Carbon Market Watch

For fair and effective climate protection.

Trouble with HFC-23 Projects (Newsletter #1)

05 May 2009

Consideration of a request by Noe21 for revision of methodology AM0001

The Swiss non-governmental organization Noe21 submitted a request for revision of the methodology AM0001 for HFC-23 destruction to the Board in December 2007. The revision request aims to address perverse incentives in this methodology. Although the request was submitted 18 months ago and despite several requests by Noe21 to the EB to consider this issue, the Board has so far ignored this request. CDM Watch urges the Board to formally consider this request now as a matter of priority.

Action to be taken by the Board: The Board should ask its Methodollogies Panel to consider the request and to prepare a recommendation.

Manipulation of plant load factors

The plant load factor is a key parameter in applying the investment analysis. At their next meeting, Board members will consider a recommendation by the Methodologies Panel how the estimation of an accurate plant load factor could be improved, taking into account the variability of the wind parameters and gaps of data. It has been reported to CDM Watch that plant load factors are manipulated in some cases in order to pass the investment analysis. It is therefore important that the Board does not delay this issue further but takes action to tackle this issue at this meeting.

CDM Watch supports all approaches proposed by the Meth Panel. Option (a) – a check that information in the CDM-PDD is consistent with information provided to banks or equity financiers – should be immediately adopted. This option is consistent with the general approach in the VVM. Option (c) – the development of additional guidance how this should be validated – would certainly be helpful for PPs, DOEs and improve the transparency and comparability of the validation process. CDM Watch encourages the EB to set up a process to develop such guidance in a timely manner.

With regard to option (b) – the determination of the annual electricity generation by a third party – CDM watch notes that such independent assessments are in many but not all cases available. If such assessments are available, the DOE should check that the information in the PDD is consistent with the independent assessment. However, in cases where such information is not available, the DOE should use other means to assess the appropriateness of this parameter. The implementation of renewable energy projects should not be further complicated by requiring additional studies.

Action to be taken by the Board: The Board should not further delay this issue but consider it as a matter of priority. CDM Watch encourages the Board to adopt approaches (a) and (c) and to further consider approach (b) as part of additional guidance to DOEs.

Revision of ACM0001 to only allow continuous measurement of methane content of landfill gas

The Board may approve the revision of approved Methodologies ACM0001 as recommended by the Methodologies Panel in response to a request by the Board arising from a request for issuance. The revision would allow only the option of continuous measurement of methane content of the landfill gas. While the intention of periodical measurements in ACM0001 was to allow for more flexibility in the implementation of the monitoring plans, the evaluation of monitored data for several registered projects concluded that the periodical measurements options could lead to overestimation of the methane content of the landfill gas because the project proponents might intentionally select the four quarterly measurements with highest value of methane content. Moreover, the cost of instruments needed to continuously monitor the methane content is not significant, compared with the amount of emission reductions. Therefore, the Methodologies Panel restricted the applicability of approved Methodologies to only allow the option of continuous measurement of methane content of the landfill gas.

Action to be taken by the Board: The Board should approve the revision of ACM0001 as recommended by the Methodologies Panel.