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The Ministry of Environment & Natural Resources established the Sri Lanka Carbon Fund to actively participate in the carbon trading business. The fund is a private company, which will facilitate CDM project development within the country and the potential CDM project developers in project development, facilitate financing and other related matters. It will also participate in Carbon Market scheme and to obtain maximum benefit to the country via carbon trading.
The Designated National Authority (DNA) for Clean Development Mechanism(CDM) activities was established in Ministry of Environment& Natural Resources. In addition, two CDM study centers have been set up at University of Peradeniya and University of Moratuwa. A project was conducted on the preparation of National Carbon Finance Business (CFB) Strategy and Preparation of draft CFB strategy. There is also a private-public partnership initiative in progress ,for the establishment of the Sri Lanka Carbon Fund..
Three Kyoto mechanisms are proposed by the protocol to achieve the Kyoto targets in reducing greenhouse gases (GHG) from the atmosphere. Clean Development Mechanism projects are viable among developing countries and developed countries. Sri Lanka being a developing nation, has no direct commitment under the Kyoto protocol . However Sri Lanka has volunteered to participate in CDM projects, thus gaining foreign exchange to the country. Sri Lanka is already involved in several CDM projects, especially through renewable energy sector.
As the National Focal Point for the implementation of the Kyoto Protocol, in Sri Lanka, the Ministry of Environment and Natural Resources functions as the Designated National Authority (DNA) for the implementation of the CDM process. A separate CDM Secretariat has been established within the Ministry. A national CDM policy and strategy has been prepared by the Ministry with financial and technical assistance from the World Bank. Under the national CDM policy the priority sectors identified for CDM project development are renewable energy, forestry and plantation, waste management, industry and energy. At the moment several CDM projects in the Mini-hydro power sector have already been approved by the CDM/ Executive Board/UNFCCC.
The National Environmental Act (NEA) No 47 of 1980 (amended in 1988 and 2000) was enacted with a focus on environmental protection and management. The emission of pollutants into the atmosphere is prohibited under section 23 of the National Environmental Act and the National Environmental (Protection and Quality) Regulations of 1990, Motor Traffic (emission control) Regulation Number 817/6 dated 3rd May 1994, Ozone Depleting substances and National Environmental (Ambient Air Quality) Regulations 1994. Gazette Notification Number 850/4 dated 20th December 1994, Amended Regulations (Air Emission, Fuel and Vehicle Importation standards) Gazette Notification Number 1137/35 dated 23rd June 2000, Amendment to Gazette Notification Number 1295/11 dated 30th June 2003, National Environmental (Air Emissions, Fuel & Vehicle Importation standards) Amended Regulations. Gazette Notification Number 1295/11 dated 30th June 2003, Extra Ordinary Gazette No 1557/14 dated 09th July 2008 and National Environmental (Ambient Air Quality) Regulations 850/4 dated 20.12.1994, amended by extra ordinary Gazette No 1562/22 dated 15.08.2008.
A set of proposed emission standards for stationary sources in Sri Lanka intend to cover all levels of industrial plants and processes listed under National Environment Act No. 47 of 1980. It constitutes a comprehensive set of standards covering a variety of fuels, raw materials, chemicals and pollutants. The recommended standards provide a three tier approach, where the equipment-based standards are first introduced to control emissions, followed by specific process/industry-based standards. Finally, specific pollutants based standards are introduced, covering all stationary sources. Although the Three-Tier approach is developed to simplify the presentation of standards, the process of implementation could bechallenging, particularly with of limited resources. Therefore, it is essential to develop a strategy for implementation.