Peatland rewetting for carbon credits – Experience from Belarus

Carbon Investment Opportunity: Belarus Peatland Rewetting Project

Elnya Raised Bog – the largest Belarusian natural peatland

- Belarus is the country of peatlands

- Peatlands cover 14.2% of the territory of Belarus (2,9 mio ha)

Why Belarus?

• From 2012 onwards

• Additional area rewetted 2012-2015 – 9 440 ha

• Rewetted area managed: 18 020 ha

• TOTAL emission reductions 2011-2028 – 871000

tCO2e

• Finances using mechanisms of voluntary carbon

market

• Total project size: 4,5 mio euro

BPR project – key features

Map showing the location of Project sites

‘Old’ Project sites – 9 sites rewetted with KfW funds in 2008- 2011

‘New’ Project

Sites – 5 sites to be rewetted with HLG funds starting 2012

Rewetting cycle

1. Selection of

degraded

peatland

3. Design

documents for

construction

works

2. Scientific

justification for

peatland

restoration

5. RESTORED

PEATLAND

4. Construction

works

Current scenario description

From the proposed options the following "medium scenario“ foresees the following:

Additional area rewetted 2011-2015 – 9 440 ha Additional area rewetted 2016-2020 – 0 ha Emission reductions 2011 -2015 – 260 000 tCO2e Emission reductions 2016 – 2020 – 365 000 tCO2e Emission reductions 2021-2028 – 246 000 tCO2e TOTAL reductions 2011-2028 – 871 000 tCO2e

National Carbon Project Cycle

Conclusion of Initial

Memorandum of Understanding (MoU)* between Ministry of Environmental Protection and HLG/KfW

Conclusion of

Emission Reduction Purchase Agreement (ERPA) between Project Entity and HLG/KfW

• Submission of a Project Idea Note (PIN) to the Ministry for Environmental Protection for a Letter of Endorsement.

• Submission of full

Project Design Document (PDD) to the Ministry. Issuance a Letter of Approval

* Initial MoU becomes MoU after Letter of Approval is issued

Implementation Indicators

Preparation, Q3 2011-Q4 2011

• scientific justification

developed and approved

Physical

Contractual Q4 2011-Q3 2012

• Contracts with Design

companies signed Q1 2012

• Design documents approved

Q2 2012

• Contracts with Construction

companies signed Q2 2012

Carbon, Q3 2011 – Q4 2015

• Letter of Endorsement (PIN)

issued by the Ministry of

Environment Q3 2011

• Letter of Approval (PDD) issued

by the Ministry of Environment Q4

2011

• PDD registered in VCS Q3 2012

• Positive Validation results Q3

2012

• Positive Verification results Q2

2015

Physical Q2-Q4 2012

• Construction works

performed/Rewetting

occurred

Carbon rights and contracts

According to Belarusian legislation (Presidential

Decree #625 and Provision of the Council of

Ministers #466)

– Project Entity (organization implementing emission

reduction project) has the right to the sell emission

reductions based on ERPA

– Ministry for the Environment based on confirmation

from independent verifying organization and MoU

transfers VERs to the buyer

Project entity in Belarus: Limited company with foreign investments

APB-BirdLife Belarus (APB) - largest environmental NGO in Belarus - partner and/or implementing agency for all main peatland related projects in BY

- 28 staff and over 150 service contracts, 1.3 mio euro / year

National centre for Biological Resources of National Academy of Sciences of Belarus (NPC) - leading national authority on biodiversity - amalgamation of 4 academic institutes (Botany, Zoology, Forest, Botanical Gardens) - long-term partner in peatland restoration/conservation projects - over 300 staff, over 2 mio euro / year

Foreign Investor / Highly preferential - the participation of HLG would properly positions of the Entity within carbon cycle - foreign investment company is the preference for APB and NPC

Partners:

International carbon standards: Double verification process

• World’s leading voluntary carbon standard

• 2011 – amended to allow Peatland Rewetting and Conservation Projects (PRC) – in frames of KfW funded project • Approved monitoring and baseline methodology is under development - in frames of KfW funded project completion in early 2012

- Voluntary Standard applied in addition to VCS - Ascertains that projects:

• minimize climate change • support sustainable development • conserve biodiversity

International Carbon Project Cycle

Starts after finalization of national carbon cycle and receipt a Letter of Approval from the Ministry of Environment

• Registration of the project

(PDD) and verification – i.e. the process of auditing the emission reductions achieved.

• Registration involves the

preparation of a validation report and its submission (together with other relevant documentation) to the VCS Registry Operator.

• Verification involves the

preparation and submission of a verification report. Once this is approved, the VCS Registry Operator will issue VCUs

Procedure

VCS PD Valid. & Verif.

Additionality Test

Methodology existing/new

Validation report

Verificationreport

Certificationstatement

Proof of title

VCS registrySerial No.

VCU Issuance

Project developer Validator & Verifier

VCS Association(Board and Secretariat)

Registry Operator(s)

appointsaccredits

Financial flows and ER estimation assumptions

• Project starts 2011 with first advance payment in Q2-Q3 of

2011

• All rewetting works are finalized at the beginning of 2014

• Generation of ERs from the ‘new’ rewetted sites starts

2014

Project development beyond 2028

How much will be available:

• Balance at the Project end

(2028): c. 1 mio USD

Where the funds are to be directed:

• National regulation (Decree 466):

all income from carbon trade is to

be directed to further GHG

emission reductions activities

Project arrangements: MoU/ERPA will stipulate that surplus funds to be

directed to peatlands restoration/conservation

Beyond project decision – Project Entity Board will decide which sites to

be further rewetted or managed