CDM Bazaar Newsletter

 

Dear Reader,

Welcome to the CDM Bazaar Newsletter. This newsletter brings to you an overview of the latest developments within the CDM and updates on the CDM Bazaar.

The key objective of the Bazaar is to contribute to an efficient global CDM market by connecting sellers and buyers of Certified Emissions Reductions (CERs) and business partners from the CDM project idea to issuance of CERs.

Update on the CDM Pipeline
The total number of issued CERs reached the milestone of 1 billion on the 7th of September 2012. The milestone was marked by the UNFCCC secretariat with the short movie "1 Billion: CDM Story in Numbers".

While the Least Developed Countries’ (LDCs) share of the total amount of issued CERs has been marginal, the last couple of years show a more positive trend. The graph below shows the share of issued CERs has increased since mid 2011. While the share is low, the increase indicates that the many initiatives to facilitate CDM project development in LDCs have had a positive impact.

Figure 1

Nine of the 143 CDM projects hosted in LDCs have issued credits and none of them are PoAs. 37 of the CDM projects in LDCs are PoAs. Figure 2 shows that more than 30% of the PoAs are located in Africa and 10% in LDCs. This is yet another indication that the most recent rules for CDM project development are benefiting LDCs and underrepresented regions.


Figure 2

CDM Loan Scheme
First Loans Worth over $3 Million under the CDM Loan Scheme Now Approved

The newly launched CDM loan scheme aimed at increasing the number of clean development mechanism (CDM) projects in developing countries has authorized funding of over US$3 million. Twenty-three climate change mitigation projects, representing diverse sizes and technologies, have been found eligible to receive funding through the CDM Loan Scheme, from a total submission of 42 proposals.
The loan scheme is run by the United Nations Office for Project Services (UNOPS) and the United Nations Environment Programme (UNEP) Risø Centre (URC) on behalf of the United Nations Framework Convention on Climate Change (UNFCCC). It provides interest-free loans for CDM projects in nations with fewer than ten registered CDM projects.
17 of the projects from the approved applications are located in Africa, three in Asia, two in the Middle East and one in Latin America. The majority of the approved loans are programmes of Activity (PoA), of which there are 13. Seven are small-scale projects and three are large-scale. The areas the projects cover are equally diverse – ranging from household-level energy efficiency (projects such as energy-efficient cook stoves) to methane avoidance and transportation.
The loans cover development of Project Design Documents, validation by designated operational entities and 1st verification of emission reductions. Applications for the CDM Loan Scheme were accepted for the second round by 30 September 2012. 19 applications were received. For more information on the CDM Loan Scheme see: www.cdmloanscheme.org

DNA and CDM Help Desks
The UNFCCC Secretariat has established a DNA Help Desk to provide Designated National Authorities (DNAs) in Least Developed Countries (LDCs), Small Island Developing States (SIDS), African countries or Parties with less than 10 registered projects as of 31 December 2010 with advice, support and assistance for the submission of:

• proposed standardized baselines
• recommendations of microscale renewable energy technologies for automatic additionality
• grid emission factors

It is possible for project participants and designated operational entities (DOEs) to liaise with a DNA to submit a request on their behalf. To get to the DNA Help Desk please read here.
Also a general CDM Help Desk has been developed to support project participants in LDCs, SIDS, African countries or Parties with less than 10 registered projects as of 31 December 2010. The CDM Help Desk is not only open for DNAs, but is also available to support developers, coordinating and/or managing entities (CMEs), and designated operational entities (DOEs). The Help Desk will ensure that participants receive reliable and timely information from the Secretariat on issues regarding their CDM projects. Read more about how to use the CDM Help Desk here.

Funding for DNAs to pay for assessment of proposed standardized baselines
The Executive Board approved, at its 68th meeting, the procedure for Designated National Authorities (DNAs) to apply for funding for the assessment of a proposed standardized baseline. The funding will be considered if:

• The DNA is a DNA of a Party that has 10 or fewer registered CDM project activities as of 31 December 2010, or represents a group of Parties, each of which has 10 or fewer registered CDM project activities as of 31 December 2010
• The DNA has requested an offer for the assessment from at least three DOE's
• the funding request is up to 20,000 USD and for a funding request submitted for a group of Parties, the maximum funding shall be USD 20,000 plus USD 5,000 per additional Party.

To read more about the procedure, please read Appendix 2: "Modalities for funding for preparation of assessment reports for establishment of standardized baselines" of the "Procedure for the submission and consideration of standardized baselines" here.

CDM Policy Dialogue
In 2011, the CDM Executive Board established a High-level panel for a CDM policy dialogue, to hold an extensive consultation with CDM stakeholders worldwide, and provide impartial recommendations for the enhancement of the CDM. In formulating its recommendations, the high-level panel commissioned a wide-ranging research programme addressing 22 topics across three main areas: the impact of the CDM to date; the governance and operations of the CDM; and the future context in which the CDM could operate. It also organized a stakeholder consultation programme holding dozens of formal and informal meetings around the world.

The panel recommends the following measures to address the crisis of the CDM and to prepare it for the future:

1: Urgently address the immediate crisis of demand
2: Develop new approaches to enhance mitigation impact
3: Set robust standards to enable linking and harmonization (of carbon markets)
4: Support the rapid implementation of the Green Climate Fund
5: Implement standardized methods for assessing additionality
6: Ensure that CDM projects help to achieve sustainable development
7: Strengthen co-benefits and enhance the scope of energy technology
8: Encourage greater access to the CDM for underrepresented regions
9: Rethink existing governance arrangements
10: Improve stakeholder interactions and public engagement
11: Establish independent mechanisms for appeals and grievances
12: Promote regulatory certainty and streamlining

The Panel furthermore recommends the initiatives to be implemented with a prior agreed timetable that will be brought into effect by the United Nations Climate Change Conference scheduled for December 2013. The final report from the High-level panel for a CDM policy dialogue can be found here.

New Small-scale methodologies from Executive Board meetings 68 & 69

• AMS-II.P. "Energy efficient pump-set for agriculture use". Read more about the methodology here.
• AMS-III.BC “Emission reductions through improved efficiency of vehicle fleets". Read more about the methodology here.
• AMS-III.BD "GHG emissions reduction due to supply of molten metal instead of ingots for aluminium castings". Read more about the methodology here.
• AMS-II.Q “Energy efficiency and/or energy supply projects in commercial buildings”. Read more about the methodology here.

Other news:

Revised "Guidelines on the demonstration of additionality of Small-Scale project activities"
Documentation of barriers is not required for the positive list of technologies and project activity types that are defined as automatically additional for project sizes up to and including the small-scale CDM thresholds (e.g. installed capacity up to 15 MW).
At EB 68, the positive list was once more revised and new technology types were added. The list now includes the following grid-connected and off-grid renewable electricity generation technologies:

• Solar technologies (photovoltaic and solar thermal electricity generation)
• Off-shore wind technologies
• Marine technologies (wave, tidal)
• Building-integrated wind turbines or household rooftop wind turbines with size up to 100 kW

In addition, the list includes the following off-grid electricity generation technologies where the individual units do not exceed the thresholds indicated in parentheses with the aggregate project installed capacity not exceeding the 15 MW threshold:

• Micro/pico-hydro (with power plant size up to 100 kW)
• Micro/pico-wind turbine (up to 100 kW)
• PV-wind hybrid (up to 100 kW)
• Geothermal (up to 200 kW)
• Biomass gasification/biogas (up to 100 kW)

To see the guidelines, including the positive list from the UNFCCC, please see here.

New definition of undeveloped zone in the "Guidelines for demonstrating additionality of microscale project activities"
Project activities up to five megawatts that employ renewable energy technology are additional if:

• The geographic location of the project activity is in one of the least developed countries or the Small Island Developing States (LDCs/SIDS) or in a special underdeveloped zone of the host country identified by the government before 28 May 2010;

Under the 68th Executive Board meeting the definition of undeveloped zones was adjusted to include a zone, municipality or any other designated official administrative unit where:

• The proportion of population with income less than USD 2 per day (PPP) in the region is greater than 50%
• The GNI per capita in the country is less than USD 3000 and the population of the region is among the poorest 20% in the poverty ranking of the host country as per the applicable national policies and procedures
• To see the guidelines, including the new definition from the UNFCCC, please see here.

Voluntary cancellation of Certified Emission Reductions The decision made by the Executive Board during its 69th meeting indicates that the CDM stakeholders will be able to cancel their CERs voluntarily in the CDM registry. The CERs can therefore be used for other purposes than before; private entities can use credits as part of a social responsibility programme or even by individuals or NGOs wishing to reduce their carbon footprint. To see the Press Release from the UNFCCC, please read here.