Non-additionality, Overestimation of Supply, and Double Counting in Offset Programs: Insight for the Mexican Carbon Market

Mexico utilizes an emissions trading system as one of its carbon pricing instruments. Mexico’s planning, like that of other countries, includes flexible mechanisms such as offsets. Offsets allow market participants to compensate for their emissions through mitigation projects. Offsetting via participation in the Clean Development Mechanism and Joint Implementation was fundamental to the Kyoto Protocol. In contrast, the Paris Agreement is ambiguous about its use. Other national or regional offset programs, such as the EU, Australia, New Zealand, Japan, or Korea, work within emission trading systems. Subnationally, the California-Quebec program has been in effect since 2014. As Greenhouse Gases (GHGs) are global, offsetting allows market participants to compensate for their emissions through mitigation projects, whether domestically or abroad. Given their global scope, such programs present a wide variability in quality. This chapter presents an overview of offset programs worldwide and argues that non-additionality, overestimated supply, and double counting are their three most pressing quality problems. This analysis sheds light upon the nascent Mexican system and its offset program.

Emission Capping & Trading, First of its Kind in ADNOC Group

The Spiking Gas Compressor project was installed in 2014, which reduces 65,000 tons of Carbon-di-oxide (CO2) emission annually. This was subsequently registered as a CDM (Clean Development Mechanism) project under UN convention and incidentally this was the first ADNOC project to be under this registration. The registration is the first step to claim for Carbon Credits under United Nations Framework of Clean Climate Convention (UNFCCC) scheme. No Carbon Credits were claimed under CDM since its commissioning in 2014 due to low carbon price. In 2019, we achieved the next big milestone of trading these accumulated carbon credits to an Austrian MNC. M/s MASDAR, pioneer in this field, who are also partner of ADNOC onshore in this green project, arranged an Upstream Emission Reduction (UER) buyer. The transaction is worth 65,000 tons of CO2 reduction and considerable monetary benefit. This transaction assumes significance not in terms of monetary value but a global recognition to ADNOC as a company amongst the leading players in the global arena in reducing the Greenhouse Gas (GHG) emissions. This project is the first & largest Clean Development Mechanism (CDM) registered in Oil & Gas industry in UAE. United Nations Framework Convention on Clean Climate (UNFCCC) recognized flare gas recovery through Spiking Gas Project as Clean Development Mechanism (CDM) project to generate Carbon Credits. The project demonstrates the commitment and support of Abu Dhabi Government and ADNOC towards climate change mitigation measures. Clean Development Mechanism (CDM) project demonstrated successful partnership with Masdar. The project was converted into to UER scheme. ADNOC Onshore & Masdar arranged a Buyer. Later, in compliance to ISO 14064/65, post Validation/ Verification by external auditors brought a considerable revenue to ADNOC.

Road-rail intermodality and the Clean Development Mechanism

The approval of methodologies involving the transportation sector confronts methodological concepts that hinder the eligibility of such projects as Clean Development Mechanism, mainly because it is a segment whose emissions come from mobile sources. The verification of additionality and monitoring of emissions, in principle, can be regarded as some of the key barriers to fit transportation sector projects into the CDM framework. This paper discusses these issues and examines, in particular, the road-rail intermodality. Since the partial replacement of cargo transport via trucks by wagon trains presents a great potential for mitigating emissions of greenhouse gases, this paper also analyzes the characteristics that a project involving road-rail intermodality must possess in order to be approved by the Executive Board of the United Nations Framework Convention on Climate Change. It also analyzes the main difficulties that such a project might face.

Potensi Reduksi Emisi GRK dan Kelayakan Finansial dari Teknologi Hidrotermal untuk Pengolahan Sampah di Kabupaten Tangerang

Peningkatan konsentrasi gas rumah kaca (GRK) di atmosfer telah menimbulkan efek pemanasan global. Salah satu kontributor emisi GRK adalah penumpukan sampah di TPA tanpa pengolahan lebih lanjut. TPA Jatiwaringin di Kabupaten Tangerang diprediksi akan mengalami overcapacity, sehingga diperlukan mitigasi untuk mengurangi sampah di TPA, salah satunya dengan teknologi hidrotermal. Namun dalam penerapan teknologi hidrotermal membutuhkan biaya yang tinggi. Penelitian ini bertujuan untuk mengestimasi potensi emisi GRK sebelum adanya proyek hidrotermal, mengestimasi potensi reduksi emisi GRK setelah adanya proyek hidrotermal, menganalisis kelayakan finansial dari proyek hidrotermal. Penelitian ini menggunakan metode Clean Development Mechanism (CDM) AMS-III.E untuk mengestimasi potensi reduksi emisi GRK proyek hidrotermal dan analisis cashflow untuk mengevaluasi kelayakan finansialnya. Hasil penelitian ini menunjukkan emisi baseline pada tahun 2021 diestimasi sebesar 18.766 t CO2 e dan akan meningkat menjadi 21.865 t CO2 e (16,5%) pada tahun 2030. Emisi proyek diestimasi sebesar 5883 t CO2 e per tahun. Rata-rata persentase potensi reduksi emisi GRK dari proyek hidrotermal tahun 2021-2030 sebesar 70,94% (Skenario 2 putaran per hari) dan 68,26% (Skenario 3 putaran per hari). Proyek hidrotermal juga layak secara finansial, dengan syarat produk hidrotermal yaitu Refused Derived Fuel (RDF) dapat terjual setidaknya 72% dan jumlah iuran masyarakat yang terkumpul minimal 50% dari target penerimaan iuran. ABSTRACTAn increase in the atmospheric concentrations of greenhouse gases (GHGs) produces global warming effect. One of GHGs emissions contributors is waste accumulation of in the landfill. Jatiwaringin landfill in Tangerang Regency is predicted to reach overcapacity. Therefore, mitigation measures are required to reduce such waste. One of potential measures is hydrothermal treatment technology for urban scale, but its implementation is costly. This study aims to: estimate the potential GHGs emissions prior the hydrothermal project, estimate the potential GHGs emission reduction after the project, and analyze the financial feasibility of the project. This study employs Clean Development Mechanism (CDM) method i.e., AMS-III.E to estimate the GHGs emissions reduction potential of hydrothermal projects and cashflow analysis to evaluate the project financial feasibility. The results show that the baseline emissions in 2021 are estimated at 18,766 t CO2 e and would increase to 21,865 t CO2 e (16.5%) in 2030. The potential project emissions are estimated at 5883 t CO2 e per year. The GHGs emission reductions could reach 70.94% (2 batches per day) and 68.26% (3 batches per day) within 2021-2030. Furthermore, the hydrothermal project would be financially feasible, if the hydrothermal product i.e., Refused Derived Fuel (RDF) are sold at least 72% and the cumulative households-contribution is at least 50% of the target.