MINISTRY OF ENVIRONMENTAL PROTECTION, PHYSICAL PLANNING AND CONSTRUCTION. Project:

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1 MINISTRY OF ENVIRONMENTAL PROTECTION, PHYSICAL PLANNING AND CONSTRUCTION Project: Capacity Building for Implementation of the United Nations Framework Convention on Climate Change and the Kyoto Protocol in the Republic of Croatia LIFE04 TCY/CRO/ PROGRESS REPORT With the contribution of the LIFE financial instrument of the European Community

2 Beneficiary: Ministry of Environmental Protection, Physical Planning and Construction Project: Capacity Building for Implementation of the United Nations Framework Convention on Climate Change and the Kyoto Protocol in the Republic of Croatia LIFE04 TCY/CRO/ PROGRESS REPORT Period covered by the report: Date of submission: Prepared by: Višnja Grgasović Head of Section for climate change and ozone layer Ministry of Environmental Protection, Physical Planning and Construction Ulica Republike Austrije 14, Zagreb, Croatia

3 TABLE OF CONTENTS SECTION I - TECHNICAL REPORT 1. SUMMARY OF ACTIVITIES AND RESULTS SINCE THE START PROJECT MANAGEMENT PROGRESS DURING THE REPORTING PERIOD ASSESSMENT OF PROGRESS FUTURE PLANNING FOR THE NEXT PERIOD OF TIME SECTION II - FINANCIAL REPORT LIFE04 TCY/CRO/029 3/20

4 SECTION I - TECHNICAL REPORT LIFE04 TCY/CRO/029 4/20

5 1. SUMMARY OF ACTIVITIES AND RESULTS SINCE THE START Task 1: Analysis and assessment of capacity building needs In this reporting period one of the most intensive part of the project was analysis and assessment of capacity building needs for implementation of the UNFCCC and the Kyoto Protocol in Croatia. In this regard project team has undertaken in-depth analysis of requirements and obligations arising from the United Nations Framework Convention on Climate Change, the Kyoto Protocol and its relevant decisions, particularly from Decision 3/CP.7. The result of this activity is draft study Analysis and assessment of Croatia s capacity building needs for implementation of the UNFCCC and the Kyoto Protocol which will serve as a background document for preparation of national implementation strategy and action plan. MEPPPC organized kick-off meeting with key stakeholders, held on and initial stakeholder workshop held on in cooperation with Croatian Business Council for Sustainable Development. Task 2: National implementation strategy and action plan Project team has prepared initial document which describes purpose, key elements and scope of strategy/action plan, organization and timetable of strategy preparation. There are three time periods which will be covered by the strategy and action plan: short-term period, from 2005 to 2008, ( Capacity building period ); medium-term period, from 2008 to 2012, ( Kyoto period ) and long-term period, after 2012 with time horizon until 2025, ( Post Kyoto period ). Task 3: Drafting of legislation Working Group has prepared a final draft By-law on CO 2 tax which will be in force by the end of Currently, project team is preparing a background documents for National allocation plan. Task 4: Guidelines for preparation of sectorial operational programs The purpose of the guidelines is to provide techno-economic analysis of greenhouse gas reduction measures for the key emission sources 1 in the following sectors: energy, transport, industrial processes, agriculture and waste. The approach used for preparation of guidelines is a bottom-up approach which has following main steps: (1) identification and description of technical emission reduction measures, (2) estimation of emission reduction potential and (3) estimation of marginal costs associated with implementation of technical measures. Project team started with preparation of sectorial guidelines in Energy, Industrial processes and Waste sector which were indicated in previous researches as priority sectors for implementation of greenhouse gas reduction measures. 1 According to IPCC Guidelines key sources are emissions sources which represent 95 per cent of total emissions in selected year. LIFE04 TCY/CRO/029 5/20

6 Task 5: Implementation of monitoring mechanisms EKONERG has prepared Croatia s National Inventory Report 2005 (NIR 2005) for greenhouse gases including CRF reporting tables as required by the UNFCCC and submitted it to the UNFCCC Secretariat in Bonn. The NIR and the CRF cover anthropogenic emissions by sources and removals by sinks of all greenhouse gases in the period in the following sectors: Energy, Industrial processes, Solvent and other product use, Agriculture, Land-use change and Forestry and Waste. Task 6: Kyoto flexible mechanisms According to timetable this activity is starting at the beginning of Some initial activities related to the design of National registry have been started in this reporting period. The representative of project team from EKONERG attended pre-sessional consultations on Registries systems held in Bonn on Task 7: Education and public awareness Croatian Environmental Education Centre (CEEC) has been subcontracted as an External assistance in the task related to education and public awareness. CEEC has started with preparation of educational tools (CD, DVD and booklet) which will be used in educational campaign covering seminars in schools, courses for state administration and business entities. Task 8: International co-operation Although first visits to Czech Republic and the Netherlands, according to the proposed timetable, were planned in April/May 2005 it was decided to postpone these visits to October/November The reason for that postponement is mainly due to the preparation of the NIR (see Task 5) in April and May. Task 9: Task management and reporting to EC A detailed work plan, as an extension of project timetable, was developed in order to give more details on each activity which has to be performed to accomplish results described in Technical description of the project from project proposal. Task 10: Task dissemination Project team prepared a design of climate change web site which will be a central place for information dissemination. It is expected that web site will be fully functional in the next reporting period. LIFE04 TCY/CRO/029 6/20

7 2. PROJECT MANAGEMENT 2.1. MANAGEMENT STRUCTURE OF THE PROJECT Role Company / institution Main responsibilities Beneficiary Ministry of environmental protection, physical planning and Overall project management and reporting to EC construction (MEPPPC) Institutional support to project implementation Providing access to relevant information sources, documentation and databases Ensuring complience of the project results with relevant MEPPP s policies Contribution of financial resources according to budget breakdown structure Partner EKONERG Energy Research Task management and Environmental Protection Institute Technical implementation of the project according to project timetable and work breakdown structure Preparation and dissemination of project deliverables / results Contribution of financial resources according to budget breakdown structure Subcontractors SENTER Internationaal, The Netherlands Consultancy on implementation of Kyoto flexible mechanisms Croatian Environmental Education Centre (CEEC) To produce first multimedia educational tools in Croatia related to climate change process (CD, video, booklet) ; To run initial educational campaign covering seminars in schools, courses for state administration and bussiness entities which represent large greenhouse gas emission sources Energy Institute Hrvoje Pozar Consultancy and participation on (EIHP) preparing National implementation strategy and guidelines for preparation of operational programme for energy sector Adjusting national energy balance to NEIS requirements LIFE04 TCY/CRO/029 7/20

8 2.2. STATUS OF THE STUFF INVOLVED IN THE PROJECT Company / institution Proposed staff Changes / appointments during reporting period Ministry of environmental protection, physical planning and construction Project manager Jasenka Nećak - Višnja Grgasović - Project staff Sandra Krmpotić - Anita Matić - EKONERG Project manager Davor Vešligaj - Valentina Delija-Ružić - Vladimir Jelavić - Project staff Željko Jurić - Andrea Hublin - Snježana Fijan-Parlov - Marko Lipošćak - Goran Janeković - Jasmina Burek - Damir Hotko - Ivana Bokun - Kristina Gorički - SENTER Internationaal Project manager NA - Project staff NA - Croatian Environmental Education Centre Project manager Vladimir Lay - Project staff NA - Energy Institute Hrvoje Pozar Project manager Damir Pešut - Project staff NA - LIFE04 TCY/CRO/029 8/20

9 3. PROGRESS DURING THE REPORTING PERIOD Task 1: Analysis and assessment of capacity building needs In this reporting period one the most intensive part of the project was analysis and assessment of capacity building needs for implementation of the UNFCCC and the Kyoto Protocol in Croatia. In this regard project team has undertaken in-depth analysis of requirements and obligations arising from the United Nations Framework Convention on Climate Change, the Kyoto Protocol and its relevant decisions, particularly from Decision 3/CP.7. The result of this activity is draft version of study Analysis and assessment of Croatia s capacity building needs for implementation of the UNFCCC and the Kyoto Protocol which will serve as a background document for preparation of national implementation strategy and action plan (Task 2). The study is attached to this Progress report. The study covers following topics: I. UNFCCC and the Kyoto Protocol requirements - Purpose and goals of capacity building - Obligations and commitments - General priority areas for capacity building - Experiences of Annex I countries including EITs II. Situational analysis in Croatia - Institutional and organizational framework - Legal framework - Strategies and action plans - Programs and projects - Current practice in preparation of national inventory - Article 4.6 of the UNFCCC - Education and public awareness - Policy and implementation instruments - Financial resources - SWOT analysis III. Capacity building needs - Shortcomings of existing system - Identification and analysis of capacity building needs Under the scope of this task, MEPPPC organized kick-off meeting with key stakeholders, held on The purpose of this meeting was to present objectives, scope of work and expected outcomes of the project. The meeting was attended by the members of National Council for Environment whose role is to monitor and provide recommendations for all strategic documents in the field of environmental protection. Initial stakeholder workshop was organized on The host of the workshop was Croatian Business Council for Sustainable Development. Project managers from MEPPPC and EKONERG made a presentation on project purpose, objectives, scope and expected outcomes. The discussion was mainly focused on new legal requirements and obligations arising from the Kyoto protocol and effects on economic growth and development on national and local level as well as on corporate level. LIFE04 TCY/CRO/029 9/20

10 Task 2: National implementation strategy and action plan The main objective of this task is to prepare national climate change mitigation strategy with short-, medium- and long-term objectives and targets and action plan which stipulates instruments, measures, roles, responsibilities and timetable for implementation. In this reporting period project team has prepared initial document with a plan of actions which describes purpose, key elements and scope of strategy/action plan, organization and timetable of strategy preparation. This document is attached to this Progress report. There are three time periods which will be covered by the strategy and action plan: - short-term period, from 2005 to 2008, ( Capacity building period ); - medium-term period, from 2008 to 2012, ( Kyoto period ); - long-term period, after 2012 with time horizon until 2025, ( Post Kyoto period ). Approach which will be used for preparation of strategy and action plan is in line with European Climate Change Programme, which is reflected in the proposed scope of strategy and organizational framework: - Foreword - Executive summary - Climate change - UNFCCC and the Kyoto protocol - European Climate Change Programme - Greenhouse gas emissions in Croatia - Objectives - Short-term objectives - Medium-term objectives - Long-term objectives - Policy and measures - Energy - Industry - Transport - Agriculture - Forestry - Waste - Cross-sectorial - National emission trading - Greenhouse gas emission taxes - Technology transfer - Sustainable development - Education and public awareness - Kyoto flexible mechanisms - Climate change mitigation scenario - Benefits and threats of strategy implementation LIFE04 TCY/CRO/029 10/20

11 The abovementioned initial document will be sent to members of Working group on Strategy (WG Strategy) which is in the process of formation. The WG Strategy will have 24 permanent members from following institutions: - Ministry of Environmental Protection, Physical Planning and Construction (3) - Ministry of Economy, Labour and Entrepreneurship (1) - Ministry of Foreign Affairs and European Integration (1) - Ministry of Finance (1) - Ministry of the Sea, Tourism, Transport and Development (1) - Ministry of Science, Education and Sports (1) - Office of the President (1) - Croatian Parliament, Working body for Physical Planning and Environmental Protection (1) - Croatian Environment Agency (1) - Environmental Protection and Energy Efficiency Fund (1) - Croatian Chamber of Economy (1) - Croatian Business Council for Sustainable Development (1) - Croatian Bank for Restructuring and Development - Representative of local government (1) - Central Bureau of Statistics - Croatian Power Company (1) - INA Oil industry (1) - Croatia Cement (1) - Energy Institute Hrvoje Požar (1) - EKONERG Energy Research and Environmental Protection Institute (2) Beside WG Strategy, there will be 8 stakeholders consultative groups: - Energy production - Energy supply - Industry - Transport - Agriculture and Forestry - Flexible mechanisms - Education and public awareness LIFE04 TCY/CRO/029 11/20

12 Task 3: Drafting of legislation Working Group has prepared a final draft By-law on CO 2 tax which will be in force by the end of Currently, project team is preparing a background documents for National allocation plan. The final draft of By-law is attached to this Progress report. Task 4: Guidelines for preparation of sectorial operational programs The purpose of the guidelines is to provide techno-economic analysis of greenhouse gas reduction measures for the key emission sources 2 in the following sectors: energy, transport, industrial processes, agriculture and waste. The approach used for preparation of guidelines is a bottom-up approach which has following main steps: (1) identification and description of technical emission reduction measures, (2) estimation of emission reduction potential and (3) estimation of marginal costs associated with implementation of technical measures. The scope of the guidelines is as follows: - Purpose and scope - Methodological approach - Description of sector - Key economic and technological indicators - Key emissions sources - Reference installations - Regulative framework - Greenhouse gas emissions from sector - Emissions reduction measures - Description of key emission source - Identification and analysis of technical emission reduction measures - Primary measures - Secondary measures - Availability and constraints of emissions reduction measures - Emissions reduction potential - Methodological approach - Baseline scenario - With measures scenario - Emission reduction potential - Cost of emissions reduction - Methodological approach - Calculation of marginal costs - Sectorial emissions reduction cost curve - Recommendations Project team started with preparation of sectorial guidelines in Energy, Industrial processes and Waste sector which were indicated in previous researches as priority sectors for implementation of greenhouse gas reduction measures. 2 According to IPCC Guidelines key sources are emissions sources which represent 95 per cent of total emissions in selected year. LIFE04 TCY/CRO/029 12/20

13 Task 5: Implementation of monitoring mechanisms The main goal of this task is to establish mechanism for monitoring of anthropogenic greenhouse gas emissions by sources and removals by sinks and to regularly report national authorities and the UNFCCC on greenhouse gas emissions in line with reporting requirements prescribed by the UNFCCC. In this reporting period project team has prepared Croatia s National Inventory Report 2005 (NIR 2005) for greenhouse gases including CRF tables as required by the UNFCCC and delivered it to the UNFCCC Secretariat in Bonn. The NIR and the CRF cover anthropogenic emissions by sources and removals by sinks of all greenhouse gases in the period in the following sectors: Energy, Industrial processes, Solvent and other product use, Agriculture, Land-use change and Forestry and Waste. The NIR is attached to this Progress report. The Croatian NIR and the CRF are located at the UNFCCC web site (see URL below): ms/2761.php Background documents essential for implementation of greenhouse gas monitoring mechanisms were analyzed, including: Council Decision 93/389/EEC and amending Decision 1999/296/EC, and UNFCCC documents FCCC/CP/1999/7 and FCCC/CP/2002/8. The important condition for successful implementation of monitoring mechanism and preparation of national greenhouse gas inventory is a clearly defined institutional/organizational framework with roles and responsibility of each participant in the process of data collection, analysis, control, verification, documentation, archiving and reporting. Taking these factors into consideration, an institutional framework that include all relevant institutions has been proposed (Figure 3-2). Croatian Environment Agency Ministry of Environmental Protection, Physical Planning and Construction National Steering Committee National Lead Institution: EKONERG - Energy Research and Environmental Protection Institute National Institutions Statistics (CBS) Energy Institute (EIHP) Croatian Center for Vehicles (CCV) Other data providers (CEE, questionnaires) Figure 3-2: Institutional arrangement LIFE04 TCY/CRO/029 13/20

14 The Ministry of Environmental Protection, Physical Planning and Construction, as a National Focal Point for the UNFCCC, is responsible for inventory preparation and communication with the UNFCCC Secretariat. EKONERG - Energy Research and Environmental Protection Institute is a national executive institution (inventory agency), authorized by the Ministry responsible for the overall preparation of annual emission inventories, which include compilation of national inventory, archiving of relevant data, documentation of activity data, emission factors and used methods, validation of data, verification of inventory estimates, and compilation of the inventory report. The Ministry will delegate part of its responsibility to Croatian Environment Agency related to coordination of inventory preparation. EKONERG should continue with inventory preparation, as a part of a future Reference centre for air emission and climate change, based on the long-term programme. Task 6: Kyoto flexible mechanisms According to timetable this activity is starting at the beginning of Some initial activities related to the design of National registry have been started in this reporting period. The representative of project team from EKONERG attended pre-sessional consultations on Registries systems held in Bonn on The main issues of consultations were: Administration of Registry systems implementation of International transaction log, initial lessons from the operation of registry systems and cooperation among administrators of registry systems Transaction checks to be taken by International transaction log. Task 7: Education and public awareness Croatian Environmental Education Centre (CEEC) has been subcontracted as an External assistance in the task related to education and public awareness. CEEC has started with preparation of educational tools (CD, DVD and booklet) which will be used in educational campaign covering seminars in schools, courses for state administration and business entities. Task 8: International co-operation Although first visits to Czech Republic and the Netherlands, according to the proposed timetable, were planned in April/May 2005 it was decided to postpone these visits to October/November The reason for that postponement is mainly due to the preparation of the NIR (see Task 5) in April and May. Task 9: Task management and reporting to EC A detailed work plan, as an extension of project timetable, was developed in order to give more details on each activity which has to be performed to accomplish results described in Technical description of the project from project proposal. LIFE04 TCY/CRO/029 14/20

15 Task 10: Task dissemination Project team prepared a design of climate change web site which will be a central place for information dissemination (see figure 3-3). It is expected that web site will be fully functional in the next reporting period. Figure 3-3: Proposed design of climate change web site LIFE04 TCY/CRO/029 15/20

16 4. ASSESSMENT OF PROGRESS Task 1: Analysis and assessment of capacity building needs Comparing to proposed timetable technical visits to Czech Republic and the Netherlands planned for April/May are behind schedule. The reason for that postponement is mainly due to the preparation of the NIR (see Task 5) in April and May. Project team has prepared a draft version of study Analysis and assessment of Croatia s capacity building needs for implementation of the UNFCCC and the Kyoto Protocol which will be presented and discussed on 2. Stakeholder workshop. Task 2: National implementation strategy and action plan National climate change mitigation strategy and Action plan are the key deliverables of this project. To successfully execute this task it is necessary to assemble competent working group and organize its work. MEPPPC decided to include all relevant governmental, public and private institutions in Working group on Strategy, which will have 24 permanent members in total. Project team has prepared a document with a plan of actions which describes purpose, key elements and scope of strategy/action plan, organization and timetable of strategy preparation. MEPPPC is currently working on formation of a Working group on Strategy, which is behind schedule in comparison with proposed timetable. The reason is the process of selection of members and official approvals. Task 3: Drafting of legislation All activities are in compliance with proposed timetable. Task 4: Guidelines for preparation of sectorial operational programs This activity is in progress. So far EKONERG has prepared following chapters in Energy, Industy and Waste sector: - Purpose and scope - Methodological approach - Description of sector - Key economic and technological indicators - Key emissions sources - Reference installations - Regulative framework - Greenhouse gas emissions from sector Task 5: Implementation of monitoring mechanisms EKONERG has prepared Croatia s National Inventory Report 2005 and MEPPPC officially submitted this document to the UNFCCC Secretariat in Bonn. There has been a delay in preparation of Second National Communication due to ongoing process of contracting institutions and experts which will be involved. All other activities are in compliance with proposed timetable. LIFE04 TCY/CRO/029 16/20

17 Task 6: Kyoto flexible mechanisms This activity is due January Some initial activities related to development of National registry system were performed. Task 7: Education and public awareness This activity is in progress. Task 8: International co-operation Comparing to proposed timetable technical visits to Czech Republic and the Netherlands planned for April/May are behind schedule. The reason has already been explained in Task 1. Task 9: Task management and reporting to EC Management of the task is in accordance with principles of project management and mostly according to proposed timetable. This progress report was due and was submitted in October Project manager will respect the proposed schedule for future reports submission. Task 10: Task dissemination Project team has prepared a design of new climate change web site, which contain all relevant information related to climate change issue. According to the proposed timetable launching of the climate change web site is behind schedule. This issue will be resolved in the next reporting period. LIFE04 TCY/CRO/029 17/20

18 5. FUTURE PLANNING FOR THE NEXT PERIOD OF TIME Task 1: Analysis and assessment of capacity building needs - Techical visits to Czech Republic and the Netherlands are scheduled to October/November Stakeholders workshop is scheduled to October Task 2: National implementation strategy and action plan - 1. Meeting of Working group on Strategy is scheduled to October Task 3: Drafting of legislation - Project team is starting to prepare National allocation plan. Task 4: Guidelines for preparation of sectorial operational programs - Final draft of sectorial guidelines for Energy and Industry and Waste is due November Task 5: Implementation of monitoring mechanisms - Start date for compilation of Second national communication is October Start date for compilation of National Inventory Report is November Task 6: Kyoto flexible mechanisms - This activity is due January Task 7: Education and public awareness This activity is in progress. Task 8: International co-operation - Techical visits to Czech Republic and the Netherlands are scheduled to October/November Task 9: Task management and reporting to EC - 2. Progress report is due Task 10: Task dissemination - Launching of climate change web site is due September/October LIFE04 TCY/CRO/029 18/20

19 SECTION II - FINANCIAL REPORT LIFE04 TCY/CRO/029 19/20

20 PROJECT CONSOLIDATED STATEMENT OF EXPENDITURES TO BE COMPLETED BY THE BENEFICIARY IN THE CASE OF PARTNERSHIP Project n o : LIFE04 TCY/CRO/029 Title: Capacity building for Implementation of the United Nations Framework Convention on Climate Change and the Kyoto Protocol in the Republic of Croatia. Full name of beneficiary: Ministry of Environmental Protection Physical Planning and Construction Reference period: from (dd/mm/yy) to (dd/mm/yy) Total amount without VAT Total amount with non-recoverable Categories of expenditure VAT 1. Personnel ,35-2. Travel 625,00-3. External assistance Durable goods: Real cost Eligible cost Real cost Eligible cost Infrastructure Equipment Prototype Dissemination Sub-total Personnel Travel expenses External assistance Consumables Other costs Overheads Consumable material Other costs Overheads 6.195,43 - TOTAL Real cost Eligible cost Real cost Eligible cost , , Name of project manager: Višnja Grgasović Function: Head of Section for climate change and ozone layer Address: Ulica Republike Austrije 14, Zagreb, Croatia Date: Signature: