1. Motoharu Yamazaki UNFCCC secretariat http://ji.unfccc.int ji-info@unfccc.int Fees under JI Track 2 Fourth meeting of the Joint Implementation Supervisory Committee (JISC 04) Bonn, Germany September 2006

2. Fees under JI Background Para 7 of decision 9/CMP.1 “any administrative costs arising from procedures contained in the {JI guidelines} relating to the functions of the {JISC} shall be borne by both Annex I Parties and the project participants” Para 2 (h) of decision 10/CMP.1 “{COP/MOP requests the JISC} to develop provisions for the charging of fees to cover administrative costs relating to the activities of the {JISC}” Related decisions encouraging Annex I Parties to contribute to supplementary funding for JI activities  Para 2 of decision 16/CP.7  Para 6 of decision 10/CMP.1

3. Fees under JI Principles UNFCCC core budget to cover basic functioning of the JISC Based on medium- to long-term considerations Regular review by the JISC Fees for appraisal/review of projects Share of proceeds (SOP) Any payment before ERU generation shall be an advance payment of SOP Advance payment shall be non-reimbursable up to certain level Reduced rate and exemption of advance payment for small-scale projects Fees for accreditation Fixed rate and non-reimbursable application fee Applicant IEs/AIEs pay the costs for assessment teams directly to team members

4. Fees under JI Assumptions (case load – project appraisal/review)

5. Fees under JI Assumption (case load – accreditation application)

6. Fees under JI Fee structure and levels Fees for appraisal/review of projects SOP: USD 0.10 per ERU for the first 15,000 t CO 2 eq/year USD 0.20 per ERU in excess of 15,000 t CO 2 eq/year Fee for app/rev of det. PDD (advance payment) : Annual average SOP Maximum = USD 350,000 Any fee over USD 30,000 is reimbursed if the project does not proceed to app/rev of det. ERUs Exempted for projects with ERUs < 15,000 t CO 2 eq/year Fees for accreditation USD 15,000 per application Direct payment to JI-ATs: as agreed on “Indicative level of fees”

7. Fees under JI Required resources and expected income Balance 2006-2012 = + USD 1.2 million Balance 2006-2012 = – USD 0.3 million

8. Fees under JI Conclusions Same fee levels as in the CDM are appropriate Significant deficit in the first years > need to be covered by contributions from Parties Potential risk of fluctuations in income > can be avoided by operating cushion by: Contributions from Parties and/or Collection of fees in the first years Many uncertainties affecting required resources and expected income, e.g. Size of the JI market, competition with Track 1 Future of JI as a mechanism after 2012 > which affects Number of JI projects under JI Track 2 Project scale distribution Need for regular review by the JISC

9. Fees under JI Examples Project scale (ERUs/year) Fee at det. PDD (USD) Fee at det. ERUs 2008-2012 total (USD) Fee total (USD) Fee % of total ERU monetary value* 10,00005,000 1.4% 30,0004,50018,00022,5002.1% 50,0008,50036,00044,5002.5% 100,00018,50074,00092,5002.6% 1,000,000198,500794,000992,5002.8% * If ERU price is USD 7 (= EUR 5.5) per unit (t-CO2 eq)