As part of the ongoing evaluation of the state’s JI/CDM programme, two external analyses of the programme were completed in 2010. The analysis from Deloitte concerned the organisation, aims etc. of the programme, while the analysis by the international consultancy Point Carbon (PC) focused on the state’s JI/CDM project portfolio and pipeline.
The focus of Deloitte’s analysis is primarily the organisation of the programme, its efficiency and the managerial set-up. Deloitte’s overall assessment is that the programme is administered based on the government’s strategy and objective of the programme. Furthermore, the programme is considered cost-efficient compared to the prices on the secondary carbon market and the chosen form of organisation supports the objective of the JI/CDM-programme in a satisfactory manner. Deloitte’s evaluation concludes that in any case the objective of purchasing 18.5 million credits seems realistic and could be reachable through supplementary purchases within the limits of the already activated funds. Inter alia Deloitte recommends a further clarification of the future objectives and strategies in correlation with the following Kyoto period 2013-2020.
Point Carbon’s review includes 1) an analysis of the existing programme with 61 JI/CDM projects at the beginning of the evaluation, 2) an analysis of the Danish Energy Agency’s pipeline of 15 new projects, and 3) an assessment of the secondary carbon market. Point Carbon concludes that the expected number of credits delivered, dependant of the method of calculation, will be lower or equal to the Danish Energy Agency’s own projection. However, the Danish Energy Agency assesses that a range of conditions, including the projects being relatively mature and being followed closely by the Danish Energy Agency, lead to the conclusion that DEA’s portfolio should be expected to perform better than average.
Moreover, Point Carbon’s evaluation emphasizes that there are many good mature projects in the pipeline. Point Carbon’s assessment was that contracting these projects will assist in ensuring that the Danish Energy Agency achieves the total target of purchasing 18.5 million credits.
The analysis of the secondary carbon market shows that the main part of secondary credits at present time derives from industrial gas projects, in particular HFC and nylon N2O projects, which have reputational and sustainability issues. It is, however, Point Carbon’s assessment that a relatively larger amount of sustainable JI/CDM projects than today must be expected on the market in the end of the period 2008-2012 and that for an additional charge of 0.5-1€ per credit it will be possible to specifically purchase these sustainable carbon credits. The alternative to the secondary market is purchasing verified sustainable credits directly from a project owner, with the possibility of a preceding sustainability evaluation. Subsequently, the Danish Energy Agency has applied the last-mentioned approach.