Efforts Initiated to Remove the Bottlenecks

8/4/2019 Efforts Initiated to Remove the Bottlenecks

1/15

Efforts initiated to remove thebottlenecks in CDM

Rakshya Thapa


2/15

Introduction


3/15

Share of proceeds

CDM projects have to pay the following fee:

Administrative expenses (also called Registration fee) of the Executive

Board (0.10 USD/CER/yr issued for the first 15,000 tCO2 and 0.20

USD/CER/yr) for the rest

Adaptation Fund (2% of the issuance)

At the 37 meeting, the CDM Executive Board clarified that:

No share of proceeds shall be due for project activities hosted in least

developed countries (LDCs); No registration fee has to be paid for CDM project activities with expected

average annual emission reduction over the crediting period below 15,000

t CO2-equivalent


4/15

Simplified additionality - I

At the 54th and 60th meeting the CDM Executive Board approved

Guidelines for demonstrating additionality of Micro-scale project

activitieswhich established simplified additionality demonstration for

project activities up to:

5MW of renewable energy technology (type I)

Energy savings of 20GWh per year (type II)

20,000 tCO2e per year (type III). ADB through input to the public calls to the EB requested for the

inclusion of type III projects


5/15

Simplified additionality - II

Such projects are automatically additional if they are:

in LDCs, SIDs or in a special underdeveloped zone of the host country (type I, II and

III)

Off-grid projects supplying electricity to households/communities/SMEs (type I)

Distributed energy generation where subsystem


6/15

Programme of Activities (PoAs)

CDM program of activities evolved especially to address very small-

scale project activities, sectors and countries which have not

benefitted from traditional CDM approach low volume of

reductions against high transaction costs

The CDM EB is continuously working to remove bottlenecks in PoA

(clarity in available guidelines) development and to facilitate larger

coverage (use of multiple methodologies)

ADB successfully sought SSC WGs clarification on the use of

multiple methodologies across separate CPAs in a PoA


7/15

Top down methodologies and default values

EB has been developing top-down methodologies particularly

suited for application in underrepresented countries and project types.

The main aim is to identify types of project activities with emission

reduction potential for which there are no approved methodologies.

There are several examples of the EB introducing default values

into methodologies


8/15

Simplified option for Grid Emission Factor

(GEF)Tool

Simplified options have been recently developed to calculate

the GEF

The simplified method exempts underrepresented countries

from calculating the built margin.

The simplified combined margin removes the need to

consider built margin calculation

Refer to EB 61 Tools to calculate emission factor for an

electricity system.


9/15

Changes to the start date of the crediting period

Projects in LDCs whose start date of the crediting period is

after the date of registration may request for changes in the

start date of the crediting period by 2 years and not morethan 4 years (see EB 52)


10/15

Loan Scheme - I

One of the major decisions in terms of CDM reform for underrepresented

countries have been the adoption of guidelines for operationalization of the

loans scheme to support to countries with less than 10 registered CDM

projects.

Cover costs of the development of PDDs, validation and first verification

Loans are to be repaid starting from first issuance of CERs

The CMP 6 outlines the Guidelines for operationalisation of the loan

scheme including selection of an Implementing agency and criteria for

selecting projects under the loan.


11/15

Loan scheme - II

Eligible projects must:

Be located in a country with fewer than 10 registered CDM projectactivities

Use commercially viable and available technology;

Be financially viable;

Have high likelihood to secure project finance;

Have high likelihood to be commissioned and completed with regard topermits, licenses, political risk, etc.;

estimated annual emission reductions at least 15,000 for non LDCs/SIDsand at least 7,500 tCO2e for LDCs/SIDs

Meet eligibility criteria of CDM project activity or CDM PoA


12/15

Standardized baselines (SB)

CMP6 decision defined standardized baseline as a baseline established for a

party or a group of parties to facilitate the calculation of emission reduction and

to determine additionality of CDM projects while assuring environmental integrity.

The CDM EB was requested to develop SB and prioritize methodologies applicable

to LDCs, SIDs, parties with 10 or fewer projects as of 31 Dec 2010 and under-represented project types

At its 62nd meeting, the CDM EB adopted the Guidelines for the establishment of

sector specific standardized baseline

SB can potentially reduce transaction costs, enhance transparency, objectivity and

predictability, facilitate access to CDM for underrepresented project types and

regions.


13/15

Additional Efforts

Start date of crediting period: projects will now be able tostart their crediting periods from the date on which a

complete request for registration was made

Reduced timelines for registration and issuance

Clarity on investment analysis guideline very useful forproject developers in demonstrating financial additionality.

Enhanced competency requirement for DOE


14/15

Recommendations

Removing uncertainty during the judgement by introducing a more

objective approach, one based on clear eligibility criteria and quantitative

Developing a positive list consisting of specific project types of a specific

size. Projects which fit those eligibility criteria can be automatically

deemed additional.

Clear guidance on the micro-scale additionality tool

Setting default or common parameters which would be regularly updated

and made publicly available from the host country and confirmed by the

EB.

Exemptions or simplified rules for registration and issuance processes forsmall scale projects


15/15

Thank you

For inquiries please contact

Rakshya Thapa

CMP-Technical Support Facility

Tel: (+632) 632 4444 ext. 70412

Email: [email protected]

Efforts Initiated to Remove the Bottlenecks

Documents

Transcript of Efforts Initiated to Remove the Bottlenecks