In this issues of Monthly Carbon Newsletter: - Reformation efforts in CDM - India's Energy Efficiency Market Based Mechanism - General Carbon Wins Award For Best Carbon Markets Service Provider, Asia - VER price trend - Many more news and updates of Carbon Market

1. General Carbon Newsletter
MONTHLY CARBON NEWSLETTER MARCH 2011, ISSUE:02
Point of View
GENERAL CARBON WINS
The new Chairman of the CDM Executive Board helped
AWARD FOR BEST CARBON
infuse confidence on the ability of CDM to handle surge in
MARKETS SERVICE PROVIDER,
issuance of credits and registration of projects, as we
ASIA
approach the 2012 deadline. The success due to
appointment of external consultants to clear the backlog in
issuance and registration has been a big boost for the
market in the first quarter of 2011.
The post 2012 Green Climate Fund committed at Cancun
was to be established with the goal to reach US$100 billion
a year by 2020. The Green Climate Fund is not making
much progress due to non-appointment of delegates by
member states. In another move that takes the focus away WORLDWIDE DEVELOPMENTS
from CDM, the Federation of Electric Power Companies
(FEPC) of Japan, one of the largest buyers of credits, has New host countries Libya and
expressed dissatisfaction with CDM procedures and Myanmar enter CDM.
timelines. The FEPC has suggested bilateral offset
mechanisms and is conducting feasibility studies with ultra Togo, Burkina Faso, and Gambia
super-critical coal-fired power generation and nuclear
launch multicountry PoA:
power projects to establish the framework for bilateral
offset mechanisms. Keep a close watch on bilateral “Promoting Efficient Stove
structures and NAMAs as this may throw open new Dissemination and Use in West
opportunities.
Africa”, this project also includes
The market is still trying to cope with theft of EUAs, which Senegal.
paralyzed trading activities as many registries were closed
through most of February. Demand for post 2012 volumes World Bank post 2012 fund -UCF
from renewable energy projects is picking up while VCS
VER demand has yet to recover in the new year. T2 fully subscribed
Best, India sees first issuance of
Satish Kashyap RECs, trading to commence in
March. Over 40 projects
(~300MW) accredited by the
Reformation of CDM: The Near And Far Of It respective state agencies.
Continuation of EU ETS into a third phase post 2012 looks VCS Releases Version 3
certain but it is not clear as to which types of CERs in
terms of technology and project host country will be
accepted into the EU ETS. Geographically, projects Kenyan Carbon Project Earns
originating in least-developed countries (LDC) would be at First-Ever VCS REDD Credits
an advantage as the EU laws will accept CERs from LDCs
into the scheme in a post-2012 regime. So far, majority of
the CDM projects have been from India, China and Brazil;
the LDCs are faced with capacity building problems (31
LDCs have no CDM projects yet) while coming up to
speed. Project proponents, who are looking to register
their project before Dec 2012, see the pace of CDM
process as a serious challenge. Below, we have put

2. together the reforms undertaken by CDM recently and VCS VER PRICE WATCH
what further action could be taken.
India, China:
1. Tackling procedural delays: The recent transition from a Renewables, EE
two step review process (one round of review request Pre 2008 vintages
followed by final review by the EB) to a single step US$ 0.50- 1.00
(assessment by secretariat & RIT after request of review) Post 2008 vintages
US$ 1.00-2.75
is a welcome change brought about by the EB. Historically,
the bureaucratic procedure has been a stumbling block in Renewables, EE- Pre CDM
streamlining CDM work flow. While the average time for Pre 2008 vintages
approval of a new methodology still takes about a year, the US$ 0.50-2.00
start-of-commenting-period to registration time has been Post 2008 vintages
about 21 months in 2010. CDM EB has recently been able US$ 2.00-3.50
to reduce the waiting time for registration and issuance
from three months to one month by deploying more Industrial gases, others
manpower. Another area of delay that could be managed Pre 2008 vintages
US$ 0.25-0.50
with a similar approach is completeness check which takes
Post 2008 vintages
a month or two before the project appears under US$ 0.50-1.00
“requesting registration”.
Rest of Asia, Africa:
2. Improving transparency: The CDM guidelines and
methodology leave a lot of room for interpretations which Renewables, EE
have led to inconsistent treatment of similar projects Pre 2008 vintages
among various DOEs and the EB. The recent steps US$ 1.00-2.00
Post 2008 vintages
towards DOE performance monitoring and appeal against
US$ 2.00-4.00
ruling by the CDM EB are a good relief.
Renewables, EE- Pre CDM
3. Balancing geographical distribution: Three of every four Pre 2008 vintages
projects in the CDM pipeline come from China, India or US$ 1.50-3.00
Brazil. The LDCs barely account for 1% of the share, while Post 2008 vintages
the number of projects from small island-states, that are US$ 2.00-5.00
likely to be worst affected due to climate change, is
negligible. This has led to criticism of the CDM mechanism Industrial gases, others
Pre 2008 vintages
as a tool which is being manipulated by few players. In
US$ 0.25-1.00
response to that, the UNFCCC Secretariat has taken steps Post 2008 vintages
to make loans available for development of CDM project US$ 0.50-1.00
activities in countries with less than 10 registered projects.
Programmatic approach has come in as a handy tool to
penetrate other developing countries as well. Less than
3% of the total CDM project submissions originate from CDM EB NEWS
Africa, but in the case of PoAs, Africa accounts for a Two new small scale
quarter of all PoA submissions. The CDM EB has intended
methodologies approved at EB59:
to address the operational barriers of PoAs through an
open call for inputs till 18th of March 2011. AMS-I.I: “Biogas/biomass use for
thermal application for
4. Negative economies from project size and transaction
households/small users”, and
cost: The transaction costs associated with CDM projects
like consultancy fees, DOE fees, UNFCCC registry fees, AMS-III.AS: “Switch from fossil
etc, are a big hindrance for project activities with lower fuel to biomass in existing
emission reductions. In case of new technologies, the time manufacturing facilities for non-
and money taken to develop a new methodology is a big
deterrent even for an average sized project. Many worthy energy applications.”
projects cannot pursue CDM these costs. Bundling of AMS-III.AJ: “Recovery and
similar project activities has its own limitations which has recycling of materials from solid
led project proponents to look at a programmatic approach
wastes” was expanded to also
to address the shortcomings of the process. The future
direction from EB on PoAs will be something to watch for include recycling of PET bottles.
in coming months.
Assessment of Cancun
The reform efforts are showing results and the EB clearly
seems to pursue the path. In its last meeting the EB Agreements by UNFCCC
adopted a two year Management Plan with objectives Executive Secretary now
towards improving operational efficiency, transparency and online.
capacity building activities across regions.

3. Driving India's energy efficiency plan EDITORS
through a market based mechanism Vinodini Chitrakaran,
vinodini.c@general-carbon.com
Over the last year, the Bureau of Energy Efficiency Rameez Shaikh,
(BEE) in India has started engaging with industry to rameez.shaikh@general-
draw the framework for a domestic energy efficiency carbon.com
market. Large industrial establishments consuming
energy greater than a threshold have been identified
and brought under the purview of the Energy GERERAL CARBON PTE LTD
Conservation Act, 2001. These industrial establishments 16 RAFFLES QUAY, #33-03
have already started reporting and auditing their energy HONG LEONG BUILDING,
consumption. BEE has worked with industrial SINGAPORE 048581.
establishments in energy intensive sectors like thermal
power plants, iron & steel, cement, fertilizer, aluminum,
textile, pulp & paper and chlor-alkali to: This newsletter is brought to you
by General Carbon. Contact
Establish the baseline energy consumption gcnews@general-carbon.com if
Develop targets for each sector
you have any queries or
Outline process for measurement and
verification comments or wish to contribute
Establish market for trading of the certificates news and updates. We welcome
your suggestions and
During the next few months the framework will be rolled-
contributions.
out which will govern the first phase of the energy
efficiency market from April 2011 to March 2014. Some
of the significant decisions that will be addressed
include:
If you wish to unsubscribe from
1. Baseline - Developing baseline energy consumption this newsletter please reply to this
for a sector, covering different establishments, varying email with “unsubscribe” in the
technologies, age of establishment, production capacity, subject line.
raw material and product-mix output, poses numerous
challenges.
General Carbon is a leading
2. Target setting - Setting targets based on absolute emission reduction consulting,
numbers will be unlikely given the differences between
establishments. A percentage based target may lead to sustainability advisory and
punishing early movers, whose previous energy investment firm with presence
efficiency improvements may penalize them. across Singapore, India, Sri
Lanka, Thailand, Philippines,
3. Measurement and Verification - Norms for
accreditation of energy auditors have already been Indonesia, South Africa, Nigeria,
rolled out. Framework for supervision, monitoring and Ethiopia and Kenya.
policing of auditors to ensure accurate implementation of
policy will be essential.
4. Market process - Clarity on penalty has been
provided. Key market establishment principles will have
to be implemented to ensure participation of financial
institutions who can invest in energy efficiency projects.
If structured and rolled out well, this could become an
interesting study in a first of its kind domestic
environmental commodity.

4. Other Carbon News
Companies go for project approvals before Kyoto
expires
Airlines to get 213 million EU CO2 permits in 2012
Delayed Solar-Power Plants Face Fines as India's
Gujarat Sets Precedent
Reforestation Project Is DRC’s First Registered
Under Kyoto Protocol
Japan proposes new CO2 market mechanisms to UN
Australia government to set carbon price from mid-
2012
Biofuel appeal stokes bullish palm price outlook
Carbon Trust and Siemens Strike £550M Green
Finance Deal
IFC Launches €150 Million Carbon Credit Fund to
Promote Climate-Friendly Economic Growth
NZ Clean Energy Centre on track to open in April
Cambodia's Isolated Villagers Change Their Lives
With Lower-Cost Solar
Global CCS industry builds momentum with 21 new
projects
US, India to convene Joint Task Force on reducing
climate damaging HFCs
EU Carbon Rises to Five-Month High on Natural-Gas,
Coming Rules