Report No: ACS14378 . Republic of India India PMR - Partnership for Market Readiness Organizational Framework for Scoping of PMR Activities . June 29, 2015 . GSURR SOUTH ASIA . . Document of the World Bank . Standard Disclaimer: . This volume is a product of the staff of the International Bank for Reconstruction and Development/ The World Bank. The findings, interpretations, and conclusions expressed in this paper do not necessarily reflect the views of the Executive Directors of The World Bank or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. The boundaries, colors, denominations, and other information shown on any map in this work do not imply any judgment on the part of The World Bank concerning the legal status of any territory or the endorsement or acceptance of such boundaries. . Copyright Statement: . The material in this publication is copyrighted. 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India’s Organizing Framework for Scoping of PMR activities Ministry of Environment and Forests May 28, 2012 Version 1.1 (April 23, 2012) PARTNERSHIP FOR MARKET READINESS (PMR) TEMPLATE FOR SCOPING OF MARKET READINESS ACTIVITIES (revised APRIL 23, 2012) 1. Policy context: Domestic mitigation objectives and emissions profile (1/3) 1.1 Policy context and objectives  India- has a relatively low carbon footprint,  A steadily declining carbon intensity over the last decade,  Will further contribute to reduce climate change through voluntary actions.  Announced in June 2008-  National Action Plan on Climate Change (NAPCC) having 8 National Missions outlining proposed climate mitigation and adaptation actions announced;  Announced in December 2009,  a voluntary goal of reducing emissions intensity of GDP by 20 to 25 percent over 2005 levels by 2020, announced; Note: See the Annex I for further details on NAPCC PARTNERSHIP FOR MARKET READINESS (PMR) 2 TEMPLATE FOR SCOPING OF MARKET READINESS ACTIVITIES (revised APRIL 23, 2012) 1. Policy context: Domestic mitigation objectives and emissions profile(2/3) 1.2 Overview of country’s GHG emissions (1)  India’s GHG Emissions- 2007 level  2007, India’s greenhouse gas (GHG) emissions by sources and removal by sinks were 1,727.71 million tons of CO2 equivalents (or 1,904.73 million tons of CO2 equivalents without land use, land use change and forestry), with the largest shares from electricity generation (38%), agriculture (18%) and other energy industries (12%). Figure 1: Greenhouse Gas Emissions Distribution across Sectors, 2007 Source: Interim Report of the Expert Group on Carbon Strategies for Inclusive Growth, May 2011 PARTNERSHIP FOR MARKET READINESS (PMR) 3 TEMPLATE FOR SCOPING OF MARKET READINESS ACTIVITIES (revised APRIL 23, 2012) 2. Technical building blocks of market readiness and role of market instrument(s) 2.1 Taking stock of relevant sectors (and/or target area)  By 2020, 1,452 to 1,620 million tonnes of CO2e are projected to emit only from the power sector due to the increase of power demand from 172 to 377 GW.  Further efforts on introduction of renewable energies or reduction of the demand have the potential to reduce GHGs emissions against business as usual scenario.  Energy efficiency measures must be also promoted and brought up to a scale that permits significant reductions in energy intensity of India’s GDP growth.  Hence, India intends to propose the following Market Readiness Components:  Market based instruments beyond REC mechanism for Off-grid renewable and Net-metering  Expansion of the Perform Achieve and Trade (PAT)  Mitigation plan to clean up the Ganga river basin PARTNERSHIP FOR MARKET READINESS (PMR) 4 TEMPLATE FOR SCOPING OF MARKET READINESS ACTIVITIES (revised APRIL 23, 2012) 2. Technical building blocks of market readiness and role of market instrument(s) 2.2 Core Readiness Components (1) – with Off-grid Renewable and Net-Metering Key objective is include the off-grid renewable power application within the REC fold Key challenges and issues to be addressed through the PMR support are:  Renewable energy is presently promoted through a regulatory (REC) mechanism under which States have Renewable Portfolio Obligation (RPO). The renewables based power purchased by utilities in excess of RPO can be traded as Renewable Energy Certificates (REC). However, the REC caters to only the grid connected utilities. Off-grid renewable power and net metering is out of its purview.  However, decentralized electrification using RE technologies are perceived as an economic options for meeting unmet demand in electrified villages.  The challenge is how to include off-grid renewable power applications within REC fold.  Off-grid regime will require putting in place a robust MRV guidelines. Note: See the Annex II for further details on the concept of unbundling environmental services PARTNERSHIP FOR MARKET READINESS (PMR) 5 TEMPLATE FOR SCOPING OF MARKET READINESS ACTIVITIES (revised APRIL 23, 2012) 2. Technical building blocks of market readiness and role of market instrument(s) 2.2 Core Readiness Components (1) – with Offgrid-REC mechanism Background  Off-grid REC regime will on one hand help in creating a parallel electricity market based on decentralized distributed RE based generation. On the other hand, it will help in reducing direct subsidy component from Govt of India for such projects.  Further, creation of a REC market for off-grid will help reduce demand for grid connected power. In addition, as REC is linked with actual power generation, it will ensure continued operation and maintenance of the RE systems PARTNERSHIP FOR MARKET READINESS (PMR) 6 TEMPLATE FOR SCOPING OF MARKET READINESS ACTIVITIES (revised APRIL 23, 2012) 2. Technical building blocks of market readiness and role of market instrument(s) 2.2 Core Readiness Components (1) – with REC mechanism PMR support is intended to assess the potential and design/develop an off-grid REC mechanism in India. PMR support is envisioned/planned for the following activities:  Assessment of market potential for Off-grid REC;  Identifying the market components  Designing a market based mechanism for Off-grid applications  Development of MRV guidelines  Compatibility with REC mechanism  Assessment on needs and cost implications for the system design. PARTNERSHIP FOR MARKET READINESS (PMR) 7 TEMPLATE FOR SCOPING OF MARKET READINESS ACTIVITIES (revised APRIL 23, 2012) 2. Technical building blocks of market readiness and role of market instrument(s) 2.2 Core Readiness Components (2) – with energy efficiency measures under PAT The PAT is an existing market based mechanism that was developed to enhance the cost effectiveness of improving energy efficiency through certification of energy saving which can be traded. PMR Support would explore the feasibility of expanding the PAT scheme: Domestically - to add new energy intensive sectors not currently covered by the Scheme; and Internationally - by establishing a mechanism to promote the international fungibility of an Escert in the global carbon market. Key areas to be addressed: The key challenge for domestic expansion is for the Bureau of Energy Efficiency to set targets that avoid penalizing already efficient industries and going easy on non-compliant ones; and The key challenge for international market expansion is to set up a system that is transparent and that links with the global market without any market distortion or double counting. Note: See the Annex II for further details on the concept of unbundling environmental services PARTNERSHIP FOR MARKET READINESS (PMR) 8 TEMPLATE FOR SCOPING OF MARKET READINESS ACTIVITIES (revised APRIL 23, 2012) 2. Technical building blocks of market readiness and role of market instrument(s) 2.2 Core Readiness Components (2) – with energy efficiency measures under PAT PMR Support is intended to expand the PAT to new energy intensive sectors not already covered by the scheme. These include: Existing Sectors under the PAT New Sectors to join the PAT through PMR 1. Thermal power plants 1. Transport sector (industries and services) 2. Iron & Steel 2. Small & Medium Enterprises 3. Cement 4. Fertilizers 5. Aluminum 6. Textile 7. Pulp & paper 8. Chlor alkali Source: Energy Conservation Act (2001) Note: See the Annex IV for further details on the PAT scheme in India PARTNERSHIP FOR MARKET READINESS (PMR) 9 TEMPLATE FOR SCOPING OF MARKET READINESS ACTIVITIES (revised APRIL 23, 2012) 2. Technical building blocks of market readiness and role of market instrument(s) 2.2 Core Readiness Components (2) – with energy efficiency measures under PAT PMR support will be used to address several areas in expanding the PAT to the new sectors, including: Conducting studies to assess real potential of intervention; Identifying segments and stakeholders, including justifying and analyzing selected target areas; Defining boundaries; Conducting outreach and engagement activities; Setting and defining expanded mechanism; and Building upon PATs lessons in the existing sectors. PARTNERSHIP FOR MARKET READINESS (PMR) 10 TEMPLATE FOR SCOPING OF MARKET READINESS ACTIVITIES (revised APRIL 23, 2012) 2. Technical building blocks of market readiness and role of market instrument(s) 2.2 Core Readiness Components (2) – with energy efficiency measures under PAT PMR Support is also intended to explore the feasibility of expanding the PAT Scheme to the international market. This would involve establishing a mechanism to promote international fungibility of an Escert based on the level of environmental bundling and GHG emission reductions associated with the PAT. PMR support is envisioned/planned for the following activities: Development of a methodology to evaluate the global carbon market benefit of a registered Energy savings project under the PAT mechanism. To avoid double counting, this benefit would be in addition to any domestic benefits (e.g., energy and environmental); Development of a reporting guideline for energy efficiency; and Development of a domestic verification procedure and capacity building for a Compliance Auditor. PARTNERSHIP FOR MARKET READINESS (PMR) 11 TEMPLATE FOR SCOPING OF MARKET READINESS ACTIVITIES (revised APRIL 23, 2012) 2. Technical building blocks of market readiness and role of market instrument(s) 2.2 Core Readiness Components (2) – with energy efficiency measures under PAT In expanding the PAT, India proposes to expand the Monitoring and Reporting guidelines to cover the new sectors. In this regard, PMR support will help to address: •Monitoring, measurement and reporting guidelines/standards: Development of guidelines/standards. •Domestic verification procedures: plans for developing/implementing a system of independent verification. In expanding the PAT, India proposes to expand the existing registry system in order to keep track of the additional energy savings, GHG emissions, allocation, compliance status, etc. In this regard, PMR support will help to address: • Identifying existing system for tracking energy savings; •Establishing broad objectives for tracking energy savings and subsequent GHG reductions in the covered sectors; and •Identifying technical, system and capacity gaps for tracking energy savings and emissions. PARTNERSHIP FOR MARKET READINESS (PMR) 12 TEMPLATE FOR SCOPING OF MARKET READINESS ACTIVITIES (revised APRIL 23, 2012) 2. Technical building blocks of market readiness and role of market instrument(s) 2.2 Core Readiness Components (3) – Ganga Wastewater treatment project PMR support is intended to support a plan for wastewater treatment to clean up the Ganga river basin with mitigation as a co-benefit, by promoting the implementation of wastewater treatment projects, including both greenfield and existing, that will capture or avoid methane gases generated from wastewater  Waste water treatment installations (or their absence) in the Ganga River Basin not only constitute a significant source of GHG emissions, but can also pose serious health risks  Untreated sewage and industrial wastewater represents the primary sources of pollution, with only one-third of the sewage generated in the main-stem towns and cities receiving treatment before being discharged in the river  Previous efforts to clean up the Ganga have not been sustainable New , comprehensive vision for clean-up and conservation of the Ganga  National Ganga River Basin Authority (NGRBA) established in 2009  National Ganga Mission launched in 2010 by MoEF PARTNERSHIP FOR MARKET READINESS (PMR) 13 TEMPLATE FOR SCOPING OF MARKET READINESS ACTIVITIES (revised APRIL 23, 2012) 2. Technical building blocks of market readiness and role of market instrument(s) 2.2 Core Readiness Components (3) – Ganga Wastewater treatment project Key Ganga River Basin Characteristics  One of India’s holiest rivers  20 percent of pollution(by volume)  40% population (500 million) industrial  30% of its water resources  181 Class-I (< 100,000) and Class-II  26% of country’s landmass (< 50,000) cities dispose 12410 MLD of wastewater into Ganga or its tributaries PARTNERSHIP FOR MARKET READINESS (PMR) 14 TEMPLATE FOR SCOPING OF MARKET READINESS ACTIVITIES (revised APRIL 23, 2012) 2. Technical building blocks of market readiness and role of market instrument(s) 2.2 Core Readiness Components (3) – Ganga Wastewater treatment project Ganga River Basin Wastewater Treatment  Objective: Ganga river clean-up and  Type of action: Wastewater resulting emissions reductions through treatment coupled with avoidance treatment of wastewater or capture of GHG emissions  Motive: The Ganga has high (initially mainstem, then basin- economic, environmental and cultural wide) value in India, but extreme pollution pressures threaten sustainability of the river  Rationale: (1) Sizeable gap between sewage generation and treatment capacity; (2) Limited regulation or enforcement for wastewater treatment and none for methane recovery or avoidance, and; (3) Substantial GHG mitigation potential PARTNERSHIP FOR MARKET READINESS (PMR) 15 TEMPLATE FOR SCOPING OF MARKET READINESS ACTIVITIES (revised APRIL 23, 2012) 2. Technical building blocks of market readiness and role of market instrument(s) 2.2 Core Readiness Components (3) – Ganga Wastewater treatment project New National Ganga Mission  Multi-billion dollar, decades long initiative with a comprehensive, basin- level, multi-sectoral approach  World Bank involvement through 1 billion USD project to initially focus on mainstem Class-I Cities  No untreated municipal sewage or industrial effluents discharged into Ganga by 2020  Preliminary baseline and MRV framework being developed through PoA Lessons Learned From Previous Initiatives  New comprehensive, basin-level, multi-sectoral approach contrasts to earlier “town-centric” and “end-of-the-pipeline” efforts  Ganga Action Plan (PhaseI & PhaseII) implemented since 1985, creating close to 1100 MLD of treatment capacity in 84 Class-I and Class-II cities along the mainstem  Issue of inadequate resource mobilization and improper fees and consequently no operation and maintenance Note: See the Annex V for further details on the sectoral mitigation plan: Ganga River Basin PARTNERSHIP FOR MARKET READINESS (PMR) 16 TEMPLATE FOR SCOPING OF MARKET READINESS ACTIVITIES (revised APRIL 23, 2012) 3. Organization and consultations (1/3) 3.1 PMR contact point  The Ministry of Environment and Forest is the nodal agency responsible for coordination of external support to India’s Climate Change activities and will lead the work of the PMR.  Focal Point: Sh. R.R. Rashmi, Joint Secretary, Climate Change Division Ministry of Environment and Forests PARTNERSHIP FOR MARKET READINESS (PMR) 17 TEMPLATE FOR SCOPING OF MARKET READINESS ACTIVITIES (revised APRIL 23, 2012) 3. Organization and consultations (2/3) 3.2 Consultation process  Stakeholder consultation will be conducted throughout the MRP preparation process  To be determined by MoEF PARTNERSHIP FOR MARKET READINESS (PMR) 18 TEMPLATE FOR SCOPING OF MARKET READINESS ACTIVITIES (revised APRIL 23, 2012) 3. Organization and consultations (3/3) 3.3 Partners in the formulation and implementation of the country’s Market Readiness Proposal (MRP)  The Ministry of Power:  Responsible for the implementation of the National Mission on Enhanced Energy Efficiency  MoEF will closely work with the MoP for developing the MRP on broadening the coverage of PAT  The Ministry of New and Renewable Energy:  Responsible for the National Solar Mission  MoEF will closely work with the MNRE for the development and implementation of MRP on Off-grid REC mechanism PARTNERSHIP FOR MARKET READINESS (PMR) 19 TEMPLATE FOR SCOPING OF MARKET READINESS ACTIVITIES (revised APRIL 23, 2012) 5. Organization of work and estimated timeline (2/2) 5.2 Overview of estimated timeline for formulation of Market Readiness Proposal The preparation phase will take 12 months as listed in the following table. Activities 1 2 3 4 5 6 7 8 9 10 11 12 Preparation Stakeholder consultation Assessment and development Drafting Market Readiness Proposal Finalizing MR proposal PARTNERSHIP FOR MARKET READINESS (PMR) 20 TEMPLATE FOR SCOPING OF MARKET READINESS ACTIVITIES (revised APRIL 23, 2012) 7. Conclusions – Summary of market readiness priority areas for PMR support 1. Off-grid Renewable Energy Certificate (REC)  Assessment of Marker potential and market components  Designing a market based approach around off-grid RE applications and net- metering  Development of MRV guidelines 2. Broadening of sectoral coverage of the Perform Achieve and Trade (PAT)  Assessment on new sectors not currently covered by the PAT  Development of a methodology/reporting guideline and assessment on expansion of the PAT scheme 3. Wastewater treatment project to clean up the Ganga river basin  Development of a comprehensive mitigation plan that could promote the implementation of wastewater treatment projects in the Ganga river basin PARTNERSHIP FOR MARKET READINESS (PMR) 21 TEMPLATE FOR SCOPING OF MARKET READINESS ACTIVITIES (revised APRIL 23, 2012) Annex I: NAPCC Policy context and objectives  NAPCC identifies measures that promote our development objectives while also yielding co-benefits for addressing climate change effectively.  The eight missions are:  National Solar Mission  National Mission for Enhanced Energy Efficiency  National Mission on Sustainable Habitat  National Water Mission  National Mission for Sustaining the Himalayan Ecosystem  National Mission for a Green India  National Mission for Sustainable Agriculture  National Mission on Strategic Knowledge for Climate Change PARTNERSHIP FOR MARKET READINESS (PMR) 22 TEMPLATE FOR SCOPING OF MARKET READINESS ACTIVITIES (revised APRIL 23, 2012) Annex II: Unbundling Environmental Services (1) Off-grid RECs Value representing domestic benefits from renewable form of electricity e.g. local air quality, energy security, etc. Can be captured through a preferential tariff, fiscal incentives or as Renewable Energy Certificates Rs/kWh Total Revenue Value representing global benefits e.g. reduction in greenhouse gas reduction. Basic Captured through (compliance Electricity or voluntary) carbon market. Tariff (Rs/kWh) PARTNERSHIP FOR MARKET READINESS (PMR) 23 TEMPLATE FOR SCOPING OF MARKET READINESS ACTIVITIES (revised APRIL 23, 2012) Annex II: Unbundling Environmental Services (2) Off-grid RECs Modalities and procedures to be defined under the PMR Rs/kWh Total revenue Value of To the carbon market the offset  Quantity and value to be determined (Rs/TCO2e) by the carbon market standards and Value of prices Off-grid REC (Rs/kWh) To the Indian market for Renewable Energy Certificates Basic Electricity Tariff (Rs/kWh) PARTNERSHIP FOR MARKET READINESS (PMR) 24 TEMPLATE FOR SCOPING OF MARKET READINESS ACTIVITIES (revised APRIL 23, 2012) Annex II: Unbundling Environmental Services (3) Energy Efficiency Measures under PAT Modalities and procedures to be defined under the PMR Total revenue from Carbon offset energy saving value (TCO2e/ unit product) To the carbon market Quantity and value to be determined Energy Saving by the carbon market standards and Certificate prices value (TOE/unit product) To the Indian market for Energy Financial value of Saving Certificates for PATS energy saving to the Designated Consumer (TOE/unit product) PARTNERSHIP FOR MARKET READINESS (PMR) 25 TEMPLATE FOR SCOPING OF MARKET READINESS ACTIVITIES (revised APRIL 23, 2012) Annex IV: PAT in India (1) Assessment of readiness of sector/target area – Key design details The PAT is an existing market based mechanism that was developed to enhance the cost effectiveness of improving energy efficiency through certification of energy saving which can be traded. PAT Scheme – key design elements DESIGN ELEMENT DETAIL Energy Conservation Act 2001, modified by the Energy Conservation ESTABLISHING LEGISLATION Amendment Act 2010, Article 14 (August 2010). REGULATOR / ADMINISTRATOR Bureau of Energy Efficiency (BEE) of India’s Ministry of Power. • Specific energy consumption (SEC) target assigned to each DC TARGET • By 2014-15, expected savings include: 23 Mtoeq, 19GW and 98 MtCO2 per year. Selected Designated Consumers (DCs) in 8 energy intensive sectors (478 DCs): COVERAGE Thermal Power plants, Iron & Steel, Cement, Fertilizer, Aluminum, Textile, Pulp & Paper, Chlor alkali. • First PAT cycle from April 1, 2012 to March 31, 2015. COMPLIANCE PERIOD • Fulfillment of compliance obligations subsequent to first cycle termination. All DC’s that do no meet their targets will need to buy ESCerts or pay penalty ENFORCEMENT of 10 lakhs (US$20,000) in addition to the value of compliance. • ESCert issued to any DC exceeding own SEC target which could be traded TRADING with DCs who fall short of their given targets • Bilateral transactions or cleared through the two national power exchanges PARTNERSHIP FOR MARKET READINESS (PMR) 26 TEMPLATE FOR SCOPING OF MARKET READINESS ACTIVITIES (revised APRIL 23, 2012) Annex IV: PAT in India (2) Assessment of readiness of sector/target area – Proposed structure PARTNERSHIP FOR MARKET READINESS (PMR) 27 TEMPLATE FOR SCOPING OF MARKET READINESS ACTIVITIES (revised APRIL 23, 2012) Annex IV: PAT in India (3) Core Readiness Components – proposed institutional design BEE MoP Market Regulator & Administrator Apply for ESCerts Updated Any Baselines Any Baselines Apply for Issuance of through PAT list of DCs Improvement Improvement Empanelment E-filing EScerts Assessment and DENA PAD Document Information (PAD) Audited Result of DCs Designated SDA Regular DENA Audit Consumers updates (DCs) Regular Checks & Levy Penalties in case of defaults ESCerts Trading Updated ESCerts Account Info Updated Obligation Central Registry Trading Exchange of DCs: Deficit or Surplus Settlement Details PARTNERSHIP FOR MARKET READINESS (PMR) 28 TEMPLATE FOR SCOPING OF MARKET READINESS ACTIVITIES (revised APRIL 23, 2012) Annex IV: PAT in India (4) Core Readiness Components – concept of target, compliance, ESCerts & Penalty PARTNERSHIP FOR MARKET READINESS (PMR) 29 TEMPLATE FOR SCOPING OF MARKET READINESS ACTIVITIES (revised APRIL 23, 2012) Annex V: Ganga wastewater treatment project Climate change mitigation and low emission development policy objectives The river Ganga has high economic, environmental and cultural value in India, but extreme pollution pressures pose a great threat to the sustainability of the river. Key Ganga River Basin Characteristics: • 26% of country’s landmass • 40% of India’s population (close to • Average population density is 551 • 30% of its water resources 500 million) people per square kilometer, more than 10 • One of India’s holiest rivers • < 70% live on less than $2 a day times the global average PARTNERSHIP FOR MARKET READINESS (PMR) TEMPLATE FOR SCOPING OF MARKET READINESS ACTIVITIES (revised APRIL 23, 2012) 30 Annex IV: Ganga wastewater treatment project Assessment of historic and projected emissions trends, and key drivers of sector GHG emissions • There is a large gap between sewage generation and treatment in India; 38,000 MLD of municipal sewage generated in Class-I Cities and Class-II Towns, treatment capacity exists for only about 120,000 MLD* • 181 Class-I (< 100,000) and Class-II (< 50,000) cities dispose 12410 MLD of wastewater directly into Ganga or its tributaries • Operations and maintenance of existing plants and sewage pumping stations is also an issue with 39 percent not adhering to general standards/ regs* • Phase I of the World Bank’s 1 billion USD implementation support projects will initially focus on the Class-I Cities mainstem, treating 3,000 MLD • Based on current wastewater treatment projects, potential mitigation is around 180,000 tons ktCO2e of by the year 2050 when gross wastewater generation is projected to be 120,000 MLD* Existing initiatives and regulations Justification and current status The Ganga Action Plan (GAP)1985 -2000: Treatment capacity Waste water treatment installations (or their absence) in the of 869 MLD was created in 25 Class-I Cities in 3 states. GAP II Ganga River Basin, where 40 percent of India’s population was launched in stages between 1993 and 1996 and covered lives, not only constitute a significant source of GHG 59 towns along the main stem of river Ganga in five states emissions, but can also pose serious health risks. Previous and created 222 MLD of capacity (18 STPs). efforts to clean up the Ganga had mixed results. Now the Several wastewater treatment proposals also exist under the National Ganga River Basin Authority (NGRBA) has been Clean Development Mechanism (CDM) created and tasked with cleaning the Ganga with River basin PARTNERSHIP FOR MARKET READINESS (PMR) approach. * Reference: Central TEMPLATE FORPollution SCOPING Control OF Board, 2009 MARKET READINESS ACTIVITIES (revised APRIL 23, 2012) 31 Annex IV: Ganga wastewater treatment project Description • Definition: Avoidance or capture of GHG emissions by Indicator Detail methane recovery during the treatment of wastewater; to be carried out in two phases (mainstem, then basin)  Ganga river basin clean-up and resulting emissions reductions • Rationale: The current treatment technology (e.g. anaerobic Objective through the treatment of digester or anaerobic treatment system) is not specified. wastewater • Mitigation Plan role: Clean up of the Ganga via the treatment  Wastewater treatment (industrial of wastewater coupled with the capture or avoidance of Focus area/s and domestic) associated methane gases a national priority, serving to  Methane recovery or avoidance further bolster the institutional framework necessary to Type of Action make a lasting and self-sustaining impact through wastewater treatment Scope  Ganga River Basin Stakeholders  GoI, NGRBA, SME on Ganga Regulatory and institutional framework Regulation exists for wastewater treatment but, none is in place for the recovery or avoidance of methane from wastewater. The existing regulation can be improved; only 60 percent of industrial and [26] percent of municipal wastewater is treated. Giving the growing demands, business as usual is not a sustainable option. The Urban Local Bodies (ULBs) have the primary responsibility for wastewater, solid waste and river front management, but actual devolution of functions and responsibilities has been limited, and the responsibilities for urban services overlap considerably across state and local agencies. However, the GoI has developed a new and comprehensive vision for clean-up and conservation of the Ganga. The National Ganga River Basin Authority (NGRBA) was established in 2009. The NGRBA has been given the mandate to develop a multi-sector program (“the NGRBA Program”) for ensuring pollution abatement in the Ganga. PARTNERSHIP FOR MARKET READINESS (PMR) TEMPLATE FOR SCOPING OF MARKET READINESS ACTIVITIES (revised APRIL 23, 2012) 32 Annex IV: Ganga wastewater treatment project Scope On a basin-wide level, this Mitigation Plan condones the implementation of wastewater treatment projects, including greenfield and existing, that will capture or avoid the methane generated from wastewater and thus avoid GHG emissions. The recovered biogas may also be potentially combusted in an energy generating facility, constituting a renewable energy source. Such activities will contribute to the further sustainable development of India with regards to environmental, economic, social and technological sustainability. Boundary Activities under this Mitigation Plan will be restricted to wastewater treatment with methane recovery or avoidance in the Ganga river basin. Recognizing that the Ganga clean-up will take a long time and significant resource commitments, the NGRBA intends to develop a program that balances institutional development and capacity building at an increasing scale: ‒ Program launch: Set up the NGRBA’s operational-level institutions, address the critical knowledge needs, design the investments program and implement the obvious priority investments (most likely Class-I Cities on the mainstem) ‒ Phase I: Extensive wastewater networks and treatment infrastructure will primarily focus on the mainstem ‒ Phase II: This phase will have a broader range, allowing for basin-level activities involving Class-II Towns on the Ganga’s many tributaries Definitive clean-up of the Ganga will also require addressing the multiple other sources of pollution in addition to wastewater, such as, solid waste and non-point sources. It would also require maintaining adequate in-stream flows and other measures for ecological restoration of the river. PARTNERSHIP FOR MARKET READINESS (PMR) TEMPLATE FOR SCOPING OF MARKET READINESS ACTIVITIES (revised APRIL 23, 2012) 33 Annex IV: Ganga wastewater treatment project Mitigation potential Projects will involve the installation of anaerobic digester(s) with methane recovery systems. Typical wastewater treatment (industrial or domestic) projects will either include: - Replacing an existing wastewater treatment system with a new treatment system coupled with methane recovery - A greenfield wastewater treatment system coupled with methane recovery - Wastewater treatment system capacity addition coupled the methane recovery As of 2008, 232 Class-I Cities (< 100,000) in the Ganga river basin generated 11,387 MLD of municipal sewage, but only had a capacity of 44 percent (4991 MLD). Class-II Towns 149 (<50,000) generated 1,024 MLD and had the capacity to treat 8 percent (79MLD). This gap of nearly 41 percent represents very large mitigation potential.* It is estimated that municipal wastewater will be around 120,000 MLD by 2051. This will have a profound impact on the decreasing per capita water availability as the population grows.* MRV Issues Initial MRV will be done at the individual project level, but a centralized authority will be responsible for final verification of emissions reductions. A centralized record keeping system will record important project elements such as: name of implementing entity; technology description; location; date of commissioning; information pertaining to applicable baseline and how baseline was determined, and; data regarding all parameters required for baseline emissions, projects emissions and leakage calculation, including data source. Each project activity will also verify that it does not result in negative impacts to the environment and that it will provide the following environmental benefits: reduction of methane emissions; potential performance improvement of existing wastewater treatment system (in the case of replacement projects); reduction of risk of water contamination; generation of energy from renewable sources (i.e. methane) which may be put to use rather than flared or released into the atmosphere, and; reduction of fossil fuel use due to potential use of methane in energy generation * Reference: Status of Water Supply, Wastewater Generation and Treatment in Class-I Cities and Class-II towns of India. Central Pollution Control Board. 2009 -10 PARTNERSHIP FOR MARKET READINESS (PMR) TEMPLATE FOR SCOPING OF MARKET READINESS ACTIVITIES (revised APRIL 23, 2012) 34 Annex IV: Ganga wastewater treatment project Identification of successes, failures, challenges and lessons learned to date One major problem that has been identified is previous attempts to clean up the Ganga is that, while the GoI is generally able to find the necessary finances to support capital costs, no further provision is made for operation and maintenance after project completion. Local authorities (i.e. ULBs) do not have the means to meet operating expenses and are not as of yet able to collect user fees to this end. Lessons learned from previous efforts are reflected in the NGRBA Program. Some relevant features include: ‒ A comprehensive, basin-level, multi-sectoral approach in contrast to earlier “town-centric” and “end-of-the-pipeline” efforts ‒ Access to the necessary budgetary and financial resources, supplemented by international sources such as carbon markets (Additional resources to be provided by central and state governments, as well as international development partners; urban renewal programs to address infrastructure needs) ‒ Emphasis on the long-term sustainability of investments, through operational mechanisms and capacity building of local providers ‒ Support investments in improving the regulatory and enforcement capacity of environmental management institutions in the basin Next steps and activities to be undertaken to complete MRP Indicator Completion date Set up NGRBA operational-level institutions, address critical knowledge needs 2015 Implement obvious priority investments Before 2020 No untreated water discharged into mainstem Ganga By 2020 Address other sources of pollution such as solid waste and non-point sources Beginning 2030 Maintain adequate in-stream flows Beginning 2030 Ecological restoration of Ganga 2025 PARTNERSHIP FOR MARKET READINESS (PMR) TEMPLATE FOR SCOPING OF MARKET READINESS ACTIVITIES (revised APRIL 23, 2012) 35