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This document outlines the concept of additionality within the context of Clean Development Mechanism (CDM) projects, emphasizing its significance for project acceptance. It details the process of Project Design Document (PDD) preparation, including the responsibilities of project participants and the costs involved. Key barriers to project implementation, such as high investment and lack of enforceable regulations, are discussed. The document provides insights into demonstrating additionality and the steps needed for successful CDM project registration, including public comment processes and the format required for PDDs.
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Additionality and PDD Preparation Amr Abdel-Aziz, Ph.D. Integral Consult
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
Institutional Technology Economic Additionality In Easier Terms Barriers • No Enforceable regulations that mandates the implementation of the project
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
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
CDM Project Cycle • First step in the CDM project cycle
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.)
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
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
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)
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
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
PDD Format A. General Description of Project Activity B. Baseline Methodology C. Duration of Project Activity / Crediting Period
Objections PDD Format D. Monitoring Methodology and Plan E. Calculation of GHG Emissions by Sources F. Environmental Impacts G. Stakeholder Comments
PDD Format Annex 1 : Contact Info on Project Participants Annex 2 : Info Regarding Public Funding Annex 3 : Baseline Information Annex 4: Monitoring Plan
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
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
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
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
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
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)
