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C ARBON P ARTNERSHIP F ACILITY 1 A PRIL 2014 S ELLER P ARTICIPANT T RAINING O VERVIEW OF P ROCESS TO P REPARE AND I NCLUDE CPA S UNDER A CDM P O A.

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Presentation on theme: "C ARBON P ARTNERSHIP F ACILITY 1 A PRIL 2014 S ELLER P ARTICIPANT T RAINING O VERVIEW OF P ROCESS TO P REPARE AND I NCLUDE CPA S UNDER A CDM P O A."— Presentation transcript:

1 C ARBON P ARTNERSHIP F ACILITY 1 A PRIL 2014 S ELLER P ARTICIPANT T RAINING O VERVIEW OF P ROCESS TO P REPARE AND I NCLUDE CPA S UNDER A CDM P O A

2 C ARBON P ARTNERSHIP F ACILITY 2 1.CPA evaluation and selection 2.Compliance with PoA-DD 3.CPA design 4.Inclusion process Content

3 C ARBON P ARTNERSHIP F ACILITY 3 Step 1: Perform due diligence on Projet  Technical feasibility - What is the potential for greenhouse gas reduction? - Are the thresholds for assessable criteria met? - Domestic waste: minimum amount and quality of waste - Animal waste: minimum number of sows - Renewable energy: minimum electric capacity  Financial analysis - Assess investment and operations costs based on available quotations - Is the GHG reduction potential sufficient to cover these costs? - When is the breakeven if the project underperforms? - Is there any additional income besides CERs? CPA evaluation and selection

4 C ARBON P ARTNERSHIP F ACILITY 4 Step 1: Perform due diligence on Project  Assessment of legal aspects - Land property: - Who is the owner of the land on which the project will be implemented? - If the CPA Operator is not the owner, what are the commercial terms of the lease? - Authorizations and licenses: - What authorizations and/or licenses are required to operate the project? - How long will it take to get these licenses? - Or, when do they expire? CPA evaluation and selection

5 C ARBON P ARTNERSHIP F ACILITY 5 Step 1: Perform due diligence on Project  Assessment of environmental, social and political aspects - Environmental Impact Assessment (EIA): - Has an EIA been carried out? - What were the conclusions? - Does it comply with national regulations (and, where relevant, with World Bank safeguard policies)? - Local stakeholders: - Do they support the project? - Is the social impact of the CPA positive? - Political background: - Is the local / regional/ national power favorable to the project? - Political stability? CPA evaluation and selection

6 C ARBON P ARTNERSHIP F ACILITY 6 Step 2: Perform due diligence on CPA Implementer  KYC (Know Your Customer) - Company registration (Certificate of Incorporation, articles of association, company directors and shareholders) - Financial statements - Any experience in other similar projects?  Feasibility of CPA operations - Is the project proponent capable of implementing the project? - Will the CPA operator outsource the project construction? The project operations? - Are they able to handle maintenance and CDM monitoring ? - What are the cost and availability of local contractors and equipment? - What will be the delivery delay?  BE REALISTIC! CPA evaluation and selection

7 C ARBON P ARTNERSHIP F ACILITY 7 Compliance with PoA-DD The CPA must be “eligible” for inclusion in the PoA - Eligibility criteria, according to CDM rules: The project must fulfill ALL criteria defined in the PoA-DD (section B.2). For example –Brazil - the CPA must be a municipal or regional sanitary landfill - Additionality: The start date must not be prior to the validation date of the PoA It must be demonstrated that the project is additional - Project boundaries: The CPA must be within the scope of the PoA both in terms of location (geographical boundary) and activities

8 C ARBON P ARTNERSHIP F ACILITY 8 Compliance with PoA-DD NO DEVIATION from monitoring description is allowed: – It must be clear to new potential CPA Implementers, that the project will have to STRICTLY comply with the information described in the PoA-DD in terms of: Technology to be employed; Monitoring parameters; Formula applied; Monitoring plan. – If changes are needed for CPAs which are already included, then the CME must submit a “Request for approval of post-registration changes” (PRC) to the UNFCCC. The PRC may apply to the specific CPA-DD or to both the CPA-DD and the PoA-DD. – New CPA to be included will then have to comply with the revised PoA-DD.

9 C ARBON P ARTNERSHIP F ACILITY 9 How to prepare a CPA-DD? Refer to (and comply with) the following documents: 1. The framework of the CPA-DD is provided in the Generic CPA-DD prepared at the time of PoA registration. 2. The CME needs to complete the framework with information specific to the new CPA. 3. However, the CPA-DD template has been updated since the registration of the PoAs: it is necessary to refer to the latest template (CPA-DD form & guidelines). CPA design CPA-DD form CPA-DD guidelines CPA-DD generic PoA-DD Project information Methodo- logy and tools - Checklist - Supporting documents - Financial analysis - ER calculations -Etc.

10 C ARBON P ARTNERSHIP F ACILITY 10 CPA design UNFCCC template :  All UNFCCC forms have been updated after the PoA registration.  New CPA to be included must follow the new template.  The previously called “Generic CPA-DD” is now included as “Part II” in the PoA-DD  Basically, the content is the same but the order of the section is different.

11 C ARBON P ARTNERSHIP F ACILITY 11 Key sections of the CPA-DD: CPA design Section of the CPA-DDKey comment A.5 Technical descriptionNot too specific: CPA implementer are committed to implement the project as described here. Refer to the CPA-DD guidelines to insert only information which is required. Section D: Eligibility of the CPA and estimation of emission reductions Major section: Be careful with the wording and avoid giving too much details D.4 Description of the baseline scenario Additionality will be demonstrated in this section : though the framework is given in the Generic CPA-DD, this section is the most difficult exercise of the CPA-DD writing D.6.3 Ex-ante calculations of emission reductions Refer to section B.5.2 of the Generic CPA-DD. Use the ex-ante ER estimation tool adapted to the conditions of the new CPA D.7.1 Data and parameters monitoredIt is important not to be too specific: we recommend sticking to the tables of section B.6.2 of the Generic CPA-DD without adding any information. It is not just a copy/paste exercise, the CPA-DD writer must understand the purpose of each parameter D.7.2 Monitoring planRefer to section B.6.1 of the Generic CPA-DD, and here again it is important not to be too specific.

12 C ARBON P ARTNERSHIP F ACILITY 12 CPA inclusion process Preparation 1.Selection and contracting of DOE with the support of the World Bank 2.CME writes and sends CPA-DD to DOE 3.DOE sends findings / protocol to CME Site visit 4.DOE may undertake a site visit (optional). Then the CME coordinates with CPA Operator on site Audit process: Q&A 5.CME answers corrective actions and clarifications, prepares and gathers additional documents 9.New questions raised by I/TR  2 nd round of questions and answers Final review Inclusion 13.DOE sends the inclusion package to the UNFCCC 14.The new CPA will be automatically included in the registered CDM PoA 12.DOE final internal review and approval 11.CME, World Bank and DOE review the final documents to correct errors and inconsistencies 6.CME sends all in one shot: duly answered protocol + supporting evidences + modified CPA-DD 7.DOE reviews the responses and prepares a draft report 8.When all CAR and CL are closed, auditor sends the draft report to I/TR for internal / technical review 10.When 2 nd round (or more) is closed, DOE prepares the final report (FVR)

13 C ARBON P ARTNERSHIP F ACILITY 13 Training on CDM Operations Plans and Sub-ERPA Contracting Washington D.C., USA, 1 st April 2014


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