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Focus on project finance. Annual report Financing models for the development of renewables

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1 Focus on project financing Annual Report 2011 Financing models for the development of renewable energies

2 standards atmosfair was created in 2004 as part of a research project by the Federal Ministry for the Environment. In it, demanding standards for voluntary compensation were developed. Standards approach If I fly then atmosfair. Compensation is only the second choice, direct avoidance is more effective Climate protection is more important than maximizing donation income Essential component: Awareness-raising, leads to direct avoidance in the long term Climate protection projects Permanent CO reduction 2 Contribution to technology transfer North South Direct help for people on site contribution to local environmental protection - calculation fully scientifically sound documented checked organization & finances non-profit independent efficient transparent responsible 2 atmosfair annual report 2011

3 The atmosfair standards act as a yardstick for the compensation market that has now emerged. atmosfair is a multiple test winner in international comparative studies. atmosfair wind project in South Africa Implementation of cooperation with business travel specialists for travel optimization, including video conferences No cooperation with partners who do not comply with atmosfair standards (e.g. when calculating CO - 2), even if atmosfair would generate high income as a result No compensation of Activities for which there are better and simpler solutions to avoid CO - 2 (e.g. private driving or electricity consumption) Representation of the actual climate impact (see CO calculation), regardless of the industry 2 All projects must meet two standards: CDM ( UN) and Gold Standard (environmental NGOs) Calculation and monitoring of CO reduction in accordance with UN standards 2 Qualified and UN-approved testers (e.g. TÜV) who are liable for errors Documentation of all test reports via the website of the Climate Secretariat of UN No forest projects, only renewable energies and energy efficiency. Joint implementation with experienced partners in developing countries drawing of all climate effects of air traffic (e. B. through contrails, ozone formation, etc.) according to the state of the art (IPCC), so the calculated climate impact is significantly higher than through own emissions calculator: checked by the Federal Environment Agency All data sources and methods are documented on the atmosfair website Low administrative costs: over 90 % of the donation income goes to climate protection projects in developing countries for planning, construction and operation. Donations are tax-deductible, control by the tax office. Demanding legal form ggmbh: including liability and publication in the commercial register Science 3

4 Content contrails over Italy Source: atmosfair ggmbh Foreword Focus on project financing - impact analysis News from our projects Overview: Our projects & reductions Environment: EU - Emissions trading current Reporting Business trip according to the new standard Customized computers for conference centers Tourism: At the ITB We fly atmosfair finances About us: Media, test results, references and partners Imprint Editor: Editor: Title: Design: Edition: Print: atmosfair ggmbh, Dr. Dietrich Brockhagen Petra Kirberger atmosfair project Kenya: Small biogas plants under construction Fabian Spörer Maximilian Spettel Oktoberdruck AG, EMAS certified, 100% recycled paper, certified with the Blue Angel 4 atmosfair annual report 2011

5 Foreword Dear Readers, The door closes quickly, as Fatih Birol, chief economist of the International Energy Agency (IEA) put it at the 2011 climate conference in Durban. If the plans to build coal-fired power plants, especially in developing countries, are carried out as currently planned, the 2 C climate target will no longer be achievable from 2017, because economists assume that the coal-fired power plants built by then will run for many years. I don't know how you feel about it, but as someone who was already there in 1997 in Kyoto, I increasingly get the feeling that the farther and higher it sits, the bigger the dove, which is invoked over and over again. The climate conference in Durban in December 2011 was by no means the breakthrough that we urgently need. We are now so far advanced that climate policy is calculated in years and not decades. The IEA, which, as the coal organization of the world's major energy-consuming countries, does not exactly have the reputation of a green radical organization, made a simple rhyme for the delegates in Durban: Don't wait for a global deal. Act now. You can and should introduce climate protection programs that give your citizens affordable and safe access to sustainable energy. Atmosfair can only join in with this appeal. It is up to you as an individual to drive the energy transition forward, regardless of a global deal. Already today you can - ask for free electricity, gas with a growing renewable share and low-energy mobility. And your atmosfair climate protection contribution also helps! A lot has happened at atmosfair: 2011 was not only the most successful year to date in terms of numbers, many projects were restarted thanks to your support. For companies, together with the Association of German Travel Management, we have created a new global standard for accounting for emissions on business trips. The standard helps to find reduction potential and has already found many users, from small companies to global corporations. At the ITB Berlin, atmosfair was awarded the Green Palm for its commitment to climate protection. And last but not least, atmosfair's queen football reigned for the 2011 World Cup, and atmosfair contributed to the compensation for the flights of the participating teams. Many thanks to all supporters, partners, source: atmosfair ggmbh Dietrich Brockhagen, atmosfair Dr. Dietrich Brockhagen Managing Director atmosfair ggmbh 5

6 Climate protection How your contributions become projects Focus on project financing Source: atmosfair ggmbh The hydropower plant near Esperanza (Honduras) has been delivering clean electricity since 2005 - thanks to the support of atmosfair. At around four million euros, atmosfair made more climate protection contributions in 2011 than ever before. What happens to it atmosfair operates its climate protection projects according to different models, which differ in the relationship of roles and implementation responsibility between atmosfair and its partners. This leads to different opportunities and risks on both sides. We present these models to you here. Atmosfair's work is financed through voluntary climate protection levies. From this grows our responsibility to the donors: The funds should be used effectively. People in developing countries and climate protection should benefit as much as possible. We are committed to the following principles: Fulfillment of CO compensation 2 Innovation and use of technology that directly benefits people Contribution to economic development (jobs, settlement of businesses) and local environmental protection Transparency in the use of funds and low administrative costs Contract projects versus development projects How do climate protection contributions become concrete climate protection? In principle, atmosfair distinguishes between two project models: contract projects and development projects. In contract projects such as the hydropower plant in Honduras, atmosfair supports the partner with payments for proven 6 atmosfair annual report 2011

7 Source: atmosfair ggmbh Source: atmosfair ggmbh Additional benefit: In Nigeria people no longer have to cut as much wood as they use efficient stoves. This saves money and protects the soil from erosion .. Additional benefits: In Honduras, not only is the region electrified, the reforestation of the surrounding area is also part of the program .. -Reductions. The partner is primarily responsible for project implementation. This is different with development projects such as the Kocher project in Nigeria. Here atmosfair is responsible for setting up the project together with a local partner. atmosfair invests in the production, logistics and sales of stoves that still have to be provided in the future, and also bears the entire financial risk. atmosfair has been running both projects for years and invested around 1 million euros for each between 2007 and 2011. The graphic on pages 8 and 9 shows how the funds are being used in the two projects. - atmosfair uses an average of 9% of all donations for fixed costs such as office rent, customer care and public relations. - The external auditors account for almost 4% of the costs in both projects. Employees e.g. of the TÜV critically review the atmosfair project report, both during the validation at the start of the project and during the annual verifications (see graphic on page 21). They are on site and check all information, e.g. the approval of the population, the functionality of the system or how many stoves are actually used, how many jobs were created, ultimately, the amount of savings and the benefits for the people. The process is complex, but required for both CDM and Gold Standard certifications. And it forces the project operator to closely monitor the success of the project. - In addition, the project appraisal also incurs internal costs at atmosfair. Atmosfair uses 1.7% (Honduras) and 3.1% (Nigeria) of the donations for its own staff, UN administration fees for project approval (registration) and the annual test. The project must be documented in accordance with the CDM criteria and accompanied in the annual verification process. Both are labor intensive. In Nigeria, atmosfair is responsible for all steps, in Honduras, on the other hand, atmosfair only took over parts of the project, as the project was already registered with the UN climate secretariat when the contract was signed. Compared to other CDM service providers, atmosfair works extremely cheaply. One of the reasons for this is that its own expertise is so high that atmosfair also allows third parties, such as currently able to offer CDM services to the UN World Food Program in Ethiopia. With this income, the internal audit costs can be largely covered. Example Nigeria: direct help on site - unlike in Honduras, atmosfair needs staff in Nigeria to support the partner on site, e.g. for logistics from customs to the warehouse to the partner, as well as for the development of the sales system and for the continuous improvement of the Cooker technology. In addition, the partner received direct help, e.g. for the technical equipment (transport vehicle, supply of the office in Kaduna with solar energy). Almost 5% of the income was used for this. If all these payments are deducted, about 78% of the climate protection comes from projects 7

8 Focus on project financing, sluggishly used directly for the purchase of stoves for Nigerian households. Atmosfair used this money to finance the purchase of efficient firewood stoves, so households benefit directly from this. If we take into account the work of atmosfair-personal on site and the support of the Nigerian partner, the funding rate is approx. 84%. That's a good number. The magazine Finanztest has found that organizations that work locally, such as when promoting child sponsorships as part of regional development projects, 65% is a good rate. Most of the money in Nigeria is used to buy stoves at the beginning of the project. Since the efficient stoves use 80% less firewood than the traditional ones, the savings are significant. These savings accumulate year after year and have to be confirmed regularly by TÜV and the UN climate secretariat. The first certification for 2009/2010 has already been successful. Take Honduras as an example: Green electricity made profitable In Honduras, our partner as a hydropower plant operator did not need any direct help in setting up the project. The bottom line here was that more than 85% of the atmosfair climate protection contributions came directly to him and the hydropower plant, most of them as advance payments. The support takes the form of a kind of additional feed-in tariff for green electricity and the associated savings. With the expected additional income, the partner was able to make the necessary investments (for turbines etc.). But atmosfair also worked beyond that: The existence of the project was endangered during the financial crisis in 2009, the partner had liquidity problems so that atmosfair had to step in with advance payments for future reductions. In the meantime, 95% of the savings paid have been achieved. In Honduras, the savings per ton have a fixed price that atmosfair and the partner have agreed upon and with which both can calculate. In Nigeria, on the other hand, atmosfair finances the entire project and thus also all -A use of your climate protection contributions Fixed costs atmosfair 9% 100% 91% Use of funds Project auditor (TÜV) 3.7% Of the climate protection income used (blue or green bars), administrative and audit costs go from (orange) as well as costs in the local countries (dark green). The light green bar on the far right shows the amount of money that will immediately reach the people in the project. Use of your climate protection contributions 100% use of funds 9% fixed costs atmosfair Personnel UNO, personnel / (work) project approval in Nigeria 3.1% 1% Technical equipment (e.g. vehicle) 4.7 87.3 84.2 83.2 78.5 3, 7% project inspector (TÜV) 1.7% personnel UNO project approval 91% 87.3% 85.7% 8 atmosfair annual report 2011

9 Since 2007 in Nigeria 78.5% of the contributions to Nigerian households. Corresponds to (contributions from) and approx. Promotion for the purchase of Save80 stoves. Corresponds to a stove price reduction of approx%. Reductions (t / year) since 2007 in Honduras Expected real reduction total approx. T Certified reductions (conservative) total approx. T (not all stoves are found again) Project duration Source: atmosfair ggmbh savings that can be proven during the 10-year duration. Here the costs per ton are initially high, but if the project is successful, they drop well below the costs in the Honduras project. In Nigeria, the actual climate benefit is also higher than the demonstrable benefit. Because the inspectors from the TÜV find fewer cookers than are actually in use during their on-site inspection visits in the households. Many Nigerians are shy when an examiner comes and do not show the stove because they fear that it would be forbidden etc ... but even if such a project should deliver fewer certificates during an examination, the climate protection contributions invested would not be lost: in any case we have provided people with stoves that make their lives easier every day. The atmosfair project mix With all these advantages, the model of your own development projects is attractive, but it means a lot of effort for atmosfair. Few providers of compensation therefore have such projects of their own. Development projects are also associated with considerable financial risk. That is why atmosfair relies on a mix of contract projects that enable the promotion of important renewable technologies. 85.7% of the contributions to power plant operators in Honduras Corresponds to EUR (contributions from) and approx MWh of electricity. Promotion of power plant repair .. Corresponds to the reduction of the electricity price by 20% savings (total) so far certified. Project duration Typical atmosfair development projects are the stove projects in Kenya, Rwanda, Lesotho, Cameroon and India, and the household biogas project in Kenya. The other atmosfair projects are contract projects, but atmosfair mostly manages the CDM process (as in Honduras) and also makes other contributions. In Bolivia, for example, atmosfair brokered the Indian project technology and thus played a major role in bringing the project to fruition. With this type of work your own competence also grows. Greatest success so far on an international level: The Nigeria project was the first CDM project with stoves in Africa that was approved for unlimited size according to the new UN regulations. Projects 9

10 Climate protection Bolivia: Electricity from Brazil nut shells Experiences from a project in Africa In 2009 the company came into contact with atmosfair. atmosfair had worked with a similar approach in its project in Burkina Faso, Africa; the system there was based on wood gasification technology from the Indian manufacturer Ankur. So atmosfair introduced the Indian technology to the Bolivians. A Bolivian-Indian joint venture was founded and the plant was finally ready in March 2012. atmosfair assured the project a feed-in tariff for the expected savings, which enables economical operation. In the power plant, the nutshells are converted into gas. The Amazon basin extends far into the north of Bolivia. The area is sparsely populated and there is hardly any infrastructure. In the villages around the border town of Cobija, many people live on Brazil nuts that they collect in the rainforest. The nuts come from wild stocks; their use is a convincing reason for the population to preserve the rainforest. Later the Brazil nuts are peeled and mostly packaged for export.What remains are thousands of tons of nutshells, which have an excellent calorific value. The Brazil nut exporter Tahuamanu came up with the idea of ​​using this woody residue and generating electricity from it. But he lacked the technology to successfully implement the project. Source: atmosfair ggmbh Source: atmosfair ggmbh Project with a pioneering role atmosfair is thus supporting a project that is taking on a pioneering role for the energy supply in the entire Amazon region. So far, electricity there has been generated almost exclusively with diesel generators, and it is distributed via countless isolated island networks. Water is abundant, but the landscape is flat. Huge reservoirs would be required to generate electricity from hydropower. Biomass has the greatest potential as a renewable energy source. The 700 kW plant is now to feed so much green electricity into the local grid that more than 1 million liters of diesel can be saved annually. That corresponds to about tons per year. Approval as a Gold Standard microscale project is imminent. Now it remains to be seen whether the technology delivers what it promises. Since this is one of the first projects of this kind in the world, this is not yet a matter of course! At a glance ... Technology: Local environment: Further advantages: Project partner: ... and in detail: Gasification (pyrolysis) of woody harvest residues, replacement of fossil fuels, additional fertilizer added value in rural areas, jobs in agriculture, transport and technical support of the plants in Tahuamanu, Brazil nut exporter 10 atmosfair annual report 2011

11 Lesotho: Climate protection right down to logistics Source: atmosfair ggmbh In Lesotho, South Africa, efficient stoves have been sold since mid-2011. Next to the stove: a black plastic cooking box in which the pot can ferment for 20 minutes with boiling water without having to add more firewood. In Lesotho, felled wood is the preferred fuel for cooking. But only a few areas are forested; too little for enough wood to grow back. Two thirds of the bush forests have been destroyed in the past 25 years. The introduction and distribution of efficient Save80 cooker sets will reduce clear-cutting and with it the associated soil erosion. The innovation brings even more: families spend significantly less on firewood and cooking produces less smoke, which has made women and children particularly sick. The use of stoves also has a global effect: each individual saves around 2.5 tons per year. New investment model DHL is the investor in this project, atmosfair is carrying out the project on behalf of DHL. DHL receives the certificates, voluntary climate protection contributions from atmosfair users for flight compensation are not used for the project. On the contrary, atmosfair receives money as compensation for its work, which lowers administrative costs, as well as part of the - certificates. At a glance ... atmosfair partner Solar Lights, a local medium-sized company, has been offering Save80 stove sets in the South African country since mid-2011. Solar Lights has been able to sell through efficient stoves under the management of the native German Michael Hönes. Traditional fireplaces are to be replaced by firewood stoves by the beginning of 2013. Climate-friendly transport Deutsche Post DHL is financing the project. The savings are used for GOGREEN shipping, which Deutsche Post DHL customers can use to send their shipments in a climate-friendly manner. Deutsche Post DHL also plays a key role in project logistics. It transports the stove sets from Germany to Lesotho. Technology: Local environment: Further advantages: Project partner: Project financier: ... and in detail: Efficient firewood stoves save 80% energy Less smoke development, avoidance of deforestation, avoidance of erosion Lower costs for household energy, support of local women's initiatives Solar Lights Deutsche Post DHL lesotho- efficient-firewood-stoves / projects 11

12 Cameroon: Start of a new stove technology The local stakeholder consultation in Cameroon Source: atmosfair ggmbh Poster of an Envirofit stove sales show by atmosfair partner Pro Climate International. It is already the fourth atmosfair firewood stove project in Africa: after Nigeria, Lesotho and Rwanda, atmosfair has now also started selling efficient stoves in Cameroon. The scenic and biological diversity is unique in Cameroon. But massive deforestation endangers these treasures. According to an FAO study, the country loses around hectares of forest area every year. Given the population growth, the need for firewood will continue to increase. The mangrove forests along the coast are particularly threatened by development. The efficient stoves should help the population in the south-west and Littoral regions to reduce their wood consumption. The atmosfair partner organization Pro Climate International, which has a lot of project experience in the country, is also based there. In the summer of 2011, the local stakeholder conference took place in the city of Buea. Potential users, NGOs and those in charge of the regional institutions discussed the project as an important support in the fight against poverty and climate change. In addition to this meeting, atmosfair also provided substantial support for a study on wood consumption. Given the currently planned project size of 3,000 to a maximum of 6,000 stoves, approval according to the UN CDM procedure would be too costly. That is why atmosfair is developing this project according to the simpler Gold Standard, in which the UN and liable auditors are not involved. This was approved by the atmosfair advisory board, which ensures that this remains the exception for micro-projects. atmosfair is responsible for the Gold Standard support and project management. Pro Climate International manages sales, marketing and monitoring. Atmosfair takes over the pre-financing together with the stove manufacturer Envirofit. Thanks to the compensation, atmosfair was able to reduce the cost of a stove for local users from 25 to 13 US dollars. At a glance ... Total savings: Local environment: tons per year Less smoke development, reduction in deforestation Technology transfer: Efficient firewood stoves Further advantages: Lower expenditure on firewood and less time spent on collecting wood Project partner: Pro Climate International and in detail: Cameroon-efficient firewood stoves 12 atmosfair annual report 2011

13 Other projects Source: atmosfair ggmbh Source: Deutsche Welle Local workers built the small biogas plants. Kenya: Small biogas plants In Kenya, biomass is the most important source of energy for the population. In the Nairobi River Basin region, west of Nairobi, atmsofair supports the construction of small biogas plants. Many thousands of dairy farmers live here, mostly keeping two to three animals. You can operate the biogas plants using cow dung or other agricultural waste. This replaces up to 10 kg of firewood every day, which families have used to run their stoves up to now. In addition to the biogas, nutrient-rich manure is produced, which the farmers can spread on their fields. atmosfair subsidizes smallholders with 100 euros per system. In cooperation with a microfinance bank, users can also pay off the system costs in installments. Both of these have significantly increased the demand for biogas. The project partner SES has already implemented more than 120 systems, the inspectors from TÜV Nord were on site to check the project. They control how much is actually saved, whether the materials are of sufficient quality so that the systems can actually last 20 years and whether the craftsmen are sufficiently qualified. Your report is the prerequisite for the registration of the project and recognition by the UN Climate Secretariat. The farmers receive additional income from the power plant. India: Electricity from harvest residues For power plant operator Anand Chopra from the Indian project partner KPTL, 2011 was a successful year: Electricity generation from the remains of the mustard harvest ran without major interruptions, which compensated for the losses from the production standstill in 2010 due to the drought. There has also been progress in the use of fly ash as a waste product: in contrast to traditional brick production, it is only sun-dried and thus saves energy. KPTL has now applied to the Indian authorities for approval as a building material. atmosfair was on site in summer 2011 to support the review of the savings by TÜV Süd. The power plant has saved almost tons within two years. Deutsche Welle films on location Deutsche Welle has made a film about the green power plant in the middle of rural Rajasthan. It can be viewed on atmosfair.de or on the Deutsche Welle TV website: Projects 13

14 Other projects Biomass for cold India: stoves from local production Source: atmosfair ggmbh atmosfair employee Robert Müller with local partners. The efficient stoves are also well received in India. Direct solutions for climate protection that is what atmosfair offers its numerous partners from the tourism industry. This also includes, for example, environmentally friendly forms of air conditioning. After flying, hotel air conditioners are one of the biggest sources in tourism. While solar cooling cannot yet be used on a large scale for technical and financial reasons, the use of biomass opens up interesting possibilities. In Sri Lanka, atmosfair has already had good experience with biomass boilers. This technology is now to be further developed and supplemented with a so-called absorption refrigeration machine. This machine makes it possible to generate cold from hot water or steam. In combination with biomass boilers, the result is a particularly elegant and climate-friendly solution: In such a construction, a single boiler can supply a hotel with energy for hot water, for laundry and also for cooling, approx. 80% of the total energy consumption. Calculations by atmosfair show: If renewable or residual biomass is available, the concept is also cheaper than conventional air conditioning systems in the medium term. Atmosfair is currently looking for partners from the hotel industry who are interested in setting up a pilot project. Deforestation, soil erosion and floods in the Indian state of Madhya Pradesh too, the high demand for firewood has fatal consequences for nature. The supply of biomass for poor households is also expensive and takes a lot of time. An efficient firewood stove. which is tailored to the needs of the rural population is intended to remedy this. atmosfair partner Parikrama Energy Services (PES) developed such a stove in three years. PES is firmly rooted in the region and works closely with representatives of the village communities around the city of Jabalpur. Thanks to the financial support from atmosfair, PES can now offer the stove at a heavily subsidized price. He only needs half the previous amount of firewood. The validation of the project by the Gold Standard has started. At the official stakeholder meeting, i.e. the meeting of all those affected and involved, the project was presented to the local population in September 2011 and was very well received. PES has already sold around 500 stoves. The project is to be gradually expanded to several thousand households. 14 atmosfair annual report 2011

15 Other projects Indonesia: Composting rubbish Rwanda: Efficient stoves Lesotho: The houses are also insulated in a climate-friendly manner. Source: atmosfair ggmbh Source: atmosfair ggmbh Sustainable waste management is now also possible as a UN climate protection project. Since 2001 there have also been efficient stoves in Central Africa. There is no functioning garbage disposal in the poor metropolitan areas of Indonesia. People have to dispose of their household rubbish in the middle of residential areas. The connection to existing, huge landfills is not a real alternative from a climate perspective, as they are run without any management. atmosfair supports the partner organization BORDA, which introduces sustainable waste management at district level in self-managed composting and recycling centers. So far it has been difficult to implement such projects as a UN climate protection project. Because according to the UN methods, the methane emissions of the individual illegal garbage heaps should actually be measured in order to be able to quantify the savings achieved by the project. An impossible undertaking. atmosfair has succeeded in having an addendum to the existing UN method approved. It is now permissible to use the avoided connection to large landfills for the calculation of the emission reduction. Atmosfair has thus opened the door for similar projects under the UN CDM. Because only with this addition is it possible for projects for all people to contribute to sustainable and climate-friendly development, including those who do not yet have higher emissions due to poverty, e.g. caused by the landfill, atmosfair has launched its first project in Rwanda. As in other African countries, efficient cooker systems are to be used in this central African country, thus reducing wood consumption and the climate-damaging effects of traditional cooking. Rwanda is very densely populated. On average, more than 390 people per km2 live here - more than in any other African country. The demand for wood cannot be met sustainably. In addition: in Rwanda the stoves are also fired with charcoal. This is very resource-intensive and has a particularly bad climate balance. 9 kg of wood are needed to produce 1 kg of charcoal. Thanks to the efficient cooker, the intermediate step to charcoal production is made superfluous and thus a lot is saved. The Kigali-based small company ENEDOM is responsible for on-site implementation. EN EDOM takes on the training of the users so that the enormous savings potential of the cooker system is achieved. So far, 500 stoves have been delivered to Rwanda as part of a pilot phase. At the same time, work is underway to ensure that the UN approves the project as an official climate protection program. Registration as a gold standard project is also planned. Projects 15

16 Other projects Workers lay pipes for the water supply in Sri Lanka. Source: atmosfair ggmbh Sri Lanka: Small hydropower plant In Sri Lanka, atmosfair is supporting the construction of a small hydropower plant. Special plastic pipes are used that have not previously been used in Sri Lanka. They are very light and space-saving, so that the pressure line can also be laid in impassable terrain without having to cut a too large aisle. At the beginning of 2011, the stakeholder meetings with the local population took place in Koslanda in the province of Uva. The small hydropower plant is scheduled to go into operation in mid-2012 and supply households with green electricity. India: Small biogas plants Since 2006, thousands of biogas plants have been in operation in southwest India and are reducing the deforestation of the forest. Tons are saved every year. In the mud brick containers, the cow dung ferments to gas. Everyday life becomes easier for the families: they no longer have to collect wood and the air in the houses is free of smoke. The Gold Standard project is being marketed and developed by Women for Sustainable Development and ADATS. Both NGOs have a lot of experience with development projects in the region, the ADATS presented a video about the construction of biogas plants in Karnataka. It can be viewed on the atmosfair website. The small biogas plants are operated with cow dung. Source: atmosfair ggmbh South Africa: information boards at a stakeholder conference .. Source: atmosfair ggmbh South Africa: wind farm The atmosfair project on the Cape in South Africa has made great progress. Together with the local Oelsner Group, atmosfair is planning the construction of the Kerrifontein wind project. 14 turbines are to be built. The public hearing as prescribed by the Gold Standard took place in July 2011. The project is now officially included in the register. The environmental impact assessment financed by atmosfair was also completed. The project thus fulfills another requirement for receiving a feed-in tariff for the sale of the electricity generated. The process includes an official application in a bidding process. Construction is scheduled to begin at the end of 2012. 16 atmosfair annual report 2011

17 projects in Germany Source: atmosfair ggmbh The results and actions of the Heinrich Mann School in Berlin-Neukölln were varied. -Amosfair does not count savings from projects in Germany because they are already recorded in the Kyoto system and are counted by Germany in its inventory. Schools as energy-saving champions Since 2009, atmosfair has been sponsoring initiatives for effective and innovative climate protection as part of the energy-saving championship competition for schools. Atmosfair has taken on the sponsorship of the Heinrich Mann School in Berlin. Many took part: class groups and elective courses, parents, the director, the caretaker and an energy and expert office. Together they looked for ways to save on heating, took part in the photo competition Show your picture of the climate !, initiated a collection of old cell phones and a climate breakfast. atmosfair supports the school with euros. She wants to put the money into building a small wind turbine. In addition, an energy self-sufficient space is to be created in which the power supply is provided entirely by renewable energies on site. atmosfair thus supports the development of environmental awareness among children and young people and contributes to the use of environmentally friendly technologies in another school. The competition is an action by Klima sucht Schutz and the BMU. Project sponsor is online.More information: Climate education in schools: the fifty-fifty project This is how saving energy starts very small: With the fifty-fifty initiative, schoolchildren are looking for ways to save energy in everyday life. Schools can save hard cash with this campaign: half of the energy costs saved are paid directly to the schools by the school authorities. On average, schools reduce their heat consumption by 80 MWh and electricity consumption by kWh. The result is every year 25t less and euros more in the school budget! atmosfair again financially supported the fifty-fifty campaign in 2011, and a total of 18 schools have now benefited from the support. Projects 17

In addition, atmosfair also develops gold standard micro-scale projects. These small projects are intended to open up new technologies and countries in which the conditions for larger projects are not yet met. Bolivia: Electricity from Brazil nut shells technology mediated by atmosfair, contract concluded with project operator Gold standard validation completed, registration is imminent India: Efficient firewood stove Contract between atmosfair and project operator concluded 500 efficient stoves locally produced and sold Project plan in validation Cameroon: Efficient firewood stoves Contract concluded between atmosfair and project operator 500 efficient stoves produced and sold Project plan in the process of validation Sri Lanka: Small hydropower plants Contract between atmosfair and project operator concluded Plant under construction Local stakeholder meeting successfully concluded Key Project in operation Project in approval Project in planning The terms used in the project descriptions such as verification, validation or registration are explained in the graphic on page 21. 18 atmosfair annual report 2011

19 -Reduction, obligation and fulfillment of climate gas reduction, provided or contractually bound Total by 2020 Honduras: Small hydropower plant 15.0 13.0 20.0 9.0 26.0 33.0 26.0 142 Nigeria: Efficient firewood stoves 0.5 4, 0 9.0 23.0 42.0 152.6 231 India: power generation from harvest residues 11.0 43.0 28.0 36.0 35, Thailand: biogas from wastewater 2.0 5.5 5.5 5.5 5.5 27.5 52 India: Solar lamps 1 (1.0) (2.0) (2. The project in Burkina Faso is not included as the reductions are used for the BMU's climate protection initiative. 1 Numbers in brackets mean that the projects run, but atmosfair does not offset the reductions because the formal CDM verification has become too expensive for a small project. 2 There can be a period of up to 2 years between the receipt of the donation and its use in a climate protection project. Therefore, the income from the reporting year 2011 presented as reduction obligations to be provided in 2013. Obligations fulfilled The table shows the climate gas reductions that the individual atmosfair projects should or have already achieved in accordance with the funding agreement with the project operator. This is offset by the savings that the projects have to generate so that atmosfair can meet its obligations towards the donors. It is taken into account that up to two years can pass between the time of the donation and the reduction in a climate protection project, because every climate protection project requires a longer start-up phase (see page 21). The comparison of the reduction obligations through climate protection contributions received with the achieved or contractually bound climate gas reductions from the projects shows that atmosfair has fulfilled all obligations since its first year of operation in 2005. Projects 19

20 Environment emissions trading: prices plummeted Giving the environment and its use a price: This is the principle behind European emissions trading (EU ETS). The currency is emission certificates. How much is a ton worth in this trade? In spring 2011, a CER, an emission allowance from a climate protection project in developing countries in the EU, still cost around 13 euros. A year later the price dropped to 4 euros. Is climate protection so cheap? Start of allocation - Certificates Annex 1 previous - emissions t t Annex 2 previous - emissions t t atmosfair does not participate in emissions trading. Nevertheless, the EU-ETS is an important point of reference: In addition to voluntary climate protection contributions from individuals, atmosfair also receives contributions from companies to offset their business trips. For them, the price is important, even if atmosfair can show that you cannot set up projects with integrity for 4 euros. - Reduction of actual trade - output t sale 500 t actual - output t purchase 500 t The target of reduction has been achieved. Plant A made money selling the certificates. Plant B has - saved costly investments. Certificates are traded in the EU ETS (source: UBA). The problem is: Emissions trading is an artificial market that depends on many factors - economic development, the politically determined upper limit for emissions, the price of oil, etc. - but only little on how expensive it actually is to avoid emissions is. The principle of emissions trading The idea is simple: each of the companies that fall under the EU ETS must show pollution rights for their emissions. The governments specify the amount of certificates available on the market and thus determine the total amount of emissions emitted. If a company's emissions are greater than the amount of its entitlements (see Appendix 2 in the graphic), it must purchase additional certificates that another company does not need (in the graphic Appendix 1). The tighter the supply of certificates, the more expensive they become and the more direct investments in greenhouse gas savings are worthwhile. Fewer emissions too many certificates In theory, the current price should reflect the actual avoidance costs of a ton. In practice, however, the certificate price has fallen because the governments have issued too many allowances. In addition, the rise in emissions has been curbed by the weak economic development in the EU countries after the financial crisis. In addition, the industry lobby has succeeded in enforcing numerous exemptions. So companies have certificates left over that they can save. And because there is no price pressure, companies - depending on the economic recovery - may not make any further climate protection efforts until 2015 or after that. The EU is considering taking up to 1.4 billion allowances from the market in order to stabilize the price. Certificates from the CDM climate protection measures in developing countries are cheaper and quicker to implement than in industrialized countries. In order to use money as effectively as possible for climate protection, EU emissions trading allows savings to be made from other parts of the world for your own balance sheet. 20 atmosfair annual report 2011

21 Typical sequence of a CDM Gold Standard project atmosfair in cooperation with partners, authorities and given deadlines. 1 Examination of the project idea This is possible via the United Nations Clean Development Mechanism (for more on the CDM, see box below). While some CDM projects have doubts about their additionality, i.e. the question of whether they would not have been created without climate funding, this is doubly guaranteed in the CDM projects by atmosfair. On the one hand, atmosfair does not buy in the certificates market like other compensation providers do, but essentially supports self-supervised and self-developed projects. In addition, the Gold Standard checks the additionality of the projects separately. atmosfair uses the mechanisms of emissions trading for a practical purpose: atmosfair proves the results of the use of its climate protection contributions at UN level via the prescribed project audits by liable auditors, publication obligations on the UN websites, stakeholder participation and the permanent shutdown of certificates. Long-term financial commitments for sustainable climate protection atmosfair usually accompanies the projects from the start, the financing is often provided in advance, and the contracts are long-term. The local partners submit a financing plan for longer periods of time so that the real reduction costs can be well calculated. Since 2003, they have saved a total of around tons on paper. That is about as much as was emitted in Germany in 2010 as a whole. The EU has now pulled the emergency brake and excluded such projects from EU emissions trading from 2013. But so far, the large number of certificates from industrial gas projects has pushed the price down further. The CDM has come under pressure in recent years. Projects with the industrial gases HFC 23 and N2O are considered particularly critical. Half of all certificates distributed so far come from ten such projects in Korea, India and China. Both greenhouse gases can be avoided easily and inexpensively. So simple that some project operators are suspected of only running the systems to generate lucrative certificates. There are also doubts about Chinese wind farms. 90% of these systems are registered with the UN as CDM projects, although the expansion is generously supported by the state. China is now the world's wind power leader. So it can hardly be said that the wind farms were only made possible by the money from the certificates sold and are therefore also a central criterion for recognition as a CDM project. Environment 21

22 Position: compensation yes, climate neutral no. Can you fly climate neutral? The taz asked atmosfair at the beginning of 2012. Some in the climate-neutral industry did not like our answer: The word climate-neutral goes further than offsetting. Climate-neutral suggests that it no longer makes a difference for the climate whether I fly, take a train using renewable energies or stay at home, because it is climate-neutral. However, this is not true, especially when it comes to flights, which is why atmosfair speaks of compensation here. The term already says that it is not the ideal solution. Organizations such as the German Advisory Council on Global Change (WBGU) have shown that our society must fundamentally transform in order to comply with natural climate protection requirements. Technological innovation, such as the use of renewable energies, is a necessary part of this, as is the more conscious use of natural resources. However, it is currently foreseeable that these transformation processes will take place too slowly and that the climate will be damaged, with consequences for people around the world. atmosfair is taking on a task in this transformation process: there is currently no technical solution for air traffic like those who travel by train invest in the rail system. problem-free biofuels, or the zero-emission aircraft. Just as the rail ticket with renewable energies already exists today, in the electricity sector small hydropower or wind turbines, at some point there will be a renewable solution in the aircraft industry, perhaps the solar hydrogen aircraft. As long as this solution does not exist, air passengers can use atmosfair to offset the greenhouse gases from their flight. Climate impact of air travel more than just a climate-impacting process Contribution to global warming * (in relation to) Direct ozone formation Decrease in methane -CH 4 Direct direct sulfate Water vapor Nitrogen oxides generated soot The CO emissions are only a fraction of the climate impact of a flight. Sun shielding particles Formation of contrails Formation of cloud clouds from ice 1.0 0.8-0.5 0.05 0.1-0.1 0.3 0.5-3 Total: 1.9-4.7 source : IPCC (2007) The climate effects of flying are diverse. You cannot make them neutral. 22 atmosfair annual report 2011

23 Emissions trading with little effect Since January 2012, airlines that take off from or land at airports in the EU have had to hold allowances for their emissions. They receive 80% free of charge, the airlines have to bid for around 15%. This is what the EU Emissions Trading Directive provides. This is the first time that emissions from air traffic will be restricted across the EU. By 2020, the permissible emissions should remain at 95% of the level of. In fact, however, emissions from air traffic have since grown significantly above this mark. For this increase, the airlines have to buy authorizations from other companies in the trading system, e.g. from the electricity, cement or steel producers. 2.5 t / 0 1.1t / 0, for which the EU issues emissions trading Not covered by EU emissions trading: climate impact of non- emissions vs. + additional climate impact (non- emissions). Can you fully compensate with atmosfair by building up renewable energies: Whether the foreign airlines will comply with the EU requirements will only become apparent in April 2013, when American, Chinese or Indian airlines will also have to surrender certificates in the EU. At the beginning of 2012 there was considerable legal, economic and political resistance from states and airlines. Important pollutants left out Unfortunately, the directive has weak points from an environmental point of view. On the one hand, it does not regulate all greenhouse gases, but only the pure emissions (see also the graphic on p. 20). But they only make up a third of the total climate impact from air traffic. However, since the other pollutants do not occur in the same way on all flights and their climate impact depends on external and changing circumstances such as flight altitude, humidity, etc., it will hardly be possible to include them in the EU directive. Is climate protection cheaper than coffee before departure? The main problem, however, is different: the entire EU emissions trading system does not currently lead to investments and concrete reduction measures in European industry. Because the prices for permissions are in the basement. As a result of the recession and financial crisis in the EU, emissions decreased because industry produced less (see also p. 20). Air traffic can benefit from this and from other sectors. 0.4 t / 2.5 climate impact per passenger: approx. 4 t 4 t / 92 EU emissions trading only covers part of the overall climate impact of a flight. atmosfair shows the full costs that are necessary to offset the entire climate impact of a flight by building up renewable energies. buy the necessary permissions for its growth at cheap prices. The federal government also comes to the conclusion that the effect [of emissions trading, editor's note. R.] on the forecast growth in demand will be extremely low (Bt-Drs. 17/8264). Bills show that at the current certificate price for passengers, the ticket price should only increase by around 2 euros even on a long-haul flight - that's less than a cup of coffee at the airport. The atmosfair approach, on the other hand, reflects the full climate costs, and above all: atmosfair uses the voluntary climate protection contributions directly to reduce and build an energy system with renewable energies worldwide .. Environment 23

24 Travel Amount Unit Kilometres km Miles miles Segments 2 21 City pairs 5 Average segment distance in km km Average segment distance in miles miles emissions Amount Unit According to VDR 11.6 tons per segment, average 0.55 tons per passenger kilometer, average 187 g / pkm per passenger mile, average 301 g / pm According to other methods 5 DEFRA / GHG Protocol 10.5 tons ICAO 9.1 tons VFU 12.1 tons 1 Nautic miles 2 One person, one way, from origin to destination 3 Total distance of all segments divided by number of segments 4 Product of number of passengers and kilometers traveled 5 For further information on other methods and global warming impact, see glossary Fuel Amount Unit Fuel consumption total 4,3 Tons fuel Fuel consumption in altitudes> 9 km 3,2 Tons fuel Share fuel use in RFI altitudes (> 9 km) 82% Average fuel consumption (per 100pkm 4) 5.6 liters Global Warming impact 5 Reporting period: 01/01 / / 31/2011 Unit in altitudes <9 kilometers 3.3 tons in altitudes> 9 kilometers s 10 tons + RFI 2 21 tons + RFI tons + RFI 4 40 tons p. 7 Report in compliance with VDR - reporting standard Companies on business trips: Cooperation with the Association of German Travel Management (VDR) - Bilanz First: 20% advantages for companies Economy 56% Worldwide applicability Business: 24% comparability of CO2 emissions Flight - Summary transparency basis for Optimizing travel policy The VDR standard records and calculates the balance sheet for all relevant areas of a business trip. Companies face many requirements when it comes to climate protection: Customers demand transparency, investors are increasingly relying on sustainable companies and employees want more commitment to climate protection with which they can identify. Legislation is also developing: countries such as France have recently made it mandatory to record business trips, and the EU's existing glossary directive already explicitly requires reporting on environmental and climate issues in the management report. Unlike other sources of emissions, business travel is clearly visible, and in the non-manufacturing sector they make up a significant proportion of total emissions: in the service sector, it can quickly be more than half of total emissions. Emissions balances so far with little informative value Nevertheless, there has been no standard for recording business travel up to now. Although there were methods to calculate from different modes of transport. But none of them were designed for the special internationality and data situation of the players in the business travel industry. International travel through several countries with different modes of transport caused particular difficulties. The result was emission balances with little informative value: the figures are imprecise and not comparable. 24 atmosfair

25 It is difficult to decide on the basis of such balancing measures in the travel management of a company. Cooperation VDR-atmosfair That changes with the new VDR standard. The Association of German Travel Management e.v. (VDR) presented it with atmosfair at the autumn conference for business travel and mobility management 2011. This was preceded by intensive professional cooperation in which the standard was drawn up and coordinated. The VDR is the business travel association for Germany with an important impact on the European and international associations. Its members are primarily companies, from SMBs to large corporations for whom business travel is important. There are also service providers and transport companies such as travel agencies, airlines or special travel credit cards. The sustainability committee of the VDR, the participation of experienced service providers and a separate review process with companies of all sizes ensured that the standard does what it should: Worldwide applicability, minimum accuracy and easy handling in daily business travel practice. From door to door and valid worldwide The main challenge for the VDR standard was to reconcile these three requirements. That was successful, and it is now possible to balance and analyze emissions in a uniform and high-quality manner. The standard covers all elements of a door-to-door business trip: flight, train, rental car / motor vehicle, hotel and events. The calculation methods are standardized worldwide, so that a train journey in Peru can be recorded in exactly the same way as a hotel booking in Moscow. With atmosfair, the VDR has gained an experienced partner to create the methodology. The quality of the atmosfair calculation methods has been confirmed in a large number of studies, not least by the Federal Environment Agency. [...] I am sure: Not only will the climate benefit from the new accounting standard, but companies will also benefit from greater energy efficiency and lower costs. Environment Minister a.d. Röttgen on the presentation of the VDR standard The results are thus comparable and provide the necessary basis for companies to record reduction potentials, to review the company's travel policy, to change it precisely and finally to evaluate changes made. Building on existing methods The VDR standard builds on existing and verified calculation methods such as those of the ICAO, the IPCC or the Greenhouse Gas Protocol. This is important to ensure international reach. The further development of the VDR consisted of standardizing the existing system boundaries (which is part of the business trip), as well as refining existing methods to such an extent that a minimum level of accuracy is achieved that allows a change of direction in the direction of climate protection in the company. For example, the booked car class, hotel category or flight class must be mapped. Company 25

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