Requirement of New Rules for PoA: DOEs Perspective UNFCCC Workshop on PoA under the CDM: Challenges and the Road Ahead Jun Wang; TÜV NORD CERT GmbH 2011-05-07

PoA Procedural and Projects Development Table of Contents 1 PoA Procedural and Projects Development 2 Current PoA Rules compare to CDM 3 Required New Rules for PoA Registraion 4 Required New Rules for CPA Inclusion 5 Required New Rules for PoA Issuance 6 Recommendations Stand 23.11.2009

1 PoA Procedural and Projects Development Milestones 2007 2009 2010 2011 Procedural development (Concept comes out in 2005) EB 32 issued PoA Procedures for registration and issuance EB 36 approved PoA-DD / CPA-DD templates EB 47 issued Procedures for review of erroneous inclusion of a CPA and Procedures to approve PoA application of multi- methodologies EB 55 updated PoA Procedures registration and issuance (Annex 38) and Procedures for review of erroneous inclusion of a CPA (Annex 37) EB 60 issued Clarifications on PoA Procedures (Annex 26) & Priority Area for PoA Regulatory Revision (Annex 27) EB 63 plans further PoA Regulatory Revision Key events 1st PoA GSP on 2007-12-4 1st PoA registered on 2009-07-31 961 new CPAs included on 2010-08-20 (by 2011-05-01)   No. of PoAs No. of PoAs/CDM At validation 1 38 73 78/2921 Registered 2 5 8/3034 Incl. new CPAs 2/- Issued CERs 0/1034 Source: UNFCCC website UNFCCC Workshop on PoA: Requirement of New Rules for PoA -DOEs Perspective 2011-05-07

2 Current Specific PoA Rules compare to CDM 3 Templates Section structure Guidance CME Authorization PoA Indication Not for CPAs Multi-Meth Approval PoA Additionality Sampling Plan 3 DDs 2 Reports No CC Scheduling PoA Doc. Design DNA Approval Validation Registration Further CPA Inclusion Monitoring Verification Issuance No Iss. interface Materiality level? Cancellation Acc. … No MR template No GSP interface Sampling? Materiality level No same DOE … 100% Records CME Responsibility Sampling? … No EB Approval DNA/EB review Eligibility Criteria CPA Additionality DOE liability Sampling/Materiality UNFCCC Workshop on PoA: Requirement of New Rules for PoA -DOEs Perspective 2011-05-07 Project Cycle – Programme of Activities 2011-03-12

3 Required New Rules for PoA Registration Consistent Section Structure Current PoA-DD and CPA-DD Template compare to CDM PDD: Sec. PDD PoA-DD CPA-DD A. General description of project activity … of PoA … of CPA B. Application of a baseline and monitoring methodology Duration of the PoA Eligibility of CPA Estimated ER C. Duration of the project/ crediting period EI D. Environmental Impacts (EI) SC E. Stakeholders' Comments (SC) for CPA - UNFCCC Workshop on PoA: Requirement of New Rules for PoA -DOEs Perspective 2011-05-07

3 Required New Rules for PoA Registration Further Guidance PoA-DD template Starting Date of PoA A.4.4.2 Monitoring Plan Vs. E.7.2 CPA Monitoring Plan Sampling method/procedure for verifications with different or identical verification periods E.7.1 Table for Monitoring Parameters Value of data applied for the purpose of calculating expected emission reductions in section B.5 CPA-DD template CPA implementer/Operator v.s. entity/individual responsible for the CPA B.6 missing tables for monitoring parameters UNFCCC Workshop on PoA: Requirement of New Rules for PoA -DOEs Perspective 2011-05-07

3 Required New Rules for PoA Registration DNA Approval Guidance for new Host countries Approvals after PoA Registration Optional DNA approvals for CPA inclusions – requested by some DNAs UNFCCC Workshop on PoA: Requirement of New Rules for PoA -DOEs Perspective 2011-05-07

3 Required New Rules for PoA Registration PoA Validation Priority area for EB 63 PoA Additionality incl. Policy driven PoA (EB 60 Annex 27 3(a)) Multi-Meth Approval (EB 60 Annex 27 3(b)) Eligibility Criteria for CPA inclusion (EB 60 Annex 27 3(c)) Sampling Plan Guidance (EB 60 Annex 27 5(d)) Clarification on SSC meth. leakage req. under PoA: “The scrapping of replaced equipment should be documented and independently verified.” - Who is responsible, how and when to verify? DOE, consultant, 3rd party, before/during verification…? Clarification on mandatory policy PoA V.s. current CDM decision on mandatory policies (EB 54 para. 54): Definition/quantification on improvement of the mandatory policy enforcement, e.g., 50% threshold in AM0025? UNFCCC Workshop on PoA: Requirement of New Rules for PoA -DOEs Perspective 2011-05-07 Project Cycle – Programme of Activities 2011-03-12

3 Required New Rules for PoA Registration As per Procedure for requests for registration of proposed CDM project activities (EB59 Annex 13): “5. The DOE shall submit the required documents listed in latest applicable version of the completeness checklist for requests for registration, which the secretariat will make publicly available by publishing it on the UNFCCC CDM website.” “11. …The schedule of requests for registration to be processed, including the expected date of commencement, shall be made publicly available.” Completeness Check automatic scheduling and reporting to be adopted to the new CDM registration procedures and system Keep deadlines of the subsequent completeness check steps UNFCCC Workshop on PoA: Requirement of New Rules for PoA -DOEs Perspective 2011-05-07 Project Cycle – Programme of Activities 2011-03-12

4 Required New Rules for CPA Inclusion DOE CPA inclusion liabilities – EB 60 Annex 27 para. 3(d) 5(e) Revise PoA Procedures for Registration and Issuance Current version 4.1- EB55 Annex 38: “26. If a DNA involved in the PoA or a Board member identifies information that may disqualify a CPA from inclusion in the PoA or renewal of its crediting period, the Secretary of the Board shall be notified, in accordance with the “Procedures for review of erroneous inclusion of a CPA” within one year after the inclusion of CPA into a registered PoA or renewal of the crediting period of the CPA, or six (6) months after the first issuance of CERs for that CPA, whichever is the later, Such a request for review shall be related to issues associated with the compliance of the CPA with the eligibility criteria specified in the CDM-POA-DD. ”

4 Required New Rules for CPA Inclusion Revise CPA Erroneous inclusion Review Procedures Current version 4.1- EB55 Annex 37: “10. A DOE, that has not performed validation, registration, inclusion or verification functions with regard to this PoA shall conduct the review referred to in paragraph 9, by assessing a random sample of 10% of all CPAs currently included and submitting a report to Board within eight weeks. ” “16. The consequences of the extension of the review are that: (a) … (b) A further sample of 15% of included CPAs shall be reviewed in accordance with the modalities contained in paragraphs 10 to 13; (c) If this second review also leads to the exclusion of further CPAs, the Board may decide to extend the review to all included CPAs. ” Consequences: Re-open the review to all CPAs included! Need clear definition on review scope of issues, materiality and limited timeframe Project Cycle – Programme of Activities UNFCCC Workshop on PoA: Requirement of New Rules for PoA -DOEs Perspective 2011-05-07 2011-03-12

4 Required New Rules for CPA Inclusion Guidance on CPA inclusion Eligibility Criteria incl. CPA Additionality requirements (EB 60 Annex 27 3(c)) Guidance on Sampling of CPA Validations and Materiality (EB 60 Annex 27 5(d)) Project Cycle – Programme of Activities UNFCCC Workshop on PoA: Requirement of New Rules for PoA -DOEs Perspective 2011-05-07 2011-03-12

5 Required New Rules for PoA Issuance PoA/CPA Verification No CPA MR template or MR GSP interface A version of the standardized format for monitoring reports applicable to Programme of Activities (PoA) shall be established as per EB 54 meeting report para. 72; Applicable guidelines to CPAs “Procedures for revising monitoring plans” and “Procedures for requests for deviation prior to submitting request for issuance”; Sampling Plan Guidance (EB 60 Annex 27 5(d)) Sampling for Baseline, Monitoring and Verification Materiality Guidance incl. Materiality level Procedures to approve same DOE conducting PoA Validation/CPA Inclusion and PoA Verification E.g. automatic approval for SSC PoA as per para. 20 of the decision 4/CMP.1, Annex II Project Cycle – Programme of Activities UNFCCC Workshop on PoA: Requirement of New Rules for PoA -DOEs Perspective 2011-05-07 2011-03-12

5 New Rules for PoA Issuance PoA/CPA Issuance Checklist and Submission Interface Procedure for requests of Issuance of CERs (EB54 Annex 35) “6. The DOE shall submit the required documents listed in latest applicable version of the completeness checklist for requests for issuance, which the secretariat will make publicly available by publishing it on the UNFCCC CDM website. The DOE shall submit the required documents using the electronic, internet-based, submission tool provided by the secretariat to the DOE.” CER Cancellation/Compensation Account In case of erroneous inclusion or issuance Compensate CERs from CME/PP‘s other issuance UNFCCC Workshop on PoA: Requirement of New Rules for PoA -DOEs Perspective 2011-05-07

6 Recommendations EB 60 Annex 27, Priority areas for the forthcoming revision of the regulatory framework for PoA, para. 4 : “The Board agreed that the work on this matter should be progressed in conjunction with the consolidation of project cycle rules and requirements into clear standards and procedures. The Board requested the secretariat to develop the project cycle consolidation in a manner that is unambiguous regarding the applicability of project requirements to programmes and ensures that exemptions and derogations are explicitly defined. Work closely to Smoothen the rules for qualified/ eligible and sustainable PoA/CPAs

6 Recommendations Work closely! Source: Module 2 Lesson 1 Transcript, World Bank E-learning course on the CDM PoA UNFCCC Workshop on PoA: Requirement of New Rules for PoA -DOEs Perspective 2011-05-07 2011-03-12

Thank you for your attention! Mrs. Jun Wang PoA Product Manager GHG Auditor - Lead Assessor TÜV NORD CERT GmbH Langemarckstraße 20, D-45141 Essen Fon +49 (201) 825-2778 Fax +49 (201) 825-2139 jwang@tuev-nord.de www.tuev-nord.de