CERUPT The Experiences so far Reginald Hernaus Ministry of Housing, Spatial Planning and the Environment

2 Objective of the presentation Provide insight into: -The features of CERUPT: a tender! -The experiences with CERUPT: -Preparations -Results -Lessons learned

3 The features of CERUPT: a tender (1) Kyoto and Marrakech CDM requirements: -Define WHAT: the “product”: CER -how is it produced? -how is its quality guaranteed? -Relevant aspects (1): -Emission reductions -Baseline setting -Sustainable development -Stakeholder involvement

4 The features of CERUPT: a tender (2) -Relevant aspects (2): -Validation and registration -Verification, certification and issuance -Host country and donor country involvement (DNAs) -Designated Operational Entities (DOEs) -Executive Board Ruling …….

5 The features of CERUPT: a tender (3) EU Procurement Guidelines -Define HOW: identify the purchase modalities -Public procurement -General and specific terms of the Emission Reduction Purchase Agreement (ERPA)

6 The features of CERUPT: a tender (4) -Relevant aspects: -A two-stage procedure -Expressions of Interest, proposals -CERUPT programme manager: Senter -Check by an independent Advisory Expert Committee on CDM -”VROM” takes the final decision -Selection and contract awarding criteria -No negotiation! -Price by competitive bidding

7 CERUPT: A two-stage procedure (1) -Stage 1: Selection -Focus on the Supplier -Exclusion criteria -Financial standing -Technical capacity -Initial project screening based on a PIN (Letter of Endorsement required)

8 CERUPT: a two-stage procedure (2) -Stage 2: Contract awarding -Focus on the Proposal -Feasibility of the project (financial close) -Volume and price -Technology preferences (implementation of sustainable development)

9 Experiences with CERUPT (1) 1) Preparations (September-November 2001): -CLEAR: Requirements EU Procurement Guidelines -UNCLEAR: “Modalities and procedures for the CDM” 2) Launch on 1 November Resulted in 78 Expressions of Interests covering all relevant regions and technologies (31 January 2002)

10 Experiences with CERUPT (2) 3) Results: -26 proposals qualified for the awarding stage (deadline: 26 September 2002) -”VROM” Decision that 18 proposals will be awarded (13 March 2003) -Central and Latin America (11) -South-East Asia (7) -Africa (-)

11 Experiences with CERUPT (3) Technologies and volumes: Central and Latin America: Biomass, Energy Efficiency, Geothermal, Hydro, Landfill, Wind (ca. 7,7 Mton) (Panama: 3,4 Mton) South East Asia: Biomass, Geothermal, Wind (ca. 8,8 Mton) (Indonesia: 5,4 Mton)

12 Experiences with CERUPT (4) Proceeds of CERUPT: 10-16,5 Mton CO2 (?) ERPAs will contain conditions precedent: -Financial close -National regimes on stakeholder consultation -Executive Board approval.... External Factors: -Extreme wheather events -Political instability....

13 Experiences with CERUPT (5) 4) Lessons Learned: No discrimination among suppliers, transparency, competition: development of the carbon market However: Rigid deadlines, No negotiations, Drop out of projects

14 Initial conclusions -For the time being NO CERUPT-2! -Based on initial experiences CERUPT and other Dutch CDM implementation instruments -Government Change in The Netherlands -Gain experience with other tracks of the CDM Purchase Programme -Relevance for the post-Kyoto era?

15 Questions/observations on CERUPT? -Policy related: VROM -Implementation of the current tender: Senter