This presentation was delivered as part of the "Developing Building Blocks of a Global Mitigation Architecture" workshop series.

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NAMAs for Sustainable Refrigeration, Air-
conditioning and Foam Production
Developing Knowledge on Building Blocks of a
Global Mitigation Architecture
Bonn, 11th June 2011
Markus Wypior, GIZ-Proklima
Markus.Wypior@giz.de

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• Objective: Establish tools and methodologies for NAMAs in
refrigeration, air conditioning and foam sectors
• Expected outcome: 4 NAMAs ready to be submitted for
funding;
• Partner countries: Thailand, India, South Africa, Mexico
• Scope:
– Budget: EUR 2.000.000
– Duration: Nov 2010 – Dec 2012
• Beneficiaries: Governmental partners, NOUs, Industry
associations
• Type of project: Sectoral studies
30.04.2013
BMU ICI: NAMA Studies in the Refrigeration,
Air- conditioning and Foam Sectors

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Estimated HFC Emissions till 2050
Fig A: Predicted Growth of HFCs without constraint
Fig B: HFC share of global GHG-emissions (compare HFC high vs. 450
ppm stabilization szenario –> blue dotted line)
Source: Velders, Guus J.M. et.al., 2009

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LCDS:
- Facilitate an overall low-carbon development reflecting the various options
across sectors and subsectors and respective policies and actions
- Longer term national policy setting and adjustment
NAMAs:
- Identified reduction measures under LCDS or
- Initial action in sectors with significant emissions in order to develop and
demonstrate technology and policy options, especially where insufficient
information is available
- Building capacity to maintain GHG inventories on HFC and energy sector
- Important to remove barriers and facilitate development of standards,
regulation and longer term policies
- Need to incorporate capacity building, methods and instruments for data
generation and benchmark or scenario development to strengthen the overall
LCD process
Similar Models under the MP: -> Country programmes ->Sector Plans
Experience: Policy setting and implementation is an iterative process and
improves with the progress at both levels
Relation of NAMAs to LCDS

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NAMAs in the RAC/Foam sectors typically include the following
range of activities:
• Capacity building
• Development of regulatory framework & standards/norms
• Development of baseline, reduction or intensity targets
• Stakeholder coordination, consultative processes
• Monitoring/MRV
• Establishing supporting infrastructure (logisitics, supplies, admin, after
sales services etc.)
• Technology development/adaptation, demonstration, diffusion
• Market transformation
This requires sector inventarisation, identification of significant emission
reductions, existing potentials and barriers for their realisation,
What are Key Design Features of NAMAs?

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- Immediate abatement potential / low hanging fruits first
- Feasibility of alternative technologies and policies
- Financial/economic feasibility
- MACs (unilateral NAMAs+)
- Sector specific incremental cost calculation (supported NAMAs+)
- Transparency of funding technology transfer (incremental operating
cost/capital cost)
- Feasibiliy for transformation or supporting framework or policy
enforcement
Similar Models under the MP: -> Project funding ->Sector Funding
Experience: Transparency is provided through agreements on emission
targets (Flexible implementation, compliance committed)
Important Selection Criteria

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How can the Private Sector Involve
in the Implementation of NAMAs?
- Provide reliable regulatory framework
- Development of standards/norms
- Participative development of NAMA proposals
- Provide opportunities for labelling, certification , tests, approvals
- Build on existing technology networks
- Improve risk management (insurances, bank guarantees)
- Banking issues (Letter of credit etc.)
- Incentive programmes (state, national, sector)
- Associations to assist in MRV activities
- Supporting infrastructure, after sales, disposal, destruction
- Back up supplies, trade issues
- Sector communication plans
- MRV framework has to be economically feasible
Important Requirements:

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What are Good Practices
to Develop and Implement NAMAs?
• Assessment of the refrigeration, air-conditioning and foam sector
• Test application of conceptualized methodologies for inventory of sectors
emissions
• Evaluation of technology and development needs
• Support analysis of existing regulatory framework and standards, outline of
applicable policy instruments and incentive mechanisms
• Ranking of various options (taking under consideration technical feasibility & cost
efficiency)
• Support participative development of technology roadmaps, including national
strategies and mitigation targets, with private and public stakeholders
• Assist formulation of appropriate sector benchmarks, indicators and procedures
for monitoring, reporting and verification, building on the current established
practice of ANNEX I reporting
• Identify needs for international financial assistance, support for submission of
financial requests to potential donors and to the registry at the UNFCCC
Example: Development of NAMAs in the RAC Sector

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Thank you.

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Back up

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Ozone Layer Protection
Climate Change
CFCs (MP)
Funding
Sector
HFCs (KP)
Ozone Layer/Climate Protection in RAC and Foam Sectors
Controlled
Substances
End-user
(only KP)
Lang-term
Alternatives
Natural Gases
Energy efficiencyCO2 (KP)
Non - Market
Market based
CDM
HCFCs (MP)
IndirectEmissionsDirect
Only ~20% of all
projects will
avoid 2nd
conversions
Cost efficient conversions to
„substances in kind) MontrealMontreal
UNFCCC
/Kyoto
UNFCCC
/Kyoto
Production
(MP & KP)

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MACs INCREMENTAL COST DEFINITION MP
Costs from equipment manufacturer, end user and end of
life perspective
Costs from equipment manufacturer perspective
Net present value over total equipment lifetime, including
incremental investment cost (residual value old equipm. =
0%)
incremental unit costs
incremental operating cost over lifetime, incl.
energy cost over LT (manufacturing and end use)
refrigerant cost over LT (charge and emission)
Capital investment cost + one year of incremental
operating cost
[incremental] investment cost (residual value old equipm.
<= 100%)
incremental operating cost of one year, incl.
[in some cases: energy cost manufacturing for 1 year]
refrigerant cost for 1 year (charge)
- MACs: Adaptation to local conditions is in many cases difficult (depreciation, capitalcosts,
qualfication costs etc.) risk that policy assumptions may not work, because markets
behave differently, e.g. because of opportunity costs or investments,
consumers are not willing to pay increment
- Incremental Costs: Negotiating process difficult, but shows general good economy.
Advantage: investment follows policy objectives. Markets can be transformed at once.
Generally shared prvate investment increase tarnsaction costs and implementation time
Cost perspectives - Experiences under the MLF

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Recent Developments MP - UNFCCC
Montreal Protocol
-MOP 11/2011:
- Phase down of HFCs under the MP, 2 proposals, USA/MEX/CAN &
Micronesia
- Proposal to control HFC-23 under the MP
UNFCCC – AWG-LCA
-Cancun Agreement: Decision 84. ..establishment..of one or more non-
market based mechanisms to enhance the cost-effectiveness of, and to
promote, mitigation actions; Decision 85. ..to elaborate the mechanism or
mechanisms ..
-Oasis: industrial gases with high global warming potentials ….should be
addressed through non-market-based mechanisms.
-EU Proposal:…support action on HFCs under MP as a prime example of
a non-market-based approach….. complementary to mitigation action
under the UNFCCC and without prejudice to Nationally Appropriate
Mitigation Actions (NAMAs).