Who gives the letter of approval?
6/CMP.1, Annex, paragraph 15(a) requires that written approval be provided from each Party involved:
The designated operational entity shall:
- Prior to the submission of the validation report to the Executive Board, have received from the project participants written approval of voluntary participation from the designated national authority of each Party involved, including confirmation by the host Party that the project activity assists it in achieving sustainable development (6/CMP.1, Annex, paragraph 15(a)).
The CDM Glossary of Terms (Version 03) defines a "Party involved" as follows:
A Party involved is a Party that provides a written approval (CDM Glossary of Terms (Version 03)).
In practice, there are usually two Parties involved (except in the case of unilateral CDM projects):
- the host Party (that authorises the participation of the host Party entity); and
- the Annex I Party (that authorises the participation of the Annex I buyer).
Each project participant requires a letter of approval which they will need to obtain from the relevant Party involved.
Annex I Party letter of approval
Approval from an Annex I Party is not required at the stage of project registration. However, the Annex I Party must provide a written approval to the Executive Board before it is able to receive CERs from the project:
The Board agreed that the registration of a CDM project activity can take place without an Annex I Party being involved at the stage of registration. Before an Annex I Party acquires certified emission reductions from such a project activity from an account within the CDM Registry, it shall submit a letter of approval to the Board in order for the CDM Registry administrator to be able to forward CERs from the CDM Registry to the national registry of the Annex I Party (CDM Glossary of Terms, Version 03).
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, Sweden and Norway have confirmed that they will authorise the participation of entities from anywhere in the world, including countries that have not ratified the Kyoto Protocol.