry’s lack of awareness of the opportunities offered by the CDM.  Lack of skills needed to develop a CDM project.  No Chinese consultancy companies offering industry CDM services.  No specific impetus for CDM projects

20. Problems Addressed (2)  GHG credits not considered an asset by the industries.  Lack of capability to collect, analyse and disseminate CDM information.  Lack of capability to link national CDM efforts to emerging international accreditation systems.

21. Market Potential in 3 Priority Areas in China  Preconditions: Majority of the development plan is developed into CDM project Total mitigation potentialAccumulation from 2006 to 2010 (million ton) Accumulation from 2011 to 2020 (million ton) Energy Efficiency 100350 Renewable Energy2501,413 CMM & CBM972,100 Total447 3,863

22. Accumulation till 2010 Accumulation till 2020 Market Potential in 3 Priority Areas in China

24. Renewable Energy Type of Energy Source Resource GW Current installed capacity MW 2010 installed capacity MW Mitigation potential from 2006 to 2010 Mt CO 2e 2020 installed capacity MW Mitigation potential from 2011 to 2020 Mt CO 2e Wind250 onshore 750 Offshore 126550001820000250 Small Hydro 12530,00050,00015080,000600 Bioenergy350 million toe/year 1900 6,0004120,000 480 Solar PV SWH 1700 Bn tce50 50 m m 2 450 150 m m 2 3 38 1,000 300 m m2 8 75 total 250 1413

26. Energy Conservation and Energy Efficiency Mitigation Potential in Energy Conservation Sector Energy conservation potential till 2010 is about 278 m toe Total mitigation potentials till 2010 is about 1 Bt CO2e Energy conservation potential till 2020 is about 957 m toe Total mitigation potentials till 2020 is about 3.5 Bt CO2e

28. Current annual methane utilitzation Methane utilization from 2006 to 2010 Mitigation potential from 2006 to 2010 Methane utilization from 2011 to 2020 Mitigation potential from 2011 to 2020 million m 3 billion m 3 million t CO 2e billion m 3 million t CO 2e 5003.597 32 2100 CMM and CBM

29. Official Website of CDM in China Official information of CDM is available at:  http://cdm.ccchina.gov.cn

30. Thank you for your attention ！ Song Yanqin Tele ： 63908475 Fax ： 63908468 Email ： yq_song@263.net