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Thailand’s Draft Market Readiness Proposal (MRP) Version 2.0 : 7th October 2013

Draft Market Readiness Proposal

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Country: Thailand Responsible agency: Thailand Greenhouse Gas Management Organization (TGO) Ministry of Natural Resources and Environment Date of submission: October 2013

Thailand’s Draft Market Readiness Proposal (MRP) Version 2.0 : 7th October 2013

Outline

Overview

• MRP Objectives and Focus
• MRP Development Process

Market Readiness Proposal

• 1. The Big Picture: Policy Context (Building Block 1)
• 2. The Proposed Components (Building Block2, 3 and 4)

2.1) A vision toward Mandatory ETS 2.2) Energy Performance Certificate Scheme (EPC) 2.3) Low Carbon City Program (LCC) 2.4) Low Carbon City Fund (LCC Fund)

• 3. Organization, Communication, Consultation and Engagement (Building Block 5)
• 4. Summary of Schedule and Budget (Building Block 6)

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Thailand’s Draft Market Readiness Proposal (MRP) Version 2.0 : 7th October 2013

Overview

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Thailand’s Draft Market Readiness Proposal (MRP) Version 2.0 : 7th October 2013

MRP Objectives and Focus

General Objective: To prepare readiness on market-based mechanisms in Thailand. Specific Objectives:

1.

To design and initially implement a domestic market mechanism to reduce energy consumption and GHG emissions in energy sector with a view to transform to emission trading scheme in the future.

2.

To promote and support municipalities and local communities to implement GHG mitigation actions while achieving sustainable development and low carbon society goals through domestic market mechanism.

3.

To prepare the infrastructure for market mechanism including database, MRV system, registry system, institutional and regulatory framework.

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Thailand’s Draft Market Readiness Proposal (MRP) Version 2.0 : 7th October 2013

MRP Development Process

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Task Team

Project management and coordination

Thailand Greenhouse gas management Organization (TGO)

Study and conceptual design

• f Energy Performance

Certificate scheme

ICF Incorporated LLC

Study and conceptual design

• f Low Carbon City program

Factor CO2 + Asian Institute of Technology + ICLEI South- East Asia

Development of Thailand Market Readiness Proposal

Energy for Environment Foundation (E for E)

Project review

• Mr. Lex De Jonge

Thailand’s Draft Market Readiness Proposal (MRP) Version 2.0 : 7th October 2013 Data collection & Feasibility Study* Draft Conceptual design of EPC and LCC* Consultation with related ministries , private sectors and local municipalities* Grant agreement signing Draft MRP development Informal presentation at PA6

Sep 2012–Feb 2013 Jan - Mar 2013 Sep 2012 – Feb 2013 Mar 2013 Mar - May 2013 May 2013

Consultation with local municipalities in 3 regions (Northern, Southern & Northeastern)* Country visit Presentation of draft MRP at PA7 Submission of Draft MRP to Secretariat Consultation with related ministries and the private sector*

May - Sep 2013 June – Aug 2013 Oct 2013 Aug 2013 Sep 2013

MRP Development Process

Draft MRP Development

Approval by the Cabinet

Jan 2013

Remark * Data collection & feasibility study, draft conceptual design of EPC ad LCC, and all consultations were funded by Thai government.

• PAT scheme training was organized to build capacity to all key stakeholders in February 2013.

Thailand’s Draft Market Readiness Proposal (MRP) Version 2.0 : 7th October 2013 7

MRP Development Process

During the draft MRP development, TGO organized the stakeholder consultation meeting with related Ministries, local municipalities and private sector more than 20 times to have an engagement from key stakeholders for successful implementation.

• Ministry of Energy
• Federation of Thai Industries (F.T.I.), The Thai Chamber of Commerce (TCC)
• Ministry of Finance
• Local municipalities
• PMR Steering Committee
• Focus group

Thailand’s MRP MOEN MOF FTI Local

municipality

Private sector

Thailand’s Draft Market Readiness Proposal (MRP) Version 2.0 : 7th October 2013

Market Readiness Proposal

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Thailand’s Draft Market Readiness Proposal (MRP) Version 2.0 : 7th October 2013

Chapter 1. Big Picture: Policy Context

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• 1. National Policies/Plans on Climate Change
• 2. National Appropriate Mitigation Actions (NAMAs) pledge
• 3. Historic and projected emissions trends and key drivers of the GHG

emissions

• 4. Mitigation actions and its plan for their implementation

Thailand’s Draft Market Readiness Proposal (MRP) Version 2.0 : 7th October 2013

1.1 National Policies/Plans on Climate Change

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National Policies/Plans on Climate Change and Environment Specific Plans

11th National Economic and Social Development Plan (NESDP) 2012-2016

Ministry of Natural Resources and Environment (MONRE) National Environment Quality Management Plan 2012-2016 Thailand Climate Change Master Plan 2013-2050 Ministry of Energy Ministry of Transport Ministry of Industry Ministry of Agriculture and Cooperatives

Energy Efficiency Development Plan 2011-2030 Alternative Energy Development Plan 2012-2021

National transport Master Plan 2011-2015 National Industrial Development Master Plan 2012-2031 Strategic Plan

• n Climate

Change in the Agricultural Sector Power Development Plan (PDP2010 : Revision 3) 2012 – 2030

National Agricultural Development Plan

2012-2016

Thailand’s Draft Market Readiness Proposal (MRP) Version 2.0 : 7th October 2013

Institutional Arrangement

11 Prime Minister (Chairman) National Committee on Climate Change Policy (NCCC) National Environment Board Technical Sub-committee Negotiation Sub-committee NAMA Sub-committee Ministry of Natural Resources and Environment (Secretariat) Office of Natural Resources and Environmental Policy and Planning (ONEP) Thailand Greenhouse Gas Management Organization (Public Organization) (TGO) Government Agencies Private Agencies Public Agencies Other Stakeholders

Thailand’s Draft Market Readiness Proposal (MRP) Version 2.0 : 7th October 2013

Thailand Greenhouse gas management Organization (TGO)

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 Established in 2007, TGO is a key organization working on climate change in Thailand act as the technical arm for National Committee on Climate Change Policy (NCCC) and co-assistance secretariat to NCCC.  TGO’s missions:

• Serving as a focal point for the Kyoto mechanism (CDM-DNA)
• Promoting CDM and Voluntary crediting mechanisms (VCS, GS, etc)
• Promoting carbon markets
• Enhancing the capacity building on GHG management
• Serving as the National Information clearing house of greenhouse gas

 TGO’s Members of the Board of Directors comprise of

• Director Generals from Ministry of Natural Resources and Environment, Ministry of Energy, and

Ministry of Transport

• Honorary Advisors (Energy, Industry, Science & Technology, Forestry, F.T.I.)
• Advisors to the Board of Directors (Legal, etc)

 Under this PMR program;

• Thai cabinet has approved TGO to participate in this PMR on 15th January 2013.
• Memorandum of Understanding (MoU) was signed between Ministry of Energy and TGO to provide

a mutual agreement in cooperating and implementing the Energy Performance Certificate Scheme (EPC) together.

Thailand’s Draft Market Readiness Proposal (MRP) Version 2.0 : 7th October 2013

1.2 NAMAs pledge

 The NAMA pledge is undergoing for approval by the NCCC and then by the cabinet.  Thailand NAMA will focus on the energy sector.

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Thailand’s Draft Market Readiness Proposal (MRP) Version 2.0 : 7th October 2013

1.3 Historic GHG emissions and Key Emitters

 Net GHG emission from the year 2000 to 2009 has been increased from 229 M tCO2e to 331.4 M tCO2e (Increase at 3.9% per year).

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 The Energy sector is the largest emitter ~ 70% share , followed by agriculture, industrial process, LULUCF and waste management.  In Energy Sector, energy industries and transport are key drivers, totaling account for almost 70%,

• f the total emissions.

Source: TGO & JGSEE (2012)

Source: TGO & JGSEE (2012)

Thailand’s GHG emissions in 2000 Thailand’s GHG emissions in 2000-2009

Source: TGO & JGSEE (2012)

Thailand’s Draft Market Readiness Proposal (MRP) Version 2.0 : 7th October 2013

Projected GHG emissions trends

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Future emission projection in the BAU scenario, 2012 – 2050 (M tCO2e)

 BAU scenario: considering the annual growth of GDP and population at 4.22% and 0.12% for the period of 2012 – 2050  Total GHG emission in 2050 under BAU: 1,331 M tCO2e (A)  Energy sector contributes about 76% of total emissions  Upon implementation of policies officially launched including PDP, EEDP and AEDP, total GHG emissions will be reduced to 883.5 M tCO2e. (B)

Source: TGO & JGSEE (2012)

(A) (B)

Thailand’s Draft Market Readiness Proposal (MRP) Version 2.0 : 7th October 2013

1.4 Mitigation action and its plan for their implementation

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Energy Sector

 The 20-Year Energy Efficiency Development Plan (EEDP), targeting a 25 percent energy intensity (in term of GDP) reduction by 2030.  The 10-Year Alternative Energy Development Plan (AEDP), with alternative energy comprising 25 percent of total energy consumption in 2021.

Agriculture and Forestry Sector

 Encouraging local authorities to enhance carbon sinks through forestation and sustainable forest resource management.  Allocating national budget to establish an information center and satellite systems to track forest cover, land use, and land-use change.

Waste Sector

 Promoting electricity generation from waste.  Promoting the “Clean and Green City” initiatives, providing technical assistance to local governments.

Thailand’s Draft Market Readiness Proposal (MRP) Version 2.0 : 7th October 2013

Initiatives to promote the domestic carbon market

Existing initiative instruments

1. Thailand Carbon Offsetting Program (T-COP): a carbon offsetting program, launched in August 2013, aiming to use contributions from participants for supporting domestic GHG emission reduction activities, especially for projects under the T-VER program. 2. Thailand Voluntary Emission Reduction Program (T-VER): a domestic GHG crediting mechanism (project-based), using methodologies which derived from CDM and J-VER methodologies. The T-VER program will be officially launched by the end of 2013.

Proposed initiative instruments under the PMR

1. Energy Performance Certificate Scheme (EPC): a voluntary target-and-trade scheme aiming to achieve energy efficiency in energy-intensive factories & buildings and to build core market readiness components in order to be a foundation for establishing the future ETS. 2. Low Carbon City Program (LCC): a GHG crediting mechanism which will be a part of T-VER program, aiming to achieve GHG emission reductions implemented by municipalities and local communities.

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Thailand’s Draft Market Readiness Proposal (MRP) Version 2.0 : 7th October 2013

The relationship among EPC, LCC, T-VER and T-COP

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T-VER

T-COP

Remark:

• T-VER

= Thailand Voluntary Emission Reduction Program

• TVERs

= Carbon credits generated under T-VER program

• T-COP

= Thailand Carbon Offsetting Program

• LCC

= Low Carbon City Program

• LCC-TVERs = Carbon credits generated under LCC program

(using T-VER process)

• EPC

= Energy Performance Certificate Scheme

• PMR

= Partnership for Market Readiness

LCC Fund

$

TVERs

EPC

$

Voluntary Buyers

Philanthropists

LCC-TVERs

$

LCC

$

LCC-TVERs

PMR program

Thailand’s Draft Market Readiness Proposal (MRP) Version 2.0 : 7th October 2013

Chapter 2. The Proposed Components

 Chapter 2.1: A vision toward Mandatory ETS  Chapter 2.2: Energy Performance Certificate Scheme (EPC)  Chapter 2.3: Low Carbon City Program (LCC)  Chapter 2.4: Low Carbon City Fund (LCC Fund)

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Thailand’s Draft Market Readiness Proposal (MRP) Version 2.0 : 7th October 2013

2.1 A vision toward mandatory ETS

 In recent years there has been a lack of clarity on new market mechanisms or various approaches under UNFCCC, domestic carbon market becomes an important instrument to reduce GHG emissions in Developing countries.  Mandatory ETS is one of the cost-effective tools for reducing GHG emissions.  Thailand is interested in exploring the possibility of developing a Mandatory ETS.  Based on above, Thailand is establishing the voluntary market-based instruments:  The voluntary market-based instruments are designed to align with national priorities.  These instruments are expected to help Thailand fill in existing policy and implementation gaps in the current national priorities of EE, RE and Low Carbon Society Plans.  Finally, the instruments will also be the foundation for establishing the future emission trading scheme in Thailand.

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Thailand’s Draft Market Readiness Proposal (MRP) Version 2.0 : 7th October 2013

Policy Mapping

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The 11th National Economic and Social Development Plan (NESDP) 2012-2016 To redirect the country to a low-carbon and environmentally friendly economy

The 20-Year Energy Efficiency Development Plan (EEDP) 2011-2030

To promote the reduction of energy intensity by 25% in 2030 compared with that in 2010 (23.5% of final energy

consumption in 2030 or 38,200 ktoe)

The 10-Year Alternative Energy Development Plan (AEDP) 2012-2021

To promote the increase of RE share to 25% of final energy consumption in 2021

(Equivalent to 25,000 ktoe/yr in 2021)

Energy sector : the key driver of economic development & the largest GHG emitter. Country Strategy (Prime Minister Yingluck Shinawatra)

To move toward Green Growth economy and low carbon society

Thailand’s Draft Market Readiness Proposal (MRP) Version 2.0 : 7th October 2013

The 11th National Economic and Social Development Plan (NESDP) 2012-2016

Low Carbon Society Plan  Aims at shifting the development paradigm and redirects the country to low carbon and environmentally friendly economy and society.  The plan emphasizes restructuring country’s production and consumption behavior in order to prepare for a transition toward a low-carbon and environmentally friendly economy. Development of eco-cities is considered important.

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Challenges to achieve Low Carbon Society in NESDP 2012-2016

 Lack of criteria in defining a Low Carbon City  Public and community understanding in low carbon society  Difficulties in initiating GHG emission reduction projects in public sector and/or municipalities and local communities  Lack of GHG abatement potentials and costs data in municipalities and local communities  Capacities of municipalities and local communalities to reduce GHG emissions

Thailand’s Draft Market Readiness Proposal (MRP) Version 2.0 : 7th October 2013

The 20-Year Energy Efficiency Development Plan (EEDP) 2011-2030

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Challenges to achieve EEDP’s target:

 Only 5.2% of the target achieved (2012)  Mandatory target on energy performance has not been in place  Lack of continuous MRV for energy saving  Lack of energy database management system for converting from energy data to GHG emission data

EEDP Target: Despite various EE measures implemented by the Government, the energy intensity of the country has not improved significantly .

Thailand’s Draft Market Readiness Proposal (MRP) Version 2.0 : 7th October 2013

The 10-Year Alternative Energy Development Plan (AEDP) 2012-2021

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Challenges to achieve AEDP’s target:

 Only 10.6% of the target achieved (2012)  Regulatory restriction prevents some RE development  Public and community acceptance and understanding  Transmission constraint

The progress of RE development in Thailand is largely on track especially in power sector.

Electricity from RE Supplying to the Grid 1992-2012 as of Dec 2012

Thailand’s Draft Market Readiness Proposal (MRP) Version 2.0 : 7th October 2013

Existing policies gap analysis and potential solutions

Existing implementation gaps & barriers Potential solutions Proposed Program

• The existing performance is still lower

than the targets Need new market-mechanisms to accelerate and ensure the achievement

• f the EEDP and AEDP targets

EPC and LCC

• Mandatory target on energy

performance has not been in place Testing the target setting methodology EPC

• Lack of energy database management

system for converting from energy data to GHG emission data Energy & GHG database management system EPC

• Lack of continuous MRV on energy

saving A robust MRV system EPC

• Limited data and information with

regards to climate change & GHG emissions Systematic data and information collection EPC and LCC

• Lack of public and community

understanding and capabilities for implementing GHG emission reductions Enhance capacity building and provide technical assistance for municipalities and local communities LCC

• Lack of data in GHG abatement

potentials and costs in municipalities and local communities Update data and develop local GHG abatement potentials and costs LCC

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Thailand’s Draft Market Readiness Proposal (MRP) Version 2.0 : 7th October 2013

EPC & LCC toward the future domestic carbon market

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Thailand’s Draft Market Readiness Proposal (MRP) Version 2.0 : 7th October 2013

Development Plan for the EPC, LCC and ETS

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Development Plan of the EPC & ETS Development Plan of the LCC

LCC preparation

Funding/Support will come from National and/or International budgets Required financial & technical support from PMR Funding

2014 2015 2016 2017 2018 2019 2020 …. 2024 2025 2026 2027 2028 2029 2030

LCC Implementation EPC Preparation EPC demonstration ETS preparation ETS Compliance

Thailand’s Draft Market Readiness Proposal (MRP) Version 2.0 : 7th October 2013

Proposed Activities and Budget for preparing an ETS legal framework

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Objective:

• To move toward an establishment and operation of mandatory emission trading scheme

(ETS), Thailand need a proper legal framework to provide institutional safeguards for emission trading and ensure a fair, open and equitable market. Proposed Activities:

• Study the legislative practices in overseas emission trading schemes (e.g. EU ETS, China

ETS, Korea ETS, etc.).

• Research the legal nature of the legislative package for establishing the ETS.
• Propose the basis legal system required for establishing ETS in Thailand.

Estimated Budget: 0.20 Million USD

Thailand’s Draft Market Readiness Proposal (MRP) Version 2.0 : 7th October 2013

2.2 Conceptual Design of Energy Performance Certificate Scheme (EPC)

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Grants

Technical Assistance: Energy audit, MRV, etc.

$$$

Surplus: Floor price

guarantee Shortage: No penalty

PMR

$$$

ENCON Fund Others

$$$ $$$

Thailand’s Draft Market Readiness Proposal (MRP) Version 2.0 : 7th October 2013

2.2 Conceptual Design of Energy Performance Certificate Scheme (EPC)

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Component Tentative Description Conceptual framework

• Voluntary target-and-trade scheme
• Intensity target setting not absolute target setting
• Performance-based incentive
• No penalty if the targets not met

Scope and Coverage

• Designated Factories and Buildings (DF&Bs)
• 7 Industrial sectors (Food & Beverage, Cement, Ceramic, Paper, Iron & Steel ,

Petro-Chemical and Thermal power plants)

• 4 Types of commercial buildings (Office, Hotel, Hospital and Department store)

Target setting methodology

• Based on Specific Energy Consumption (SEC) with the base year 2010
• Each participants will receive its own SEC target according to an approved

methodology Allocation of allowance

• EPC is the allowance-based unit
• Allocation methodology will be studied during 2014-2015

Thailand’s Draft Market Readiness Proposal (MRP) Version 2.0 : 7th October 2013

2.2 Conceptual Design of Energy Performance Certificate Scheme (EPC)

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Component Tentative Description MRV

• MRV will be developed to ensure the transparency, accuracy, consistency,

confidentiality, and impartiality

• EPC participants monitor its own energy data and submit the energy

management report to DEDE

• The report will be verified by the third party, accredited by DEDE

Registry system

• The EPC registry system will be established

Institutional Arrangement

• DEDE will be the scheme advisor and accreditation body for verifiers
• TGO will be the scheme administrator

Incentives for participants

• From PMR: Support for MRV (technical assistance, energy audit and MRV

support)

• From ENCON fund and/or other funds: The surplus of allowances (only from
• ver-performers) are guaranteed to buy back by the sink fund (under

discussion)

Thailand’s Draft Market Readiness Proposal (MRP) Version 2.0 : 7th October 2013

2.2 Development Plan for the EPC Scheme

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Emission Trading Scheme will be built on a basis of EPC

EPC Preparation phase EPC demonstration phase ETS preparation phase ETS Compliance period

2014 2015 2016 2017 2018 2019 2020 2021 .… 2025 2026 2027 2028 2029 2030

Energy Performance Certificate Scheme (EPC) Duration: 3 years (2017-2019) Character: Voluntary Units of Allowance: toe Incentives: Financial support & technical assistance Linkage: No linkage Emission Trading Scheme (ETS) Duration: 5 years (2026– 2030) Character: Legally binding scheme Incentives: No subsidy or any other incentives Units of Allowance: tCO2 Use of offset: carbon credits from LCC program is allowed Linkage: potential link to other ETS scheme(s) Under PMR program Need further study and additional support to move to ETS

Thailand’s Draft Market Readiness Proposal (MRP) Version 2.0 : 7th October 2013

2.2 Proposed Activities and Budget for EPC

 EPC Preparation phase (2014-2016) Objective: This phase would focus on preparing core components for demonstrating EPC scheme Activity Areas:

• Identify and bridge the data gaps, data

compilation & analysis

• Develop methodology and procedures

for target setting and allowance allocation

• Establish MRV, registry systems and

develop detail operational guidelines of EPC scheme

• Study on performance-based incentives
• Outreach activities and media campaign

to invite participation in the EPC demonstration

• Capacity building and stakeholder

consultations Estimated Budget: 2.36 Million USD

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 EPC Demonstration phase (2017-2019) Objective: This phase would focus on launching the scheme on a demonstration basis where the design framework of the EPC scheme will be tested. Activity Areas:

• Technical and financial support on MRV
• Assessment of the efficiency of the

demonstration study

• Outreach activities and media campaign

to propagate the success of EPC Estimated Budget: 1.69 Million USD

Thailand’s Draft Market Readiness Proposal (MRP) Version 2.0 : 7th October 2013

2.3 Conceptual Design of Low Carbon City Program (LCC)

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Grants

Technical Assistance: Assessment of Local GHG abatement, PDD development, etc.

$

PMR

$

• 1. Evaluation of GHG mitigation potentials
• 2. Identification of GHG mitigation activities
• 3. Evaluation of GHG emission reductions
• 4. Preparation of Project Design Document
• 5. Implementation of GHG emission

reduction activities

• 6. Monitoring of GHG emission reduction
• 7. Verification of GHG emission reductions
• 8. Issuance of LCC-TVERs

under PMR LCC Program Cycle

Thailand’s Draft Market Readiness Proposal (MRP) Version 2.0 : 7th October 2013

2.3 Conceptual Design of Low Carbon City Program(LCC)

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Component Tentative Description Conceptual Framework

• A crediting mechanism using T-VER process and standard, focusing on

municipalities and local communities Eligible Participants

• Thai municipalities (2,283 municipalities ) and local communities
• In pilot phase, 32 municipalities are targeted

GHG covered Carbon dioxide (CO2), Methane (CH4) and Nitrous oxide (N20) Eligible Project Types 1. Energy efficiency 2. Renewable energy 3. Waste management 4. Transportation management (only bio-fuel is included in the pilot phase) 5. Forestry and Green area 6. Agriculture

Thailand’s Draft Market Readiness Proposal (MRP) Version 2.0 : 7th October 2013

2.3 Conceptual Design of Low Carbon City Program(LCC)

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Component Tentative Description Methodologies

• Using T-VER process and methodologies
• T-VER methodologies are derived from CDM and J-VER methodologies
• MRV system is developed in line with the ISO 14064-2 and 14064-3

Additionality

• Micro scale& Small scale is automatically additional by default
• Large scale: The additionality will be demonstrated by payback period

Incentive

• Carbon finance will be provided by the LCC Fund (see LCC Fund section)

Thailand’s Draft Market Readiness Proposal (MRP) Version 2.0 : 7th October 2013

2.3 Development Plan for the LCC Program

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LCC Preparation phase LCC Implementation

2014 2015 2016 2017 2018 .… 2028 2029 2030

LCC preparation phase Evaluation of GHG mitigation potential Identification of GHG mitigation activity Evaluation of GHG emission reduction Project Design Document Preparation LCC operating phase Implementation of GHG mitigation activities Monitoring of GHG emission reduction Verification of GHG emission reduction Issuance of LCC-TVER credits Under the PMR program

Thailand’s Draft Market Readiness Proposal (MRP) Version 2.0 : 7th October 2013

2.3 Proposed Activities and Budget for LCC

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 LCC Preparation phase (2014-2016) Objective: This phase would focus on preparing core components for implementing the LCC Activity Areas:

• Develop the local GHG abatement plan and Project Design Document for selected

municipalities and communities

• Study on the LCC-TVERs price
• Capacity building and technical support

Estimated Budget: 3.08 Million USD

Thailand’s Draft Market Readiness Proposal (MRP) Version 2.0 : 7th October 2013

2.4 Conceptual Design of Low Carbon City Fund (LCC Fund)

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Study the design of the LCC fund, admin & legal requirement, etc

PMR

$

$

Thailand’s Draft Market Readiness Proposal (MRP) Version 2.0 : 7th October 2013

2.4 Conceptual Design of Low Carbon City Fund (LCC Fund)

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Component Tentative Description Conceptual Framework

• To become the one-stop service for buyers and sellers of LCC-TVERs generated

from LCC program

• To deliver carbon finance and technical support to local municipality and

community

• To provide voluntarily GHG offsetting opportunities
• To provide confidence and credit guarantee to financial institutions
• To increase market liquidity of the LCC-TVERs

Core Activities

• Providing technical support
• Project identification & screening
• Supporting to create an investment & financing structure
• Identifying sources of debt financing
• Providing carbon finance
• Organization and co-organization of events
• Promotion, outreach and business development to promote LCC program

Thailand’s Draft Market Readiness Proposal (MRP) Version 2.0 : 7th October 2013

2.4 Conceptual Design of Low Carbon City Fund (LCC Fund)

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Component Tentative Description Potential sources of Fund

• Voluntary Buyers

1.Thailand Carbon Offsetting Program (T-COP) 2.Other voluntary buyers

• Philanthropists (e.g. existing CSR supporters)

Carbon Pricing Mechanism

• The prices of the LCC-TVERs will be determined based on marginal

abatement cost of GHG emission reduction technologies

Thailand’s Draft Market Readiness Proposal (MRP) Version 2.0 : 7th October 2013

2.4 Development Plan for the LCC Fund

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LCC Fund Preparation LCC Fund Operation

2014 2015 2016 2017 2018 .… 2028 2029 2030

LCC Fund preparation Study to assess and to propose a final structure Study of pricing methodology for providing carbon finance to LCC projects Study on the administrative and legal arrangement Promotion, outreach and business development to promote LCC program

LCC Fund Operation  Providing technical support  Project identification & screening  Supporting to create an investment & financing structure  Identifying sources of debt financing  Providing carbon finance  Organization and co-organization of events  Promotion, outreach and business development to promote LCC program

Under the PMR program

Thailand’s Draft Market Readiness Proposal (MRP) Version 2.0 : 7th October 2013

2.4 Proposed Activities and Budget for LCC Fund Preparation Phase

 LCC Fund preparation phase (2014-2016) Objective: This phase would focus on the detail assessment for establishing LCC fund to support the implementation of LCC program Proposed Activities:

• Study on fund structure (admin & legal)
• Study on potential sources of fund
• Outreach activities and media campaign

Estimated budget: 0.55 Million USD

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Thailand’s Draft Market Readiness Proposal (MRP) Version 2.0 : 7th October 2013 44

• 1. Consultation during the MRP development
• 2. Organization of Thailand’ PMR
• 3. Communication, consultation and engagement
• 4. Proposed activities and budget

Chapter 3. Organization, Communication, Consultation and Engagement

Thailand’s Draft Market Readiness Proposal (MRP) Version 2.0 : 7th October 2013

3.1 Consultation during the MRP development

During the draft MRP development, TGO organized the stakeholder consultation meetings with several parties such as:  Discussions with DEDE, Ministry of Energy

• Conceptual design of EPC scheme, scope and coverage, target setting, trading

concept and MRV process, etc.  Discussion with Industry Associations

• Conceptual design of EPC scheme, technical support (in identifying energy saving

potential, energy efficient technology and technology providers) and incentives  Discussion with Ministry of Finance

• Financial support and incentive

 Discussion with Municipalities and National Municipal League of Thailand (NMT)

• Conceptual design of LCC program, benefit and incentive from participating in LCC

program, etc.  Consultation with Indian experts on PAT Scheme

• Lesson learnt and experiences of PAT scheme in India

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Thailand’s Draft Market Readiness Proposal (MRP) Version 2.0 : 7th October 2013

3.2 Organization of Thailand’s PMR

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PMR Steering Committee

• Participants: Officials from 14

key agencies

• Role: To provide recommendations
• n market development and

monitor the PMR program

EPC Working Group

• Chaired by DEDE
• Participants: Gov. agencies,

Representative from DF&Bs, Representative from Energy auditors, Representative from ESCO, Business Associations

• Role: To provide recommendations on

scheme design, technical issues, MRV system

LCC Working Group

• Chaired by TGO
• Participants: Gov. agencies,

Representatives from municipalities & communities, NGOs, Universities

• Role: To provide recommendations
• n LCC program and LCC fund

Project Management Unit (PMU)

• Chaired by TGO
• Role: In charge for overall
• rganization, management, and daily
• peration as well as to coordinate

with other relevant stakeholders, Ministries and agencies

Thailand’s Draft Market Readiness Proposal (MRP) Version 2.0 : 7th October 2013

3.3 Communication, Consultation and Engagement

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 It is essential to build the political and technical consensus on both the EPC scheme and the LCC program. This project will include specific activities to ensure proper communication, consultation and engagement with stakeholders. Communication 1. Identification of target audiences and what to communicate. 2. Development of materials such as brochures, booklets for communication. 3. Communication through media, a website, social networks, etc. Consultation and Engagement 1. Direct interview with key stakeholders to get feedback on their perception of the project, the main barriers, and the alternatives to overcome these barriers. 2. Consultation workshops will be held to review the design of the EPC scheme and the LCC program as well as the type and level of incentives. The consultation workshops also aim to increase awareness and engagement among stakeholders. A series of workshops will be conducted by TGO.

Thailand’s Draft Market Readiness Proposal (MRP) Version 2.0 : 7th October 2013

3.4 Proposed Activities and Budget

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Objective:

• To support the operation of PMU office, the budgets required for both administration cost and

capacity building for the staff.

• To build the political and technical consensus on both the EPC scheme and the LCC program as

well as to increase awareness and engagement among stakeholders, a proper communication, consultation and engagement with stakeholders are needed Proposed Activities:

• Project management
• Capacity building for PMU and key stakeholders
• Direct interview & Consultation workshops for EPC and LCC

Estimated budget: 3.75 Million USD

Chapter 4. Summary of Schedule and Budget

Proposed Programs Objectives & Main Activities Total Required Budgets (Million USD)

• 1. Required Budget from 2014-2016 (Preparation Phase)

6.19 1.1 ETS preparation To study the legislative practices in overseas ETS and to research the legal nature of the legislative package for establishing the ETS and present the basis legal system required for establishing ETS in Thailand. 0.20 1.2 EPC preparation This phase would focus on preparing core components for demonstrating EPC scheme. 2.36 1.3 LCC preparation This phase would focus on preparing core components for implementing the LCC program. 3.08 1.4 LCC Fund preparation This phase would focus on the detail assessment for establishing LCC fund to support the implementation of LCC program. 0.55

• 2. Required Budget from 2017-2019 (Implementation phase)

1.69 2.1 EPC Demonstration This phase would focus on launching the scheme on a demonstration basis where the design framework of the EPC scheme will be tested. 1.69

• 3. Required Budget for Organization, Consultation and Engagement Activities during the PMR

project 3.75 Total Required Budget during the PMR project 11.63

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