Requirements for bundling

The key requirements for bundled projects (Principles for bundling) were clarified by the Executive Board at EB 21, Annex 21. These principles apply to bundles of large-scale projects as well as small-scale projects.

General requirements for bundling

Project activities wishing to be bundled must indicate this at the registration stage:

Project activities wishing to be bundled shall indicate this when making the request for registration (EB 21, Annex 21, paragraph 5(a)).

All project activities to be included in a bundle must be submitted at the same time, and project activities cannot be withdrawn or added:

The composition of bundles shall not change over time (i.e. the submission of project activities to be used in a bundle shall be made at the same time. A project activity shall not be taken out of a bundle nor shall a project activity be added to the bundle after registration) (EB 21, Annex 21, paragraph 5(c)).

Furthermore, once projects are bundled, they cannot be debundled except in exceptional circumstances:

Once a project activity becomes part of a bundle for a project cycle stage, it shall not be de-bundled for this stage. The Board may consider debundling in exceptional situations (EB 21, Annex 21, paragraph 5(b).

Project activities within a single bundle must have the same crediting period (length and start date):

All project activities in the bundle shall have the same crediting period (i.e. the same length and same starting date of the crediting period) (EB 21, Annex 21, paragraph 5(d)).

A request for registration must contain a form with information related to the bundle:

The form should cover issues such as title of the bundle, general description, project participants, locations, types and categories, estimated amount of emission reduction, crediting period and monitoring plans (EB 21, Annex 21, paragraph (f).

The contents of this form for bundled small-scale projects (F-CDM-SSC-BUNDLE) are set out below.

Requirements for bundling of small-scale projects

Separate guidance on the bundling of small-scale projects was adopted by the Executive Board at EB 34, Annex 10 (Guidelines for completing the form for submission of bundled small-scale CDM project activities (F-CDM-SSC-BUNDLE). These guidelines contain an Information note on bundling of small-scale CDM project activities, which sets out detailed guidance on bundling requirements. This guidance replaces earlier, more limited guidance at EB 20 (Clarifications relating to bundling of small-scale project activities).

The general requirements listed above for bundled projects are repeated in the information note as they apply equally to small-scale and large-scale bundles. In addition to the above, the following requirements apply.

As there is no separate guidance for small-scale afforestation and reforestation (SSC A/R) projects, the guidance below can be read as applying equally to such projects.

All projects within the bundle must comply with the simplified modalities and procedures for SSC A/R projects and use an approved small-scale methodology:

Each small-scale CDM project in the bundle should comply with the simplified modalities and procedures for small-scale CDM project activities and use an approved simplified baseline and monitoring methodology included in Appendix B of the simplified modalities and procedures for small-scale CDM project activities (EB 34, Annex 10, paragraph 4).

Form

A form covering the entire bundle must be submitted with the PDD(s):

A form with information related to the bundle (F-CDM-BUNDLE) must be included in the submission; Form is available at UNFCCC CDM website: http://cdm.unfccc.int and go to CDM:
Guidance - clarifications - tools. The form should cover issues such as title of the bundle, general description, project participants, locations, types and categories, estimated amount of emission reduction, crediting period and monitoring plans (EB 34, Annex 10, paragraph 8).

In spite of the above, the form is called F-CDM-SSC-BUNDLE. This form provides an overview of the bundle of projects, or set of sub-bundles. It must be completed in addition to the project design documents (PDDs) for each sub-bundle, and must cross-reference each PDD.

If the bundle contains only one sub-bundle (because all projects are of the same type, category and measure), F-CDM-SSC-BUNDLE will cross-reference that single PDD.

Small-scale limits

The entire bundle (or where the bundle is divided into sub-bundles, the entire sub-bundle) must remain under the limit for the type of project every year during the crediting period:

The sum of the size (capacity for type I, energy saving for type II and emission reductions of project activity for type III) of the technology or measure utilized in the bundle should not exceed the limits for small-scale CDM project activities as set in paragraph 28 of -/CMP.2 (EB 34, Annex 10, paragraph 9).

Project participants must demonstrate that these limits will not be exceeded:

It should be demonstrated that the bundle will remain under the limit for the type every year during the crediting period. The total emission reduction estimated for the crediting period must be included in the draft CDM-PDD and further monitored (EB 34, Annex 10, paragraph 10).

If the bundle does exceed these limits, the amount of CERs that can be received will be capped at the maximum estimated emission level in the bundle form (in the PDD):

If a bundle goes beyond the limits for the selected small-scale CDM project activities type, the emission reduction that can be claimed for this particular year will be capped at the maximum emission reduction level estimated for the bundle by the project participants in the "Bundle" form for that year during the crediting period (EB 34, Annex 10, paragraph 11).

Project design document(s)

If all projects in a bundle are of the same type, technology and measure, a single PDD may be submitted covering all projects:

If all project activities in the bundle belong to the same type, same category and technology/measure, Project participants may submit a single CDM-SSC-PDD covering all activities in the bundle (EB 34, Annex 10, paragraph 17).

The same baseline may be used, but only where this can be justified in the circumstances. If the same baseline is used, a common monitoring plan and report can be used. If different baselines are used, monitoring should be conducted by sampling:

If project participants use the same baseline for all the project activities in the bundle, it should be justified by considering the particular situation of each project activity in the bundle. As an example two project activities using the same technology to produce electricity but connected to different grids must use different baselines. A common monitoring plan can be utilized for the bundle with the submission of one monitoring report, under conditions to be specified. If different baselines are used, the proposed procedure for sampling must consider this situation, including the proportionate representative samples of each baseline used. In this case (a single PDD is used) a single verification and certification report shall be submitted by the DOE (EB 34, Annex 10, paragraph 17).

In addition, the following guidance is available on bundles containing small-scale project activities that are all of the same type, category and technology/measure:

Project activities may use the same baseline under some conditions (details on these conditions will be further elaborated);

One DOE can validate this bundle;

A common monitoring plan can be utilized for the bundle with the submission of one monitoring report, under conditions to be specified (e.g. conditions for sampling);

All CDM project activities within the bundle should have same crediting period, i.e. the same length and same starting date of the crediting period;

One verification report is adequate, one issuance will be made at the same time for the same period, and a single serial number will be issued for all the project;

The sum of the size (capacity for type I, energy saving for type II and direct emissions of project activity for type III) of the technology or measure utilized in the bundle should not exceed the limits for small-scale CDM project activities as set in paragraph 6 (c) of the decision 17/CP.7; and

Each small-scale CDM project in the bundle should comply with the simplified modalities and procedures for small-scale CDM project activities and use an approved simplified baseline and monitoring methodology included in Appendix B of the simplified modalities and procedures for small-scale CDM project activities (EB 21, Annex 21, paragraph 6).

If a bundle contains small-scale project activities of:

the same type, same category and different technologies/measures; or
the same type, different categories and different technologies/measures; or
different types,

separate PDDs are required:

In all other cases (if the bundle includes project activities with (a) the same type, same category and different technology/measure; (b) same type, different categories and
technologies/measures and; and (c) different types), Project participants would have to make the submission of the bundle using a CDM-SSC-PDD for each of the project activities contained in the bundle. Different monitoring plans will be required for project activities in the bundle and separate monitoring reports must be prepared. In these cases a single verification and certification report can be submitted for the bundle provided that it appraises each of the project activities of the bundle separately and covers the same verification period (EB 34, Annex 10, paragraph 18).

Presumably, however, each sub-bundle of projects of the same type, category and technology/measure can use a single PDD.

For bundled projects with different types, categories or technology/measures, the following principles apply:

Project activities may use the same baseline under some conditions (details on these conditions will be further elaborated);

One DOE can validate this bundle;

Different monitoring plans will be required for the bundle and separate monitoring reports must be prepared;

All small-scale CDM project activities within the bundle should have same crediting period, i.e. the same length and same starting date of the crediting period;

One verification report will be adequate, one issuance will be made at the same time for the same period, and a single serial number will be issued for all the project;

The sum of the size (capacity for type I, energy saving for type II and direct emissions of project activity for type III) of the technology or measure utilized in the bundle should not exceed the limits for small-scale CDM project activities as set in paragraph 6 (c) of the decision 17/CP.7; and

Each small-scale CDM project in the bundle should comply with the simplified modalities and procedures for small-scale CDM project activities and use an approved simplified baseline and monitoring methodology included in Appendix B of the simplified modalities and procedures for small-scale CDM project activities (EB 21, Annex 21, paragraph 7).

Validation

The host Party letter of approval (required for validation) must indicate acceptance of the fact that the projects will be bundled:

The letter of approval by the host Party(ies) has to indicate that the Party is aware that the project activity(ies) taking place in its territory is part of the bundle (EB 34, Annex 10, paragraph 15).

The entire bundle can be validated by a single DOE:

One DOE can validate this bundle (EB 34, Annex 10, paragraph 12).

Registration

At the time of registration, project participants must submit a written statement agreeing to bundle the project activities and identifying a focal point for communications with the Executive Board and the UNFCCC Secretariat:

The agreement of all project participants to bundle their individual project activities;

One project participant who shall represent all project participants in order to communicate with the Board in accordance with approved Modalities and Procedures for Communication (EB 34, Annex 10, paragraph 5).

Bundled projects are only required to pay one registration fee:

Bundled project activities shall be submitted in a single submission to the Board and pay only one fee proportional to the amount of expected average annual emission reductions of the total bundle (EB 34, Annex 10, paragraph 6).

Registration of the bundle may be reviewed according to the process for reviews of registration:

If three Board members or a Party involved in a project activity requests the review of the project activity, the total bundle remains under review and the implications and recommendations on the review of project activity shall lead to a decision by the Board to register or not register the bundle (EB 34, Annex 10, paragraph 7).

Verification and issuance

A single verification report can cover the entire bundle, and CERs will be issued together:

One verification report is adequate, one issuance will be made at the same time for the same period, and a single serial number will be issued for all the project (EB 34, Annex 10, paragraph 13).

A bundle of projects will have a single identifier for issuance purposes:

If a bundle of project activities is submitted with a single or different CDM-SSC-PDDs it shall have only one identifier for purposes of issuance of CERs (EB 34, Annex, 10, paragraph 16).