Clean Development Mechanism (CDM)
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Under the Kyoto Protocol, first adapted in 1997 but not ratified until February of 2005, there are three broad methods of tackling greenhouse gas (GHG) emissions: A joint implementation mechanism is aimed at encouraging joint projects among developed countries; carbon emissions trading allows countries with surplus credits to sell the same to countries with quantified reduction commitments, while clean development mechanism (CDM) is about setting up projects that reduce GHG emissions in developing countries. The CDM can either be in collaboration with project promoters or done unilaterally by entities in the developing world. Carbon credits so earned can be sold. |
Kyoto protocol
CDM benefits are available under Kyoto protocol to all the project activities that reduce global GHG emissions. GHG mean C02, Methane etc.
Eligibility
- Any project that aims to reduce GHG gas (CO2, Methane} emission is eligible. This reduction can be achieved directly or indirectly.
- Some of the projects that are available are
- waste heat recovery power project including BF gas
- biomass based power projects
- wind based power projects
- energy efficiency increasing activity
- methane gas prevention projects
- more than 1000 projects all over the world are registered.
How CDM benefits are got
- For successfully registered and implemented under CDM will receive certified emission reductions CER. The CERS are traded in hard currencies and are indeed additional cash flow. Duration of benefits is 10 years.
- Increases project returns.
SOME FACTS ON CDM
- CDM process is a very public one giving the project developers a platform to highlight credentials to CDM investors.
- Although CDM has been designed to encourage any type of GHG reduction, it has a strict procedure for validation, registration, monitoring and verification.
- Hence if you are putting a project then you need to go through in a very professional manner.
- IPTL offers you the complete services taking care of every activity
How does one earn carbon credits?
For every one tonne of carbon dioxide (CO2) reduced, the country or the company gets one carbon credit. India at present does not have any emission control targets, but as a developing country it is entitled to earn carbon credits in return for implementing "green" projects under a clean development mechanism (CDM). Companies in developed countries that have emission reduction targets till 2012 can partner with Indian firms through technology sharing or financial help. Such green projects can then earn credits for both partners. The normal credit period is for 10 years.
Is certification required?
Yes, the green project must be validated by and registered with the United Nations Framework Convention on Climate Control (UNFCCC), which also issues the carbon credits.
Where does one sell carbon credits and who buys them?
CERs issued can be sold to companies in developed countries. Normally sells are made to CER trading companies, but sells to direct buyers is also possible.
CDM RELATED MATTERS
IPTL offers the following services
Establishing eligibility for CDM
Notification to CDM EB/NCDMA
• PDD preparation which comprises of
A. Base line selection
B. Methodology selection
C. Barrier analysis
D. Base line emission calculations
E. All inputs for completing PDD
• Preparation of PCN
• Application for host country approval. Presentation before DNA committee
• Preparation of PIN
• Getting quotation from DOE
• Negotiation with DOE and selecting DOE
• Submission of PDD to DOE
• Getting PDD web hosted by DOE
• Preparing and guiding client for visit of DOE for validation team
• Helping client during site visit of validating team and stake holder consultation
• Getting the project registered with CDM EB
• At verification stage
A. Selecting DOE for verification
B. Establishing and helping in maintaining CDM reports
C. Attending verification meetings
D. Getting verification report to CDM EB
E. Getting CER issuance
• Getting annexure 1 buyer and negotiations with him to get best prices for CERs.
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