MLF Activities in response to decisions on funding activities related to destruction

1
MLF Activities in response to decisionson
funding activities related to destruction

• Stephan Sicars, Senior Programme Officer, MLF
  Secretariat
• Seminar on the environmentally sound management
  of banks of ozone-depleting substances
• Geneve, Suisse, 14 Juin 2010

2
Content

• Introduction
• Interim Guidelines
• Timing and activities
• Business plan (2010 2012)
• Observations from submissions
• Conclusion and outlook

3
Introduction

• XX/7 Environmentally sound management of banks
  of ozone-depleting substances
• Invite the MLF to enable practical solutions
  gaining better knowledge destroying banks,
  and on costs related to the collection,
  transportation, storage and destruction in A5C
• Request ExCom to consider commencing pilot
  projects that may cover the collection,
  transport, storage and destruction of ODS
• Conformity with national, regional, and/or
  international requirements (Basel, Rotterdam)

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Interim guidelines for demo projects for ODS
disposal (58) (I)

• Define collection, transport, storage and
  destruction
• Collection Get ODS bottled
• Limited number of demonstration projects
• No funding for collection, except to monitor
  sources
• Limited number
• Funding for non-LVC max. US 13.2/kg
• Halon and CTC max one project, only if important
• Annual report progress experiences

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Interim guidelines for demo projects for ODS
disposal (58) (II)

• Information to be included with project
• What exactly is done?
• How much ODS? Assurance that objectives will be
  reached
• Synergies?
• Detailed description of management and financial
  set up
• Total cost inclusing non-MLF costs and their
  funding sources sustainability of business model
• Clear indication how to secure other sources of
  funding
• Concept for monitoring the origin of recovered
  ODS discouraging virgin ODS declared as used
• Can also include other disposal options
  (recycling and reuse)

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Timing and Activities of ExCom (I)

• Timeline
• MoP XX / ExCom 57-59 / MoP XIX / ExCom
  60-61
• ExCom 57 PRP, 58 guidelines, 59 more PRP
• XXI/2 Environmentally sound management of banks
  of ozone-depleting substances
• ExCom to consider further pilot projects in
  A5C to consider the costs of a one-time window
  to address LVC
• ExCom to develop and implement a methodology to
  verify the climate benefits/costs associated with
  MLF
• Call on Parties to consider making additional
  support available to the MLF for destruction of
  ODS

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Timing and Activities of ExCom (II)

• ExCom 60
• Decision 60/5 (i) Bilateral/implementing
  agencies to suggest at the 61st ExCom a level of
  funding for activities in LVC
• PRP (approved) Business plan 2010 (not approved)
• ExCom 61
• Business plan 2010

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Business plan - 61st Meeting (I)

• 21 demonstration projects
• 11 countries
• 6 regions/sub-regions
• 4 preparation requests w/o later funding
• Value
• Projects between US 100,000 and US 1.4 million,
  
• Total US 18.7 million
• ODS phase-out
• Up to 1200 ODP tonnes/project
• Total 2685 ODP tonnes
• 3 technical assistance projects
• 14 PRP requests, 7 regions/sub-regions

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Business plan - 61st Meeting (II)

• Algeria (59)
• Bangladesh - TA (-)
• Brazil (57)
• China (59)
• Colombia (59)
• Cuba (59)
• Ghana (57)
• India Demo TA (-)
• Lebanon (-)
• Mexico (57)
• Nigeria (60)
• Turkey (57)

• Regions
• Africa (-)
• Asia/Pacific Demo TA (57 -)
• Eastern Europe, Central Asia (-)
• Latin America Caribbean (-)
• Prep w/o BP requests for project funding
• Indonesia (57)
• Mexico (57)
• Philippines (57)
• Nepal (59)
• In brackets Meeting at which preparatory
  funding was approved

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Observations - submissions

• Presently 2 project submissions received
• Both withdrawn after extensive discussions
• One documented for ExCom 60
• Both in conjunction with energy efficiency
  projects
• Both aimed at sustainability beyond MLF support
• Not always full understanding of the concept in
  guidelines No collection
• Timing
• Collection is time critical, destruction less
• Gap closed through storage (minimum losses)

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Observations (II)

• Both want to use carbon funding to achieve
  long-term sustainability
• Both face severe challenges in financial set-up
  Liquidity
• Projects require (more) entrepreneurial thinking
• Cash flow analysis timing of expenditures/income
  essential
• Risk assessment instead
• Prioritisation of income maximisation / cost
  minimisation before technical or regulatory
  perfectionism

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Observations (III)

• CFC-12 is an asset (max 30 /kg), CFC-11 less
  (max 14/kg)
• Combined projects possible, where CFC-11
  collection/destruction funded from surplus CFC-12
  funding
• There will be a race by the private sector to
  secure CFC-12 banks
• In cases where CFC-11 and CFC-12 co-exist in
  banks (fridges) ExCom will have to decide if to
  fund into disposal of one (CFC-11) if the other
  created profits for the private sector (CFC-12)
• Incremental cost issue
• Given possible income of CFC-12, incremental cost
  will be often negative, eliminating eligibility
• CFC prices for destruction multiple of CFC prices
  during pre-phase-out period Attempts of illegal
  production very likely

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Conclusion and outlook (I)

• Project submissions according to Business Plan
• 2010 12 projects with 2,120 ODP tonnes
• 2011 9 projects with 565 ODP tonnes
• Implementation time frame Typically 2 years

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Conclusion and Outlook

• Two different approaches
• Countries having surplus ODS already collected
  (no submission yet)
• Limited amounts for most countries
• Regional projects expected
• Some countries have major ODS banks
• Possibly not eligible for carbon funding
• Countries having collection efforts ongoing
• Energy efficiency projects
• Quantities larger
• What will happen to CFC-11?
• Carbon market funding for collection /
  sustainable destruction Severe liquidity issues
  but possibly still significant incremental
  savings