Carbon Market Watch

For fair and effective climate protection.

Serious concerns against new Nitric Acid projects (Newsletter #1)

05 May 2009

The Board will consider requests for resubmission of previously rejected requests for issuance. It will also discuss several responses to requests for revision of methodologies related to Nitric Acid CDM projects. The greenhouse gas N2O has a global warming potential (GWP) of 310 according to the IPCC (1998) standardization compared to a global warming potential of 1 for CO2. Therefore, this project activity aims at reducing N2O waste gas emissions in the production of Nitric Acid (HNO3). However, numerous stakeholders have claimed that the destruction of N2O has become business as usual and is applied in the vast majority of plants. Moreover, the current methodologies for Nitric Acid project activities have resulted in higher profit generation from CERs compared to the profit from producing Nitric Acid. Allowing new CDM projects would lead to the production shift of Nitric Acid plants from Annex 1 countries to CDM host countries and would as a consequence cause market distortion and carbon leakage. Therefore, CDM Watch urges the Board to reject the requests for resubmission of rejected Nitric Acid issuance projects and not to accept requests for revision of methodologies that would allow new Nitric Acid plants under the CDM.

Action to be taken by the Board: The Board should reject resubmissions for issuance of rejected Nitric Acid projects and should not approve Nitric Acid Methodologies revisions that would include new Nitric Acid plants. In particular, CDM Watch supports the recommendations of the Methodologies Panel not to accept the following requests:

–       AM_REV_0108 concerning revision of the approved Methodologies AM0028 to make it applicable to new nitric acid production capacities, which have been installed and are commercially operational on the day when requesting the registration of a project activity under the CDM.

–       AM_REV_0115 concerning revision of the approved Methodologies AM0028 to broaden its applicability to include the case in which the exiting Nitric Acid plant was relocated without changing the underlying concept of the Methodologies.

–       AM_REV_0116 concerning revision of the approved Methodologies AM0034 to include Nitric Acid plants that were already approved by the government for construction by the cut off date of 31 December 2005.