| CDM - What is a CDM project? |
|
|||||
| Who can invest in CDM projects? | Who
can develop a CDM project? |
What else do I have to know about CDM? |
Information window
|
|||
home > information window
CDM link |
What is a CDM Project? Clean Development Mechanism (CDM) is one of the flexible mechanisms following the Kyoto Protocol. Art. 12 of this protocol states all the regulating framework of the CDM. The CDM offers industrialized countries the possibility to engage in economically and environmentally competitive emission reduction projects in developing countries. Through the CDM, certified emission reductions (CERs) will be generated. Projects that will be implemented through the CDM have to fulfill additional criteria that will be defined by a national framework of the host countries (developing countries, where the project will be implemented). A CDM project has a pre-defined project-cycle that was defined by the UNFCCC, the official executive institution concerning these questions. This project cycle is described in the following graphic. ) During the process of project development various institutions will have to be contacted. In the early phase usually a consulting service will be required, to accomplish with the existing guidelines and to help analyze the financial and economically feasibility. In the phase of pre-registration at the UNFCCC a certifier (Designated Operational Entity - DOE) has to be contracted to assure that the documents to be presented (Project Design Document, Monitoring Plan, Baseline Study) were correctly prepared. Cost of consultants will vary depending on the work to be done and on the size of the project. Costs of validators are defined through the UNFCCC. To get a CDM project accredited by the UNFCCC, the host country and the potential buyer country institutions (designated national authority - DNA) have to be contacted. They have to offer a paper of agreement, confirming that the national guidelines will be fulfilled. |
key terms: Kyoto Protocol CERs Host country UNFCCC Project cycle Designated Operational Entity (DOE) Project Design Document, Monitoring Plan, Baseline Study Designated National Authority (DNA) |
||||
I. INVESTMENT link |
Who can invest in CDM projects? Theoretically everyone can invest in CDM projects. Industrialized countries that are defined in the Annex B of the Kyoto Protocol can only use the final CER. Because of the size of projects, especially banks, funds, governments and similar institutions will probably invest in such type of projects. |
key terms: Annex B |
||||
I.1. PROJECT SEARCH link |
Which kind of projects are listed in the database? In the database only projects that already have passed a feasibility check or that already have defined a PIN (Project Idea Note) will be offered. That will ensure that all the projects displayed are qualified as a CDM project and follow the established guidelines. (Furthermore we plan to obtain the pre-registrations of the projects, offered through our database from the host country and some Annex B countries like Germany, Japan, Canada, ...) |
key terms: Feasibility check Project Idea Note (PIN) |
||||
I.2. INVESTOR INTEREST link |
If I want to show my interest as an investor how should I proceed and which kind of information will I receive? If you are interested as an investor, every time a project passes a feasibility check or is offered through a PIN, you will be contacted and informed about the new project. This happens before the project is displayed online through the database. |
key terms: Feasibility check Project Idea Note (PIN) |
||||
II. PROJECT DEVELOPMENT link |
What does "CDM project development" mean? Do I need a project developer? Who can develop a CDM project? Theoretically everyone can develop a CDM project. If there exists any emission reduction potential or an idea how to sequester carbon, any company or institution may implement such a project. To get it accredited as a CDM project several requirements must be fulfilled, such as certain documents (PDD, Monitoring plan, ...), a pre-defined project cycle (see above), certain characteristics (additionality criteria in terms of emission reductions, social and economic aspects), certain institutions have to be contacted (host country dna, buyer country dna, validator) and contracted (validator). To facilitate the whole process of a CDM project development, it is recommended to contract a consulting company that will help develop all the required documents and will guide you through this time consuming process. |
key terms: Project Design Document, Monitoring Plan, Project Cycle Designated National Authority (DNA), Validator |
||||
II.1. PROJECT PROPOSAL link |
FEASIBILITY CHECK - What is the objective of a Feasibility Check? The feasibility check aims at giving the project developer an idea, if basic requirements to be a CDM project are fulfilled. This is done in terms of regulative compliance and in an economic feasibility check. The Feasibility check will not be suficient to find an investor. At least a Project Idea Note has to be prepared for that. PROJECT IDEA NOTE - A Project Idea Note is prepared. What now? The PIN, that already demonstrates a complete planning of a project in terms of all required CDM criteria, will be given to interested investment institutions that will decide on investing in the project. In the case, that it seems interesting to them, the investor will sign a letter of intention to buy all or a certain amount of emission reductions (ER). |
key terms: Feasibility check Project Idea Note (PIN) letter of intention, Emission Reductions (ER) |
||||
II.2. SERVICE REQUEST link |
Which services does a CDM project sponsor need in relation with CDM? As described above, the only required service is the DOE service in the validation phase and, in case of a normal project, the service from a second DOE in the verification phase. A consulting service is recommended to facilitate the process development and to ensure the correct formalities of that complex process. A GHG potential analysis helps companies to detect sources of emission reductions that could turn to a CDM project in the future. PROJECT DEVELOPMENT- Which type of assistance is needed? During the development of a CDM project assistance will be needed in terms of legal, economic and technical advice. VALIDATOR SERVICE - Why a Validator's service is required? The project cycle requires a validation by a first DOE in the phase before the registration and a verification of a second DOE before the issuance of the CER. For small scale CDM projects simplified guidelines assure that the project development requires one DOE only. GHG EMISSION REDUCTION POTENTIAL ANALYSIS - How will a GHG analysis look like? How can I identify potential projects? The GHG emission reduction potential analysis consists of a preliminary evaluation of the GHG emissions differences between the two scenarios, with and without the proposed project. Depending on the size of the emissions the CDM project proposal might have no impact at all in the outcome. Depending on project complexities the projections for the development costs of a CDM project ranges from US$ 25,000 to US$ 250,000. Therefore, assuming a CER value of US$ 5 per tCO2 offset, projects resulting in less than 5,000 tCO2 reductions would not have commercial scale. Every project that reduces GHG emissions and/or capture GHG is a potential CDM projects. Projects switching energy use from a fossil fuel source for renewable sources, increasing energy efficiency and biological carbon sequestration (reforestation & afforestation projects) are just a few examples. |
key terms: Designated Operational Entity (DOE) Designated Operational Entity (DOE) |
||||
III.1. OVERVIEW link |
What else do I have to know about CDM? Because of the large background knowledge needed in relation to CDM, a full overview cannot be given through this homepage. Some texts may help in understanding the issue, but we highly recommend you to contact a professional consulting company with experience in this market. The consulting company is specialized in developing CDM projects. PROJECT CYCLE - Is a certain project cycle pre defined? CDM GUIDES - How can I better understand that complex issue? Different institutions have prepared guides related to the CDM. We have chosen some of them that are displayed at our homepage. |
key terms: Project cycle |
||||
III.2. NATIONAL FRAMEWORKS link |
Which role do frameworks from the different countries play? The national frameworks play an important role in the accreditation of the realized ER. Without the agreement of the host country (Brazil), a project will never be registered as a CDM project. Framework of BRAZIL - Which role do the Brazilian framework play? The Brazilian framework defines the additionality required criteria in terms of sustainability such as non-eligible projects and social, economic and environmental criteria. These criteria should be fulfilled to obtain approval as a CDM project by the host country. The official documents can be downloaded from our website. To guarantee the acomplishment of the criteria, it is highly recommended that you contact a consultant or validator that have experience in this area. Framework of a ANNEX I country (Germany, ...) - Which role do a ANNEX I framework play? Annex I countries can further define additional criteria to accept a project and the generated ERs as a CDM project. That could be in terms of project activity, i.e. nuclear energy or forestation projects could be denied from the potential buyer country. Official existing documents can be downloaded from our website. Also in this case support provided by a professional service company is highly recommended. |
key terms: national framework, host country Brazilian framework ANNEX I country framework |
||||
III.3. UNFCCC documents link |
Which influence does the UNFCCC has? The UNFCCC (United Nations Convention on Climate Change) is the official executive institution that is defining new regulatory frameworks through the Executive Board (EB). The EB must checks if a project meets all the requirements and registers it as a CDM project. After monitoring and certification, the EB will also issue the CER to the project developer. CDM PDD - For which type of projects is this document useful? Every project that does not hold the Small Scale criteria will use this type of document to be presented to the EB for registration. CDM SCC PDD - For which type of projects is this document useful? Every project that holds the Small Scale criteria can use this type of document to be presented to the EB for registration. The criteria for Small Scale Projects you can find in our project activity list. |
key terms: UNFCCC Executive Board (EB) Certified Emission Reductions (CER) Project Design Document (PDD) Small Scale Project Design Document (PDD) |
home > information window
|
realized by: |
supported by: | sponsored by: | ||
 |
 |
 |
 |
|