Perspective of JI in Hungary József Feiler Climate Change Unit

1. Experiences with JI projects 2. Criteria for project approval 3. Potentials 4. Status for Track 1 JI in Hungary

Experiences with JI projects Recent JI statistics: 36 Project Idea Notes received until now 27 Letters of Endorsement / Letters of no Objection issued 14 Letters of Approval issued

Experiences with JI projects

Project partner (country)Projects endorsed Projects approved ERUPT (The Netherlands)105 Austrian Government104 PCF (World Bank)11 Other64 Total:2714 Experiences with JI projects Summary table – number of projects

Additonality: 1.Environmental additionality: the project results in emission reductions compared to BAU scenario 2.Financial additionality: the project would not have taken place without the additional financial resources provided by carbon financing 3.Legal additionality: the investment is not required by law 4.No LoE for already running projects 5.No LoE for projects receiving other forms of investment aid Criteria for project approval

Types of projects NOT endorsed: Fuel switching to gas no longer supported due to lack of financial additionality Biomass potential from wood waste from forests already exhausted by 5 relatively large biomass JI projects Large hydro projects not supported by current government due to environmental considerations (> 5 MW) Effect of EU ETS and linking on power sector and some district heating installations Potentials

Types of projects currently endorsed: Landfill gas utilisation in deposits to be closed before 2009 Wind projects with energy storage Biomass + sink together (no projects to date) Geothermal and solar power (no projects to date) Methane capture in agriculture Demand-side energy saving projects (no projects to date) Off-grid solar power and wind power (no projects to date) Sink projects – forestation (no projects to date) So far, most projects have been renewables Potentials

Types of projects MAYBE endorsed: Wind power  a question of system operation  financial additionality depends on new feed-in tariff regulations for renewables – feed-in tariff of 23 HUF/kWh (9,2 Eurocent/kWh) Biogas Plants Potentials

National System NS in Hungary currently: No responsible body for inventory preparation by lawNo responsible body for inventory preparation by law No QA/QC yetNo QA/QC yet No uncertainty managementNo uncertainty management Basic management systemBasic management system A staff of 1,5 personsA staff of 1,5 persons Upgrade of the system is likely in early 2006Upgrade of the system is likely in early 2006 AA amount EU deadline 15th June 2006, UNFCCC deadline 31st of December 2006 Hungary is likely to meet both deadlines National Registry UK registry currently for EU ETS Status for track 1

Direct double counting: Art 11b (3): “Until 31 December 2012, for JI and CDM project activities which reduce or limit directly the emissions of an installation falling within the scope of this Directive, ERUs and CERs may be issued only if an equal number of allowances is cancelled by the operator of that installation.” The future of JI with direct linkage to the EU ETS sector depends on mode of allocation and the difference between the price of EUAs and ERUs. Indirect double counting: Art 11b (4): Until 31 December 2012, for JI and CDM project activities which reduce or limit indirectly the emission level of installations falling within the scope of this Directive, ERUs and CERs may be issued only if an equal number of allowances is cancelled from the national registry of the Member State of the ERUs’ or CERs’ origin. The future of JI with indirect linkage to the EU ETS sector depends on political feasibility of including more projects and reducing number of allowances elsewhere within the total amount The future of JI with indirect linkage to the EU ETS sector depends on political feasibility of including more projects and reducing number of allowances elsewhere within the total amount. Obstacles – Linking directive

Scenarios for double counting...

Thank you for your attention! József Feiler, Hungary