Project participant is defined in the CDM Glossary of Terms as follows:
[A] project participant is (a) a Party involved, which has indicated to be a project participant, or (b) a private and/or public entity authorized by a Party involved to participate in a CDM project activity (CDM Glossary of Terms, Version 03).
An entity can become a project participant before or after registration of a CDM project, but must always have a letter of approval from a Kyoto Protocol Party before it can do so and subsequently receive CERs from that project. Receipt of CERs by way of a secondary transfer represents an exception to this.
Rights of project participants
Project participants have the following rights under the CDM rules:
- The right to mark information sent to the CDM Executive Board as proprietary or confidential not subject to disclosure without the project participant's prior consent:
Information obtained from CDM project participants marked as proprietary or confidential shall not be disclosed without the written consent of the provider of the information, except as required by national law (3/CMP.1, Annex, paragraph 6).
- The right to be heard by the Executive Board if adversely affected by the suspension or withdrawal of the accreditation of a designated operational entity (DOE):
Any suspension or withdrawal of a designated operational entity that adversely affects registered project activities shall be recommended by the Executive Board only after the affected project participants have had the possibility of a hearing (3/CMP.1, Annex, paragraph 23).
- The right to select, enter into a contract with, and subsequently communicate with the DOE performing validation, and the DOE performing verification and certification:
The designated operational entity selected by project participants to validate a project activity, being under a contractual arrangement with them, shall review the project design document and any supporting documentation (3/CMP.1, Annex, paragraph 37).
The designated operational entity shall... Inform project participants of its determination on the validation of the project activity (3/CMP.1, Annex, paragraph 40(e)).
The designated operational entity shall...inform the project participants...in writing immediately upon completion of the certification process (3/CMP.1, Annex, paragraph 63).
- The right to instruct the Executive Board on the forwarding and distribution of CERs from a CDM project activity, and receive CERs generated by the project. This instruction must be made in accordance with the modalities of communication lodged with the Executive Board at the time of registration or as subsequently amended:
Upon such issuance, the CDM registry administrator shall promptly... Forward the remaining CERs to the registry accounts of Parties and project participants involved, in accordance with their request (3/CMP.1, Annex, paragraph 66).
- The right to receive notification of a review of registration and its result:
The Executive Board shall notify the project participants ... that a review has been requested (4/CMP.1, Annex III, paragraph 9(b)).
Project participants... shall be notified of the [review] decision by the Executive Board (4/CMP.1, Annex III, paragraph 14).
Note that 38/CMP.5 revoked Annex III to decision 4/CMP.1. However, the Executive Board will continue to apply Annex III until revised procedures are finalised
- The right to receive notification of a review of issuance and its result:
The Executive Board shall notify the project participants ... that a review has been requested (4/CMP.1, Annex IV, paragraph 9(b)).
A notification of the decision by the Executive Board shall be sent to the project participants (4/CMP.1, Annex IV, paragraph 14).
Note that 38/CMP.5 revoked Annex IV to decision 4/CMP.1. However, the Executive Board will continue to apply Annex IV until revised procedures are finalised
Right to receive CERs
The UNFCCC Secretariat has confirmed that only registered project participants may receive CERs directly from the project. Since a letter of approval is required to become a project participant, an entity must always have a letter of approval from a Party before it can receive CERs from that project.
Most Annex I Parties will only provide a Letter of Approval to entities that have a corporate presence in that country. However, the United Kingdom and the Netherlands have confirmed that they will authorise the participation of entities from anywhere in the world, including countries that have not ratified the Kyoto Protocol.
Instructions made on the distribution of CERs must be made in accordance with the modalities of communication lodged with the Executive Board at the time of registration or as subsequently amended.
Adding a new project participant
The UNFCCC Secretariat has confirmed that a new letter of approval is required from the relevant designated national authority (DNA) when a new project participant is added (whether this takes place before or after registration). This includes both the replacement of a project participant with another entity, or the addition of a new entity as a project participant (in addition to the existing project participants).
The letter of approval should authorise the participation of the new project participant in the CDM project activity, as required in the original letter of approval.
The letter of approval must be issued by the host Party for a replacement host Party project participant, and by the relevant Annex I Party for a replacement or additional Annex I project participant.
For host Parties that list Annex I project participants in the host Party letter of approval, the addition or replacement of an Annex I project participant prior to registration will require a new host Party letter of approval in addition to a new Annex I Party letter of approval. This is because if the project design document (PDD) and the host Party letter of approval do not list the same project participants, and the Executive Board will not register the project.
The position is summarised in the table below:
|Host Party LoA?||Annex I Party LoA?||Host Party LoA?||Annex I Party LoA?|
|New host Party project participant||√||Χ||√||Χ|
|New Annex I project participant||?||√||Χ||√|
For projects that are already registered, the following information is also required:
- A letter indicating the intention to add a new project participant:
- from the focal point (if the focal point has full delegated authority to add and remove project participants); or
- from all project participants (if the focal point does not have authority to unilaterally add and remove project participants); and
- Updated contact details of all project participants, in the same format as they were originally in the PDD.
For projects that are not yet registered, this information should simply be added to the PDD.
Withdrawal of a project participant
Where a project participant wishes to withdraw from a project, this must be communicated to the secretariat in writing in accordance with the modalities of communication:
The Board agreed that in cases where project participant(s) wish(es) to withdraw their participation from a registered CDM project activity the secretariat shall ensure that all project participants have communicated their agreement to this withdrawal in writing, in accordance with the modalities of communication. In cases where such written acceptance and a suitable revised modalities of communication have been received, the secretariat shall:
- update the list of registered project participants on the UNFCCC CDM website,
- inform all Parties involved of this withdrawal, and
- maintain a publicly available record of the history of participation (EB 38, paragraph 57).
The Modalities of Communication requires the responsible focal point to re-submit Annex 2 of the F-CDM-MOC form, which will then be attached to the existing MoC.
Addition or withdrawal of project participants: In cases where the addition or withdrawal is not associated with changes in the nomination of focal points as described in 15. above, the focal point for scope of authority 3 (b) shall submit Annex 2 of the F-CDM-MOC form only, "Addition/Withdrawal of project participants", duly signed by the authorised signatory of the project participants concerned, which shall be attached to the existing MoC . If the addition or withdrawal of project participants does encompass changes to the nomination of focal point for any of the scopes of authority, a new F-CDM-MOC form duly signed by the authorised signatories for each project participant shall be submitted by the focal point for scope of authority 3 described in (c) (EB 45, Annex 59, paragraph 18).
Unless the modalities of communication explicitly states that the focal point has full delegated authority to add and remove project participants unilaterally, it will not be permitted to do so, and written consent will be required from all project participants to effect this.