Green House Gases such as Carbon Dioxide and Methane are responsible for global warming. Reduction of these emissions anywhere across the world has significant environmental and socio-economic benefits.
To address the global concern, the Kyoto Protocol was signed to make nations responsible for reducing their emissions. Kyoto Protocol establishes binding commitments on Annex I countries for reducing their emission levels. These nations can reduce their emissions in the following ways:
- Take up initiatives on home ground aimed at:
- Reducing emissions of their established industrial activities
- Ensuring that upcoming activities use non-polluting fuels
- If such developed countries are unable to achieve their emission reduction targets, they have the option of procuring carbon credits or emission reduction credits from Non-annex I countries that have taken up initiatives resulting in reduction of GHG emissions.
Over the years, several standards have evolved for enabling trading of emission reductions among nations. Of these, the CDM and the VCS Standards are key options. The Chicago Climate Exchange (CCX) is yet another platform for trading voluntary emission reductions.
The first and best option is to take the project forward for CDM (Clean Development Mechanism) registration with the UNFCCC to receive CER (Carbon Emission Reduction) credits. CERs fetch the highest price amongst all other options of carbon registration.
We at GreenStratos facilitate your entire CDM (Clean Development Mechanism) project cycle from project conceptualization to final certification by UNFCCC. Further, we also facilitate issuance and sale of CERs (Carbon Emission Reduction).
Organizations or individuals from non Annex- I countries that take up initiatives beyond their usual business for reducing their GHG emissions can execute such initiatives as a CDM project and avail carbon credits as incentive for the additional efforts & risks being taken by them. Such initiatives could be:
- Energy Generation though renewable sources
- Energy Conservation and Energy Efficiency
- Fuel switch (Fossil Fuels to renewables)
- Landfill capture
- Waste Management
- land-use change as well as forestry activities
After assessing the documentation of the project, we prepare a feasibility assessment for the GHG emission reductions of the project and demonstrate the existing baseline scenario, financial as well as technological and environmental additionality of the project to register it for CDM.
At this stage, it is very critical to establish:
- Serious consideration of CDM registration during the planning stage
- Board resolution for taking forward the project for CDM registration
- Financial appraisal by bankers demonstrating the viability of the project by taking into consideration CDM revenue flows
- In case the project is procuring agricultural biomass as co-feed for the co-generation project, we should demonstrate that there is sufficient surplus biomass available within the vicinity of the plant not only to meet the needs of the existing users but also by the proposed plant
- Chronology of the events of CDM registration demonstrating the efforts made by the plant management to pursue CDM registration
- In case either appointment of CDM consultant is delayed or validator is not appointed within one year of the public announcement (initiation of first step) of the project implementation, then the chances of project going through CDM registration become slimmer.
The following presents a overview of the steps involved in the CDM process
- Review the project activity and assess the eligibility criteria for the CDM
- Preparation of PIN (Project Idea Note) & PCN (Project Concept Note)
- Prepare Project Design Document (PDD)
- Obtain Host Country Approval
- Organize and manage the validation process on behalf of the Company.
- Assist the Company in Monitoring and Verification
A new or upcoming project should always plan for CDM registration during the planning stage and avail itself of the higher revenues through CERs that will help meet the desired investment return benchmark. The process for CDM registration however has several terms and conditions such as early and serious consideration of CDM. If a project fails to pass the eligibility test for CDM, VCS provides a good option for project proponents to realize carbon revenues for their projects.
- Gold Standard VERs are the highest paid VERs in the Carbon market. But going ahead for Gold Standard VER for a project that has already commenced activity requires the project to go for retroactive registration.
- To assess whether the project is eligible for retroactive registration or not it is essential for us to prepare a Gold Standard Passport and submit the same to the Gold Standard Academy for its concurrence and approval. As per the market trends, Gold Standard VERs fetch significantly higher revenues than VERs.
- Incase, the project is not eligible for Gold Standard Registration, the next best solution is VCS VER registration. As per the latest version of the VCS standard, any project which has been implemented prior to November 2008 should have appointed Validator by November 2008 so as to make it eligible to get credits both retroactively as well as for the future.
- In case the project has not taken any of the above three options and satisfies the following criteria, it is eligible for registration under the Chicago Climate Exchange (CCX):
(a) If the project has been implemented after 2003
(b) If it is eligible for carbon credits as per UNFCCC
(c) If the project is not a hydro project. |
If the above criteria are satisfied then the project can get registered at Chicago Climate Exchange where by it becomes eligible to get credits from 2003 onwards.
GHG emissions reduction projects in the domain of renewable energy and energy efficiency that have good sustainable development attributes are eligible for Gold Standard registration. CDM or VER projects registered with Gold Standard currently have higher premium in the international market. Further, organizations involved in implementing and procuring Gold Standard credits have higher reputational benefits. Professionals at GreenStratos have experience and expertise in taking forward projects for Gold Standard registration.
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