Additionality and PDD Preparation

1. Additionality and PDD Preparation Amr Abdel-Aziz, Ph.D. Integral Consult

2. Additionality

3. Baseline Barriers Emissions Project 2004 2025 Year Additionality Definition • Emission reductions that are additional to any that would occur in the absence of the CDM project CDM Importance • Most critical issue for project acceptance • Project will be refused if additionality is not proven

4. Institutional Technology Economic Additionality In Easier Terms Barriers • No Enforceable regulations that mandates the implementation of the project

5. Nitric Acid Plant Nitric Acid Plant Example – N2O Abatement Project will not be implemented Project will not be implemented Barrier: High Investment for Project Barrier: High Investment for Project • Enforceable regulations mandates reduction of N2O • No regulations to mandate reduction of N2O Project will be implemented Project will not be implemented Not Additional Additional

6. Additionality How to Demonstrate • Flow chart of series of questions that lead to narrowing down of potential options • Qualitative or quantitative assessment of different potential options and an indication of why the non project activity is more likely • Qualitative or quantitative assessment of one or more barriers facing proposed project • An indication that the project type is not common practice in the proposed area of implementation

7. PDD Preparation

8. CDM Project Cycle • First step in the CDM project cycle

9. Who Prepares a PDD ? • Responsibility of project participant • Usually, project participant hires a consultant to prepare the PDD • Project participant should avail funds for PDD preparation • Can be funded through special arrangements (CD Projects, seller and buyer agreement, etc.)

10. Why Prepare a PDD ? • Validation is done based on a PDD • One of the requirements to be registered as a CDM project • Registration is a step done prior to verification and certification • i.e. can not have a CDM project and consequently certified emission reductions (CERs) without a PDD

11. PDD Cost ? • Approximately $ 40,000 to $ 50,000 • Baseline $ 20,000 to $ 30,000 • Monitoring Plan $ 10,000 to 20,000 • Cost can be reduced by: • Development of Standardized baseline • National Experts • Previous experience of existing PDDs

12. PDD Preparation Process • Prepare Project Identification Note (PIN) prior to Proceeding with PDD • Preliminary approval of Designated National Authority (DNA) • Prepare PDD • Assign DOE for validation • Submission of PDD to DNA to obtain official approval for project (voluntarily participation + assists in achieving SD)

13. Registration Process • Prior to registration, DOE shall make the PDD available for public comments for 30 days (parties, stakeholders, UN-FCCC accredited NGO) • Registration requires the following: • PDD • DNA written approval • Explanation of how DOE has taken into account public comments • Registration of project should be completed in 8 weeks, unless there is a request for review

14. PDD Format • PDD format available on UNFCCC CDM website • Must prepare PDD according to format • PDD Format available in 6 official languages of UN • Working language of the board is English  Must submit in english • 7 Sections and 4 Annexes

15. PDD Format A. General Description of Project Activity B. Baseline Methodology C. Duration of Project Activity / Crediting Period

16. Objections PDD Format D. Monitoring Methodology and Plan E. Calculation of GHG Emissions by Sources F. Environmental Impacts G. Stakeholder Comments

17. PDD Format Annex 1 : Contact Info on Project Participants Annex 2 : Info Regarding Public Funding Annex 3 : Baseline Information Annex 4: Monitoring Plan

18. Proposing a new Methodology • Have to submit draft PDD + new baseline methodology + new monitoring methodology • Takes approximately 4 months to get approved by Meth panel and EB • Public comments are invited for 15 days • Better use existing approved methodology to reduce time

19. Small Scale Projects - Criteria • Renewable energy project activities with a maximum output capacity equivalent of up to: 15 MW • Energy efficiency improvement project activities which reduce energy consumption, on the supply and/or demand side, by up to the equivalent of: 15 GWh per year • Other project activities that both reduce anthropogenic emissions by sources and directly emit less than: 15 ktCO2eq annually

20. Small Scale Projects - Requirements • Reduced requirements for PDD preparation • Simplified baseline methodologies by project category • Simplified Monitoring methodologies by project category • Less cost in preparation • Same DOE may undertake validation and verification

21. Small Scale Projects - Format

22. Bundling and Debundling • Bundling • Combining a number of small scale projects in one PDD to reduce transaction costs • Projects may be bundled as long as the total size is below limits for single project • Debundling a large project to benefit from small scale simplified procedures is not allowed

23. Useful Resources and Tools • Approved methodologies on UNFCCC CDM website • PDDs under review on UNFCCC CDM website • IPCC guidelines for emission estimation • PDD guidelines • CDM guidebook

24. Recommendations • Do not underestimate the difficulty of preparing a PDD • Use conservative assumptions • Be transparent and “truthful” • A good PDD increases the chances of accepting a project • Process entails several check points (Stakeholder comments, validation, Public comments, may be a request for review)