CLEAN DEVELOPMENT MECHANISM

(CDM) IN MALAYSIA:PROCESS AND

PROCEDURE

CDM AWARENESS WORKSHOP 2010

5 OCTOBER 2010

by
CDM ENERGY SECRETARIAT
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Presentation Outline

• Introduction
• CDM Institutional
Framework
• CDM Development
in Malaysia

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Involvement in Climate Change Process

• United Nations Framework Convention on

Climate Change
– Signed on 9 June 1993
– Ratified on 13 July 1994

• Kyoto Protocol
– Signed on 12 March 1999
– Ratified on 4 September 2002
– Entered into force on 16 February 2005

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CDM in Malaysia

• Institutional Framework and Approval

Procedure are in placed

• National CDM Criteria endorsed

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CDM Institutional Arrangement

• National Steering Committee on Climate Change (NSCCC) –

established in 1994
• National Committee on CDM (NCCDM) established on 31 May 2002
• Designated National Authority (DNA) appointed in May 2003–
Ministry of Natural Resources and Environment (NRE)

• Established 3 Technical Committees:

– Technical Committee on Energy
(Chaired by Ministry of Energy, Green Technology and Water)
– Technical Committee on Forestry
(Chaired by Ministry of Natural Resources and Environment)
– Technical Committee on Agriculture
(Chaired by Ministry of Agriculture)

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CDM Institutional Framework

NATIONAL STEERING COMMITTEE ON DNA: Designated National

CLIMATE CHANGE Authority
 Set up in 1994 by Cabinet
 Chaired by Secretary General, NRE CEMD: Conservation and
 Members from Government, private sector and NGOs Environmental
 Secretariat: CEMD Management Division
MEGTW: Ministry of
Energy, Green
NATIONAL COMMITTEE ON CDM Technology and Water
 Chaired by Deputy Secretary General (I), NRE - DNA NRE: Ministry of Natural
 Members from Government sector and NGOs
Resources and
 Secretariat: CEMD
Environment
MOA: Ministry of
Agriculture
TC: Technical Committee
TC TC TC
ENERGY FORESTRY AGRICULTURE FRIM: Forest Research
(MEGTW) (NRE) (MOA) Institute Malaysia
MARDI: Malaysian
Agricultural Research and
RESPECTIVE SECRETARIAT Development Institute
ENERGY – GREENTECH MALAYSIA
FORESTRY – FRIM
AGRICULTURE - MARDI
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 CDM Project Cycle

Carbon Contracting
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Project Project Host

Idea Design Country Verification
Note Document Letter of &
(PIN) (PDD) Approval Certification
1 3 5 9
Request for
Initial Registration
Project Revenue
project -Small scale
Registration from
Idea 4 weeks
7 CERs
-Large scale
8 weeks
Conditional Project Project Issuance
Letter of Validation Monitoring of CERs
Approval 4 8 10
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PROJECT PROJECT IMPLEMENTATION

PROJECT DESIGN PHASE
REGISTRATION PHASE
PHASE
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 APPROVAL PROCESS – OPTION 1

Project Proponent

Project
National Committee on Idea Note
CDM
(NCCDM) No
Fulfill
National
Criteria

Project Design
Document
Operational
Entity (OE) No
Fulfill
International
Criteria
Yes – On condition of OE
validation of PDD
Designated National
Authority (DNA) Host Country’s Letter
of Approval
CDM 8
Executive Board Registration
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 APPROVAL PROCESS – OPTION 2

Project Proponent
National Committee on
CDM
(NCCDM) Project Design
Document

No
Fulfill
Operational National & International
Entity (OE) Criteria
Yes – On condition of OE
validation of PDD

Designated National
Host Country’s Letter
Authority (DNA) of Approval

CDM Registration
Executive Board

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Project Idea Note

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Additional Information Sheet

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Checklist for submission of PIN

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Checklist for submission of AIS

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Malaysia CDM Administration Fee

Type of Document Administration Fee (RM)

PIN 1,000

PDD 2,500 (Small Scale Project)

5,000 (Large Scale Project)

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 National CDM Criteria

1. Project must support the sustainable development policies of Malaysia and bring direct
benefits towards achieving sustainable development;

2. Project must involve participation of Annex 1 Party/Parties as CER buyer. In addition, they
are encouraged to participate as equity or technology providers;

3. Project must provide technology transfer benefits and/or improvement of technology;

including enhancement of local technology;

4. Project must fulfill all conditions underlined by the CDM Executive Board; and

5. Project proponent should justify the ability to implement the proposed CDM project activity

* Where flaring is used in methane abatement project, the project developer is required to
utilize at least 10 percent of biogas for energy utilization

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Further Requirements

CRITERIA 1 Show the Letter of EIA exemption

from State Department of Environment

CRITERIA 2 Show the Letter of Intent which

signed by both parties (Buyer and
Project Developer)
CRITERIA 3 Validation Report

CRITERIA 5 MAA, FORM 9, 24, 49 and MAA

Extra Documentation SREP approval letter

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CDM Baseline 2008

Peninsular Malaysia 0.672 tCO2/MWh

Sabah 0.651 tCO2/MWh

Sarawak 0.825 tCO2/MWh

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CDM Application (Energy Project)
As of September 2010

Year No. of Projects Estimated ER (tCO2e)

2002 3 124,987
2003 2 62,190
2004 9 918,275
2005 25 2,823,171
2006 21 2,621,098
2007 45 4,404,759
2008 50 4,342,384
2009 24 1,632,589
2010 13 286,809
 TOTAL (PINs and PDDs) 192  17,216,262 18
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CDM Application (Project Type)
Project Application by Project Type

Oil and Gas, 104,800

Manufacturing Industries, 552,545 Biomass - Empty Fruit Bunch (EFB),
Chemical Industry, 160,000 4,261,709
Biodiesel - Transportation, 2,042,000

Mini Hydro, 185,852 Biomass - Palm Kernel Shell (PKS),

135,358

Biomass - Wood Waste,

Hydro, 2,041,948 311,444

Agriculture,
370,000 Biomass - Kenaf Waste,
30,833

Animal Waste,
Spent Bleaching Earth (SBE),
158,639
29,722
Biogas - Palm Oil Mill Effluent (POME),
Landfill, 1,561,264
Municipal Waste, 596,254 3,803,599
Fuel Sw itch, 62,011 Energy Efficiency (EE), 1,058,839

Biomass - Empty Fruit Bunch (EFB) Biomass - Palm Kernel Shell (PKS) Biomass - Wood Waste Biomass - Kenaf Waste
Spent Bleaching Earth (SBE) Biogas - Palm Oil Mill Effluent (POME) Energy Efficiency (EE) Fuel Switch
Landfill Municipal Waste Animal Waste Agriculture
Hydro Mini Hydro Biodiesel - Transportation Chemical Industry
Oil and Gas Manufacturing Industries 19

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Trend and Analysis of CDM Projects

1. Malaysia CDM project associated with RE (70%), EE (7%),

Landfill (8%) and others (15%)
2. More on small scale of the CDM projects
3. More projects on Methane Avoidance, Methane Recovery,
Off-grid electricity generation, Landfill and little on
Energy Efficiency
4. CERs value and prices varies depends on project
agreement

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 CDM Application (Energy Project)

57 energy projects with estimated potential emission

reduction amounting 4.2 mtCO2e has been successfully
registered with CDM EB

 Potential of energy generated (89.5 MWe and 300.2

MWth)

 5 CDM projects were issued CER, amounting to

708,028 tCO2-eq @ USD7.1 mill (RM 24.1 mill)
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CERS Issued

Project Name CERs Issued (tCO2eq)

Biomass Energy Plant-Lumut 76,716
Replacement of Fossil Fuel by Palm Kernel 366,260
Shell Biomass in the Production of Portland
Cement
SEO Biomass Steam and Power Plant in Malaysia 130,079
LDEO Biomass Steam and Power Plant in 97,059
Malaysia
Sahabat Empty Fruit Bunch Biomass Project 37,914
TOTAL 708,028

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 Bukit Tagar Sanitary Landfill

Front view of MASB Power Plant

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23 Heat Recovery Boiler & EnviroCycler in MASB Power
Plant
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Kina & Seguntor plants

Boiler
Front view of
the plant
Fuel treatment 24

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Monitoring Of CDM Projects
Issues raised
• DOE validation process took longer time
• Project monitoring is lengthy
– Calibration of equipment (for some of the equipment
no “local calibrator”)
• Registration with CDM EB
– Longer process (request for review and so forth)
• Methodology keep on changing every now and then
• More and more requirement or new guideline from CDM
EB
• SREP: Agreement on the REPPA
• No issues on local CDM process

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Potential CDM Projects

1. Palm Oil Industry with the highest renewable

energy source and potential

- Energy generation from biomass and biogas

- More than 400 palm oil mills operating all over the
country which produces 30 million m3 of POME every
year
- 85% of the mills use solely open ponds using anaerobic
digestion

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 Potential CDM Projects

2. Wastewater sector

- Domestic wastewater accounted for a small portion of

methane inventory of the waste sector
- Centralized sewerage treatment plants will increase
the amount of methane for CDM viability
- At the moment, no application on CDM project related
to domestic wastewater

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 Potential CDM Projects

3. New focus area/sector for local CDM projects

- Energy intensive sector e.g. iron and steel, cement etc.

– utilisation of renewable energy and energy recovery
- High GHG emission contributor e.g. transport sector –
NGV vehicles
- Energy efficient in electricity generation e.g. fuel cells
power plant and conversion of open cycle gas turbine
to combined cycle gas turbine
- Conversion of solid waste to biofuels

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 Conclusion

• Current CDM potential in Malaysia associated with

energy – biomass, biogas, hydro and waste management
– landfill gas, MSW, Composting
• Future potential – transport sector, biofuel, oil and gas,
various industrial sectors and agriculture sector
• CDM : tool to turn economically unattractive projects
into attractive investments
• Total of 18 million tonnes CERs/yr estimated in 2010
• Opportunities to develop new markets for innovative,
environmental friendly technologies
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Contact for Further Information (DNA)
Designated National Authority
Environmental Management & Climate Change Division
Ministry of Natural Resources and Environment
Level 6, Tower Block 4G3, Precinct 4
Federal Government Administrative Centre
62574 PUTRAJAYA

Contact Person: Dr. Lian Kok Fei

Tel. No.: 603-8886 1126
E-mail: [email protected]

Contact Person: Mr. Sharil Faizal Abdul Jani

Tel. No.: 603-88861137
E-mail: [email protected]

Fax No.: 603-8888 4473

Website: www.nre.gov.my
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Contact for Further Information
CDM Energy Secretariat
Malaysian Green Technology Corporation
No. 2, Jalan 9/10, Persiaran Usahawan, Seksyen 9
43650 Bandar Baru Bangi
Selangor Darul Ehsan
Malaysia

Contact person: Cik Sazalina Zakaria

Tel. No.: 603-8921 0852
E-mail: [email protected]

Fax No. :603-8921 0801

Website: www.greentechmalaysia.my

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Contact for Further Information

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 Thank You

Malaysian Green Technology Corporation

No. 2, Jalan 9/10, Persiaran Usahawan, Seksyen 9
43650 Bandar Baru Bangi, Selangor Darul Ehsan
Website: www.greentechmalaysia.my E-mail: [email protected]
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