Eligible project types
Specific eligibility rules have been developed for particular project types.
Hydroelectricity plants with reservoirs
The Executive Board has clarified that hydroelectricity plants with reservoirs must meet certain power density thresholds to minimise the risks associated with scientific uncertainty concerning greenhouse emissions from reservoirs. In particular, the Executive Board decided that:
... hydroelectric power plants with power densities (calculated from installed power generation capacity divided by the flooded surface area) of:
- less than or equal to 4 W/ m2 cannot use current methodologies;
- greater than 4 W/ m2 but less than or equal to 10 W/ m2 can use the currently approved methodologies, with an emission factor of 90 gCO2eq/kWh for project reservoir emissions; and
- greater than 10 W/ m2 can use current approved methodologies and the project emissions from the reservoir may be neglected (EB 23, Annex 5).
The Executive Board has also clarified that the existing renewable energy methodologies (AM0019, AM0026 and ACM0002) include hydroelectric power plants. However, the Board noted that this decision should not prevent project participants from submitting new methodologies for consideration by the Methodology Panel, particularly in relation to reservoirs with no significant vegetative biomass in their catchments area (EB 23, Annex 5).
Local/national/regional policies, standards and programs
The COP/MOP has decided that local/regional/national policies or standards cannot be considered as CDM project activities, but project activities under a programme of activities can be registered as a single CDM project activity:
The Conference of the Parties serving as the meeting of the Parties, ...
- Decides that a local/regional/national policy or standard cannot be considered as a clean development mechanism project activity, but that project activities under a programme of activities can be registered as a single clean development mechanism project activity provided that approved baseline and monitoring methodologies are used that, inter alia, define the appropriate boundary, avoid double-counting and account for leakage, ensuring that the emission reductions are real, measurable and verifiable, and additional to any that would occur in the absence of the project activity (7/CMP.1, paragraph 20).
At EB 23, the Executive Board decided that the transfer of know-how and training, as such, cannot be considered as CDM project activities: but that eligibility of projects shall be based only on measurable emission reductions which are directly attributable to these project activities (EB 23, paragraph 80).
The effect of this decision is that while technology transfer of itself is ineligible for the CDM, emission reductions directly attributable to such project activities are eligible.
Creation of infrastructure or capacity to enforce a policy or standard
At EB 33, the Executive Board agreed that the act of creating infrastructure (e.g. testing labs or the creation of an enforcement agency) or capacity to enforce a policy or standard is not, of itself, eligible for consideration as a CDM activity. However, in the same decision the Executive Board went on to decide that the eligibility of project activities that are a result of the creation of infrastructure or capacity to enforce a policy or standard shall be based only on measurable emission reductions which are directly attributable to these project activities (EB 33, paragraph 30).
Therefore, the act of creating infrastructure or enforcing a policy standard is not of itself eligible for inclusion in the CDM, but measurable emission reductions directly attributable to such actions are eligible. As the Executive Board noted in this decision, its approach to this issue is consistent with the approach it adopted to the eligibility of training and the transfer of know-how at EB 23.
Reduced consumption of bunker fuels
At EB 25, the Executive Board agreed that project activities or components of project activities resulting in emissions reductions from reduced consumption of bunker fuels (such as "fuel saving on account of shortening of the shipping route on international waters") are not eligible as CDM projects (EB 58, paragraph 58).
Hydrochlorofluorocarbon 22 (HFC 22) is used as a feedstock for the manufacture of other chemicals not controlled under the Montreal Protocol. At COP/MOP 1, the COP/MOP reaffirmed the importance of HFC 23 destruction as a measure to mitigate greenhouse gas emissions, and HFC 23 destruction projects remain eligible for inclusion in the CDM.
However, the same meeting, the COP/MOP also noted that issuing CERs for HFC 23 destruction at new HFC 22 facilities could in fact act as an incentive to increase global production of HCFC 22 and/or HFC 23 and recognised that "the CDM should not lead to such increases". Accordingly, the COP requested that this issue be examined by the Subsidiary Body for Scientific and Technological Advice (SBSTA) (8/CMP.1).
The Executive Board considered the SBSTA's work on this issue in EB 32, and noted that the SBSTA will work towards preparing a draft decision for the COP/MOP on this issued (EB 32, paragraph 86).
Production of biofuels
The Executive Board confirmed at EB 30 that:
project activities claiming CERs from the production of biofuels only, while not taking into account consumers (end-users) of these biofuels, are not eligible as CDM project activities (EB 30, paragraph 14).
This is consistent with earlier guidance at EB 26, which provided that:
Methodological proposals for the CDM project activities that seek to claim certified emissions reduction (CERs) from the substitution of fossil fuels by biofuels may be proposed for project activities where:
- The consumers (end-users) of biofuels claim CERs from displacing fossil fuel consumption with biofuel.
- The producer of biofuels claim CERs, for biofuel production, provided:
- the consumers, to whom the biofuel is sold, are included in the project boundary; and
- the emissions reduction from use of biofuel are estimated based on monitored consumption by the consumers included within the project activity (EB 26, Annex 12, paragraph 1).
In addition, this decision clarified that biofuel production is not eligible to claim CERs where the biofuels are exported to Annex I Parties:
No biofuel production exported to Annex I countries is eligible to claim CERs under the CDM (EB 26, Annex 12, paragraph 2).
Energy efficiency projects
The Executive Board's approach to the eligibility of energy efficiency measures remains unclear. At EB 34 the Executive Board noted work underway by the Secretariat to review energy efficiency efforts undertaken to date, including investigating why some energy efficiency-related methodologies have not been approved by the Executive Board and ways of facilitating registration of some energy efficiency activities under the CDM (paragraph 21). The Executive Board Secretariat continues to investigate this.
Switching from non-renewable to renewable biomass
Project activities involving switching from non-renewable to renewable biomass are currently not eligible for CDM approval. However, at COP/MOP 2, the COP/MOP requested that the Executive Board make a recommendation at COP/MOP 3 simplified methodologies for calculating emission reductions for small-scale project activities that propose the switch from non renewable to renewable biomass (1/CMP.2, paragraphs 29 and 30).
Accordingly, the Executive Board plans to submit the following two such methodologies:
- SSC I.E: Switch from Non Renewable Biomass for Thermal Applications by the User (EB 34, Annex 4); and
- SSC II.G: Energy Efficiency Measures in Thermal Applications of Non Renewable Biomass (EB 34, Annex 5).
If these methodologies accepted by the COP/MOP, projects involving biomass switching from non renewable to renewable sources will be eligible for inclusion in the CDM.
Emission reductions due to use/consumption of product produced in project activity
At EB 35, the Executive Board determined that emission reductions due to the use/consumption of a product produced in a project activity are only eligible for inclusion as CDM project activities if the users and/or consumers are included in the project boundary and monitoring is undertaken of the product's actual use or consumption, and its location. This is set out in full in EB 35, paragraph 22:
- the users and/or consumers of the product [of the process] are included in the project boundary; and
- monitoring is undertaken of the actual use and/or consumption, and the location of the product used or consumed (EB35 at paragraph 22).
Carbon capture and storage
At COP/MOP 2, the COP/MOP instructed the Executive Board to continue to consider proposals for new methodologies relating to carbon capture and storage (CCS) in geological formations, but to refrain from approving any such methodologies until further guidance was provided by the COP/MOP. The COP/MOP also requested the SBSTA (Subsidiary Body for Scientific and Technological Advice) to prepare recommendations on the issue to be considered by COP/MOP 3, with a view to taking a decision at COP/MOP 4.
As anticipated, COP/MOP 3 did consider the report provided by the SBSTA at its 27th session (SBSTA 27), but did not take a decision (instead deciding on a 'workplan' for 2008). The Secretariat will prepare a revised report on submissions already received on the issue to be considered at SBSTA 28. New submissions are also invited and the Secretariat will prepare a final report on these submissions, earlier submissions and the discussion at SBSTA 27 to be considered at SBSTA 29, with a view to providing a final recommendation to COP/MOP 4.
At the 7th Conference of the Parties serving as the Meeting of Parties to the Kyoto Protocol (CMP7), the CMP decided to include Carbon Capture Storage (CCS) as an accepted CDM Project Activity.
The decision included an attached "Modalities and procedures for carbon dioxide capture and storage in geological formations under the clean development mechanism" which explains how the CDM Project Cycle applies to CCS.
CCS is defined as:
"the capture and transport of carbon dioxide from anthropogenic sources of emissions, and the injection of the captured carbon dioxide into an underground geological storage site for long-term isolation." (Decision 10/CMP7 Annex 1)
The modalities also included a mechanism for addressing non-permanence of storage through the creation of a specific CER reserve account in which the CDM Registry holds CERs for the purpose of accounting for any net reversal of storage.
A decision on the eligibility of CCS projects involving the trans-border transportation of CO2 was reserved for CMP 8.
At its 67th meeting the Executive Board adopted a series of guidelines and procedures which provide the basis for the future registration of CCS projects as a CDM Project Activity.
The Board approved the new "Procedure for the Submission and Consideration of a Proposed New Baseline and Monitoring Methodology for Carbon Capture and Storage CDM Project Activities". The new procedure outlines the steps by which project proponents shall submit proposed new methodologies (PNMs) for CCS project activities for consideration by the Board. The new procedure also outlines the timeframe and steps to be taken by the Board in considering PNMs.
The Procedure requires that project proponents not only fill out the "Proposed new baseline and monitoring methodology form for CCS CDM project activities" but also completes sections A to C of the "Project design document" to provide an example of the application of the PNM.
To assist in this process the Board also approved new "Guidelines for Completing the Proposed New Carbon Capture and Storage Baseline and Monitoring Methodology Form". As well as, "Guidelines for Completing the Project Design Document Form for Carbon Capture and Storage CDM Project Activities".
The guidelines provide direction on the type of CCS specific information and the degree of detail required in proposing a new methodology and CDM project activity. This gives project proponents an idea of the types of pre-project feasibility and scientific studies required to satisfy the project design and methodology requirements of the CDM.