This section describes the offset project development process, from project design to commercialization, using the example of the Clean Development Mechanism (CDM). Although the project development process for projects implemented under voluntary offset standards may differ slightly from CDM procedures, the CDM project cycle is a useful frame of reference to outline a process that is generally similar across programs.<\/p>\n
CDM project cycle:<\/p>\n
The project design phase includes the development of the project concept, the selection or development of the baseline and monitoring methodology, and consultation with stakeholders. All these elements are documented in the Project Design Document (PDD).<\/p>\n Project concept<\/strong><\/p>\n A feasibility study of a potential offset project is conducted to assess its technical feasibility, investment requirements, development and operating costs, expected returns, administrative and legal hurdles, and project risks and pitfalls. Based on the results of the feasibility study, the project owner will decide whether or not to proceed with the development of the potential offset project.<\/p>\n Methodology<\/strong><\/p>\n The offset project methodology defines the rules that the project proponent must follow to establish the project's baseline and determine the project's additionality, calculate emission reductions, and monitor parameters (e.g. electricity produced within the project) used to estimate actual emission reductions. It is a general recipe that can be applied to different projects of a given type (e.g. renewable energy production) and usage conditions (e.g. grid-connected). Within several programs, if there is no approved methodology for a specific type of project, the project developer can submit a new methodology for approval to the offset program (e.g.\u00a0CDM<\/strong><\/a>,\u00a0the gold standard<\/strong><\/a>,\u00a0VCS).<\/strong><\/a><\/p>\n Project Design Document (PDD)<\/strong><\/p>\n The project proposal document (PDD) describes the project activity in detail. It contains a description of the selected technology and explains the methodology used to define the baseline scenario, demonstrate complementarity and calculate emission reductions. It also contains information on the monitoring of all relevant technical parameters (e.g. temperature, gas flow, electricity generation, operating hours, etc.) including how to establish monitoring procedures, perform measurements, quality control and record keeping and access. It contains an estimate of the amount of emission reduction to be achieved by the project. Finally, it documents how the project contributes to sustainable development. The PDD is used throughout the implementation phase to ensure that the project will perform according to the parameters specified in the document.<\/p>\n Stakeholder consultation<\/strong><\/p>\n KOs of offset projects under the CDM and most voluntary offset programs are required to provide evidence that project activities will not adversely affect local populations and other relevant stakeholders. To ensure that all relevant stakeholders are given the opportunity to comment on the proposed CDM project, the proponent must inform them about the project through appropriate forms of media. The contractor must respond to all comments from interested parties and describe the procedure for minimizing negative impacts. The results of stakeholder consultations must be documented in a project proposal document (PDD).<\/p>\n Project verification<\/strong><\/p>\n Under the Clean Development Mechanism, project validation will be carried out by an independent third-party auditor approved by the UN. These auditors are called Designated Operating Entities or DOEs under the Clean Development Mechanism. The CDM project validation process usually consists of five phases:<\/p>\n Voluntary standards do not always require validation and sometimes combine validation and verification. Details can be found in\u00a0detailed descriptions of voluntary offset programs<\/strong><\/a>\u00a0on this website.<\/p>\n Approval by the host country<\/strong><\/p>\n The final acceptance of the CDM project by the CDM Executive Board is not possible without the consent of the project host country. The project documentation must be submitted to the competent authority, which will check the project activity against national rules and regulations and confirm whether the project meets the sustainability criteria of the host country. This screening process and host country requirements vary from country to country.<\/p>\n Voluntary compensation projects generally do not need the consent of the host country.<\/p>\n Project registration<\/strong><\/p>\n The CDM Executive Board's decision to register a project is based on a review of the Data Protection Directive, a validation report and public feedback. Once the CDM EB approves the project, it is officially registered as a CDM project.<\/p>\n In the voluntary offset market, most projects are directly approved by project auditors and do not go through a further registration process with the offset program authority. The exception is the gold standard, where the approval of the project is evaluated by the technical advisory committee of the gold standard.<\/p>\n Implementation of the project<\/strong><\/p>\n Project implementation can start at any time during the project cycle. However, if the project is implemented before its registration by the executive board of the clean development mechanism, the project proponent must submit documentary evidence that he took into account the income of the clean development mechanism at the time of project planning. Documentary evidence must be submitted at the time of application for CDM registration. If documentary evidence is not submitted, the project will likely be rejected on the grounds that it is not additional.<\/p>\n Project monitoring<\/strong><\/p>\n Project proponents are required to keep records quantifying the reduction in emissions achieved during the project implementation phase. These records, kept in the monitoring report, must be in accordance with the parameters and procedures established in the original PDD, which was validated by the DOE and registered by the CDM EB. Emission reduction is issued on the basis of a monitoring report. Therefore, the project proponent has to make a compromise between continuous compensation income from loans (more frequent monitoring reports) and lower administrative costs (less frequent monitoring reports). There are no requirements on how long or short the monitoring period must be, as they range from a few weeks to a few years.<\/p>\n Project verification<\/strong><\/p>\n The monitoring carried out by the project developer is then evaluated and approved by a third-party auditor. In order to minimize the conflict of interests within the Clean Development Mechanism, the verifying auditor cannot also perform project verification; Another auditor must be selected for verification. The project implementer submits a monitoring report to the auditor together with relevant supporting documents. The auditor will perform an administrative review of the report to ensure that monitoring has been performed in accordance with the procedures outlined in the original PDD. The auditor can also carry out an on-site visit if necessary. After the administrative review and on-site visit, the auditor will prepare a draft verification report highlighting any issues. Once the project proponent resolves these issues, the auditor prepares a final verification and certification report that also quantifies the actual emission reductions achieved by the project. Verification takes place in accordance with the requirements specified in the project protocol.<\/p>\n In the voluntary market, this is usually the last step before offset credits are issued and sold.<\/p>\n Project certification<\/strong><\/p>\n The verification report is submitted to CDM EB for certification and issuance of compensation credits. The issued credits are then transferred to the registration account of the relevant project participant after payment of the mandatory fees\u00a0of the UNFCCC Secretariat.<\/strong><\/a><\/p>\n In the voluntary market, most emission reductions are directly approved by project auditors and do not go through an additional certification process with the offset program authority. The exception is the gold standard, where the approval of emission reductions is carried out by the gold standard's technical advisory committee.<\/p>\n Commercialization<\/strong><\/p>\n In the commercialization phase, the project developer sells compensation credits from the project to the buyer. Credits can either be sold directly to a company that uses them to meet its legally binding or voluntary emission reduction obligations, or they can be sold to a trading company that facilitates the transaction between the seller and the end user of the credits. The contract for the sale of carbon credits from the project can be signed at any stage of the project development cycle. Depending on the project developer's risk tolerance, some will sign contracts already at the planning stage (ie forward contracts) to lock in the price and other terms and insulate themselves from the risks of price volatility, while others will wait until the credits are created, certified and issued before their sales (ie sales on the spot market). The project developer usually gets paid for the credits only after they are delivered. However, in a few cases, the project developer may receive an advance payment. Such payments are usually made when the project developer wants to bridge an investment gap or needs to meet cash flow requirements during project implementation. More information about\u00a0how to get offset credits<\/a>.<\/p>\n<\/div>\n<\/article>\n<\/div>","protected":false},"excerpt":{"rendered":" This section describes the process of developing an offset project, from project design to commercialization, using the Clean Development Mechanism (CDM) as an example. Although the project development process for projects implemented under voluntary offset standards may differ slightly from CDM procedures, the CDM project cycle is a useful reference framework to outline a process that is broadly similar across [\u2026]<\/p>","protected":false},"author":7,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[8],"tags":[],"class_list":["post-1899","post","type-post","status-publish","format-standard","hentry","category-offsetove-projekty"],"acf":[],"_links":{"self":[{"href":"https:\/\/www.co2news.sk\/en\/wp-json\/wp\/v2\/posts\/1899","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.co2news.sk\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.co2news.sk\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.co2news.sk\/en\/wp-json\/wp\/v2\/users\/7"}],"replies":[{"embeddable":true,"href":"https:\/\/www.co2news.sk\/en\/wp-json\/wp\/v2\/comments?post=1899"}],"version-history":[{"count":0,"href":"https:\/\/www.co2news.sk\/en\/wp-json\/wp\/v2\/posts\/1899\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.co2news.sk\/en\/wp-json\/wp\/v2\/media?parent=1899"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.co2news.sk\/en\/wp-json\/wp\/v2\/categories?post=1899"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.co2news.sk\/en\/wp-json\/wp\/v2\/tags?post=1899"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}![\"\"](\"https:\/\/www.offsetguide.org\/wp-content\/uploads\/2019\/11\/project-implementation-e1573755504924.png\")
Project proposal<\/strong><\/p>\n\n