CDM PROJECT ACTIVITY

Clean Development Mechanism (CDM)

What is the clean development mechanism?

The CDM allows emission-reduction projects in developing countries to earn certified emission reduction (CER) credits, each equivalent to one tonne of CO2. These CERs can be traded and sold, and used by industrialized countries to a meet a part of their emission reduction targets under the Kyoto Protocol.

The mechanism stimulates sustainable development and emission reductions, while giving industrialized countries some flexibility in how they meet their emission reduction limitation targets.

The CDM is the main source of income for the UNFCCC Adaptation Fund, which was established to finance adaptation projects and programmes in developing country Parties to the Kyoto Protocol that are particularly vulnerable to the adverse effects of climate change. The Adaptation Fund is financed by a 2% levy on CERs issued by the CDM.

Register a project activity

In accordance with the modalities and procedures for the CDM:

"Registration is the formal acceptance by the Executive Board of a validated project as a CDM project activity. Registration is the prerequisite for the verification, certification and issuance of CERs related to that project activity". paragraph 36 (a) Annex decision 3/CMP.1 (735 KB)

The Designated Operational Entity shall;

• Submit CDM Project Activity Registration Form

The designated operational entity shall submit to the Executive Board, if it determines the proposed project activity to be valid, a request for registration in the form of a validation report. (The registration form is under Executive Board consideration)

• Include the project design document (CDM-PDD),
• The written approval of the host Party as referred to in paragraph 40 (a) Annex decision 3/CMP.1 (735 KB) and an explanation of how it has taken due account of comments received.

• Pay Registration Fee

The Executive Board at its sixth meeting agreed on to charge an initial administration fee at registration stage ("registration fee"). The Conference of the Parties serving as the meeting of the Parties to the Kyoto Protocol at its first session decided on a fee structure for share of proceeds to cover administrative expenses of the CDM. The Executive Board has provided further guidance on a revised registration fee calculation for CDM project activities.

• The Board, at its eighth meeting, further clarified that the date of receipt of a request for registration is the date when the deposit of the registration fee indicated in the registration form has been received by the secretariat.
• The banking information required for the payment of the registration fee must be obtained from the DOE validating your project.

• The Registration

Requests for registration of project activities are submitted for registration by the DOE. Following the commencement date (or kick-off date) for analyzing the request, the secretariat will complete within 7 days a completeness check to determine whether the submission is complete. If the submission meets the requirements of the completeness check, then the secretariat will conduct within 23 days an information and reporting check. If the request for registration meets the requirements of the information and reporting check, the secretariat will publish it on the UNFCCC CDM website.

However, if the request for registration does not meet the requirements of the completeness and information and reporting checks, then upon submission of the revised documentation it shall be treated as a new request for registration.

Following the publication of the request for registration on the UNFCCC CDM website, the project activity will be automatically registered after 28 days unless a Party involved in the project activity or at least three members of the Executive Board request a review of the proposed CDM project activity. The review by the Executive Board shall be made in accordance with the Procedure for review of requests for registration.

For more information, please refer to the Procedure for requests for registration.

• Starting date of a CDM project activity

The starting date of a CDM project activity is the date at which the implementation or construction or real action of a project activity begins. Project activities starting as of the year 2000 (1 January 2000) and prior to 10 November 2001 (date of adoption of the CDM Modalities and Procedures) have to provide documentation, at the time of registration, showing that the starting date fell within this period.

CDM Project Cycle

1.   PROJECT DESIGN  (Project Participant) :

Project participant prepares project design document, making use of approved emissions baseline and monitoring methodology.

 Project design step in detail

• Project Design Document (CDM-PDD): The project design document form was developed by the Executive Board on the basis of Appendix B of the CDM modalities and procedures. Project participants shall submit information on their proposed CDM project using the CDM-PDD form.
• Proposal of a new baseline and/or monitoring methodology: The proposed new baseline methodology shall be submitted by the designated operational entity to the Executive Board for review and approval, prior to validation and submission for registration of the project.
• Use of an approved methodology: An approved methodology is a methodology previously approved by the Executive Board and made publicly available along with any relevant guidance. When an approved methodology is used, the designated operational entity may proceed with the validation of the CDM project activity and submit the CDM-PDD with a request for registration.

2.    NATIONAL APPROVAL  (Designated National Authority) :

Project participant secures letter of approval from Party.

The Designated National Authority (DNA) of a Party involved in a proposed CDM project activity shall submit a letter indicating the following:

·         That the country has ratified the Kyoto Protocol.

·         That participation is voluntary.

·         And, from host parties, a statement that the proposed CDM project activity contributes to sustainable development (EB 16, Annex 6, paragraph 1).

3.    VALIDATION  (Designated Operational Entity) :

Project design document is validated by accredited designated operational entity, private third-party certifier. Validation is the process of independent evaluation of a project activity by a designated operational entity against the requirements of the CDM as set out in CDM modalities and procedures and relevant decisions of the Kyoto Protocol Parties and the CDM Executive Board, on the basis of the project design document.

4.    REGISTRATION  (Executive Board) :

Valid project submitted by DOE to CDM Executive Board with request for registration.

Registration is the formal acceptance by the Executive Board of a validated project as a CDM project activity. Registration is the prerequisite for the verification, certification and issuance of CERs related to that project activity.

 

Registration step in detail

• Completeness check by secretariat
• Vetting by secretariat
• Vetting by Executive Board
• If a Party or three members of Executive Board request review, project undergoes review, otherwise proceeds to registration

5.   MONITORING  (Project Participant) :

Project participant responsible for monitoring actual emissions according to approved methodology.

6.    VERIFICATION  (Designated Operational Entity) :

Designated operational entity verifies that emission reductions took place, in the amount claimed, according to approved monitoring plan.

Verification is the independent review and ex post determination by the designated operational entity of the monitored reductions in anthropogenic emissions by sources of greenhouse gases that have occurred as a result of a registered CDM project activity during the verification period.

Certification is the written assurance by the designated operational entity that, during the specified period, the project activity achieved the emission reductions as verified.

7.    CER Issuance  (Executive Board) :

Designated operational entity submits verification report with request for issuance to CDM Executive Board.

 

CER issuance step in detail

• Completeness check by secretariat
• Vetting by secretariat
• Vetting by Executive Board
• If a Party or three members of Executive Board request review, issuance request undergoes review, otherwise proceeds to issuance