The Kyoto Protocol is an international legal document that defines qualitative commitments on greenhouse gases (GHG) emission reduction. For achieving its environmental objectives the Kyoto Protocol use so called ’flexible mechanisms’, of which Clean Development Mechanism (CDM) is the most suitable one under conditions of Uzbekistan. CDM is a trading of emission reduction resulted from project implementation in a country that has no commitments on emission limitation. To turn an action (emission reduction) into a commodity (Certified Emission Reduction, CER) is subject to satisfying to definite rules regulated by Executive Board on CDM. Having passed through all the steps and procedures of the preparatory stage that ended up by the registration at the UN body, Uzbekistan is now proceeding to a new phase - actual implementation of activities on emission reduction.

The first registered CDM projects are “Reduction of Nitrous Oxide Emission at “Navoiazot” Plant, Shop 25, Line No. 3” and “Reduction of Nitrous Oxide Emission at “Navoiazot” Plant, Shop 25, Line No. 2”, which are implemented in accordance with President’s Resolution No. 525 dated of December 6th, 2006. It is expected that more 4 similar projects to be registered soon, also implemented by SJSC ’Uzkimyosanoat’ in cooperation with Japanese company ’Mitsubishi Corporation’.

The projects are implemented under technical support and coordination by the Ministry of Economy, in its capacity of Designated National Authority (DNA), and located at 3 shops on nitric acid production at chemical plants in cities of Chirchik, Fergana and Navoi under SJSC ’Uzkimyosanoat’. According to expert estimations, implementation of these CDM projects would secure GHG emission reduction in scope of around 1 million tons of СО2-equivalent per year.

The projects will be financed at the expense of funds attracted by ’Mitsubishi Corporation’, with no warrantees of the Government of Uzbekistan, to be repaid through transferring to the company a part of produced CERs.

The total investment costs of these 6 projects are estimated to US$6 million, while the expected annual CER sales return is about 10 million euros.

Uzbekistan has vast potential for implementation of CDM projects in key economy sectors such as energy, oil & gas, chemicals, municipal services, agriculture and others. The Republic possesses considerable reserve of natural resources, the GDP growth rate is high, favorable conditions were created for foreign investors for capital attraction to the economy of Uzbekistan. Since DNA started its activity the institutional and legal base for CDM implementation has been developed and improved.

Thanks to technical support of UNDP project “Capacity Building on Clean Development Mechanism in Uzbekistan” more than 80 CDM projects were developed, whose current status varies from formulation of Project Idea Note to searching for investors and submission of Project Design Document to UN registration.