UNIDO - Ministry of Environment

CDM Programme - Pakistan

Turning Potential into Projects

CARBON TRADING WORKSHOP

Workshop Report
17th March, 2010, Lahore Chamber of Commerce and Industries (LCCI)
Organized in Collaboration
Ministry of Environment & Punjab Board of Investment and Trade

Punjab Board of
Investment & Trade
 UNIDO - Ministry of Environment
Clean Development Mechanism (CDM) Programme, Pakistan

Workshop Report

Carbon Trading Workshop

Held at:
17th March, 2010
Lahore Chamber of Commerce and Industries (LCCI) Lahore
Organized in Collaboration with
Ministry of Environment & Punjab Board of Investment and Trade

Punjab Board of
Investment & Trade

United Nations Industrial Development Organization

Pakistan 2010
 Carbon Credit Workshop

Preface and Acknowledgment 1

Executive Summary 2

Brief on the Workshop 3

1. Introduction 4
1.1 Inaugural Session 4
1.2 Technical Session 5
1.3 Discussion Session 8

Carbon Trading: An opportunity for Pakistan 9

ANNEXES

ANNEX - A Agenda of the Workshop 12

ANNEX - B PRESENTATIONS

A. Evolution of Carbon Market Development in Pakistan 14

B. Role of the Clean Development Mechanism Executive Board
(Registration and Issuance Processes) 19
C. Overview of CDM Potential, Prospects benefits for private Sector and Role of
DNA for Promotion of CDM Project Activities in Pakistan 26
D. CDM Project Development & Possibilities of Carbon Finance in Public and
Private Sector of Pakistan 38
E. CDM Project Overview Pak-Arab Fertilizers limited 47

ANNEX - C List of the Participants 50

ANNEX - D Event Media Coverage 53

Picture Gallery 55
Profiles of speakers 56

UNIDO-Ministry of Environment Clean Development Mechanism (CDM) Programme, Pakistan 2010

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 Carbon Trading Workshop

The UNIDOPakistan Clean Development Mechanism Programme under the project Institutional Capacity
Enhancement for CDM in Pakistan is working with the collaboration of the Ministry of Environment to enhance
CDM project development in Pakistan. Towards this end it has carried out various activities such as identification of
potential projects, matching project developers with project proponents, carrying out studies in the area of Energy
Efficiency, Waste to Energy projects, networking with national and international CDM project consultants and
organizing seminars and workshops to enhance CDM project development in the country. UNIDO CDM
programme is thus supplementing the role of the CDM Cell Ministry of Environment which has the dual
responsibility of supporting CDM project development as well as a working as Government of Pakistan regulator
for CDM activities in the country.

The strategic aim of the UNIDO project has been the development of actual projects for which the programme has a
caption Turning Potential in to projects Pakistan has tremendous potential in almost all major areas where a CDM
project can be developed however the total potential has not been realized. The reasons for this have been,
insufficient awareness of the CDM, scarcity of local technical consulting companies and the specialized nature of
CDM project development, insufficient size of some potential projects and most importantly a difficult investment
climate.

Punjab Board of Investment and Trade (PBIT) has been recently established, to specifically encourage investment
and therefore it was considered appropriate to organize a Carbon Trading Workshop with their collaboration.

We would like to place on record the efforts of Mr. Jawed Ali Khan, Director General, Ministry of Environment who
took the initiative to get the workshop organized and along with support of Mr. Momin Agha Deputy Secretary,
Ministry of Environment arranged for the presence of eminent personalities involved in CDM project development.
We Would also like to thank these eminent persons for taking time out of their busy schedule to make their
presentations. Mr. Malik amin Aslam Environment Consultant and Former Minister of State for Environment, Mr.
Shafqat Kakakhel Former Ambassador for Pakistan and Former Deputy Executive Director United Nations
Environment Programme (UNEP), Mr. Bikash Panday International Expert CDM and presently Director Winrock
and Ms. Saima Qadir of the World Bank who joined the proceedings from Islamabad through video conference
facility.

We wish to thank Ch. Abdul Ghafoor, Minister for Commerce and Investment, Government of Punjab who kindly
consented to be the Chief Guest on the occasion. Thanks are also due to the active involvement of the office bearers
of the Punjab Board of investment and Trade Mr. Pir Saad Ahsanuddin CEO and Vice Chairman, Mr. Fazal Abbas
Maken Secretary Commerce & Investment and Chief Operating Officer PBIT, Mr. Sajid Yousafani Director
General Facilitation, Mr. Habib ur Rahman Gilani General Manager Finance & Administration and Mr. Asif Abbas
Mehr Director Finance PBIT.

Lastly, CDM Cell Ministry of Environment and the UNIDO team would like to translate our slogan Turning
Potential in to Projects in to a reality by collaborating further with the various agencies both public and private in
Pakistan to enhance CDM Project Development in Pakistan.

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 Carbon Trading Workshop

The Ministry of Environment in collaboration with UNIDOPakistan CDM Programme, Lahore

Chamber of Commerce & Industry (LCCI) and Punjab Board of Investment and Trade (PBIT)
organized a one day Carbon Trading Workshop held at the Lahore Chamber of Commerce &
th
Industry (LCCI) on 17 March 2010.

The workshop was well attended by the representatives of the private sector (Members LCCI,
Potential CDM project proponents, Environment consultants, public sector (WAPDA, Punjab
Industrial Estates), regulatory agency, CDM project developers, validators, concerned officials of
the Ministry of Environment, representatives of the Punjab Board of Investment and Trade (PBIT),
Representative from the UNIDO CDM Programme Country team and senior officials of the LCCI
(List of participants is at Annex-III). The event was adequately covered by the print and electronic
media. (Annex-IV)

Mr. Chaudhry Abdul Ghafoor, Minister for Commerce and Investment, Government of Punjab was
Chief Guest on the occasion. The first session started with the welcome address by the Sitting Vice
President of LCCI Mr. Irfan Iqbal Sheikh followed by the Inaugural address by Pir Saad Ahsanuddin
Vice Chairman and CEO of PBIT. Mr. Jawed Ali Khan, Director General Environment Ministry of
Environment and Mr. Tanvir Mahmud National Programme Coordinator (UNIDO-CDM
Programme, Pakistan) also spoke on the occasion. The first session concluded with an interactive
discussion session regarding the potential of developing CDM projects in Pakistan and how this
could be taken forward. Details are given in the Proceedings of the Workshop section of the report.

The second session comprised of presentations made by various Resource persons .The main topics
included, introduction to CDM cycle, eligibility criteria, methodologies, validation, verification and
approval processes, carbon credit opportunities, evolution of Carbon market in Pakistan, role of
CDM Executive Board in project registration, process of carbon trading in Pakistan, CDM project
development and possibilities of finance in different areas of public and private sector of Pakistan
and CDM Capacity enhancement initiatives by the Ministry of Environment, UNIDO and the World
Bank through Win rock International.

The event was made successful with the active support of the Ministry of Environment, the Punjab
Board of Investment and Trade (PBIT) and Lahore Chamber of Commerce and Industries (LCCI).
The event provided an opportunity to bring together interested members of the chamber, potential
investors, CDM project advisory/ development companies, technology providers, Designated
Operational Entities (DOEs), corporate sector and all other relevant stakeholders.

The most significant aspect of the Workshop was the presence of eminent personalities in the field of
CDM development. These were Mr. Malik Amin Aslam Environment Consultant and Former
Minister for State for Environment, Mr. Shafqat Kakakhel Former Ambassador for Pakistan and
former Deputy Executive Director United Nations Environment Program (UNEP), Mr. Bikash
Pandey International Expert CDM and presently Director, Win rock Consultant and Mr. Tanvir
Mahmud International Consultant UNEP and presently National Program Coordinator UNIDO
CDM Program. Ms Saima Qadir of the World Bank joined the proceedings from Islamabad through
video conference facility

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 Carbon Trading Workshop

The Clean Development Mechanism (CDM) was created under Article 12 of the Kyoto Protocol
under which the industrialized countries can finance projects with the objective of reduction in Green
House Gases (GHG) global emissions through climate change mitigation projects in developing
countries contributing to their sustainable development. These projects enable them to receive off set
credits that can be applied against their own emission targets. The industrialized countries receive
credit for these projects in the form of Certified Emissions Reductions (CERs)

Through CDM, the developed countries can implement GHG mitigation processes in developing
countries at reduced cost of approximately US$15 per ton of CO2 equivalent compared to
approximately US$50 for reducing one ton of CO2 equivalent in their own country. Pakistan
deposited its instrument of accession to the Kyoto Protocol on 11th January 2005. A CDM Cell was
established in August of that year. A Designated National Authority (DNA) has been created under
the Ministry of Environment which is responsible for ensuring transparent, participatory and
effective management of CDM Process in the country.

Because of the diverse nature of the projects eligible to receive carbon credits, the UNFCCC has
developed an elaborate mechanism for which specialized knowledge and experience is required.
Developing countries that have acquired such knowledge and skills have been able to seek maximum
benefits from the mechanism, however despite substantial potential Pakistan has yet to realize the
benefits of the CDM Process. One of the reasons is the lack of awareness of the industrial community
in this regard.

The CDM Cell, Ministry of Environment is responsible for carrying out the Capacity Building
Activities for CDM project development in Pakistan. As a specialized agency, UNIDO is mandated
to promote industrial development and industrial international cooperation for sustainable
development. The UNDIO-CDM project in collaboration with the Ministry of Environment,
Government of Pakistan and funded by the Government of Norway aims to strengthen the capacities
of the Ministry of Environment and other relevant institutions including the private sector by
developing skills for identification and development of CDM Projects.

A workshop entitled Carbon Credit Opportunities in the Power Sector of Pakistan was held in
Lahore on the 22nd of August 2009 in association with the Lahore Chamber of Commerce and
Industry. The workshop introduced the concept of carbon trading to private sector entities in Punjab.
The current Workshop entitled Carbon Trading Workshop, held on the 17th of March 2010 in
association with the Lahore Chamber of Commerce and Industry and the Punjab Board of Investment
and Trade was a more in depth session than the first one. In this workshop businesses were given the
opportunity to not only learn about the CDM Process, but were also presented with successful models
of the process in Pakistan.

The entire CDM process, both at the macro level and at the individual project level was clearly
illustrated by the speakers providing the technical support for the workshop.

The workshop focused on presented a broad based view of carbon trading. Areas such as forestry and
agriculture, which are also up and coming CDM sectors were stressed and the role of consultants and
government agencies in the CDM Process was explained to the workshop participants.
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 Carbon Trading Workshop

PROCEEDINGS ON THE WORKSHOP

1. INTRODUCTION

Clean Development Mechanism is the international initiative which provides incentives to private
companies and countries to develop and implement projects aimed at reducing carbon emissions at
the global level and thus mitigating climate change by transferring financial resources across
national boundaries through a market mechanism. Clean Development Mechanism (CDM) is being
considered as an effective tool to introduce CDM projects in private sector organizations of Pakistan.
The workshop has provided a forum for promotion and enhancement of CDM trading opportunities
in the private sector of Pakistan.

1.1. Inaugural Session

The Ministry of Environment in collaboration with UNIDO, The Punjab Board of Investment and the
Lahore Chamber of Commerce and Industry organized a Carbon Trading Workshop held at the
th
Lahore Chamber of Commerce building on the 17 of March, 2010.
The attendees of the workshop included:

1. Members of the Lahore Chamber of Commerce and Industry.

2. Representative of UNIDO.
3. Officials of the Ministry of Environment of the Government of Pakistan, including its CDM Cell.
4. Representatives of the private sector including potential CDM project proponents and companies
which are in the process of CDM developing and validation.
5. Representatives of public sector institutions.
6. Representatives of the Punjab Board of Investment.

Following a recitation from the Holy Quran the Inaugural Session of the workshop was commenced.
A welcome address was given by Mr. Irfan Iqbal sheikh, Vice President of the Lahore Chamber of
Commerce and Industry. In his address he expressed that the carbon market had huge potential in
Pakistan and emphasized that through the CDM procedure energy projects can be initiated. This
would meet the nation's energy needs, contribute to a cleaner environment and also combat climate
change.

Mr. Tanvir Mahmud, National Project Coordinator UNIDO-CDM Programme, Pakistan briefed on
the UNIDO's projects in Pakistan and the role of UNIDO in facilitating the CDM process in Pakistan.
Despite its limitations in the area of funding UNIDO is playing a key role in Pakistan.

Pir Saad Ehsan-ud-Din, Vice Chairman and CEO of the Punjab Board of Investment and Trade
delivered the inaugural address of the workshop and stressed the public sector's support for the CDM
Process and carbon trading. He emphasized that the private sector must clearly express their needs
and concerns so that the government and public sector would be able to aid them in their endeavours.
The private sector would not be able to effectively partake in the CDM process without governmental
support and this is only possible if the private entities disregard their inhibitions in seeking out help
from the public sector.

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 Carbon Trading Workshop

Mr. Jawed Ali Khan, DG Environment, Ministry of Environment welcomed all of the attendees
and illustrated the Ministry of Environment's resolve to facilitate carbon trading and the CDM
Process in the private sector. He mentioned that the government of Pakistan had approved twenty
three CDM projects and one of them has already generating carbon credits. He also stressed that
any business that has an interest in the CDM process should come forward and express their
interest and the Ministry of Environment would facilitate them.

The Chief Guest, Chaudhry Abdul Ghafoor, Minister for Commerce and Investment Government
of Punjab addressed the attendees. In his address he mentioned that Pakistan was going through a
period of great difficulties and that Pakistan must strive to market itself in a more positive light.
He also expressed that the Chief Minister of Punjab would be willing to implement any measures
that would lead to the economic prosperity of the province and the Government of Punjab would
be willing to promote any such endeavours.

1.2. Technical Session

Following a tea break the technical session of the workshop was initiated. The speakers and their
presentations were as follows;

1.2.1. The Evolution of the Carbon Market in Pakistan,

Mr. Malik Amin Aslam

The presentation largely dealt with the potential for carbon sequestration in Pakistan and its role
as one the world's fastest emerging carbon markets. The vast potential in the energy and forestry
sectors was discussed. Despite being a late starter in the carbon trading arena, Pakistan is now a
leader in this field among the developing countries. He stressed that there is vast potential in
alternative energy projects which would both generate investment and help ease the countries
energy crisis. One area which Pakistan is lagging behind in and which is a key component of clean
energy production is wind power. Pakistan has a coastline which stretches over one thousand
kilometers and this coastline provides vast potential for wind energy generation, but Pakistan has
not availed this resource. India which lies right across the border and has similar climatic
conditions is generating 3000 MW of electricity through wind power, but Pakistan which has the
same environment has not yet implemented the harnessing of this resource and this a key are for
the future implementation of CDM projects in Pakistan. Solar energy must also be pursued
aggressively as Pakistan has some regions which boast the highest solar intensity in the world.
The Renewable Energy Board of Pakistan has tied-in the CDM process by in its policies for the
alternative energy sector. The operative cost for alternative energy projects may still be relatively
high, but the Government of Pakistan has agreed to subsidize these projects. Despite the
unsatisfactory results of the Copenhagen Conference on Climate Change one issue that was
cemented in the conference was that the concept of carbon trading was endorsed and despite that
fact that the world may be moving away from the Kyoto Protocol Mechanism, the carbon trading
process was here to stay. It has been forecasted that carbon trading will soon become a trillion
dollar market and even surpass the oil industry, thus it is in Pakistan's economic interest to
promote this field.

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1.2.2. The Role of CDM Executive Board in CDM Projects Registration

Mr. Shafqat Kakakhel

As the member of the Executive Board of the UNFCCC Mr. shafqat Kakakhel explained the
process required for the implementation of CDM projects at the UNFCCC approval level l. He
explained that professional expertise is required to formulate CDM Project Design Document
(PDD) since it goes through an elaborate process of review at the UNFCCC before approval is
granted. The CDM Process is not solely a business venture, any project must lead to measurable
reductions on greenhouse gases, and thus the scrutiny of the process is in depth. There are a few
projects in Pakistan that are awaiting approval but more projects can be developed based on the
tremendous potential in the country.. Pak-Arab Fertilizer Project is already generating carbon
credits for Pakistan. Efforts have to be redoubled so that Pakistan can have more CDM projects in
the future.

The role of the CDM Executive board is based upon the Kyoto Protocol and the policies of the
CDM process are approved by the member parties of the Kyoto Protocol and executed and
monitored by the executive board of the CDM. The purpose of CDM is to achieve sustainable
development goals through the transfer of technology it also leads to economic gains and also
helps countries deal with the negative impacts of climate change. The CDM is not a funding
mechanism but is an incentive for triggering investment. He further explained that CDM projects
have to go through a transparent, but extremely rigorous process in order to qualify. Two percent
of the funds generated through carbon trading go to a fund called the adaptation of fund, of which
Pakistan is currently acting as vice-president. The adaptation fund's goal is to help developing
nations adapt to the adverse effects of climate change. Before a party can initiate a CDM project it
has to complete its documentation and then precede through its countries Designated National
Authority (DNA). The DNA for Pakistan is the Ministry of Environment. The financing
mechanism for a CDM project is relatively flexible and a project can begin with one financier and
go on to add others, thus as the Carbon Credits increase the benefits to the host country increase
and the financing entity also benefits financially.

1.2.3. Overview of CDM Potential, Prospects, Benefits for Private sector and role of DNA
for promotion of CDM project activities in Pakistan

Syed Amjad Hussain

The role of the CDM Cell in the Ministry of Environment was explained and how the CDM
Process is a win-win situation for all investors in Pakistan as no taxation is involved in this
process. He mentioned that the CDM Cell has organised thirty events to promote the
understanding of the CDM Process in Pakistan. CDM projects have to be identified and then
implemented, for this more effort has to be put in. The successful examples from India, China and
Brazil have to be studied and an effort must be made to pursue similar projects in Pakistan. The
CDM cell is playing both a facilitative and a promotional role for CDM activities in Pakistan.

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1.2.4. CDM Project Development and Possibilities of Carbon Finance in Different

Areas of Public and Private Sectors of Pakistan

Bikash Raj Pande

The previous presentations largely concentrated on the international/market level

implementation of CDM Projects, but this presentation focused on the project level aspects of
CDM. Thus the concentration was on a micro/initiation level. Under the CDM process both the
host country and the buyer must benefit from carbon trading, so it is not a one way process.
Another aspect that the presenter stressed upon was that CDM was a much specialised field. Only
projects which would not be possible without carbon trading can be implemented on a CDM
basis. Projects which are already functioning cannot be switched into CDM Projects; this can
only be done at the very inception of the project. CDM Guidelines are very stringent. One of the
main economic incentives for a CDM project is that it gives a business a secondary currency
stream. Thus a power project would earn income by selling the electricity that it would generate
and also through carbon trading. This secondary income generation capacity is an important part
of the appeal of CDM projects. Another qualifying aspect of a CDM project is that the CDM
Process is only for projects which would not be possible without a CDM Basis, thus projects
which would be financially successful without a CDM basis should not apply for CDM status.

A perfect example of a CDM project would be that a project is being implemented, but it does not
meet the proposed financial thresholds, but if carbon revenue is taken into account through its
secondary income stream, then it meets the requirements. There are one hundred and fifty
approved methodologies for CDM Projects and these include vast range areas including
alternative energy, waste management, agriculture etc. Thus if a project is based upon an
approved methodology it makes the project much simpler as the guidelines are relatively easy to
obtain and implement for the successful adaptation and implementation for the project. Project
Idea Notes (PINS) are the basic documents for proposed CDM projects. Win rock International
provides the service of preparing PINs free of cost for businesses that intend to follow the CDM
Process

1.2.5. Presentation on Carbon Trading Opportunities

Samia Qadir

Ms. Saima Qadir addresses the conference via telephone. She is of view that Carbon Trading is a
very slow process and that businessmen must not expect immediate results in terms of increased
revenue immediately.. It takes at least a year or more before a CDM project would result in the
generation of funds.

1.2.6. Pak Arab Fertilizers Limited CDM Projects Overview

Sibtain Naqvi

Pak-Arab Fertilisers is the sole carbon credits generating project in Pakistan up to date. It
promotes environmental protection by limiting greenhouse gases and also provides valuable

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foreign exchange for the national exchequer. He mentioned the chemical process by which the
fertiliser is produced and how this process can be made much more ecologically friendly through
the implementation of certain technologies. If this equipment is used in a factory than the
production of carbon dioxide from the process can be cut down substantially and this is what the
Pak-Arab Fertiliser plant is doing.

1.3. Discussion Session

The floor was then opened for a discussion. The significant points are as follows:-

On a question regarding the inclusion of coal power projects under the CDM, Mr. Malik
Amin Aslam mentioned that coal power has not been included in any CDM project thus far,
despite the fact that China is a leader in both the coal power industry and the CDM Sector.
Mr. Shafqat Kakakhel mentioned that coal power generation is highly polluting and goes
against the basic philosophy of CDM. Mr. Tanvir Mahmud explained that a CDM project has
to primarily reduce Green House Gas and in the case of Coal the process would in fact
generate Green House gas so at the outset it cannot qualify for CDM. However if there is an
existing Coal Power plant where the Green House gas can be reduced below the established
Baseline through process improvements then perhaps it can qualify for CDM with good data
and Justification.

On a remark by a participant regarding the promotion of the CDM process so that interested
parties can receive information on the process and develop their understanding of it, Lahore
Chamber of Commerce agreed to establish a desk to facilitate this. The DG Environment
mentioned that three people have already been sent overseas (China) to receive training on
the CDM process and these experts will then promote the understanding and
implementation of the CDM Process in the future.

Mr. Sohail Kareem Rana informed the entire process of development of the CDM project
and also briefed about the Lahore Compost project. He emphasized that CDM project
development required expert technical knowledge as well as knowledge of the various rules
and procedures of the United Nations Framework Climate Change Convention (UNFCCC).
There should be a strict sense of detail in formulating a project according to the required
rules and procedures of the UNFCCC.

On a question by a participant whether or not a CDM project can be successful without a

carbon trading element Mr. Shafqat Kakakhel explained that a project which was
financially viable without the Carbon credits would then not be able to qualify as a CDM
project.

Mr. Sibtain Naqvi informed that the total cost of a CDM project is variable and is dependent
upon the extent of process changes that are carried out.

Mr. Bikash Pandey, Winrock International stated that currently only small scale hydropower
projects qualify as CDM projects. He also mentioned that all of the documentation required
for formulating a CDM project is s publicly available on the internet mostly through the
UNFCCC website.

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Carbon Trading: An Opportunity For Pakistan

Although it is not a major contributor to Global Green House Gas Emissions , Pakistan today is
considered being among the worse 20 countries in the world that are gravely endangered and
vulnerable to the adverse effects of climate change, Pakistan produces around 30 million metric tons
of carbon emissions which is only about 0.4% of global Green house gas emissions.

Kyoto Protocol created a market in which companies and governments that reduce GHGs levels can
sell the ensuing emissions credits, which, are purchased by businesses and governments in
developed countries close to exceeding their GHG emission quotas. Kyoto Protocol is an opportunity
for developing countries like Pakistan for addressing environmental issues while capitalizing on the
economic benefits of the protocol. The flexibility of Kyoto Protocol trading initiative signifies its
acknowledgement that developing countries may continue for time bearing with their development
process given their limited resource. However, these countries need to build up their capacity to
handle the critical issue of environment sustainability going forward. The protocol has provided
Pakistan an entry avenue in the form of Carbon Trading to the international market.

Clean Development Mechanism is the international initiative introduced under Kyoto Protocol
which provides incentives to private companies and countries to develop and implement projects
aimed at reducing carbon emissions at the global level and thus mitigating climate change by
transferring financial resources across national boundaries through a market mechanism. At present,
Pakistan possesses a very small share of of carbon trading market as shown below.
Pakistan
Qatar
South Africa
Indonesia
Argentina
Chile
Mexico
Korea
Brazil
India
China
0 10 20 30 40 50 60 70

China is the largest seller of Certified Emission Reduction (CERs) capturing almost 40% share
followed by India having 11.3% share and Brazil having 6.5%. On the buyer side UK has got the
highest share of 28.8% followed by Switzerland with 20.7% and Japan with 11.3%. By 2012 there is
a possible rise expected in the carbon market after US signs the Kyoto Protocol.
Registered Project Wise Top Traders of CDM Market
Sellers Market Share Buyers Market Share
China 58.9 UK 28.82
India 11.3 Switzerland 20.71
Brazil 6.5 Japan 11.27
Mexico 2.9 Netherlands 11.05
Chile 1.5 Sweden 6.33
Source: CDM 2008, UNFCC website

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Private sector investments in carbon offsetting projects will not only broaden economic base but
will also assist the communities adapt to climate change. In this regard, government should
provide incentives to small and medium sized companies to enable them actively participate in
offsetting carbon emissions. The private sector must be informed of the benefits as how the
potential of CDM projects and carbon emissions trading could be harnessed.

Entrepreneurial private-sector players in the CDM business are looking to harness the potential of
CDM projects in the cement, sugar and renewable energy sectors. At the UN, the 4,252
applications in the CDM pipeline are in 26 different categories. The potential of exploring the
CDM potential in other sectors in Pakistan is immense. For instance, environmentally friendly
housing and public transport are two crucially underdeveloped sectors. As it stands, the
government is in the process of building an alleged million housing units a year to cater to an
exploding population. Public transport is also crucially needed in all our urban areas. There is also
a great potential to carry out Renewable Energy projects which qualify for CDM projects. Energy
Efficiency is another major area since due to inefficient processes a lot of Energy is wasted. With
the present energy crises this aspect becomes all the more important. The potential of developing
CDM projects in some of the sectors is given below

Abatement Sectors Potential for CO2 Abatement (Million Tons/ year)

Brick Manufacturing 10.0

Transportation 8.8

Oil and Gas Sector 6.53

Textile Industry 5.62

Fertilizer Industry 5.03

Cement Industry 4.71

Iron and Steel Industry 1.78

Glass Industry 0.88

Inorganic Chemicals 0.3

Pakistan has yet to maximize benefits of Carbon Trading in terms of technology and resource
inflow. Carbon Trading Workshop is one of the initiatives for capacity building along with
strengthening of Clean Development Mechanism (CDM) set up in the country that may help in
creating conducive environment for efficient functioning of the domestic environment market.

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 Carbon Trading Workshop

Annex - A
Workshop on Carbon Trading
17th March, 2010 at Lahore

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Presentations
 Evolution of Carbon Market Development in
Introduction
Pakistan
Setting the stage
The Response
Government & Private Sector
Untapped opportunities
Presentation by
Malik Amin Aslam
Barriers to be overcome
Executive Director
ENVORK : A Research & Development Organization Looking Ahead
& Former Minister of State for Environment (Pakistan)
amin@isb.comsats.net.pk
March 2010
Where are we headed?

14
Setting the Stage
Setting the Stage
Prime Ministers Task Force on
Climate Change
Kyoto Protocol ratified in 2004 Policy
Formulation
Policy & Institutional Framework & CDM Steering Committee
Prime Ministers Task Force Monitoring Ministry of Environment

Raise the profile / Inter-Ministerial linkages

CDM Cell (Technical outsource)

UNIDO-Ministry of Environment Clean Development Mechanism (CDM) Programme, Pakistan 2010

Technical outsource / Short circuit bureaucracy !
CDM Strategy One
Host country approval with clarity & transparency Window Project CDM Cell Other Stakeholders
Proponent (National / International)
Incentives to overcome market lag including : Timed approval Operation (DNA)
Income Tax benefits Full ownership of credits
Defining sustainability objectively by judging against Economic
~ Social ~ Environmental criteria
Unilateral, Bilateral and Multilateral all allowed
Awareness Raising & Marketing Facilitation Technical Committees
~Energy (Renewable/Transport/Conservation) ~
Domestically and Internationally & ~ Agriculture / Forestry ~
Promotion ~ Waste Management ~
Public and private sector
Carbon Trading Workshop
 The Initial Response The Response to date
Private Sector
First project wake up call !
Rs 3 billion vs Rs 3 billion national budget / 1 bn tC/annum
Pakistan not yet a power player yet on the Carbon
Pipeline developing fast market BUT at least a visible footprint established
60 Trail Blazer projects 20+Host Country Approvals already Backed by a solid policy & Institutional framework
Diversity (Fertilizer, Textiles, Small Hydro, Wind, Waste) Driven by abundant untapped opportunities
More than 4 Million CT/annum credits in pipeline
Ancillary support structures mushrooming
Public Sector
Huge latent opportunities - carbon capitalization challenge
Motivation for internalization low
private sector involvement required
Revenue earning development a new concept !
Rs 12 bn. Mega forestry initiative budgeted in Pakistan
Linking up with carbon funds / private sector outsourcing

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The Response to date
The Opportunity
Abundant opportunities present in Pakistan in Energy as
well as Forestry sectors:
Renewables (Wind, Solar, Small Hydro, Waste to energy)
Efficiency Enhancements (Transport, Buildings, Industry)

UNIDO-Ministry of Environment Clean Development Mechanism (CDM) Programme, Pakistan 2010

All with tremendous co-benefits to economy :
Arrest the continuously increasing fuel import bill
Assist in facing national power shortages
Place countrys future eco growth on a low-carbon trajectory
Cheap electricity especially for off-grid locations
Participate in carbon trading through CDM ~ subsidize !
Address priority issues such as rural development / poverty reduction
and job creation
Pakistan experience with project development reflects and mirrors
the global trend
Carbon Trading Workshop
 GUPIS
3.6
MONTHLY WIND MAPPING OF PAKISTAN GILGIT
2 .5
CHITRAL 1.5
4.6 BUNJI
MONTH: JUNE DROSH 3 .3 2 .5 3.1
CHILAS ASTOR
DIR 2 .9 SKARDU
The Opportunity : WIND ANEMOMETER HEIGHT 30 METERS 1.0

DATA SOURCE: METEOROLOGICAL DEPARTMENT OF PAKISTAN 1.3

PESHAWAR MUZAFFARABAD
1.7
1.9 BALAKOT
PARACHINAR 1.1 KAKUL
1 M/S 6 M/S
3 .4 1.9
ISLAMABAD
2 M/S 7 M/S

3 M/S 8 M/S 1.4 JHELUM

1046 km long coast line with optimal 0.9
4 M/S 9 M/S KOTLI
SIALKOT
D. I. KHAN 3.3
5 M/S 10 M/S
2 .5
wind conditions WIND SPEED 2 .2 4.3 LAHORE
COLOUR CODE ZHOB
2 .3
LORALAI
4.1 FAISALABAD
4.0
3 .3
Same coastline in India lined with QUETTA
MULTAN
3.8
BAHAWALNAGAR
2 .5 BARKHAN
SIBI 2.5
2 .2 2 .2
7.8 BAHAWALPUR
almost 3000 MW of Wind power. 2.5
DALBANDIN KALAT JACOBABAD
NOKUNDI KHANPUR
3.4
STUDY REPORT BY
Wind mapping already carried out 3.1 SUKKUR
PAKISTAN COUNCIL FOR APPROPRIATE TECHNOLOGY
2.9
KHUZDAR
PANJGUR
3.6
NAWABSHAH
6.1
Wind potential in thousands of MW
PADIDAN 3.0
9.0
5.1
9.7 5.2 CHOR
HYDERABAD
KARACHI
JIWANI ORMARA
5.9 8.1
BADIN

16
The Opportunity : MICRO HYDRO
The Opportunity :SOLAR
Northern areas of Pakistan
Identified potential of around 20000 MW
Identified sites in Pakistan
Canal systems : Tail and Head drops
with optimal SOLAR
INTENSITY conditions Micro hydro project in NA

UNIDO-Ministry of Environment Clean Development Mechanism (CDM) Programme, Pakistan 2010

Pakistan receives one of the maximum solar radiation
intensity in the world
-The cost of solar cells increasingly becoming more
competitive
-Independent, secure and cost effective source of energy in
remote areas of Pakistan ideal for off-grid locations
Carbon Trading Workshop
 The Opportunity : State of Forests : A Global Snapshot:
Countries with large net changes in Forest area 2000 - 2005

Carbon Capture and Storage

Concept still in infancy but with Huge potential
In Highly prospective sedimentary basins with suitable
saline aquifer storage capacity for CO2 (1.7 Gt CO2)
Technical and knowledge barrier present
Learning by Doing is the key.
Forestry
Deforestation rates (highest in the world)
Area under forest (lowest in the world)
Not proud facts BUT opportunities for carbon sequestration
FAO 2005
National Carbon Sequestration Project launched.
BUT Learning curve still low on carbon packaging.

17
The Opportunity :
Looking Ahead
The Good News
Plenty of banknotes waiting to be picked up. Copenhagen collapse has worsened the market certainty
Until capitalized this opportunity will remain dormant
but not vanish The Kyoto Multilateral and Binding targets process is in a
tailspin as a new parallel Bilateral and Non binding
Co-benefits present in all cases:

UNIDO-Ministry of Environment Clean Development Mechanism (CDM) Programme, Pakistan 2010

Additional financing for local SD priorities
regime emerging
Instrument for appropriate Tech. Transfer 50 plus countries have submitted their sectoral NAMAs (Nationally
Linkage with local environmental issues Appropriate Mitigation Actions)
Potential of Catalyzing of large FDI flows Is it sectoral CDM ? Will it be credited to create extra demand ?
The Bad News Positive aspect was the universal endorsement of the
Barriers are present which need to be overcome carbon trading concept at Copenhagen
Requires sustained political commitment The only agreeable thing in a meeting of disagreements
Economic motivation
Not just instituted capacity but responsive capacity !
Carbon Trading Workshop
 The Barriers: The Barriers:

Both Market & Non-Market barriers :

Lack of supportive financing framework.
International market distortions
Technology transfer impediments Skewed geographic development under CDM.
Run off the mill vs. B.A.T innovative tech access First mover advantage deeply enshrined and
However, there is hope as trade not aid !
Only B.A.T./innovative technologies will give edge.
acting as barrier (Almost 80% projects in 3
Latent carbon capitalization Learning curve for Countries)
Government Certainty window is closing post 2012 political
Awareness raising required for private sector (cost signals not clear as yet
savings/revenue generation)
Too many market CERs not enough actual
Co-shared project development potential but
effective public-private match making required projects Is it an opportunity to plug in !

18
The Future ?

A Trillion Dollar Global Market ?

UNIDO-Ministry of Environment Clean Development Mechanism (CDM) Programme, Pakistan 2010

Pakistan well poised to capture its share
from the market
Carbon Trading Workshop
 The Kyoto Protocol mechanisms | Background
Role of the Clean Three market-based mechanisms
Development Mechanism
Executive Board International emissions trading (Article 17)
Registration and Issuance Processes
Clean Development Mechanism (CDM) (Article 12)
Emission reduction projects in developing
countries
Mr. Shafqat Kakakhel Carbon Assets Creation Workshop
17 March 2010 Joint Implementation (Article 6)
Member
Emission reduction projects in any country with
CDM Executive Board a commitment under the Kyoto Protocol

19
CDM | Background CDM | Operating details
CDM: Emission reduction projects in developing A CDM project must provide emission reductions that are
countries additional to what would otherwise have occurred.

CDM assists countries to achieve sustainable development Approval is given by the Designated National Authorities . 148
goals, creates incentive for investment, provides additional

UNIDO-Ministry of Environment Clean Development Mechanism (CDM) Programme, Pakistan 2010

Parties have established their DNA.
support for adaptation
The projects must qualify through a rigorous and public registration
CDM projects produce certified emission reductions (CERs) and issuance process

CERs are saleable/tradable units that can be used for

The mechanism is overseen by the CDM Executive Board,
compliance with KP targets
answerable ultimately to the countries that have ratified the Ky oto
Protocol.
2% of issued CERs go into Adaptation Fund
Carbon Trading Workshop
 CDM | Key players CDM | Background
Project Participants Regulated mechanism overseen by

Designated Operational Entities (DOEs): A DOE under the CDM is a

legal entity or an international organization accredited by the CMP to Executive Board
undertake the processes of validation as well as verification an d
certification of a CDM project activity, 10 members, 10 alternate members who
serve in their private and personal capacity
Designated National Authorities (DNAs ): The DNA in addition to
providing information on relevant national policies and possible
resources needed in the elaboration of a CDM project activity al so assisted by:
provides a letter of approval of the project activity, which is a key
document for the registration of a project. Methodology Panel
Accreditation Panel
CDM Executive Board : The CDM Executive Board supervises the
CDM, under the authority and guidance of the Conference of the P arties Working groups (a/reforestation, small scale)
serving as the meeting of the Parties to the Kyoto Protocol (CMP ), and is
fully accountable to the CMP. Registration and issuance team (roster of experts)

UNFCCC Secretariat : supports the CDM EB UNFCCC secretariat

20
CDM | Project cycle
CDM | Background
1. Project design: PP

Project participant prepares

CDM regulatory process meant to ensure that project design document, making
emission reductions are: use of approved emissions
baseline and monitoring
6. CER issuance

UNIDO-Ministry of Environment Clean Development Mechanism (CDM) Programme, Pakistan 2010

methodology. Secures letter of
approval from host Party 5. Verification: DOE
Real
4. Monitoring: PP
Measurable 3. Registration: EB
Verifiable and 2. Validation: DOE
Additional to what would have occurred without the project 1. Project design: PP
Carbon Trading Workshop
 CDM | Project cycle CDM | Project cycle

2. Validation: DOE 3. Registration: EB

Project design document Valid project submitted by DOE

validated by accredited to the Executive Board
designated operational entity, with request for registration
private third-party certifier
6. CER issuance 6. CER issuance

5. Verification: DOE 5. Verification: DOE

4. Monitoring: PP 4. Monitoring: PP
3. Registration: EB 3. Registration: EB
2. Validation: DOE 2. Validation: DOE
1. Project design: PP 1. Project design: PP

21
CDM | Project cycle CDM | Project cycle
Registration step in detail
4. Monitoring: PP
First: Completeness check by secretariat
Second: Work of certifier checked by expert from Project participant responsible
registration and issuance team(RIT) for monitoring actual emissions
Third: Work of RIT checked by secretariat according to approved
methodology
Fourth: If a Party or three members of Executive Board 6. CER issuance

UNIDO-Ministry of Environment Clean Development Mechanism (CDM) Programme, Pakistan 2010

request review, project undergoesreview,
otherwise proceeds to registration 5. Verification: DOE
6. CER issuance
4. Monitoring: PP
5. Verification: DOE
3. Registration: EB
4. Monitoring: PP
2. Validation: DOE
3. Registration: EB

2. Validation: DOE 1. Project design: PP

1. Project design: PP
Carbon Trading Workshop
 CDM | Project cycle CDM | Project cycle

5. Verification: DOE 6. CER issuance: EB

Designated operational entity Designated operational entity

verifies that emission reductions submits verification report with
took place, in the amount request for issuance to
claimed, according to approved Executive Board
monitoring plan 6. CER issuance 6. CER issuance

5. Verification: DOE 5. Verification: DOE

4. Monitoring: PP 4. Monitoring: PP
3. Registration: EB 3. Registration: EB
2. Validation: DOE 2. Validation: DOE
1. Project design: PP 1. Project design: PP

22
CDM | Project cycle CDM | A mechanism with global reach
CER issuance step in detail 2085 registered projects in
>2.9 billion certified
63 countries
emission reductions
First: Completeness check by secretariat
> 4200 more projects in pipeline expected to the end
Second: Work of certifier checked by expert from of 2012
> 391 million CERs issued to date Status: 11 March 2010
registration and issuance team (RIT)
Third: Work of RIT checked by secretariat
Fourth: If a Party or three members of Executive Board

UNIDO-Ministry of Environment Clean Development Mechanism (CDM) Programme, Pakistan 2010

request review, issuance request undergoes
review, otherwise proceeds to issuance
6. CER issuance

5. Verification: DOE

4. Monitoring: PP

3. Registration: EB

2. Validation: DOE

1. Project design: PP
Carbon Trading Workshop
 CDM | Registered project activities, by region
CDM | Registered project activities, by region
2085 registered 2085 registered
projects in projects in
63 countries 63 countries

Status: 11 March 2010

Status: 11 March 2010

23
CDM | Registered project activities, by scope CDM | Project pipeline, by scope
Project pipeline
2085 registered
projects in >4200 projects
63 countries (includes registered
projects)

UNIDO-Ministry of Environment Clean Development Mechanism (CDM) Programme, Pakistan 2010

Status: 11 March 2010 Status: 11 March 2010
Carbon Trading Workshop
 CDM | Scaling up
CDM | Scaling up
Programmes of activities
Programmes of activities
Can extend to one or more countries
Letter of approval from each host country and AI country
Letter of approval states a PoA, and hence each project A private or public entity
activity under it, contributes to SD of host country implementing any PoA
policy/measure or stated
Project
Project activities goal requests registration activity
Can involve more than one baseline and monitoring of PoA with one project.
methodology
Project
Can have staggered start dates activity
Other project activities
Project
added later, according to activity
PoA duration 28 years maximum
proposed process for Project Project
Crediting period of project activities in the PoA: 10-year activity activity
fixed, or 7 years, renewable twice, as per Procedures for inclusion.
Renewal of a Crediting Period of a Registered CDM project
activity, limited by duration of the PoA.

24
CDM | Copenhagen outcomes 1/2 CDM | Copenhagen outcomes 2/2
The decision taken at CDMP.5,Further guidance relating to the clean Regional distribution and capacity building
development mechanism, contains a list of improvements to enhance the
efficiency of the CDM, expand its reach, and maintain its enviro
nmental
In relation to the development of projects in countries with fewer than 10 registered
integrity. More specifically, the decision:
clean development mechanism project activities, , the CMP requested the CDM EB to:

Grants the CDM Executive Board the flexibility to make changesot the
mechanisms registration and issuance procedures, which could quicken the defer the payment of the registration fee until after the first issuance
process for stakeholders. A public call for input on the reviewof the registration undertake measures such as: (a) Developing top-down methodologies that are
and issuance process was open from 12 February- 5 March 2010 particularly suited for application in these countries and (b) Introducing a

UNIDO-Ministry of Environment Clean Development Mechanism (CDM) Programme, Pakistan 2010

requirement that DOEs indicate the work they are undertaking on projects
Provides for the establishment of procedures for stakeholders toappeal decisions. originated in these countries as part of their annual activity reports
allocate financial resources from the interest accrued on the principal of the Trust
Calls for capacity-building and a system ofcontinuous performance monitoring Fund for the Clean Development Mechanism, as well as any voluntary
for designated operational entities, the third-party certifiers that assess requests contributions from donors, in order to provide loans to support the following
for registration and issuance. activities in these countries :
- (a) Cover the costs of the development of PDDs;
Calls for enhanced support to Designated National Authoritiesin the form of
training and information sharing. - (b) Cover the costs of validation and the first verification for these
project activities;
Allows for the allocation of financial resourcesto assist in the development of These loans are to be repaid starting from the first issuance of certified emission
projects in countries with fewer than 10 projects. reductions;
Carbon Trading Workshop
 Carbon Trading Workshop

http:// www.cdmbazaar.net /
More information
Thank you

cdm.unfccc.int

CDM Bazaar

UNIDO-Ministry of Environment Clean Development Mechanism (CDM) Programme, Pakistan 2010

25
 Overview of the Presentation
Overview of CDM Potential, Prospects, 1. Climate Change and Clean Development Mechanism
Benefits for Private Sector and Role of DNA
for Promotion of CDM Project Activities in 2. CDM Potential Opportunities for Private Sector

Pakistan 3. Role of DNA for Promotion of CDM Project Activities in Pakistan

By 4. Ways Forward for Promotion of CDM Projects Activities in Pakista
n
Syed Amjad Hussain
CDM Expert, CDM Cell

Clean Development Mechanism Cell, Ministry of Environment, Government of Pakistan

26
Climate Change/ Global Warming Phenomena

Suns
En
Moisture erg
Ozone 2 N2
O y
CO
Ozone M
eth
depletion ns Regulate Heat an
e
bo
ar

UNIDO-Ministry of Environment Clean Development Mechanism (CDM) Programme, Pakistan 2010

c
o-
or
Fl

Earth
Carbon Trading Workshop
 International Response
Principles of UNFCCC
The United Nations Framework Convention of Climate Change
(UNFCCC) Based on the principle of common but differentiated roles

Adopted in June 1992 by over 180 countries at the Earth Summit in Rio On one hand it recognises the
de Janeiro, Brazil.
Primary Responsibility of Developed Countries for higher emissions,
and therefore,
The Convention was signed by 154 states (including Pakistan) and entered
into force on 21st March, 1994. Asks Developed Countries to take a Leading Role

On other hand it establishes

UNFCCC is a non-binding legal framework:
Social and Economic Development as the Rightful Priority of the
- Aims at stabilization of GHG concentration in the atmosphere Developing Countries, and
at safe level.
The need to assist developing countries that are vulnerable to
- To balance out the response along mitigation and adaptation climate change
measures

27
The Kyoto Protocol of UNFCCC
Adopted in Kyoto, Japan in 1997 and ratified in February 2005 The Kyoto Protocol Mitigation Options
(Pakistan singed the Protocol on 11th January, 2005)

The Kyoto Protocol: Aims to reduce GHG emissions by 2012 and Source oriented measures
distinguish two types of countries:
Energy conservation and efficiency improvement
Annex-I countries: With binding emission targets (industrialised
countries): Fossils fuel switching

UNIDO-Ministry of Environment Clean Development Mechanism (CDM) Programme, Pakistan 2010

Renewable energy
Western and Eastern Europe, Canada, Japan, New Zealand,
Russia, Ukraine etc.
Sink enhancement measures
Non-Annex I countries: With voluntary participation (developing
countries):
Capture and disposal of CO2 (under discussion)
China, India, Pakistan, South Africa, Philippines, Uruguay, Brazil, Enhancement of forest sinks (limited options)
and other developing countries.
Carbon Trading Workshop
 The Kyoto Protocol Targets
Mechanisms Under the Kyoto Protocol
Under the KP the Annex- I countries have been
given binding targets: i.e. to reduce their combined
GHG emission by 5.2 percent below their 1990s The Kyoto Protocol introduces three market based
level, between the period 2008- 2012. flexible mechanisms for the emissions reduction:

USA -7% - Joint Implementation (JI),

EU -8%
Japan -6% - Activities Implemented Jointly (AIJ), and
Russian Federation 0% - Clean Development Mechanism (CDM).
all developed countries -5.2%

28
Concept of CERs/ Carbon Credits
Clean Development Mechanism (CDM)
Developing Country (host)

CDM is a market based instrument under the Kyoto Protocol of

UNFCCC: Sold to
CERs Developed
GHG

Assists developing countries in sustainable development country

while at the same time contributing to the ultimate objective ($)
reduction

of the Convention.

UNIDO-Ministry of Environment Clean Development Mechanism (CDM) Programme, Pakistan 2010

Developed countries to support project activities that reduce
GHG emissions in the developing countries in return for
Certified Emission Reductions (CERs)/ Carbon Credits.

The CERs generated by such project activities can be used

GHG Emission Projections

by developed countries as credits to meet their emissions

targets under the Protocol.
Baseline Scenario CDM Project
Carbon Trading Workshop
 Types of CDM Projects

GHGs Eligible under Kyoto Protocol Unilateral, Bilateral and Multilateral CDM Projects are allowed in
following sectors

Energy
The KPs emissions targets cover the six main GHGs: - Renewable/alternate energy,
- Energy efficiency/conservation, and
Name Formula GWP (CO2 eq.) - Fossil-- fuel cogeneration

Waste Management
1. Carbon- dioxide (CO2) 1
- Landfill gas capture
2. Methane (CH4) 21 - Recycling
3. Nitrous oxide (N2O) 310 - Energy from solid waste etc.
5. Per- fluorocarbons (PFCs) 92,00
4. Hydro- fluorocarbons (HFCs) 11,700 Transportation
6. Sulphur hexafluoride (SF6) 23,900
- Alternative fuel vehicles
Sinks (carbon sequestration) - Mass transit systems
- Cleaner engines, CNG

Clean Development Mechanism Cell, Ministry of Environment, Government of Pakistan

29
CDM Project Cycle
Cont---
Project Identification
and Formulation
Industrial processes (Steel, Fertilizer, Textile etc.)

Land Use, Land Use Change and Forestry (watershed management, sustainable Host Country National CDM Authority
Approval
forest management, Afforestation and reforestation)

Agricultural and livestock Practices Designated Operational

Validation Entities

UNIDO-Ministry of Environment Clean Development Mechanism (CDM) Programme, Pakistan 2010

Any other project resulting in GHG mitigation or carbon Registration
sequestration . Project Implementation and
proponents Monitoring

Verification &
Certification
Clean Development Mechanism Cell, Ministry of Environment, Government of Pakistan
Issue CERs Executive Board
Carbon Trading Workshop
 Time Required for Completion of Different Component within CDM Project Cycle
Benefits from CDM (Carbon Finance)
(An Example)
Benefits to Host country
CDM Project
(e.g., alternate energy Additional
Energy
production)
Production

Direct
Foreign
Investment &
Revenue
Certified Carbon Credits
Emission (Developed
Reductions country Buyer)
Plus other Benefits
(Jobs, Clean Env.
Tech. Transfer)
Clean Development Mechanism Cell, Ministry of Environment, Government of Pakistan

30
CDM Incentive for Developed Countries CDM Incentives for Developing Countries

Developed countries have been subjected to legally binding Capitalize an unvalued commodity CER
emission targets..2008/12.
Additional financing for local Sustainable Development priorities
and as such has potential of Catalyzing large Foreign Direct
Due to un- localized nature of CO 2it does not matter for Investment (FDI) flows

UNIDO-Ministry of Environment Clean Development Mechanism (CDM) Programme, Pakistan 2010

environment where reduction occurs.
Instrument for appropriate Tech. Transfer
Costs of abatement or reduction of emissions :
Developed Countries : U$ 50 -100/ton (estimated) Linkage with local environmental issues (air pollution etc.)
Developing Countries : U$ 1 -10/ton
Financial viability ~ Carbon financing can increase project
Internal Rate Returns (IRRs) between 0.5 to 50% (WB)
Reductions of GHG is much cheaper in developing countries.
Carbon Trading Workshop
 Potential CDM Project Areas for Private Sector in
Pakistan
Power Sector & Renewable Energy Sector
Hydropower
CDM Potential in Industries
Solar
Brick manufacturing Wind
Vehicle Transport Biomass Cogeneration
Oil & Gas Transmission & Distribution Losses
Textile Industry Domestic and Municipal Energy Efficiency
Fertilizer
Cement
Combined Cycle Power Plants
Steel
Glass

31
Solid Waste Management and Methane Capture Registered Project Activities by Sector
Land- fill methane capture Sectoral Scope Registered Projects
Composting, (01) Energy industries (renewable - / non-renewable sources) 1182
Wastewater Treatment (02) Energy distribution 0
Biogas (03) Energy demand 19
(04) Manufacturing industries 97
(05) Chemical industries 56
Fertilizers and Other Chemical Industries (06) Construction 0

UNIDO-Ministry of Environment Clean Development Mechanism (CDM) Programme, Pakistan 2010

(07) Transport 2
Catalytic N2O Abatement (08) Mining/mineral production 20
Nitric Acid (09) Metal production 3
Waste Heat Recovery (10) Fugitive emissions from fuels (solid, oil and gas) 128
(11) Fugitive emissions from production and consumption of
19
halocarbons and sulphur hexafluoride
LULUCF (12) Solvent use 0
(13) Waste handling and disposal 345
Afforestation (14) Afforestation and reforestation 3

Reforestation (15) Agriculture 106

Carbon Trading Workshop
 (Cont)
MoE Initiative for promotion of CDM in Pakistan
Pakistan ratified Kyoto Protocol in January, 2005 Project Name Hands on Capacity Building of Forest Official in Developing Proposals for
Afforestation/ Reforestation Project Design Documents (PDDs) under
Ministry of Environment has been declared as Designated National CDM
Authority for CDM D. G. (Environment) is the Focal Pont for DNA
Period 2007- 2009
CDM Cell has been established under DNA for promotion of CDM, and for
policy/ technical support to DNA. Total Cost Rs. 9.84 million

Pakistan National Operational Strategy for CDM has been approved in Funding Swiss Agency for Development Cooperation through Inter- Cooperation,
February 2006 (www.cdmpakistan.gov.pk) and Ministry of Environment

Pakistan has granted Host Country Approval to twenty one (21) CDM
projects and more than 60 CDM projects are in process of development
which require host country approval in future Objectives To build capacity of Provincial Forest Departments to develop and
manage CDM projects in forestry sector o Pakistan.
Several capacity building/awareness raising initiatives have been
conducted under this project for promotion and enhancement of CDM
Projects in Pakistan Progress Made so Far Three training sessions have been organized
National Definitions have been developed of CDM forestry
CDM Cell has planed 23 Awareness Raising Events for next 6 months for Draft Project Design Documents have been completed
promotion and enhancement of CDM Projects in the country 3 A/R CDM Projects will be readily available in 20 August, 2009.

Clean Development Mechanism Cell, Ministry of Environment, Government of Pakistan

Clean Development Mechanism Cell, Ministry of Environment, Government of Pakistan

32
(Cont)
CDM Capacity Building Initiatives
Project Name
Project Name World Banks Project for Capacity Building for Development and Implementation of Institutional Capacity Enhancement for CDM in Pakistan.
Carbon Finance Projects under Japanese Policy and Human Resource Development
Grant Period 18 months

Total Cost US$ 0.674 million

Period 18 Months
Project Implementation Grant from Royal Norwegian Embassy through United Nations Industrial
Development Organization (UNIDO)
Budget US$ 0.57 million
Objectives 1. To build institutional capacities in Pakistan for addressing climate
Aims and Objectives 1. Strengthening of institutional framework and enabling environment to promote public change; through enhancement of the DNA/CDM capacity in the
and private participation in the carbon market. Ministry of Environment for better management of CDM process and
increasing the capacity of CDM Project developers
2. Training/Workshops for enhancement of capacities of local stakeholders (public

UNIDO-Ministry of Environment Clean Development Mechanism (CDM) Programme, Pakistan 2010

institutions, private investors, NGOs etc.) in CDM project development. 2. To tape the GEF funding to give a kick-start to initiating the process of
developing second national communication to UNFCCC.
3. Support CDM project preparation and development in priority sectors: Energy, waste
management, industries, forest and agriculture).
3. To tape donor funds to initiate the process of developing national
policy/ action plan for climate change mitigation and adaptation as
envisaged under national environmental policy.

Current Status Consultant Firm i.e. WINROCK International has been hired. and is in process of
implementation Current Status The project is in process of implementation now

Clean Development Mechanism Cell, Ministry of Environment, Government of Pakistan

Clean Development Mechanism Cell, Ministry of Environment, Government of Pakistan
Carbon Trading Workshop
 Memorandum of Understanding (MoU) Cont---
Government of Pakistan has signed a Memorandum of Understanding
(MoU) on Cooperation in CDM with Federal Republic of Germany has C. Workshops by CDM Cell
been signed on 8th July 2009.
Jul Aug Sep Oct Nov Dec Jul
2009 2009 2009 2009 2009 2009 2009
Government of Pakistan has signed a Memorandum of Understanding Carbon credit opportunities in Power Sector
1.
(MoU) on Cooperation in CDM with Japanese Carbon Fund (JCF) of Pakistan
through Japan Bank for International Cooperation (JBIC) has been Carbon credit opportunities in Waste
signed in July 2008. 2.
Management Sector of Pakistan

Carbon credit opportunities in Textile &

3.
Government of Pakistan has signed a Memorandum of Understanding Polymers Industry of Pakistan
(MoU) in August 2008 with CAMCO International for the realization of Carbon credit opportunities in Steel Industry
CDM projects in Pakistan. 4. of Pakistan

Carbon credit opportunities in Alternate &

5. Renewal Energy Sector of Pakistan
A number of similar MoU for promotion and enhancement of CDM
Project Activities in Pakistan Carbon credit opportunities in Brick Industry
of Pakistan Total
6. 6

33
CDM Awareness Raising Action Plan
Cont---
S. Jul Aug Sep Oct Nov Dec
Awareness Raising Activity 2009 2009 2009 2009 2009 2009
No
B. Workshops by UNIDO
CDM Cell
Jul Aug Sep Oct Nov Dec
A. Seminars
2009 2009 2009 2009 2009 2009
BAHRIA University, Islamabad.
CDM Opportunities in the Public Sector
1. of Pakistan at Islamabad
COMSATS University, Islamabad.

National University of Science and Technology, Total CDM Potential in Sugar Sector of
Islamabad. 4 2. Pakistan at Lahore

UNIDO-Ministry of Environment Clean Development Mechanism (CDM) Programme, Pakistan 2010

PRESTON University, Islamabad.
CDM and Renewable Energy Prospects
3. in Pakistan at Islamabad
B. Consultative Meetings

Provincial of Chamber of Commerce and CDM Prospects for the Waste Disposal
1. Industries of Pakistan 4. Projects in Pakistan at Lahore

Stock Exchanges of Pakistan CDM Opportunities and Carbon Market

2. 5. Development in Pakistan at Karachi
Alternate & Renewal Energy Sector of Pakistan
3. CDM Opportunities and the Industrial Total
(MoE) 6. Sector of Pakistan at Lahore 6
Banking Sector of Pakistan (MoE) Total
4.
4
Carbon Trading Workshop
 Cont--- Tax and Credit Sharing Policies
C. PDD Trainings by M/S Winrock International No income tax or duty on transfer/ sale of CDM emission credits
21 Total 2
PDD Training for RE and EE (WINROCK)
.
Credits to be awarded fully to the project Proponents
22
PDD Training for A/R Forestry and REDD (WINROCK)
.
Banks and other financial institutions to be encouraged to provide
special incentives to CDM Project Proponents

Clean Development Mechanism Cell, Ministry of Environment, Government of Pakistan

34
Criteria for Host Country Approval Potential CDM Project Opportunities in Pakistan
Consistency with the national laws and sustainable development policies, strategies and
plans.
Industrial Energy efficiency and energy substitution:
No obligation of the GoP to the investors other than CERs.
Brick manufacturing, vehicle transport, oil & gas, textile industry,
Environmental Criteria fertilizer, cement, oil & steel, glass.
Significant reduction in the emissions of GHGs
Conservation of local resources and/or improvement of the local environment. Power Sector & Renewable energy:

UNIDO-Ministry of Environment Clean Development Mechanism (CDM) Programme, Pakistan 2010

Social Criteria Hydropower, wind, biomass cogeneration, T&D Losses, domestic
and municipal EE, combined cycle power plants, solar PV.
Poverty alleviation, jobs creation, benefits to local communities etc.
Solid waste management and methane capture:
Economic Criteria Land-fill methane capture, composting, wastewater treatment,
Positive impact on balance of payments (not result in net increase in external debt biogas.
burden), cost effective.
Fertilizers and other chemical industries;
Technological Criteria Catalytic N2O Abatement, nitric acid, waste heat recovery.
Technology and know how transfer Land use, agriculture and forestry.
Not result in import of obsolete technology Afforestation/reforestation.
Carbon Trading Workshop
 Potential CDM Opportunities in Renewable Energy Sector Potential CDM Opportunities in Waste Management Sector
Small Hydro (Off-grid Micro/Mini Hydro) (45 MW) 0.276
Grid Connected Mini Hydro (1,815 MW) 5.56 Solid Waste Management, Methane Capture and biomass energy
Large Hydro (25,641MW) 56.15 Abatement Areas Emissions Abated (Million Tons/ year)
Bagasse Cogeneration (760 MW) 1.66
Solar Home Systems 0.05 Sanitary landfills 2.04 m
Composting plants 1.70 m
Domestic Energy Efficiency 3.6 Commercial and industrial wastewater 1.63 m
Reduction in transmission & distribution losses 4.0 On farm biogas 15.00 m
Ethanol production 0.23 m
Combined Cycle Power Plant 4.0
CNG Buses 0.024
Municipal Energy Efficiency 0.47 GRAND TOTAL 20.6 million ton/year
Wind Energy 12

Units: Million tones/yr

35
Potential CDM Opportunities in Waste Management Sector
BENEFITS OF CDM IN SWM
Solid Waste Management, Methane Capture and biomass energy

Abatement Areas Emissions Abated (Million Tons/ year) Reduction of greenhouse gas (GHG) into the
atmosphere.
Sanitary landfills 2.04 m
Composting plants 1.70 m Addition of electricity to the National grid.
Commercial and industrial wastewater 1.63 m Collection of Methane otherwise released into

UNIDO-Ministry of Environment Clean Development Mechanism (CDM) Programme, Pakistan 2010

On farm biogas 15.00 m
Ethanol production 0.23 m atmosphere hence protection of environment.
Income generation and technology transfer.
GRAND TOTAL 20.6 million ton/year Poverty alleviation and sustainable development
Job creation.
Carbon Trading Workshop
 Status of 90 CDM Project in Pipeline

CDM projects in Pipeline Overall CDM Projects

90 113

FI GHGs FI GHGs
Reduction Reduction

1300 22 2019.39 25.83

F I* Foreign Investment in Million US $

GHGs** Million tons Co 2 eq/year

36
Ways Forward for Promotion of CDM Projects in Pakistan
Status of 23 Approved CDM Projects in Pakistan
Need more Awareness Raising about CDM in all potential Sectors
HCA Validation Registration Total 23
23 20 3 Capacity building initiatives for Project Design Documents (PDD) for
both public and private sectors need to enhance CDM Projects
FI GHGs F I* GHGs** F I GHGs FI GHGs activities in Pakistan

Development of policies to encourage CDM projects in all relevant

sectors
719.39 3.83 554.24 2.30 165.15 1.529 719.39 3.83

UNIDO-Ministry of Environment Clean Development Mechanism (CDM) Programme, Pakistan 2010

Development of a strong supportive institutional framework

Need to develop Programmatic and Bundling Approaches for Taping

CDM Potential in all eligible sectors
F I* Foreign Investment in Million US $
GHGs** Million tons Co 2 eq/year Need to enhance the portfolio of CDM Project through public/ private
partnership like development of linkages among all stakeholders of
CDM

Clean Development Mechanism Cell, Ministry of Environment, Government of Pakistan

Carbon Trading Workshop
 Contact DNA- Pakistan
Clean Development Mechanism Cell
Ministry of Environment, Govt. of Pakistan
4th Floor, ENERCON Building,
Sector: G - 5/ 2, Islamabad.

Ph: 0092-51-9205510
Fax: 0092-51-9245533
Email: cdmcellpakistan@gmail.com
Web: www.cdmpakistan.gov.pk

Clean Development Mechanism Cell, Ministry of Environment, Government of Pakistan

37
UNIDO-Ministry of Environment Clean Development Mechanism (CDM) Programme, Pakistan 2010
THANK YOU

Clean Development Mechanism Cell, Ministry of Environment, Government of Pakistan

Carbon Trading Workshop
 The Kyoto Protocol
CDM Project Development &
Possibilities of Carbon Finance in Entered into force 16 February 2005
Public and Private sectors of Pakistan Developed countries must reduce carbon
emissions by 5.2% from 1990 levels by 2008
2012 (1st Commitment Period; 2nd & 3rd periods
Ministry of Environment, Government of Pakistan to follow).
Punjab Board of Investment & Trade
A number of flexible mechanisms were agreed
Lahore Chamber of Commerce & Industry to:
International Emissions Trading
Bikash Pandey
bikashpan@gmail.com Joint Implementation (JI)
Clean Development Mechanism (CDM)

38
What does the CDM aim to achieve?
A transfer of finances and contribution to sustainable development in the Host
Clean Development Mechanism Country
Flow of Finances
Dual objectives
Industrialized Developing

UNIDO-Ministry of Environment Clean Development Mechanism (CDM) Programme, Pakistan 2010

Country Country
lower the overall cost of reducing GHG emissions Host Country (Pakistan)
with high with low
abatement cost abatement cost

while also supporting sustainable development

initiatives within developing countries.
Flow of Credits
Carbon Trading Workshop
 What Makes an Attractive CDM
What does it mean for projects? project?
Project which reduces GHG emissions into the
Conventional
atmosphere below the baseline situation, e.g.
Energy efficiency measures that reduce energy use
Output
Revenue e.g. efficient lamps, waste heat recovery, improved
Project insulation in boilers;
Renewable energy projects wind, solar, hydro
(reduce emissions in generation mix or replace
Revenue from
Environmental diesel/kerosene off-grid);
Benefits
CERs Capture methane from landfills, or compost organic
waste and reduce methane production;
Reforest or afforest barren areas to sequester carbon.

39
Baseline Monitoring
Clear Monitoring and Verification Plan is needed
Baseline (emissions without project)
to record and verify annual emission reductions
from project interventions. e.g.
Emission
Record of fuel use before and after,

UNIDO-Ministry of Environment Clean Development Mechanism (CDM) Programme, Pakistan 2010

reduction
Meter readings at wind or hydro plant,
Project Emissions Sample surveys of households showing, usage
of CFLs and numbers of hours used,

ton CO 2e emission per year

Total land reforested and maintaining forest.
2012 time
Carbon Trading Workshop
 What Makes an Attractive CDM Additional Value From Clean
project? Projects
Project must be additional! Implemented With CERs Not implemented withoutCERs;
The project would not go ahead without the additional without CERs not Implemented with CERs
carbon revenue implemented
Not Additional CER income

CDM is not designed to reward all projects which reduce

GHG emissions only those which would not be
implemented without carbon revenue.

CDM is designed to make feasible those low-carbon

projects which are currently not the norm in the particular
market and which are not attracting adequate
investment. CDM

40
Arguments to Demonstrate
CDM Project Approval
Additionality
A lower than acceptable project IRR would be Project Proponent develops PDD and asks Host Country for
pushed over the Hurdle Rate with CERs (EE Approval of CDM project
projects, methane capture),
Project Proponent submits Project Design Document to Validator
Financing gap will be covered by investor or bank (Operating Entity)

UNIDO-Ministry of Environment Clean Development Mechanism (CDM) Programme, Pakistan 2010

which will only invest with security of repayment
from carbon finance, (In case of New Baseline methodology: Validator submits Baseline
Methodology to Methodology Panel of the CDM Executive Board)
Carbon finance would mitigate regulatory risks in
a new sector or the risks of introducing a new Validator evaluates Project Design Document and submits it for
technology (e.g. wind energy). approval to CDM Executive Board
Carbon finance can be used to monitor, carry out CDM Executive Board registers project activity as a CDM project
quality control, and increase awareness in
projects like Improved Cook Stoves.
Carbon Trading Workshop
 What Makes an Attractive CDM
Project Cycle - timeline
project?
Feasibility Realisation
Assessment - is Validation, of emission
project eligible as Registration, reductions
Verification and Project must be large enough to make it
CDM? Approval certification
worth the transaction costs,
Initial Project At least 50,000 ERs per year,
Project Implementation
Concept Upfront costs can range from $50K to
Final Project Design- full Carbon Actual Payment for > $150K to prepare the PDD, Validate,
Project Design Document Contract CERs $$$
and Register a project.

41
Registered CDM Projects &
Pipeline (as of 1 March, 2010)
CDM Project activities globally

CDM Statistics

Annual Average CERs* Expected CERs until end of 2012**

UNIDO-Ministry of Environment Clean Development Mechanism (CDM) Programme, Pakistan 2010

CDM project pipeline:
> 4200 N/A > 2,900,000,000
of which:
1,730,000,000
--- 2065 are
registered 387,906,742

--- 46 are requesting

registration 11,030,796 > 30,000,000
activities deliver simultaneously their expected annual average emission reductions
* Assumption: All
** Assumption: No renewal of crediting periods
Carbon Trading Workshop
 Registered Project Activities by Approved Methodologies by
Sector Scope (150)
Number Of Methodologies*
(as of Mar 1, 2010) Scope
( Large-scale (AM, AR-AM) , Small-scale (AMS,
AR-AMS) , Consolidated (ACM) )
Sectoral Scope Registered Energy industries (renewable - / non-renewable sources) (1) 40
Projects Energy distribution (2) 2
Energy industries (renewable - / non-renewable sources) 1523
Energy demand (3) 12
Waste handling and disposal 0
Manufacturing industries (4) 23
Fugitive emissions from fuels (solid, oil and gas) 25
Agriculture 121 Chemical industries (5) 14

Manufacturing industries 64 Construction (6) 0

Chemical industries 0 Transport (7) 5
Fugitive emissions from production and consumption of
2 Mining/mineral production (8) 1
halocarbons and sulphur hexafluoride
Metal production (9) 6
Energy demand 26
Mining/mineral production 7 Fugitive emissions from fuels (solid, oil and gas) (10) 7
Fugitive emissions from production and consumption of
Metal production 136 halocarbons and sulphur hexafluoride (11) 5
Transport 22 Solvent use (12) 0
Afforestation and reforestation 0
Waste handling and disposal (13) 14
Energy Distribution 458
Afforestation and reforestation (14) 16
Construction 13
Solvent Use 123 Agriculture (15) 5

42
Growing Market
2005 2006 2007 2008 CDM Capacity Building Project
Tons (Mil) Euros (Mil) Tons (Mil) Euros (Mil) Tons (Mil) Euros (Mil) Tons (Mil) Euros (Mil) Implemented by Ministry of

UNIDO-Ministry of Environment Clean Development Mechanism (CDM) Programme, Pakistan 2010

Environment
EU ETS 362 7,218 1,017 18,143 1,643 28,133 2,550 46,450
World Bank funded
CDM 401 2,038 563 3,920 947 11,737 1,230 14,715
Consultants: Winrock International
JI 28 96 21 95 38 326 58 402
Carbon Trading Workshop
 CDM Capacity Building Project
Objectives
Increase Pakistan s contribution to
climate change mitigation through a Project Pipeline Development
robust pipeline of high quality carbon is the most effective way to invigorate
finance projects,
carbon finance activities in Pakistan
Build capacity within Pakistan to
continue to add to this pipeline with
good quality CDM projects.

43
Main Activities Main Activities - Project Pipeline
Task 1: Task 2:
1. Project Opportunity Analysis, Identify Project Opportunities
Preparation of 20 Project Idea Notes/ Carbon

UNIDO-Ministry of Environment Clean Development Mechanism (CDM) Programme, Pakistan 2010

2. Outreach activities (development of
training and marketing materials), Finance Document (PINs/CFD) to submit to
World Bank Carbon Funds,
3. Training on design of PDD (baseline
and monitoring methodology,
Task 3: Preparation of 4 Project Design
additionality, social benefits, risk Documents (PDD) for accepted PINs
mitigation.
Carbon Trading Workshop
 TASK - I
Tasks under the Project STATUS: Successfully Completed
The Project has Three Main Tasks a)Inception Report Submitted on 15th April 2009
Task I (Two Components) b)7 PIN & PDD Trainings Conducted across Pakistan
No TRAINING LOCATION MONTH SESSION PARTICIPANT
a) - Project Opportunity Analysis S
b) - PIN & PDD Trainings 1 PIN Islamabad January General 30
2 PIN/PDD Lahore March Energy 26
Efficiency
Task II Finalization of 20 PINs for identified 3 PIN/PDD Lahore March Solid Waste 23
Management
Project Opportunities 4 PIN/PDD Karachi March Renewable 22
Energy
Task III Preparation of 4 PDDs among the most 5 PIN/PDD Karachi March Energy 30
Efficiency
promising of 20 PINs 6 PIN/PDD Islamabad October RE/EE 40
7 PIN/PDD Islamabad October Forestry 25

44
TASK II/III TASK II/III (Contd)
PINs/PDDs Being Developed Under the Project PINs/PDDs Being Developed Under the Project
No. Name of Project Project CO2 Sequestered
Participant (Up to 7 Years) No. Name of Project Project Participant CO2 Sequestered
1 Distribution of CFLs PEPCO/ LESCO 60,412 tCO 2- (Up to 7 Years)
equivalent 7 Improved Cook Stoves Aga Khan 267,611 tCO 2-
2 Renewable Energy (micro- PPAF 374,730 tCO2- Program of Activities Foundation/ BACIP equivalent
hydro, solar) Program of equivalent
8 Building Energy Audit and Ministry of Foreign 3,500 tCO2-
Activities

UNIDO-Ministry of Environment Clean Development Mechanism (CDM) Programme, Pakistan 2010

Efficiency Enhancement Affairs equivalent
3 Open Cycle to Combined KESC 700,000 tCO2- Project Program of Activities
Cycle Conversion at KESC equivalent
Generation Units 9 Domestic Biogas Plants RSPN 144,400 tCO2-
Program of Activities equivalent
4 50MW Wind Power Plant in The Dawood 400,000 tCO2-
Gharo, Sindh Group equivalent 10 Unicol Carbon Credit Project UNICOL Limited 1,260,000_ tCO2-
equivalent
5 Vertical Shaft Brick Kiln EEBP Pakistan
Conversion Program of 11 Kandra CDM Project Petroleum
Activities Explorations Limited
6 Sewerage Treatment Plant Govt. of Sindh 12 Karachi CNG Bus Project City District
at Shaheed Benazirabad Government Karachi
Carbon Trading Workshop
 High Potential Areas
Industrial Energy efficiency and energy
Inception Report substitution:
Brick manufacturing, vehicle transport, oil & gas, textile
industry, fertilizer, cement, oil & steel, glass.
Opportunity Analysis by sector Power Sector & Renewable energy:
Hydropower, wind, biomass cogeneration, T&D Losses,
Based on domestic and municipal EE, combined cycle power plants,
solar PV.
Near term prospects for investment and Solid waste management and methane capture:
specific projects being developed, Land-fill methane capture, composting, wastewater
treatment, biogas.
Available appropriate methodologies within Fertilizers and other chemical industries;
CDM. Catalytic N2O Abatement, nitric acid, waste heat recovery.
Land use, agriculture and forestry.
Afforestation/reforestation.

45
Summary: RE Abatement Potential
Small Hydro (Off-grid Micro/Mini Hydro) (45 MW)0.276 Promising Energy Efficient Options
Grid Connected Mini Hydro (1,815 MW) 5.56
Large Hydro (25,641MW) 56.15 for Industry
Bagasse Cogeneration (760 MW) 1.66
Solar Home Systems 0.05
Domestic Energy Efficiency 3.6

UNIDO-Ministry of Environment Clean Development Mechanism (CDM) Programme, Pakistan 2010

Reduction in transmission & distribution losses 4.0
Waste Heat Recovery
Combined Cycle Power Plant 4.0 Improved Boiler Efficiency
CNG Buses 0.024
Municipal Energy Efficiency 0.47
Fuel Substitution
Wind Energy 12 Process Changes
Units: Million tonnes/yr
Carbon Trading Workshop
 Industry wise Total Abatement Summary waste management
Potentials
Abatement Sectors Potential for CO2 Abatement (Million Tons/
year)
Solid Waste Management, methane capture and
Brick Manufacturing 10.0 biomass energy
Transportation 8.8
Abatement Sectors Emissions Abated (Million Tons/ year)
Oil and Gas Sector 6.53

Textile Industry 5.62 Sanitary landfills 2.04 m

Fertilizer Industry 5.03
Composting plants 1.70 m
Commercial and industrial wastewater 1.63 m
Cement Industry 4.71
On farm biogas 15.00 m
Iron and Steel Industry 1.78 Ethanol production 0.23 m
Glass Industry 0.88

Inorganic Chemicals 0.3 G TOTAL 20.6 m

46
Abatement Potential - forestry
Afforestation:
29.7 tC/ha for agroforestry, 54.6 tC/ha for commercial
plantations and 7.5 tC/ha for plantations on farm

UNIDO-Ministry of Environment Clean Development Mechanism (CDM) Programme, Pakistan 2010

lands Thank You
Reforestation:
Sequestration: coniferous forests 39 tCO2/ha, riverian
forests 33 tCO2/ha.
REDD: Reduced Emissions from Deforestation and Degradation
20 million tonnes of CO2 for 2008
Carbon Trading Workshop
 CDM FOR N2O ABATEMENT
Pak-Arab Fertilizers Limited Pak-Arab Fertilizers is one of the leading companies in world,
CDM Projects Overview who has taken initiative to implement N 2O abatement system at
their Nitric Acid Plants.
N2O is a green house gas and has 310 times more global
warming potential than CO 2 gas

For this project Pak-Arab has made an agreement with

Sibtain Naqvi Mitsubishi Corporation Japan who has supplied the design and
Section Head N2O abatement equipment for this plant.
Nitric Acid / CDM Plants
Availing the Kyoto Protocol incentive, the CDM plants on three
Nitric Acid lines were installed in 2007 / 2008

47
Process Description Benefits Of CDM
CDM for N2O abetment process consist of Selective Catalytic
Reduction (De -NOx) and Regenerative Catalytic System (De -N2O). Control on global warming by Green House Gases reduction.

In SCR NOx react with ammonia in the presence of catalyst to form Financial benefits to under developed countries by establishing CDM
Nitrogen and Water. projects through CER crediting.

UNIDO-Ministry of Environment Clean Development Mechanism (CDM) Programme, Pakistan 2010

In RCS, N2O decompose to Nitrogen and Oxygen in the presence of
Debit of Foreign exchange to National Account.
catalyst and at 600 oC.

The equipment decomposes 90% of N 2O generated during production CDM projects helps in addressing Local Environmental Issues (Air / Water
of Nitric Acid. pollution.

CERs, thus generated become available for trading. CDM projects help creating jobs and building of local capacities and other
sustainable development aspects of national economy.
Carbon Trading Workshop
 Benefits Of CDM Generation of N2O
Ammonia Air
Mixer
Control on global warming by Green House Gases reduction.

Financial benefits to under developed countries by establishing CDM

projects through CER crediting.

Debit of Foreign exchange to National Account.

Reactor

CDM projects helps in addressing Local Environmental Issues (Air / Water

pollution.
4NH 3 + 5O 2 ---------- 4NO + 6H 2O (desired in the oxidization process )
NO + O2 ------- NO 2
CDM projects help creating jobs and building of local capacities and other 4NH 3 + 3O 2 --------- 2N 2 + 6H 2O (undesired )
4NH 3 + 4O 2 --------- 2N 2O + 6H 2O (undesired )
sustainable development aspects of national economy. 2NH 3 + 8NO --------- 5N 2O + 3H 2O (undesired )

48
Average N2O Emission in Tail
CDM Plant at Site Gas per m3
Line -A = 1400 ppm
Line -B = 1400 ppm
Line -C = 2000 ppm

UNIDO-Ministry of Environment Clean Development Mechanism (CDM) Programme, Pakistan 2010

For 90% Conversion Efficiency in RCS, we are able to reduce N 2O to

Line -A = 140 ppm

Line -B = 140 ppm
Line -C = 200 ppm

Total CERs claimed to date are over two million t CO2(e)

Carbon Trading Workshop
 Carbon Trading Workshop

Thank You

UNIDO-Ministry of Environment Clean Development Mechanism (CDM) Programme, Pakistan 2010

49
 Workshop on Carbon Credit Opportunities in Renewable Energy and Waste Management Sector of Pakistan

LIST OF PARTICIPANTS Annex C

ONE DAY WORKSHOP ON CARBON TRADING OPPORTUNITIES IN PRIVATE SECTOR
ORGANIZATION IN PAKISTAN
ORGANIZED BY UNIDO AND MINISTRY OF ENVIRONMENT IN ASSOCIATION WITH THE
PUNJAB BOARD OF INVESTMENT AND TRADE &
LAHORE CHAMBERthOF COMMERCE INDUSTRIES
17 March 2010
Sr. No. Participant Organization Name Contact Email
Name Number
1 Raja M. Ahmed The Coca-Cola Export 03008415384 muhammadathar@apac.c
Corp. o.com
2 Adnan Mahmood Engro Foods Ltd. 03008313293 amehmood@engro.com
3 M. Sameen Solution Env & Ana. Lab 03454119342 samin@ktech.com.pk
4 Ishtiaq Kaukab WAPDA Environment 03015710104 dgwiz@gmail.com
Cell Lahore
5 Syed Javed WAPDA Environment 03334684654 syedjavedsultan@hotmail
Sultan Cell Lahore .com
6 Rana Athar WAPDA Environment rana.a.das@hotmail.com
Dastagir Cell Lahore
7 Saleem Akhtar Solution Env. & Ana. 03454393483 raisaleem43@gmail.com
Lab
8 Akhtar Bhutta Coca Cola 03009496105 ambhatta@ccbpl.com
9 Irfan Aqueel Millat Equipment Ltd. 03008467026 irfan_aqueel@millatgears
.com
10 Sohail Nisar Millat Equipment Ltd. 03008441930 sohail_nisar@millatgears.
com
11 Kashif Ahmed Marekh (Pvt.) Ltd. 5118449 kashif@marekh.com
12 Waseem Akhtar Ghullam Hussain & Sons 03454206666 ghs.swm@hotmail.com
13 Sibtain Naqvi Pak Arab Fertilizer Ltd. 03332223689 sibtain.naqvi@fatima_gro
up.com
14 Faheem Arif Engro Food Supply 03028483028
15 Majid Sohail Admaster 03008440128 majid@admaster.com.pk
16 Atif Murad FINCON 03125139587 amurad@fincon-
services.com
17 M. Iqbal Bhatti 2TBL 03009620874
18 M. Saeed Shamsi Transfopower 03008453944 shamsi.sofam@gmail.co
m
19 Nasrullah Punjab Industrial estates 03224160054 nasrullah@pie.com.pk
20 M. Irfan Coca Cola 03018743915 mirfan@ccbpl.com.pk
21 M. Ismail Industries Departure 03006313333 boilerspower@hotmail.co
m
22 Mian Maqbool Industrial Boiler Guild
23 Tipoo Sultan Techno Management 8644777 technomassociates@gmai
Associates/Ectech l.com
Environmental
Consultants
24 Rai Ali Hasnain Ministry of Environment 051-9245552 hasnainrai@gmail.com
Raza

UNIDO-Ministry of Environment Clean Development Mechanism (CDM) Programme, Pakistan 2009

50
 Workshop on Carbon Credit Opportunities in Renewable Energy and Waste Management Sector of Pakistan

LIST OF PARTICIPANTS

26 Uwe Storman Azur Solar 75-28-92080 u.stormen@azur_solar.co

m
27 Sikandar Mir BOI 49-179- smirkohler@aol.com
9597890
28 Zulfiqar Ali Deputy Director BOI 99230945 zali@pakboi.gov.pk
29 Mag Christian Azur Solar c.bouda@azur_solar.com
30 Rizwan Training House 03008434781 rizwan@traininghouse.or
Consultancy g
31 Faisal Ahmed Polycon Pakistan (Pvt.) 03008479898 mfaisal@polycon.com.pk
Ltd.
32 S. Ishtiaq Mines Mineral Dept. 03004708311 s.ishtiaq008@gmail.com
Hussain
33 M. Naeem Iqbal Coca-Cola 03008456416 mniqbal@ccbpl.com
34 Shehryar Khan One UN JPE 0302811058 shehryar7@gmail.com
35 Bikash Raj Winrock International 03015094846 bikashpan@gmail.com
Pandey
36 Jawed Ali Khan DG Env. Ministry of 03005151805
Environment
37 Shafqat Kakakhel Member CDM Ex Board shafqatkakakhel2gmail.co
m
38 Iqbal Mufti Iqbal & Co. 03008866043
39 Rana Riaz Loossan Shieer Media 03214457752 ranariazpb@hotmail.com
Mahmood
40 M. S. Khan Pelsman Ltd. 03004009800 msk@questragroup.com
41 S. Raza Abbas Almoiz Industries Ltd. 03215064575 raza.abbas@almoiz.com
Lahore
42 Sibghatullah R&D (LCCI) Lahore 03214057441 sibghatullah@yahoo.com
43 Ali Mohammad Step Cyber Div. 03228600641
Agha
44 Amna Mahmood R&D (LCCI) Lahore amna.m@icci.org.pk
45 Manzar Farooq Al-Hamd Corp. 03218446812 manzar@alhamdcorp.co
m
46 Zia Rashid Maymaar Associates 03218856680 ziaizi@hotmail.co.uk
47 Ahsan Saeed PPM Chemicals (Pvt.) 03008445645 mian@lcci.org.pk
Mian Ltd.
48 Mehrunisssa R&D (LCCI) Lahore
Abid
49 Hira R&D (LCCI) Lahore
50 Waseem Akhtar GHS Solid Waste 03454206666
51 Imran Saeed Metro Hi-Tech (Pvt.) Ltd. 03028499011 imran@metrogroup.com.
pk
52 Masood WAPDA 03004192992 masood_538@hotmail.co
m
53 Sohail Khan 03008252525
54 Khaq Ali Babar Comissioner Office OSD 03004201466
55 Raza Photographer LCCI 03004521408
56 Mian Zahid LCCI 03009486534 timevision@hotmail.com
Jawaid Ahmad

UNIDO-Ministry of Environment Clean Development Mechanism (CDM) Programme, Pakistan 2009

51
 Workshop on Carbon Credit Opportunities in Renewable Energy and Waste Management Sector of Pakistan

LIST OF PARTICIPANTS

57 Rauf Ahmed DGPR

58 Moeen Irfan LCCI moeenrnd@lcci.org.pk
59 Ansar Khan SKP Carbon 111772000
60 Jawad Mian LCCI 111222499 productgroup@gmail.co
m
61 Rana Bashir Metrex Trading Co. 03004462707 metrex@lcci.org.pk
62 Zubair Punjab Power
63 Zamurad NTDC 03078710996
64 Tariq Mahmood Qurban Productions 03008437433 drimahmood@hotmail.co
m
65 Aqil Butt Dy. Dir. Agriculture 99212291
Dept.
66 Nayha Zia 03229482000
67 Farwa Iftikhar 03214429469
68 Zaheer Ahmad Spell Tech Int. 04235431096 spelltech@hotmail.com
69 Arif Ansari TCS LCCI 03004018754 arif275@gmail.com
70 Dr. Shahid Raza S.R. Consultants 03004238303 mianrs@yahoo.com
71 Jahangir Anwar C. M. Punjab Sect. 03344002881 jahanraj@hotmail.com
72 Adil Raza Daily Jinnah 03214967731 haq_serve2hotmail.com
73 Syed Umair Sampak Group 5872285
74 Badar WAPDA 042-9202211
75 Abbas Ali Abbas Ali Associates 03018441094
76 Abbas Asimar PBIT 03008459700
77 Malik Abdul Mak-Alex International 03324660694 Akmalik04@hotmail.com
Khaliq
78 M. Azhar Dy. Dir. Industries 04299211526 azhergujjer@hotmail.com
Hussain
79 Altaf H. Khan CEO Turabi Corp. 03644808362 altafhussainkhan@hotmai
l.com
80 M. Omer PIEDMC 03454275350
81 Abdul Aziz LCCI 03214182693 muariaziz@yahoo.com
Satrial
82 Khurram Malik CPPG 03064418744 kwmailk@hotmail.com
83 M. Yousaf Shah Al-Yousaf Enterprises 03228484289
84 Ch. Zahir Bashir Mian Center (Pvt.) Ltd. 03008499269

UNIDO-Ministry of Environment Clean Development Mechanism (CDM) Programme, Pakistan 2009

52
 Media
Coverage
 Carbon Trading Workshop

EVENT MEDIA COVERAGE

PBIT ORGANIZES CARBON TRADING WORKSHOP
RECORDER REPORT
LAHORE (March 18 2010): Punjab Board of Investment and Trade (PBIT) in collaboration with
United Nation Industrial Development Organization (UNIDO), Lahore Chambers of Commerce &
Industry (LCCI) and the Ministry of Environment (MoE) conducted a workshop for creating
awareness for Clean Development Mechanism (CDM).

The workshop on carbon trading was at the LCCI to promote this area among private sector
businesses, government departments and international scholars, says a spokesman of the Board here
on Wednesday.

PBIT has taken this initiative of educating business people from the agriculture, steel, and other
industry on the opportunity of gaining carbon credits in the international carbon trading market.
Because this topic is often ignored, Pakistan has ranked low on the international trading and lags
significantly behind China and India.

The United Nations Industrial Development Organization - made this awareness event possible and
also had their key representatives at the event - has been championing the cause for cleaner
technologies and through this workshop witnessed the germination the mass impetus for green
awareness in Pakistan.

The option of utilising Clean Development Mechanism (CDM) was on the agenda of the conference,
which is an initiative of Kyoto Protocol through which developed countries can reduce the emission
of greenhouse gases (GHG).

The Kyoto Protocol represents an opportunity for developing countries like Pakistan for addressing
environmental issues while capitalising on the economic benefits of the protocol. The size of the
global carbon trading industry is over USD 64 billion.

Pakistan has yet to maximise benefits of Carbon Trading (CT) in terms of technology and resource
inflow. This Carbon Trading Workshop is one of the initiatives for capacity building along with
strengthening of Clean Development Mechanisms set up in the country that may help in creating
conducive environment for the efficient functioning of the domestic environment market.

The event was chaired by the Punjab Minister of Industries and Prisons Chaudhry Abdul Ghafoor,
and consultant to Chief Minister Punjab on economic affairs and CEO/Vice Chairman Punjab Board
of Investment and Trade (PBIT) Pir Saad Ahsanuddin who emphasised that PBIT is proactively
supporting businesses that qualify for carbon trading and that anyone can get facilitation from the one
window of PBIT, which will interface with all other government departments on behalf of the
business.

The options to harness this extra revenue through clean technology has been discussed at lengths
with the valuable input of prominent personalities like Malik Amin Aslam Khan, the former Minister
of State for Environment, Bikash Pandey director of Winrock International, Shafqat Kakakhel,
Deputy-Executive-Director of the United Nations Environment Programme, Pir Saad Ahsanuddin,
CEO and Vice Chairman of PBIT, Fazal Abbas Maken, Secretary, Commerce and Investment
Department, Punjab among others.
UNIDO-Ministry of Environment Clean Development Mechanism (CDM) Programme, Pakistan 2010
54
 Carbon Trading Workshop

Mr. Tanvir Mahmud National Programme Mr. Jawed Ali Khan, Director General
Coordinator addressing the workshop Ministry of Environment speaking
on the occasion

Ch. Abdul Ghafoor

Minister for Commerce & Investment &
Mr. Malik Amin Aslam Khan, former Pir saad Ehsan Ud Din CEO of Mr. Shafqat Kakakhel former Executive
Punjab Board of Investment & Trade
Minister for State of Environment, presenting the shield to the workshop participants. Director United Nations Environment
addressing in workshop Programme (UNEP), making his Presentation

A View of the Discussion Session A View of the Inaugural Session

UNIDO-Ministry of Environment Clean Development Mechanism (CDM) Programme, Pakistan 2010

55
 Carbon Trading Workshop

Profiles of Speakers
Malik Amin Aslam Khan Bikash Pandey He was also the principal spokesman of the
Mr. Malik Amin Aslam Khan, is the former Mr. Bikash Pandey is a Director, Winrock Group of 77 and China during the
Minister of State for Environment. He is an International which is a nonprofit preparatory process for the Habitat II
Agriculturist/Environment Consultant by organization that works with people in the Conference and the Chairman of the
profession, has served as a member of the United States and around the world to committee which negotiated the Habitat
Government of Pakistan Environmental empower the disadvantaged, increase Agenda during the Conference itself
Advisory Board since 1999 and Editorial economic opportunity, and sustain natural (Istanbul, 1996). He is a member of the
Board of the Climate Policy Journal since resources. He was a country representative UNFCCC Executive Board.
1998. He has also served as a member of the of Nepal in past Years. Mr. Bikash Pandey is
UN Working Group on Climate Change presently implementing the World Bank
since 1997. Mr. Aslam Khan has also CDM capacity building project for the CDM Tanvir Mahmud
worked as Executive Director of ENVORK, Cell Ministry of Environment and is based in Mr. Tanvir Mahmud is the National Program
Islamabad, conducting research in the Islamabad. Coordinator UNIDO and handling the
climate change sector, particularly focusing Institutional capacity Enhancement for
on the design of the Clean Development CDM in Pakistan project. He holds a
Mechanism (CDM). Shafqat Kakakhel Masters Degree in Industrial Engineering
Mr. Shafqat Kakakhel is the former Deputy- (MS) with Finance & Environment from
Executive-Director of the United Nations Texas Tech. University USA and has over 28
Saima Qadir Environment Programme, He is a national of years of progressive National and
Saima Qadir has extensive experience in Pakistan, served with the foreign Service of International experience in the area of
both financial and environmental markets, his country for over twenty-eight years. In Energy & Environment, Power Engineering
with an expertise in emerging markets. She addition to undertaking various assignments and Development Finance. He has worked
started her career at Morgan Stanley and has at the Ministry of Foreign Affairs in with multinational companies; The Arabian
worked for blue chip firms Bankers Trust, Islamabad, he also completed posting in American Oil Company and Preece Cardew
Paribas, etc on Wall Street as a derivatives Beiru, Cairo, Bonn, Jeddah, and New Dehli. & Rider and international organizations
risk manager and emerging markets bond His last posting was to Nairobi, where he such as UNDP, UNIDO, UNFPA and UNEP.
trader. In addition, she helped develop served as High Commissioner He prepared the country program for the
global water projects for a large energy (Ambassador) to Kenya and Permanent implementation of the Montreal Protocol in
markets powerhouse to broker a market for Representative to the United Nations Afghanistan and is Resource Person for the
trading water rights internationally. In Environment Programme (UNEP) and the UNEP South Asia Network Regional Office
particular, she is interested in bringing United Nations Centre on Human for Asia & Pacific Bangkok.
innovation to environmental markets Settlements (now the United Nations
through structured products and debt Human Settlements Programme).
markets. Duringdiplomatic career, Mr. Kakakhel
Following her private sector career, she represented his country in numerous inter-
gained public sector experience at the governmental negotiations and events,
Global Environment Facility where she including meetings of the United Nations
headed private sector investments. Commission on Sustainable Development.

UNIDO-Ministry of Environment Clean Development Mechanism (CDM) Programme, Pakistan 2010

56
 For Further Information, Contact:
Clean Development Mechanism Programme

Programme Team Ministry of Environment

Mr. Tanvir Mahmud Mr. Jawed Ali Khan

National Prgramme Coordinator Director General

Mr. Matloob Khan Mr. Momin Agha

National Expert-CDM Deputy Secretary

Ms. Ayesha Butt Mr. Syed Amjad Hussain

Programme Officer-Environment CDM-Expert

Mr. Zia ur Rehman Clean Development Mechanism Cell

Admin/Finance Officer
Ministry of Environment,
United Nations Industrial Development Organization Government of Pakistan
Old Business Center, Serena Hotel, Islamabad (Pakistan). 4th Floor, ENERCON Buidling, Off Ataturk Avenue,
Tel: +92-51-2600126-30 Sector G-6/5, Islamabad, Pakistan.
Fax: +92-51-2600123 Tel: +92-51-9205510
URL: www.unido.org/office/pakistan Fax: +92-51-9207425
Email: cdm.project@unido.org.pk
Mr. Jan Gajowski URL: www.cdmpakistan.gov.pk
CDM Program Manager Pakistan
PTC/EMB/CPU

UNIDO Headquarters
Room # D1282, Vienna, Austria.
Tel: 0043-1-26026-4582

United Nations Punjab Board of

Industrial Development Organization Investment & Trade