Carbon Trade Mechanism Division NationalCouncilonClimate ... · • Project proponent can add more indicator according to its project characteristic • Performance of SD contribution

Nusantara Carbon Scheme (NCS)Nusantara Carbon Scheme (NCS)Indonesia First Domestic Emission Reduction CertificationIndonesia First Domestic Emission Reduction Certification

Dicky Edwin HindartoDicky Edwin HindartoDicky Edwin HindartoDicky Edwin HindartoCarbon Trade Mechanism Division CoordinatorCarbon Trade Mechanism Division CoordinatorNational Council on Climate Change of IndonesiaNational Council on Climate Change of Indonesia

National Council on Climate Change of Indonesia

National Council on Climate Change of IndonesiaNational Council on Climate Change of Indonesia

Presentation structurePresentation structure

I d i b k t

Presentation structurePresentation structure

1. Indonesia carbon market current conditioncurrent condition

2. Nusantara Carbon Scheme development

3. The way forward

National Council on Climate Change of Indonesia2

How to finance Low Emission Development in Indonesia?How to finance Low Emission Development in Indonesia?How to finance Low Emission Development in Indonesia?How to finance Low Emission Development in Indonesia?

Indonesia has commited to reduce national emission up to 26% by business as usual scenario by 2020business as usual scenario by 2020.

Indonesia climate change mitigation activities need market and non market based financial systemmarket based financial system.

MitigationMitigation

market based mechanismgovernment

budgetprivate

investmentFDI

carbon market another marketcentral and local

public private partnership and

foreign private and governmentcarbon market another market

governmentpartnership and purely private

and government investment


Indonesia current carbon market situationIndonesia current carbon market situationIndonesia current carbon market situationIndonesia current carbon market situation• Total 212 CDM projects have been approved by Indonesia DNA. 123 projects are registered on UNFCCC, and 27 CDM projects have beenprojects are registered on UNFCCC, and 27 CDM projects have been issued their CERs (total 7,450,750 ton CO2).

• 9 VCS projects have been developed, including 1 REDD+ project in p j p , g p jCentral Kalimantan.

• Indonesia and Japan are discussing the new scheme of bilateral emission reduction program under Joint Crediting Mechanism scheme, 57 feasibility studies have been finished.

• Indonesia is involved in Partnership for Market Readiness program, organized by The World Bank.

• Nusantara Carbon Scheme, the first Indonesia domestic emission reduction certification, is being developed with IGES cooperation.


CDM will not be aCDM will not be a STARSTAR anymoreanymoreCDM will not be a CDM will not be a STARSTAR anymoreanymore

Indonesia and global communities will not only use CDM as their main market based mechanisms to finance the mitigation actionsmain market based mechanisms to finance the mitigation actions.

The Indonesia DNA is facing a situation that a very limited CDM projects have been proposed for approvalhave been proposed for approval.

The needs to have the market based financing options for domestic mitigation are now growing. g g g

Other mechanism (market or non‐market)

Other mechanism (market or non‐market)

There are also growing the need to ff t b f t i t f ti l

Domestic voluntary Domestic voluntary

non‐market)non‐market)offset carbon footprints for national and international company in Indonesia

Nusantara Carbon

Nusantara Carbon

carbon marketcarbon market

Indonesia.Domestically, Indonesia develop Nusantara Carbon Scheme

SchemeSchemeto fulfill it needs on the market based mechanism.


Then we developThen we develop Nusantara Carbon SchemeNusantara Carbon SchemeThen we develop Then we develop Nusantara Carbon SchemeNusantara Carbon Scheme

Why?• As an alternative for the financial support in domestic mitigation actions.

• As a catalyst for other new market mechanism.

• To maintain the momentum of Indonesia carbon k d lmarket development.

• To ensure environmental integrity and sustainable development in Indonesia mitigation actionsdevelopment in Indonesia mitigation actions.

Nusantara Carbon Scheme h llNusantara Carbon Scheme shall ensure the achievement of GHG emission reduction while

i t i i th ti l i t i t it dmaintaining the national environment integrity and sustainable development.


Nusantara Carbon SchemeNusantara Carbon SchemeNusantara Carbon SchemeNusantara Carbon Scheme

Maintain the mitigation/carbon market g /momentum in Indonesia

Incentivize mitigation actions especially theDomestic Domestic

Incentivize mitigation actions, especially the micro‐ and community‐based ones

Improve national capacity in doing

CertificationCertification

Scheme forScheme forImprove national capacity in doingMRV‐ed mitigation actions EmissionsEmissions

ReductionReductionPosition CC mitigation as agent of sustainable development

Nusantara Carbon Scheme


Target usersTarget usersTarget usersTarget usersSeller:

Miti ti j t hi h ll t f ibl t t CDM i• Mitigation project which normally not feasible to enter CDM e.g. micro projects (<2MW, <10 GWh/y, <10.000 tCO2/y) and community‐based forestry/agriculture projectsy/ g p j

• Carbon developers looking for post‐2012 markets (as a stepping‐stone before new international‐market mechanism in place)

Buyer:

• Indonesian entities (corporations organizations individuals) who would• Indonesian entities (corporations, organizations, individuals) who would like to offset its emissions; and/or

• Indonesian entities who would like to buy NCS credit as a form ofIndonesian entities who would like to buy NCS credit as a form of Corporate/Organizational Social Responsibility

Depends on future situation, buyer can be widen to include other countries or foreign entities if necessary


NCS NCS fflowlow of processof processpp


PrinciplesPrinciples

1. Using Bahasa Indonesia.

2 ER b l d MRV bl2. ER must be real, permanent and MRV‐able.

3. Additional to business‐as‐usual.

4. Avoid double‐counting.

5. Must contribute to Indonesian sustainable development in MRV‐blable manner.

NCS Organizational Framework


General General rrequirementsequirements

1. Project location within Indonesia.

2. Coverage of Kyoto gases (CO2, CH4, N2O, HFCs, PFCs, SF6).

3. Sectoral Scope:

1. Renewable energy;

2. Energy efficiency;

3. Enhancement of industrial process;

4. Sustainable waste management;

5. Aforestation/reforestation;

6. REDD; and

7. Sustainable agriculture.

4. Crediting period 5 years with 3 times renewal option.

5. Contribution to sustainable development must be monitored and verified.


MethodologyMethodology

• Methodology must reflect NCS principles, scientifically sound, accurate in implementable manner

MethodologyMethodology

in implementable manner.

• Clearly define:

• Applicability criteria

• How to calculate baseline and project emissionsHow to calculate baseline and project emissions

• Monitoring methodology

• NCS can adopt methodologies from other scheme, such as Clean Development Mechanism, if deemed as suitable and applicable for Indonesian conditionIndonesian condition.

• All stakeholders can propose methodologies to be adopted by the C i ’ d i iCommittee’s decision.


Validation/Validation/vverificationerification and and ccreditredit mmanagementanagement

l d / f ll d l d

// gg

• Validation/Verification will adopt principles in Standar Nasional Indonesia (SNI) ISO 14064‐3:2009.

• Validator/verifier must be authorized by the Committee; individuals as validator/verifier may be allowed for micro / yprojects.

• Registration reguires PDD that has been validated;• Registration reguires PDD that has been validated; Issuance requires verified monitoring report.

• NCS Committee will operate a registry that is safe & reliable for issuance, transfer and retirement of NCUs (Nusantara Carbon Units) in a traceable manner.


NCS Guideline in NCS Guideline in ssustainableustainable ddevelopmentevelopment

• Project must be able to proof its contribution to SD within these 3 categories and indicators as follow:

Category / Indicator

Local ecological function

Environment

Local ecological functionQuantity and quality of natural resourcesBiodiversityHealth and safetyHealth and safety

EconomicCommunity’s incomeJobsAccess to public goods/facilities and services

Social

p gSocial integrityRelocation impactCulture respect

• Project proponent can add more indicator according to its project characteristic

• Performance of SD contribution will give differentiation to NCS project and probably g p j p ysteer its NCU price


NCS Guideline in NCS Guideline in ssustainable ustainable ddevelopment (ctd.)evelopment (ctd.)p ( )p ( )


Way Way fforwardorward

1. We are in the process of the NCS Organization development recently.

2. Establish pilot projects to test and develop the scheme.

3. Advocate synergy between Government/State‐Owned‐Companies/Private‐Sector programs to encourage use of NCS.

4. Promote awareness of NCS among stakeholders.g

Potential pilot project:Mangrove Reforestation and Coastal Green‐belt Protection in AcehMangrove Reforestation and Coastal Green belt Protection in Aceh and North Sumatra ProvinceDeveloper: Yagasu FoundationPotential ER: 25 tCO2/ha/y (conservative estimation)Potential ER: 25 tCO2/ha/y (conservative estimation)


Nusantara Carbon SchemeNusantara Carbon SchemeNusantara Carbon SchemeNusantara Carbon Scheme

Check this out: skn.dnpi.go.id


i k ihi k ihTerima kasihTerima kasihThank youThank youyyArigato gozaimastaArigato gozaimastaArigato gozaimastaArigato gozaimasta

National Council on Climate Change of Indonesia

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Carbon Trade Mechanism Division NationalCouncilonClimate ... · • Project proponent can add more indicator according to its project characteristic • Performance of SD contribution