Green Investment Scheme (GIS) in the Czech Republic Petr Jan Kalaš Moscow Carbon Market Forum 2008 Ministry of Environment Vršovická Praha 10 Czech Republic Moscow, 28 April 2008

Last development in the Climate Change Agenda 14 November 2007 – Czech government made decision about the further GIS implementation steps 1 January Kyoto Commitment Period and the second EU ETS period were started 21 January EU Commission published the EU Climate-Energy Package proposal 24 February Czech Republic is fully eligible under the Kyoto Protocol

GHGs Emissions trends GHGs comparison 1990 vs – 24%

Joint Implementation (JI) overview About 35 projects – LoA was issued (possibility to choose between Track 1 and Track 2) Problems with future potential for new JI projects EU ETS (Linking Directive - limited potential for new JI projects in the current regime in all EU MS) Question of additionality (feed-in-tariff, Operational Programme Environment, Operational Programme Enterprise and Innovation, etc.) New JI projects – only heating (biomass, biogas) and non – CO2 projects (landfill gas projects) Reserve allowances per year in NAP2 for indirect linking (only RES projects with LoA) EU ETS operators can use 10 % (CERs and ERUs) in the second NAP

GIS Implementation in the Czech Republic (I) MoU – Denmark, Austria (under preparation - Japan, Netherlands, Spain, Finland, etc. ) Expected (surplus) amount 100 million AAUs per Kyoto commitment period ( ) Potential buyers – governments/private sector Greening facility – State Environmental Fund ( “The resources from the SEF are one of the most important instruments of state environmental policy. Domestic resources (mainly in some kind of measures) are limited“.

GIS Implementation in the Czech Republic (II) In programming goals of the Czech Government till 2010 is mentioned that revenues from IET will be used for financing energy savings in family houses and flats, administrative and public buildings. Czech government priority – Housing sector fuel switching from lignite (still approx households is heating directly by coal) to biomass (potential approx households - 2 Mt CO 2 per year), or/and improvement of thermal insulation, eventually fuel switching from lignite to central heating system/gas (additional potential around - 1 Mt CO2 per year ) Other sectors --- has not been decided yet (gaps between various type of funds, avoid „double-counting“ situation)

Energy savings need to be improved in the building sector 1,2 Mio flats / ~15 PJ / ~ - 35 Mt CO 2

Organisational scheme of GIS

GIS Implementation in the Czech Republic (III) Ministerial GIS WG was established Main tasks – on the international/domestic side Pending issues –Legal/Financial (amendment of law about conditions of trading with allowances etc., preparation of auction, taxes, accounting questions, ERPAs) –Technical/Organizational (preparation of grants, documentation, criteria, validation, reporting, verification, call of proposal) general question – connection of CITL/ITL Pilot transaction should be done by the end of 2008 –Both, bilateral contracts, auction could be used

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