CDM FAQs
Q. What is a CDM Project?
Ans: CDM or Clean Development Mechanism is one of the three mechanism defined under Kyoto Protocol. Article 12 of Kyoto Protocol defines Clean Development Mechanism and involvement of Non-Annex Countries. Annex Countries can execute projects in Non-Annex countries and use the emission reductions achieved.
CDM mechanism helps developed countries to achieve their Kyoto targets in a cost effective way by initiating these projects in developing countries. These renewable or clean energy projects can vary in size, sector, reduction targets and location. e.g. a company in the UK can start a 15MW windmill power project in India and the emission reduction produced by the project will be owned by them. These emission reductions can then be adjusted to meet their targets.
Q. What is the CDM Project life Cycle?
Ans: A typical CDM project life cycle can be broken down into following stages:
Stage I - Project Approval Stage
- PIN/PCN Creation
- Host Country Approval
- PDD Creation
- DOE Validation
- DNA Approval
- CDM EB Approval
Stage II - Project Execution and Monitoring
Stage III - Accreditation
- Verification
- Issue of credits or CER.
Q. What is a CER?
Ans: The third mechanism of Kyoto Protocol introduces a concept of buying or selling of the Carbon Emission Reduction (CER) certificates, also known as Carbon Credits. These credits are quantified and verified by UNFCCC. Credits or offsets generated by CDM projects can be sold in the international carbon market.
These credits are quantified in terms of carbon emission being offset by the project.
1 carbon credit = 1 tone of carbon emission reduced. Price of a credit: €6 /tone*
Q. What are the sectors where CDM Project can be implemented?
Ans: Some of the potential CDM project development sectors are listed below:
Agriculture, Cement, Chemicals, Energy supply, Manufacturing, Metals, Mining, Oil & Gas, Power, Construction, Transport, Water, Waste