Carbon Investment Opportunity: Belarus Peatland Rewetting Project
Elnya Raised Bog – the largest Belarusian natural peatland
- Belarus is the country of peatlands
- Peatlands cover 14.2% of the territory of Belarus (2,9 mio ha)
Why Belarus?
• From 2012 onwards
• Additional area rewetted 2012-2015 – 9 440 ha
• Rewetted area managed: 18 020 ha
• TOTAL emission reductions 2011-2028 – 871000
tCO2e
• Finances using mechanisms of voluntary carbon
market
• Total project size: 4,5 mio euro
BPR project – key features
Map showing the location of Project sites
‘Old’ Project sites – 9 sites rewetted with KfW funds in 2008- 2011
‘New’ Project
Sites – 5 sites to be rewetted with HLG funds starting 2012
Rewetting cycle
1. Selection of
degraded
peatland
3. Design
documents for
construction
works
2. Scientific
justification for
peatland
restoration
5. RESTORED
PEATLAND
4. Construction
works
Current scenario description
From the proposed options the following "medium scenario“ foresees the following:
Additional area rewetted 2011-2015 – 9 440 ha Additional area rewetted 2016-2020 – 0 ha Emission reductions 2011 -2015 – 260 000 tCO2e Emission reductions 2016 – 2020 – 365 000 tCO2e Emission reductions 2021-2028 – 246 000 tCO2e TOTAL reductions 2011-2028 – 871 000 tCO2e
National Carbon Project Cycle
Conclusion of Initial
Memorandum of Understanding (MoU)* between Ministry of Environmental Protection and HLG/KfW
Conclusion of
Emission Reduction Purchase Agreement (ERPA) between Project Entity and HLG/KfW
• Submission of a Project Idea Note (PIN) to the Ministry for Environmental Protection for a Letter of Endorsement.
• Submission of full
Project Design Document (PDD) to the Ministry. Issuance a Letter of Approval
* Initial MoU becomes MoU after Letter of Approval is issued
Implementation Indicators
Preparation, Q3 2011-Q4 2011
• scientific justification
developed and approved
Physical
Contractual Q4 2011-Q3 2012
• Contracts with Design
companies signed Q1 2012
• Design documents approved
Q2 2012
• Contracts with Construction
companies signed Q2 2012
Carbon, Q3 2011 – Q4 2015
• Letter of Endorsement (PIN)
issued by the Ministry of
Environment Q3 2011
• Letter of Approval (PDD) issued
by the Ministry of Environment Q4
2011
• PDD registered in VCS Q3 2012
• Positive Validation results Q3
2012
• Positive Verification results Q2
2015
Physical Q2-Q4 2012
• Construction works
performed/Rewetting
occurred
Carbon rights and contracts
According to Belarusian legislation (Presidential
Decree #625 and Provision of the Council of
Ministers #466)
– Project Entity (organization implementing emission
reduction project) has the right to the sell emission
reductions based on ERPA
– Ministry for the Environment based on confirmation
from independent verifying organization and MoU
transfers VERs to the buyer
Project entity in Belarus: Limited company with foreign investments
APB-BirdLife Belarus (APB) - largest environmental NGO in Belarus - partner and/or implementing agency for all main peatland related projects in BY
- 28 staff and over 150 service contracts, 1.3 mio euro / year
National centre for Biological Resources of National Academy of Sciences of Belarus (NPC) - leading national authority on biodiversity - amalgamation of 4 academic institutes (Botany, Zoology, Forest, Botanical Gardens) - long-term partner in peatland restoration/conservation projects - over 300 staff, over 2 mio euro / year
Foreign Investor / Highly preferential - the participation of HLG would properly positions of the Entity within carbon cycle - foreign investment company is the preference for APB and NPC
Partners:
International carbon standards: Double verification process
• World’s leading voluntary carbon standard
• 2011 – amended to allow Peatland Rewetting and Conservation Projects (PRC) – in frames of KfW funded project • Approved monitoring and baseline methodology is under development - in frames of KfW funded project completion in early 2012
- Voluntary Standard applied in addition to VCS - Ascertains that projects:
• minimize climate change • support sustainable development • conserve biodiversity
International Carbon Project Cycle
Starts after finalization of national carbon cycle and receipt a Letter of Approval from the Ministry of Environment
• Registration of the project
(PDD) and verification – i.e. the process of auditing the emission reductions achieved.
• Registration involves the
preparation of a validation report and its submission (together with other relevant documentation) to the VCS Registry Operator.
• Verification involves the
preparation and submission of a verification report. Once this is approved, the VCS Registry Operator will issue VCUs
Procedure
VCS PD Valid. & Verif.
Additionality Test
Methodology existing/new
Validation report
Verificationreport
Certificationstatement
Proof of title
VCS registrySerial No.
VCU Issuance
Project developer Validator & Verifier
VCS Association(Board and Secretariat)
Registry Operator(s)
appointsaccredits
Financial flows and ER estimation assumptions
• Project starts 2011 with first advance payment in Q2-Q3 of
2011
• All rewetting works are finalized at the beginning of 2014
• Generation of ERs from the ‘new’ rewetted sites starts
2014
Project development beyond 2028
How much will be available:
• Balance at the Project end
(2028): c. 1 mio USD
Where the funds are to be directed:
• National regulation (Decree 466):
all income from carbon trade is to
be directed to further GHG
emission reductions activities
Project arrangements: MoU/ERPA will stipulate that surplus funds to be
directed to peatlands restoration/conservation
Beyond project decision – Project Entity Board will decide which sites to
be further rewetted or managed