Clean Development Machanism in Pakistan
 
 
 
Typical CDM Project Cycle  
 

Registration process

Drafting a proper Project Design Document (CDM-PDD), with the required information on technical and organizational aspects of the project activity is the key input for the validation and registration of the project.
Furthermore it shall contain information on the approved baseline methodology, additionalities, sustainable development criteria, stakeholders consultation and the applied monitoring concept, including monitoring data and calculation methods. Once the PDD is ready, it must be validated by an approved Designated Operational Entity (DOE) and any clarifications that may arise must be properly addressed.In parallel, the Host Country approval must be requested from the Designated National Authority (DNA)which represents the local Government handling CDM matters, e.g. CDM Cell under the Ministry of Environment in Pakistan. This approval will be materialized by a DNA 'support letter' required to complete the registration procedure, along with the 'validated' PDD.
The entire process stretches over minimum 4 to 6 months depending on the amount of information available and maturity of your project. Especially for early stage projects, a year and more is not an uncommon period to complete the registration process:

  • Preparation of the PDD (1-6 months)
  • Validation (2-3 months)
  • Registration (1 month for small-scale, 2 months for large scale)
    
 
 

Post Validation Activities

Once the CDM Executive Board validates your project, a 'Initial Project Verification' must be performed by a DOE to ensure that the requirements a CDM project are meet straight before starting its operation.
CDMPAK will ensure that the 'Initial Project Verification' is well prepared and results in a positive report from the DOE to the EB. 

The Initial Verification covers various aspects of your project:

  • Actual status of installation works
  • Open issues indicated in validation report
  • Physical components as described by the PDD
  • Project boundaries: check whether the project boundaries are still in compliance with the ones indicated by the PDD.
  • Environmental and Social Indicators
  • Monitoring equipment: check where necessary whether the required metering systems have been installed. The meters have to comply with appropriate quality standards applicable for the used technology.   
  • Quality assurance procedures: what quality assurance procedures will be applied for such data?   
  • External data: check the quality, reproducibility and uncertainty of external data.   
  • Management and Operational System: in order to ensure a successful operation of a Client project and the credibility and verifiability of the ERs achieved, the project must have a well defined management and operational system
  • Documentation: the system should be documented by manuals and instructions for all procedures and routines with relevance to the quality of emission reductions. The accessibility of such documentations to persons working on the project has to be secured. 
  • Qualification and training: the system should describe the requirements on qualification and the need of training programs for all persons working on the emission reduction project. Performed training programs and certificates should be archived by the system.    
  • Allocation of responsibilities: the allocation of responsibilities should be documented in written manner.    
  • Emergency procedures: the system should contain procedures which pro-vide emergency concepts in case of unexpected problems with data access and/or data quality.    
  • Data archiving: the system should provide routines for the archiving of all data which is required for verifying the project’s performance in the context of consecutive verifications.   
  • Monitoring report: the system includes procedures for the calculation of emission reductions and the preparation of the monitoring report. 
  • Internal audits and management review: the system includes internal control procedures, which allow the identification and solution of problems at an early stage.
 

Monitoring activities

The 'periodic' verification (by a DOE) are essential for the issuance of the 'carbon credits'. It is essential to maintain proper monitoring procedures throughout the years to ensure that the 'periodic' verification visit results in the issuance of 'Certified Emission Reductions'. CDMPAK services will guide you during the crediting period to ensure that monitoring is performed to the highest standard and in compliance with the CDM-EB requirements.

  
 

Trading of your Emission Reductions

The ultimate objective of registering your project with the CDM-EB is to benefit from the income generated from the sale of your 'Certified Emission Reductions' or CERs.
Buyers are looking for CERs usually through a forward contract (called ERPA) which is attractive to them because it provides price protection and certainty. 

CDMPAK plays a vital role in determining the right sale strategy and to match the best buyer for your emission reductions. The market being rather non-transparent, it is crucial for you to access reliable information to take the right decision.

CDMPAK will advice you on the best way to structure your sale of credits based on your own requirements. 
The price of CERs is expected to be a fraction of the allowances traded under the EU-ETS. The percentage achievable will depend on various factors e.g.

  • Credit rating of the seller
  • Maturity of the project
  • Type/industry of projects
  • Host country
  • Sustainable criteria