1. © 2006 UNDP. All Rights Reserved Worldwide. Proprietary and Confidential. Not For Distribution Without Prior Written Permission. UNDP MDG Carbon RBEC EFP Workshop Quantifying Emission Reductions Presented by Matt Spannagle Wednesday 27 th September 25-29, 2006, Bratislava, Slovakia

2. 1 UNDP MDG Carbon Certification Workshop 1 Presentation Overview GHG Reporting Principles & quantification 1. Completeness 2. Consistency 3. Accuracy 4. Transparency 5. Relevance 6. Conservativeness Basics of Quantification Boundaries Direct emissions Indirect emissions Leakage Calculation methods Baseline quantification Emission Factors

3. 2 UNDP MDG Carbon Certification Workshop 2 1. Completeness Include all relevant GHG emissions and removals Include all relevant information with regard to criteria & procedures That is:  Account for all relevant GHG emissions and/or removals  Report any other information required by the GHG scheme  Any exclusions reported and justified  All information material to users is reported in a manner consistent with declared boundaries, scope, time period, & objectives of reporting

4. 3 UNDP MDG Carbon Certification Workshop 3 2. Consistency Enable meaningful comparisons in GHG-related information That is: As far as practicable:  Compilation of data & information between similar sources and processes should use the same methodologies & procedures to allow for comparability  use the same methodologies and procedures over time, such that the 2006 report and the 2007 report can be effectively compared  Any changes to the basis of reporting, & consequences of such changes, shall be clearly stated and justified

5. 4 UNDP MDG Carbon Certification Workshop 4 3. Accuracy Reduce bias and uncertainties as far as practical That is: Quantification is systemically neither over nor under true emissions or removals  Uncertainties quantified and reduced as far as practicable  Sufficient accuracy to enable users to make decisions with reasonable assurance as to the integrity of the reported GHG information

6. 5 UNDP MDG Carbon Certification Workshop 5 4. Transparency Disclose sufficient & appropriate GHG related information to allow intended users to make decisions with reasonable confidence That is: Information presented regularly in a clear, factual and coherent manner cognizant of the needs of users of the information.  Data & information obtained, recorded, compiled, analyzed & documented in a manner enabling validation/verification  Assumptions, references and calculation methodologies appropriately documented, and enable reported data to be replicable by another party In particular, transparent justification for:  Selection of baseline  Selection of particular quantification methodologies over other possibilities  Exclusion/inclusion of emission sources  Any changes in quantification, monitoring or reporting over time  Any other choices in the quantification & reporting process that could materially affect the results

7. 6 UNDP MDG Carbon Certification Workshop 6 5. Relevance Select sinks, sources and reservoirs as well as data and methodologies appropriate to the needs of the intended user

8. 7 UNDP MDG Carbon Certification Workshop 7 6. Conservativeness Conservative assumptions, values & procedures are used to ensure that GHG reductions are not over-estimated Prevents PPs from gaming quantification approaches in an attempt to maximize reductions, using uncertainty in the science, parameters, models etc. Conservativeness can be applied several ways:  Selection of baseline that is ‘pessimistic’ (ie lower baseline emissions)  Quantification method selection (e.g. selecting a method that does not maximise reductions)  input parameters (e.g. altering to ‘lower than expected’ values for inputs)  overestimating any exclusions in the project (or underestimating exclusions in the baseline)  discounting (e.g. claiming only a portion of the reductions) Does not require selection of the most conservative approach, but must be more conservative than the expected true value Conservativeness often depends on the uncertainty in the project

9. 8 UNDP MDG Carbon Certification Workshop 8 Project boundaries must be set relating to the significance of emissions and degree of control the project proponent has: 1. DIRECT – “Owned” and/or controlled by the project proponent 2. INDIRECT – “Related” to the GHG project, including upstream & downstream activities related by material & energy flows in/out of the project 3. LEAKAGE – “Affected” by the GHG project Basics of quantification: Boundaries LEAKAGE (Affected) INDIRECT (Related) DIRECT (Owned)

10. 9 UNDP MDG Carbon Certification Workshop 9 Basics of quantification: ‘Direct’ Emissions GHGs that occur from sources within project boundary: Eg: 1. Combustion of C based fuels for production and/or export of petroleum products, electricity, heat, steam, etc 2. Physical or chemical processing 3. Combustion of C based fuels for on-site transportation of materials, products, waste, employees etc 4. Intentional or unintentional releases of fugitive emissions 5. Land use or land management practices

11. 10 UNDP MDG Carbon Certification Workshop 10 Basics of quantification - ‘Indirect’ Emissions Emissions occurring outside project boundary due to activities within the boundary: Eg: a)Electricity used at the facility but generated elsewhere b)Transportation of materials and waste (outside facility) c)Outsourced activities d)Emissions from waste generated by the facility that occurs outside the boundary e)Emissions from end-use and end-of-life phases of the project’s products indirect emissions are included if they are significant, Any exclusions should be justified

12. 11 UNDP MDG Carbon Certification Workshop 11 Basics of quantification - ‘Leakage’ Leakage refers to the displacement of emissions from one source to another source. 3 general forms of leakage for projects: Activity shifting: the physical displacement of GHG generating activities that would have occurred in the baseline to other locations Market leakage: GHG emissions resulting from changes in supply or demand in commercial markets as a result of the project’s activities Temporal leakage (non-permanence): with sequestration projects, GHG may be re-released to atmosphere over time Where leakage is positive (ie GHG emissions decrease) it does NOT need to be quantified, but where it is negative (ie GHG emission increase) & significant, it must be counted.

13. 12 UNDP MDG Carbon Certification Workshop 12 Basics of quantification – measuring emissions emissions from a project may be: Directly measured Calculated based on proxy data that is believed to accurately approximate emissions. In most cases emissions are calculated from a variety of input parameters, some of which may be directly measured. These parameters are then combined to produce an emissions estimate. The level of accuracy and precision to which a variable is measured is limited by practical physical and economic constraints

14. 13 UNDP MDG Carbon Certification Workshop 13 Basics of quantification - Calculation Methods Emission estimates may be derived from: 1. Direct Measurement: Point source Uncommon –sampled measurements (e.g. forestry) –calibration or design purposes 2. Mass Balance: (mass of feed/fuel etc) – (mass products, solid waste etc.) = emissions Requires knowledge of masses and average carbon contents of inputs and outputs Common where data is readily available - combustion of fossil fuels and mineral feedstocks - the C content in fuels is already known for design of the process E.g. – coal combustion for electricity production, hydrocarbon input in plastic & chemical production etc

15. 14 UNDP MDG Carbon Certification Workshop 14 Basics of quantification - Calculation Methods (cont’d) 3. Technology-Specific Emission Factor Calculations: Estimate the rate of emissions released to atmosphere from a proportion of a process activity or per unit of throughput E.g. - release of cover gases in Al/Mg production, release of N 2 O per tonne of fertiliser spread 4. Average or General Emission Factor Calculations: Where plant-specific data are not available to the organization, average or general emission factors can be used for a given source Published by govt’s, or recognised sources (e.g. IPCC) E.g. – emissions from diesel in a truck fleet might use a nationally published emission factor for tCO 2 e per litre of diesel use, since individual factors for each truck in the fleet would not be known, but the volume of diesel used will be known CO 2 emission factors well developed for many sources (eg tCO 2 e/MWh) CH 4 emission factors are less well defined, and N 2 O, PFC, HFC, and SF 6 emission factors are often limited and less certain

16. 15 UNDP MDG Carbon Certification Workshop 15 Basics of quantification - Baseline quantification Existing actual or historical emissions – Assumes the past is a good estimate of the future Usually take a ‘representative sample’ that might include several years, trends etc. Benchmarking Uses typical emissions for recent, similar situations as proxy May be ‘average efficiency’ but usually emissions/efficiency of best 20%, ‘best practice’, 5 most recent plants built etc. Build margin Offsetting the next plant to be built Proxy of emissions of most recent 20% built or 5 most recent (similar) plants built Operating margin Offsetting plants currently producing

17. 16 UNDP MDG Carbon Certification Workshop 16 Selection of Emission Factors Emission factors in decreasing order of accuracy: a)Empirical evidence of: u Calibrated and quantified GHG emission outputs for measured inputs under known conditions at a particular facility, or u Stoichiometric and mass balance measurements and calculations for a particular facility or process with all losses accounted b)Empirical evidence for similar or comparable facility or process types c)Manufacturer’s specification of emission output for individual or similar facilities under known input and load conditions d)Externally supplied EF specific to the particular region e)Externally supplied EF specific to a country or region of countries f)Externally supplied average EF for international use Whichever EF is selected, the source and justification for use should be transparently documented

18. 17 UNDP MDG Carbon Certification Workshop 17 Data Trail CollectProcessConsolidateReport To ensure transparency, and to facilitate verification, the steps in the data trail should be traceable with relevant documentation

19. 18 UNDP MDG Carbon Certification Workshop 18 Quality Management System Good GHG quantification includes quality management, which includes: a) Regular accuracy checks for technical errors b) Periodic internal audits and technical reviews c) Periodic management reviews of GHG information d) Organization and delivery of appropriate training for team members e) Completion of uncertainty analysis