EcoSecurities Group plc

Transcript EcoSecurities Group plc

Opportunities for Carbon Credits in Pakistan’s Cement Sector

28 January 2008

Who we are

EcoSecurities is a leading company in the business of sourcing, developing and trading carbon credits throughout the world

Our carbon credit portfolio is the largest in the industry and consists of

402

projects with the potential to generate over

142 million carbon credits

: > > > > > spanning

36 countries,

using

18 technologies 99

projects

registered

with the CDM Executive Board

220

projects

validated

or submitted for validation

196

of the projects have secured

financing 158

projects are

What we do Creating and selling carbon credits Developing and financing projects Buying from our carbon credit portfolio Consultancy services

Global expansion of offices and employees

New York Portland Los Angeles Mexico City San Jose Lima Santiago de Chile Dublin Oxford The Hague Bern* Kiev Rome* Madrid Casablanca Dubai Karachi Johannesburg Mumbai Rio de Janeiro Bangkok Tokyo

2 Offices in China Beijing

Chengdu Makati Singapore Jakarta Date June 2005 IPO Dec 2005 August 2007 © 2006 EcoSecurities Group plc Headcount 27 employees 72 employees 280 employees Offices and Representatives 5 15 28 Carbon credits - origination to commercialisation

Company History

Jan 1997

EcoSecurities formed

Nov 1997

EcoSecurities develops first carbon verification service in the world

Sept 2003 Nov 2004

EcoSecurities develops one of the first methodologies to be approved by the CDM Executive Board EcoSecurities’ NovaGerar landfill gas project is the first CDM project worldwide to be registered

Oct 2005 Nov 2005 Dec 2005

La Esperanza project, structued by EcoSecurities, receives carbon credits from first-ever issuance EcoSecurities Conusltancy Services is voted the world’s leading greenhouse gas advirosy firm for the 5 th year in a row EcoSecurities successfully lists on AIM

The Carbon market



The issue at hand

: Anthropogenic (i.e., man-made) climate change is a fact. If and what the implications are and if and how to address them is under dispute.



The Kyoto protocol

: Aims to reduce GHG emissions by 2012 and distinguish two types of countries:

–

Annex I

countries: With binding emission targets for industrialised countries: • Western and Eastern Europe, Canada, Japan, New Zealand, Russia, Ukraine –

Non-Annex I

countries: With voluntary participation of developing countries: • China, India, Pakistan, South Africa, Philippines, Uruguay, Brazil, etc.

The Kyoto protocol

Annex I Non-Annex I Not ratified

How to comply with Kyoto

European countries and companies have specific targets. To comply, European companies can choose to:



Do nothing, pay fines



Reduce emissions on site enough to meet target



Reduce emissions on site in excess of target and sell surplus credits



Buy surplus reductions from other companies in EU



The Kyoto protocol The reduced GHGs in a Non –Annex I countries can be sold to an Annex I country

United Kingdom Pakistan Carbon Credits (CERS) A CDM project reduces the GHG emissions in the CDM country

Actual emissions Emission cap

Costs of compliance drive the market The costs of compliance differ greatly worldwide



Flexible mechanisms

allow countries to achieve their emission targets in a cost effective way –

Emission Trading

(trading of allowances between Annex I governments) • AAUs –

Joint Implementation

• ERUs (projects between Annex I countries) –

Clean Development Mechanism

(projects in Non-Annex I countries with participation of Annex I countries) • CERs

Eligibility Criteria

 Country must have ratified Kyoto Protocol and set up national office to approve projects    Project must reduce/displace one of the six greenhouse gases Project must not have been commissioned yet Emission reductions must be additional to emission reductions that would occur under normal business-as-usual scenario    Project funding must not result in diversion of official development assistance Project must contribute to the country’s sustainable development Project must use technology that is readily available in a market (that is, cannot use experimental or trial phase technology)

Different Values for Different Gases

SIX

types of gases with different

Global Warming Potential

(GWP). Usually expressed in

CO2-equivalent

Carbon dioxide GWP: 1 Methane GWP: 21 Nitrous oxide GWP: 310 Sulphur hexafluoride GWP: 23,900 Hydrofluorocarbons GWP: 11,700 Perfluorocarbons GWP: 9,200 © 2006 EcoSecurities Group plc Carbon credits - origination to commercialisation

Proving Additionality

 The Clean Development Mechanism set up to provide financial incentives to invest in new/more efficient/cleaner technologies   Consider CNG in cars versus CNG in buses in Pakistan. Every other car runs on CNG. Where are the CNG buses? If it hasn’t happened yet, there are probably barriers to investment.

If project likely to happen anyway —i.e., without carbon credit revenue—then it becomes difficult to prove additionality  Thus carbon credit revenue needs to play a role in your decision-making as you consider investing in a project!

 What are the barriers to your investment? Cost, financial penalties, lack of available service providers, lack of skilled technicians, etc.

Landfills Small scale hydropower Agricultural biodigestors Pig waste biodigestors © 2006 EcoSecurities Group plc Biomass and waste mgt Industrial efficiency Current projects based on 18 technologies in 36 countries Carbon credits - origination to commercialisation

Summary of project types

– – – – –

Increase the share of additives (and reduce the share of clinker) Recover waste heat/gas from the kiln Substitute fossil fuels by biomass or clean fossil fuel to fire the kiln

• •

Increase the efficiency of the process (kiln, mill), e.g. Change from wet to dry process Upgrade kiln, tower, burners, etc Use alternative raw materials with less CaCO3 and MgCO3 © 2006 EcoSecurities Group plc Carbon credits - origination to commercialisation

Project examples: Options in the Cement sector

Ad additives:

Raw material blending:

> Carbonated materials: – – Limestone (CaCO3, MgCO3) Clay > > Fe and Si content correctives: – Iron ore – Sand Others: – Pyrite?

Clinker generation:

CaCO3 => CaO + CO2

MgCO3 => MgO + CO2 Heating::

Burning the limestone using:

> >

Coal, HFO, LNG Other (e.g. tires)

> > >

Fly ash, Slag Limestone Pozzolane And/or Gypsum Grinding:

Grind mill consuming grid or onsite electricity Energy provision:

Onsite generation or grid electricity Blended cement:

Cement process and CDM methodologies Transport of additives with

vehicles using petrol

conveyor belt using electricity Preparation of additives using electricity ACM0015 (use alternative raw materials with no carbonates) AM0024, ACM0012 (recover waste heat) RAW MIX

Carbonated materials from mining:

Limestone (mostly) which contains CaCO3 and MgCO3 Clay

Fe and Si content correctives: Iron ore Sand Heat (1500 °C?) in a kiln fired by fossil fuels

e.g. 0.25 tCO2/t clinker

ACM0003 (substitute fossil fuel) Alternative raw materials possible:

Bottom ash

Blast furnace slag

Gypsum

Anhydrite

Fluorite

Etc CaCO3 => CaO + CO2 MgCO3 => MgO + CO2

e.g. 0.50 tCO2/t clinker

Electricity to run the kiln

e.g. 0.05

tCO2/t clinker

Preparation of raw materials (e.g. drying, crushing) using fossil fuels and/or electricity Key: Sources of emissions Leakage + other general methodologies:

Energy efficiency (AMS II.C, AMS II.D), e.g for: switch from wet to dry process upgrade of kiln, towers, grinding separators, burners, expert control systems...

ADDITIVES, e.g.:

Fly ash

Slag

Limestone

Pozzolane + Gypsum

e.g. 0.8 tCO2/ t clinker e.g. 25%

CLINKER (contains CaO and MgO)

e.g. 75%

Grinding mill using electricity

e.g. 0.04 tCO2/t cement

ACM0005 (increase additive share in cement) NM0225 rejected (increase additive share in concrete) BLENDED CEMENT

e.g. 0.64 tCO2/ t clinker

- Gravel - Water CONCRETE

Examples of Registered Projects

Substitution of clinker with fly ash in Portland Pozzolana Cement (Blended Cement) at Lafarge India Pvt. Ltd. - Arasmeta Cement Plant [ACM0005] India Cements WHR project [AM0024] 69,359 Carbon Credits per year 51,527 Carbon Credits per year Optimal Utilization of Clinker project at Dalmia Cement (Bharat) Limited (DCBL), Dalmiapuram , Tamilnadu [ACM0005] Optimal utilization of clinker: Substitution of Clinker by Slag in Portland Slag Cement at OCL, Rajgangpur, Sundargarh, Orissa [ACM0005] Partial substitution of fossil fuel with alternative fuels like agricultural by-products, tyres and MSW in the manufacture of OPC at Grasim Industries Ltd Tamilnadu, India [ACM0003] Waste Heat Recovery Power Project at JK Cement Works,Rajasthan [ACM0004] 32,658 Carbon Credits per year 42,346 Carbon Credits per year 51,932 Carbon Credits per year 70,796 Carbon Credits per year

Carbon Credit Cycle vs. Project Cycle

Carbon Credit Application Process

UN/Kyoto Protocol rules require the following to achieve registration:  Project Design Document using approved methodology and monitoring protocol    Approval by host country Stakeholder workshop Validation by third-party auditor (Designated Operational Entity)    Registration with United Nations Verification of emission reductions by third-party auditor (2 nd Formal request for issuance submitted with verification report DOE) Average time from PDD to registration is 6-8 months Carbon credits start to accrue from time of registration

Carbon Credit Transaction Costs

      PDD development, legal fees, stakeholder workshop, site visits = Variable Validation = €15,000 Registration = US$0.10/CER for first 15,000, + US$0.20/CER for rest First Verification = €15,000 Issuance = US$0.10/CER for first 15,000, + US$0.20/CER for rest Subsequent Verification = €10,000

Working with EcoSecurities

EcoSecurities has a large and experienced team dedicated to creating carbon credits from greenhouse gas emission reduction mitigation projects and enabling project developers to secure revenue by taking them through the entire carbon credit process from creation to sale What EcoSecurities will do for you:

 Assess your commercial viability of using your existing assets to create a carbon credit project  Develop all the CDM components and guide the project through the complex UN regulatory process  Buy all the carbon credits through an Emissions Reduction Purchase Agreement (ERPA)

Working with EcoSecurities

EcoSecurities will:

 Cover all carbon credit transaction costs up front, so you can focus on your project and not worry about getting your project registered   Bear the financial risk related to carbon credit creation Work on a success fee model: we only get paid when you get paid for carbon credits

For the project developer this means:

 Securing additional revenues from carbon credits   Immediate start of their project development EcoSecurities bears the financial risk related to carbon credit creation by providing time and expertise before carbon credits are issued thus significantly lowering the risk

If I have a project, what do I do?

    MOVE QUICKLY: 2012 IS NOT FAR OFF!!

Let EcoSecurities screen your project for carbon credit potential. If we believe your project qualifies and will generate sufficient carbon credits, we will take on the project.

Sign an Emission Reduction Purchase Agreement (ERPA) with us: Similar to a power purchase agreement, in which we agree to develop and buy your carbon credits as long as there is a market for them.

Develop your project as we develop your carbon credits!

EcoSecurities Group plc

Transcript EcoSecurities Group plc

Opportunities for Carbon Credits in Pakistan’s Cement Sector

Who we are

What we do Creating and selling carbon credits Developing and financing projects Buying from our carbon credit portfolio Consultancy services

Global expansion of offices and employees

Company History

The Carbon market

The issue at hand

: Anthropogenic (i.e., man-made) climate change is a fact. If and what the implications are and if and how to address them is under dispute.

The Kyoto protocol

: Aims to reduce GHG emissions by 2012 and distinguish two types of countries:

The Kyoto protocol

How to comply with Kyoto

The Kyoto protocol The reduced GHGs in a Non –Annex I countries can be sold to an Annex I country

Costs of compliance drive the market The costs of compliance differ greatly worldwide

Eligibility Criteria

Different Values for Different Gases

Proving Additionality

Summary of project types

Project examples: Options in the Cement sector

Examples of Registered Projects

Carbon Credit Cycle vs. Project Cycle

Carbon Credit Application Process

Carbon Credit Transaction Costs

Working with EcoSecurities

Working with EcoSecurities

If I have a project, what do I do?

Thank you!

Toby Tiktinsky Pakistan Country Director Ofc: +92 (0) 21 2410627 Fax: +92 (0) 246 0097 Mob: +92 (0) 301 850 3082 Email: [email protected]

EcoSecurities Group plc

Transcript EcoSecurities Group plc

Opportunities for Carbon Credits in Pakistan’s Cement Sector

Who we are

What we do Creating and selling carbon credits Developing and financing projects Buying from our carbon credit portfolio Consultancy services

Global expansion of offices and employees

Company History

The Carbon market

The issue at hand

: Anthropogenic (i.e., man-made) climate change is a fact. If and what the implications are and if and how to address them is under dispute.

The Kyoto protocol

: Aims to reduce GHG emissions by 2012 and distinguish two types of countries:

The Kyoto protocol

How to comply with Kyoto

The Kyoto protocol The reduced GHGs in a Non –Annex I countries can be sold to an Annex I country

Costs of compliance drive the market The costs of compliance differ greatly worldwide

Eligibility Criteria

Different Values for Different Gases

Proving Additionality

Summary of project types

Project examples: Options in the Cement sector

Examples of Registered Projects

Carbon Credit Cycle vs. Project Cycle

Carbon Credit Application Process

Carbon Credit Transaction Costs

Working with EcoSecurities

Working with EcoSecurities

If I have a project, what do I do?

Thank you!

Toby Tiktinsky Pakistan Country Director Ofc: +92 (0) 21 2410627 Fax: +92 (0) 246 0097 Mob: +92 (0) 301 850 3082 Email: [email protected]

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