Transcript Validation and Verification Manual Version 3.3, March 2004 Previous Page Next Page © Copyright 2004 IETA/PCF Page 1

Validation and Verification
Manual
Version 3.3, March 2004
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© Copyright 2004 IETA/PCF
Page 1
Validation and Verification Manual: Preface
Det Norske Veritas Certification (DNV) has lead the development of this Validation and Verification Manual (VVM),
which replaces the World Bank’s Prototype Carbon Fund’s (PCF) earlier Preliminary Validation Manual, issued in
November 2000. Input to this revision is also provided by TÜV Süddeutschland and KPMG, and comments are
provided by other certification bodies applying for CDM accreditation.
Facilitated by PCF and the International Emissions Trading Association (IETA), the draft VVM was at several
occasions presented to other prospective DOEs and published on the IETA website in May 2003 and subsequently
made available for road testing the fall of 2003.
The purpose of the VVM is to be an independent state-of-the-art manual owned jointly by Designated Operational
Entities (DOEs). The VVM will be a tool to support the DOEs’ important role as partners of the UNFCCC bodies in
ensuring a credible market for emission credits. It represents an attempt to bridge the new ISO guidelines for
validation and verification under development and the principles contained in the World Business Council for
Sustainable Development’s GHG protocol in a process oriented manner. The VVM builds on existing UNFCCC
requirements and is not meant to add any new requirements to the validation and verification process.
The VVM must not be used without due consideration of its limitations. In particular, it is the responsibility of the
individual DOE to adapt the VVM guidelines, procedures and templates to ensure that they fit perfectly with:
(a)
the policies and procedures for validation and verification that the respective DOE is likely to have.
(b)
the specific circumstances of each project in relation to the relevant CDM or JI requirements as provided
and interpreted by the competent Kyoto Protocol bodies. Such adaptation can include eliminating or adding
items to the VVM validation protocols and verification checklists.
The Manual is expected to evolve and be updated over time in line with a growing body of project experience.
November 2003
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Validation and Verification Manual: Introduction
This Validation and Verification Manual has been developed for the use of validation and verification of greenhouse gas
(GHG) projects according to Art. 6 and 12 of the Kyoto Protocol (JI and CDM). Its content is drawn on experiences
gathered to date by the Prototype Carbon Fund (PCF) and third party validators/ verifiers. The purpose of the
Validation and Verification Manual is to provide guidelines for the validation and verification process, serve as a tool for
third party validators/ verifiers, and present templates for validation and verification reports. The Validation and
Verification Manual shall:
•
guarantee the quality and ensure transparency of the validation and verification process to enhance trust in
the work of third party validators/ verifiers, and
•
allow third party validators/ verifiers to work in a consistent manner, promoting fair and equal treatment of
projects
The manual is based on the Kyoto Protocol, the Marrakech Accords and relevant CDM Executive Board decisions. The
Validation and Verification Manual comprises:
•
a guideline for validation and verification activities
•
generic protocols/ checklists for validation and verification of CDM/JI projects,
•
templates for validation and verification reports.
Guidelines
The VVM does not exempt third party validators / verifiers from following
the developments regarding further guidance and standards for validation
and verification.
The methodologies presented in this manual for validation and verification
of GHG emission reduction projects are intentionally applicable for all types
of projects, including sequestration projects. However, necessary adjustments
and amendments, as applicable, should be made in order to allow for the
particularities of individual projects.
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Protocols/
Checklists
(Requirements)
Report
Templates
© Copyright 2004 IETA/PCF
Page 3
Validation and Verification Guidelines
for CDM and JI Projects
Part of the Validation and Verification Manual
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Validation and Verification Guidelines
For CDM and JI Projects
Introduction
This Validation and Verification Guideline is a part of the Validation and Verification Manual. It intends to give
guidelines to the validation and verification processes of CDM and JI projects.
The Validation and Verification Guidelines shall be seen in context with the other parts of the Validation and
Verification Manual:
• generic protocols/ checklists for validation and verification of CDM/JI projects,
• templates for validation and verification reports.
As for the rest of the Validation and Verification Manual, this guideline
is expected to evolve and be updated over time in line with a growing
body of project experience.
Guidelines
Protocols/
Checklists
(Requirements)
Report
Templates
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Structure of the Guidelines
These Guidelines are divided into six parts, with related protocols and report templates as
illustrated in the figure below:
Protocol
Report
Template
Guideline
Part One:
Generic Guidelines
Part Two:
CDM
Validation
Part Three:
Small Scale CDM
Validation
CDM Validation
Report Template
CDM Validation
Protocol
Small Scale CDM
Validation Protocol
Part Four:
JI
Determination
Part Five:
Initial Verification
Part Six:
Periodic Verification
JI Determination
Report Template
Initial Verification
Report Template
Verification
Report Template
JI Determination
Protocol
Initial Verification
Checklist
Verification
Checklist
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Part One: Generic Guidelines
Content:










Part 1:
Generic
Guidelines
Part 2:
CDM
Validation
Part 3:
SSC
Validation
Designated Operational Entities / Independent Entities
Guiding Principles
Level of assurance
Conflict of Interest
Liability and Suspension
Validator and Verifier Criteria and Selection
Validation and Verification Contract
Team Selection
Communication
Abbreviations
Part 4:
JI Determination
Part 5:
Part 6:
Initial
Periodic
Verification Verification
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Designated Operational Entities / Independent Entities
A Designated Operational Entity / Independent Entity shall be accredited (or have applied for accreditation) by the
CDM Executive Board (EB) / JI Supervisory Committee (SC) and comply with the Marrakech Accords and CDM EB/
JI-SC Decisions. In addition the Entity shall:
– Validate proposed CDM /JI project activities
– Verify and certify reductions in GHG emissions
– Comply with applicable laws and requirements of the Parties hosting CDM/JI project activities when carrying
out its functions
– Demonstrate that it has no real or potential conflict of interest related to the project
– Perform only one of either validation or verification and certification related to the same CDM project (Upon
request to the CDM Executive Board, exceptions to this may be allowed). For small-scale CDM project
activities the same operational entity may undertake validation, and verification and certification.
– Maintain a publicly available list of all CDM project activities it has been involved in
– Submit annual activity reports on CDM project activities to the CDM Executive Board
– Make the Project Design Document (PDD) and the monitoring report obtained from the project as well as the
validation report and verification report publicly available, as required.
Further requirements and information related to Designated Operational Entities: http://cdm.unfccc.int/DOE/.
Part 1:
Generic
Guidelines
Part 2:
CDM
Validation
Part 3:
SSC
Validation
Part 4:
JI Determination
Part 5:
Part 6:
Initial
Periodic
Verification Verification
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Guiding Principles
The following principles apply for both parties in a validation and verification process and shall be used as guidance
when documents related to validation and verification are prepared:
Accuracy
The relative measure of
the exactness of relevant
performance indicators. This should enable performance
indicators and emission reduction estimates to be
calculated as accurately as possible, i.e. by use of statistical
techniques in order to reduce uncertainties and arrive at
confident numbers for emission reductions.
Cost-effectiveness
The amount of costs and effort necessary to document,
validate, monitor, report and verify a GHG project
should be made dependent on the attained
uncertainties and the amount of predicted emission
reductions, i.e. by use of a risk-based assessment
approach.
Completeness
The project documentation and the scope of validation/
verification should cover all relevant greenhouse gases,
sources and sinks, – if affected by the project activities. It
should also include other indicators, e.g. leakage effects or
project effects beyond the chosen project boundaries, as
appropriate.
Reliability
For the estimation of emission reductions from the
project the most realistic and likely operational
characteristics and most likely development relevant to
the project shall be chosen as reference for projected
emissions and baseline.
Comparability
Methods for estimation of emissions [and removals] should
be comparable between the project baseline(s) and the
project. This should enable comparison of the project with
the relevant baseline scenario(s) and subsequent
determination of the selected baseline's applicability.
Consistency
The project documents should address comparable key
indicators that enable consistent review of project
performance over time. To the extent possible, the
methodologies and measurements identified in the baseline
methodology should also be addressed and made verifiable
via the Monitoring Plan.
Part 1:
Generic
Guidelines
Part 2:
CDM
Validation
Part 3:
SSC
Validation
Part 4:
JI Determination
Part 5:
Part 6:
Initial
Periodic
Verification Verification
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Validity
For the estimation of emission reductions from the
project it is crucial that factors or indicators used for
baseline determination and the use of operational
characteristics give opportunity for real measurements
of achieved emission reductions. The baseline and
operational characteristics used in the project
documentation shall therefore be based on factors or
indicators that provide a plausible picture of what would
otherwise occur.
Transparency
Transparency is an imperative for all involved parties in
the validation and verification process (see next page).
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Transparency
Transparency will be a significant means to ensure
credible emission reductions.
Client Transparency:
Where the client is a project developer, they shall be
transparent in their presentation of information, such as
project design documents, baseline study, monitoring
plans, calculation methods and assumptions and/or other
relevant project documentation.
Where the client is a project operator, they shall be
transparent in their presentation of performance data that
constitute the audit trail which sustain the determination
of emission reductions.
The project validator/verifier shall be transparent in the
reviews, discussions and decisions that give the rationale
for the validation opinion / verification statement.
Part 1:
Generic
Guidelines
Part 2:
CDM
Validation
Part 3:
SSC
Validation
Part 4:
JI Determination
Part 5:
Part 6:
Initial
Periodic
Verification Verification
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Transparency implies that:
•
All assumptions are clearly stated and
documented
•
All background material is clearly referenced
•
The rationale for selection and use of
methodologies, as well as the use of such are
clearly explained
•
There is a clear conclusion or decision from all
presented discussions
•
All formulas used for calculations are stated
•
All calculations are incorporated or referenced
•
Changes in documentation as a result of
validation/ verification are clearly identified in
revised documents
•
Confidential information is clearly identified.
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Level of assurance (1)
Level of assurance: Degree to which the validator or verifier is confident that the validation or verification
conclusions prove or disprove the fact that GHG assertions taken as a whole are free from material
misstatement.
(ISO 14064-3 (draft))
The verifier or validator shall establish a process for providing assurance to all stakeholders that the project’s
GHG assertions are complete, accurate, consistent, transparent and free from any material misstatements.
Neither a validation opinion nor a verification statement can give an absolute level of assurance. The level of
assurance is dependent on several factors, qualitative and quantitative. For a validation, most of these factors are
related to uncertainties of future events taking place. For a verification, the factors causing uncertainty is the
inherent uncertainty of emission measurements, calculations or estimations. Each Operating Entity performing
validation or verification should use its own procedures, necessary expertise and expert judgement as well as
applicable international standards and UNFCCC methodologies to arrive at a desired level of assurance. The
expertise should be maintained and updated as UNFCCC methodologies and other standards related to level of
assurance for GHG emission estimation and project validation and verification emerge.
Level of assurance - Validation:
The CDM Executive Board has agreed that in issuing a validation opinion in the validation report, the DOE shall
include a statement of the likelihood of the project activity to achieve the anticipated emission reductions stated in the
CDM-PDD. A medium level of assurance is hence appropriate for emission reductions estimates However, it should
be aimed for a reasonable level of assurance with regard to the project’s eligibility to be registered under the CDM.
Level of assurance – Verification:
As a verification opinion will result in certification of emission reductions and thereby generate the value of this asset,
a verification opinion must have a reasonable level of assurance. This must be reached by rigorously testing the
uncertainty related to quantification of emission reductions.
Part 1:
Generic
Guidelines
Part 2:
CDM
Validation
Part 3:
SSC
Validation
Part 4:
JI Determination
Part 5:
Part 6:
Initial
Periodic
Verification Verification
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Level of assurance (2)
Level of assurance – Validation/determination:
The level of assurance for a validation is limited by the fact that no one is able to predict the future exactly. Hence,
the validation opinion needs to include the disclaimer that only under the given circumstances, the estimated
emission reductions will be likely to occur. However, these circumstances will have a varying degree of certainty
themselves. The level of assurance for a baseline should for example be reached by rigorously testing critical
assertions in the PDD that have impact on the baseline determination. The selection of the project baseline and
the quantification and projection of emission reductions may nevertheless depend on factors that have high
uncertainty or low predictability. Hence, only conservative assumptions should be accepted by the validator.
Level of assurance – Verification:
In order to reach a reasonable level of assurance through the verification, it must be recognised that several facts
and factors for the determination of emission reductions need be seen as fixed factors and not as variables. This
comprises validated baseline methodology factors (e.g. baseline emission factors), validated publicly accessible
and recognised factors such as national or IPCC emission factors and coefficients and other factors that are
available in the public domain and are used for calculation input. These should be accepted despite their inherent
uncertainties and not to be pursued for further verification. The level of assurance through verification should be
reached by rigorously testing the uncertainties related to the remaining variable factors such as fuel consumption,
activity levels etc. in the quantification of emission reductions.
Emissions have a decreasing level of accuracy, dependent on whether these are monitored, calculated, estimated
or projected. For emissions factors it is the same, the more specific an emissions factor is, the higher level of
assurance it provides. It is expected that a verifier discounts verified emission reductions or requests a discount of
these by using conservative assumptions for uncertainties in emission estimates that cannot be fully quantified or
that cannot give a desired level of assurance.
Part 1:
Generic
Guidelines
Part 2:
CDM
Validation
Part 3:
SSC
Validation
Part 4:
JI Determination
Part 5:
Part 6:
Initial
Periodic
Verification Verification
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Conflict of Interest
The DOE shall work in a credible, independent, non-discriminatory and transparent manner. The structure of the
DOE shall safeguard impartiality of its operations. If the DOE is part of a larger operation, the DOE shall clearly
define the links with other parts to demonstrate that no conflicts of interest exists. The DOE shall demonstrate
that it is not involved in any commercial, financial or other processes which might influence its judgement or
endanger trust in its independence and integrity.
CDM modalities & procedures, Appendix A, paragraph 2
Cautious operations and conflict of interest
Stakeholders depend on 3rd Party assurance of GHG emission reductions through CDM and JI projects as a vehicle
to ensure real and long-term environmental gains. As the CDM/JI are emerging mechanisms and their success rely on
the credibility of CDM/JI projects, provisions for cautious operations must be made. For DOEs/Independent Entities,
this relates to e.g.:
–
Ensuring transparency of methodology, processes and results
–
Being conservative in estimates and conclusions
–
Ensuring verifiability of conclusions
–
Avoiding conflict of interest situations
Sources of potential and perceived conflict of interests should be identified and the necessary structure and provisions
should be put in place to ensure and demonstrate that no conflict of interest exists. Conflict of interests could arise
within the DOE/Independent Entity organisation or from the activities of related organisations, e.g. if parts of the
organisation or its personnel are involved in consulting activities for CDM/JI projects.
Part 1:
Generic
Guidelines
Part 2:
CDM
Validation
Part 3:
SSC
Validation
Part 4:
JI Determination
Part 5:
Part 6:
Initial
Periodic
Verification Verification
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Liability and Suspension
Cautious operations, including transparent processes and conservative conclusions, will reduce the risk of liability
for the DOE. The risk of liability exists if a DOE has falsely verified and certified excess CERs/ ERUs.
Based on CDM Executive Board/ JI Supervisory Committee recommendations, the COP/MOP may decide to
suspend or withdraw the designation of a DOE/Independent Entity if they no longer meet the accreditation
requirements. This is applicable if significant deficiencies are identified, such as fraud, malfeasance or serious
incompetence of the DOE.
The verifier is liable for the emission reductions verified and certified. If a review by the CDM Executive Board/ JI
Supervisory Committee reveals that excess CERs/ ERUs were issued, the verifier, who has falsely verified and
certified excess CERs/ ERUs, must acquire an amount of CERs/ ERUs equal to the excess CERs/ ERUs and
transfer this amount to a cancellation account.
JI modalities & procedures, paragraph 43
CDM modalities & procedures, paragraph 22
Part 1:
Generic
Guidelines
Part 2:
CDM
Validation
Part 3:
SSC
Validation
Part 4:
JI Determination
Part 5:
Part 6:
Initial
Periodic
Verification Verification
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Validator and Verifier Criteria and Selection
The nature of the project is an obvious parameter when selecting the right validator/verifier for a GHG project. While
other parameters may be of varying importance due to the circumstances, the validator’/ verifier’s capacities and
capabilities in assessing the technical nature of the project will always be of critical importance.
The general rule is that the validator shall be different from the verifier and certifier for the same CDM project (Upon
request to the CDM Executive Board, exceptions to this may be allowed). For small-scale CDM project activities the
same operational entity may undertake validation, and verification and certification.
The skills required to undertake a validation project are different from those required to undertake a verification
project. The latter typically requires more expertise in assessing the adequacy of monitoring and metering equipment,
assessing information systems, calibration records, laboratory procedures etc., while validation will require a thorough
analysis of e.g. baseline, monitoring aspects, additionality and host country circumstances.
Criteria for validator/verifier selection will be based on the following:
•
Accredited or applying for accreditation for validation/verification by the UNFCCC for the technical scopes
relevant for the project
•
Have the necessary expertise and understanding related to:
• the UNFCCC requirements and processes
• relevant environmental issues and environmental auditing methodologies
• the technical aspects of setting baselines, monitoring of emissions and other environmental impacts
• Methodologies for accounting of GHG emissions
•
Have management structure with clear responsibilities and quality assurance procedures in place
•
Work in a credible, independent, non-discriminatory and transparent manner
•
References from similar projects
•
Experience from operations in the host country
•
Availability of a project team covering all required skills
Part 1:
Generic
Guidelines
Part 2:
CDM
Validation
Part 3:
SSC
Validation
Part 4:
JI Determination
Part 5:
Part 6:
Initial
Periodic
Verification Verification
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Validation and Verification Contract
The contract between the project proponent and the validator/ verifier shall include and determine the following aspects:
Validation/ Verification scope
The scope of the engagement shall define project
boundaries, and the nature of the data necessary
to validate/ verify the project. When defining the
scope in discussion with the validator/ verifier, it
shall be ensured that the project can be validated/
verified against UNFCCC requirements using
objective criteria and a risk-based assessment
approach. A validator/ verifier shall not accept a
scope that is not sufficient to form and issue a
validation opinion/ verification statement. Scope
determination has to include:
– Parts of project included in assessment
– Methodology review/submission to the CDMExecutive Board (as applicable)
– Sites included in assessment
– Content, but not conclusions for the
Validation Opinion/ Verification Statement
– Timeframe of engagement
– Limitations in the scope
– Confidentiality clause regarding nondisclosure of confidential information
Part 1:
Generic
Guidelines
Part 2:
CDM
Validation
Part 3:
SSC
Validation
Part 4:
JI Determination
Part 5:
Part 6:
Initial
Periodic
Verification Verification
Documentation
The contract shall identify project documents, including but not
limited to the Project design document (ref. UNFCCC CDMPDD)
Other information
– Name, address and contact person(s) of the project
operating organisation and Host County authorities
– The validator's/ verifier’s liability
The validator/ verifier shall review the contract and any
presented documentation to ensure that the requirements for
validation/ verification are understood, that the documentation is
complete, accurate and verifiable. Any difference in
understanding between the validator/ verifier and the project
proponent shall be resolved before the contract is signed.
Contract caveat:
The validation is based on the information made available to the
validator/verifier and the engagement conditions detailed in this
contract. The validator/verifier can not guarantee the accuracy or
correctness of this information. Hence, the validator/verifier can
not be held liable by any party for decisions made or not made
based on the verification opinion.
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Team Selection
Team composition
The validator/verifier shall appoint
a
validation/verification team leader to be in
charge of the engagement. As most
engagements will require multiple skills to be
employed, the team shall contain necessary
competence for all relevant aspects of the
validation/verification. These skills may include,
but not limited to:
– Technical
– Environmental
– Legal
– Host Country
– Financial
Members of the validation/verification team
shall be independent of the activities they
audit. The team member(s) shall be objective,
and free from bias and conflict of interest
throughout the validation/verification process.
Time and resources needed for the
validation/verification project will depend on the
specific risks and complexity of the project.
Part 1:
Generic
Guidelines
Part 2:
CDM
Validation
Part 3:
SSC
Validation
Part 4:
JI Determination
Part 5:
Part 6:
Initial
Periodic
Verification Verification
Roles and Responsibilities
Team Leader
The tasks of the team leader typically include:
• Plan the validation/ verification processes (time, place, criteria for the
assessment, etc.).
• Select other team members.
• Run meetings.
• Be the single point of contact
• Manage the validation/ verification and conclude on decisions affecting
the validation/ verification process.
• Be responsible for the validation/ verification report and the follow-up of
possible corrective action/ clarification or forward action requests.
Team Members
Team members shall assist the team leader, and are responsible for
performing the parts of the validation/ verification assigned to them by the team
leader. These actions may be taken in conjunction with the team leader or
separately. Team members shall be responsible for acquainting themselves
with the project documentation and the project context as a part of the
validation/ verification preparations.
Inform the project proponent
The project proponent shall be provided the names of the validation/
verification team members, with sufficient notice to appeal against the
appointment of any particular member(s).
Appointment of team
The validation/ verification team shall be formally appointed and provided with
the appropriate working documents.
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Communication
To achieve a cost-effective and efficient validation/
verification, the validator/ verifier and project proponent
are required to communicate effectively. This implies that
the project proponent as well as the validator/ verifier
shall appoint personnel (single point of contact) with the
authority and responsibility to facilitate effective
communication when establishing the validation/
verification contract, identify and make contact with host
country personnel or other persons as relevant, resolve
unclear issues, or any identified corrective action or
clarification requests.
For effective communication, it is crucial that the
involved parties comply with agreed deadlines and
keep up to date on the validation progress.
This includes early notification of possible delays or
missing information.
It is also imperative that the nature of all changes
resulting from the first phases of the validation are
clearly identified.
As the project proponent is likely to engage consultants for
parts of the project design, the effectiveness of
communication also calls for direct liaison between the
validator/ verifier and the consultants. This will be
particularly important for issues of technical character.
Such communication is encouraged, and should be copied
to the project proponent. Any preliminary conclusions
made by other parties on behalf of project proponent shall
be confirmed by the project proponent before they are
used by the validator/ verifier.
Part 1:
Generic
Guidelines
Part 2:
CDM
Validation
Part 3:
SSC
Validation
Part 4:
JI Determination
Part 5:
Part 6:
Initial
Periodic
Verification Verification
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Page 18
Abbreviations
Part 1:
Generic
Guidelines
CDM
Clean Development Mechanism
LoI
Letter of Intent
CAR
Corrective Action Request
MoU
Memorandum of Understanding
CEF
Carbon Emission Factor
MP
Monitoring Plan
CER
Certified Emission Reduction
ODA
Official Development Assistance
CL
Clarification Request
PDD
Project Design Document
CO2
Carbon dioxide
UNFCCC
CoP
Conference of the Parties to the UNFCCC
United Nations Framework Convention for
Climate Change
DNA
Designated National Authority
EB
CDM Executive Board
EIA
Environmental Impact Assessment
ERU
Emission Reduction Unit
FAR
Forward Action Request
GHG
Greenhouse gas(es)
GWP
Global Warming Potential
JI
Joint Implementation
KP
Kyoto Protocol
LoA
Letter of Approval
Part 2:
CDM
Validation
Part 3:
SSC
Validation
Part 4:
JI Determination
Part 5:
Part 6:
Initial
Periodic
Verification Verification
Glossary for CDM projects:
http://cdm.unfccc.int/Reference/Documents
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Page 19
Part Two: CDM Validation Guidelines
 CDM Validation Objective
Content:
 The Validation Process
 Baseline and Monitoring Methodology
Check
 Validation Actors
 Risk-Based Validation Approach
 EB Approval of Methodologies
 Risk Examples
 Document Review
 CDM Validation Criteria
 Background Investigation
 Host Party criteria
 Follow-up Interviews
 UNFCCC criteria
 Draft Validation Report
Participation Requirements
Project Design Document
• Clarifications and Corrective Action
Requests
Baseline Methodology and Baseline
• Validation Protocol
Additionality of project activity
• Validation Protocol Legend
Sustainable Development
 Resolution of Corrective Action Requests
Assessment of Environmental Impact
 Final Validation Report
Monitoring Methodology and Plan – Coverage
of Emission Source
• Validation Opinion
• Examples of Validation Opinions
Monitoring Methodology and Plan – Monitoring
Practise and GHG Data Management
• Unresolved Issues
 Means of Verification
Part 1:
Generic
Guidelines
Part 2:
CDM
Validation
Part 3:
SSC
Validation
Part 4:
JI Determination
Part 5:
Part 6:
Initial
Periodic
Verification Verification
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Page 20
CDM Validation Objective
The purpose of a validation is to have an independent third party assess the project design.
In particular, the project's baseline, the Monitoring Plan (MP), and the project’s compliance
with relevant UNFCCC and host Party criteria shall be validated in order to confirm that the
project design as documented is sound and reasonable and meets the identified criteria.
Validation is a requirement for all CDM projects and is seen as necessary to provide
assurance to stakeholders of the quality of the project and its intended generation of
certified emission reductions (CERs).
UNFCCC criteria refer to the Kyoto Protocol criteria for the CDM, the CDM rules and
modalities as agreed in the Marrakech Accords and relevant decisions by the CDM
Executive Board.
Part 1:
Generic
Guidelines
Part 2:
CDM
Validation
Part 3:
SSC
Validation
Part 4:
JI Determination
Part 5:
Part 6:
Initial
Periodic
Verification Verification
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Page 21
CDM Validation Actors
Involved actors
Local
Stakeholders
Project participants
CDM Executive
Board
Project Entity
Validation Contract Parties
Designated
Operational
Entity
Project
Proponent
Consultants
Contractual relationships
Communication channels
during validation
Host Party
Designated
National
Authority
Parties
Stakeholders,
Accredited NGOs
Note: The above diagram reflects a contractual model where the project proponent is independent from the project entity.
The frame for “project participants” only shows an example. Other relationships are possible, such as a direct contractual
relationship between project entity and the DOE.
Part 1:
Generic
Guidelines
Part 2:
CDM
Validation
Part 3:
SSC
Validation
Part 4:
JI Determination
Part 5:
Part 6:
Initial
Periodic
Verification Verification
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Risk-Based Validation Approach
The validator shall use a risk-based validation approach to focus
and to determine the detailed scope of the validation.
The key risks associated with the project design, baseline,
monitoring plan, emission reduction estimates, environmental
impacts and comments by local stakeholders are elements that are
critical for meeting UNFCCC criteria for achieving real, measurable,
long-term as well as additional GHG reductions.
– Based on the information on the project provided in the project
design document and based on the comments received by
Parties, stakeholders and NGOs, the validator shall identify
the key risks associated with assumptions/claims made and
data sources used.
– The completeness, conservativeness and accuracy of the
underlying evidence for the assumptions/claims made and
data sources used are reviewed. Assumptions/claims and
data sources that are well identified and discussed in the
PDD, that are substantiated with information from reliable
references and that are sufficiently controlled through the
monitoring plan are of less risk and should thus be given less
emphasis.
– Remaining areas of material uncertainty associated with
assumptions made and/or data sources used, which could not
be fully recognised and approved by the validator during the
above review, shall be investigated and further tested by the
validator.
– The results of this investigation shall then - together with the
results of the review of other areas - give the necessary input
for the validation opinion.
Validation scope
Project Design Document (PDD):
Project design
Comments
Baseline
by Parties,
Monitoring Plan
stakeholders
Emission reduction estimates
and NGOs
Environmental impacts
Comments by local stakeholders
Identify risks (H, M, L) associated with
assumptions made and data sources used
Review risk areas for completeness,
conservativeness and accuracy
Detailed investigation of remaining areas of
material uncertainty
Validation Report & Opinion
Part 1:
Generic
Guidelines
Part 2:
CDM
Validation
Part 3:
SSC
Validation
Part 4:
JI Determination
Part 5:
Part 6:
Initial
Periodic
Verification Verification
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Risk-Based Validation Approach – Examples
Risks can be classified in risk categories (e.g. High, Moderate and Low). A risk may be high, moderate or low
depending on the issue’s potential to cause misstatement of the baseline emissions. In addition, a non compliance
with the CDM modalities and requirements can form a major risk situation. The risk of understating baseline
emissions is higher than the risk of overstating these. Understating baseline emissions could lead to a situation
where emissions reductions that are not real are transferred.
Whether a risk is classified as high, moderate or low is to a large extent subjective and requires the validator’s
expert judgement. In order to be able to make decisions on an issue the validation team leader should have
sufficient validation and verification experience.
Once an issue has been classified as high risk, more information shall be provided by the project proponent to
clarify the situation and explain how the risk can be reduced. Measures can be taken to limit the risk e.g. in the form
of additional emission monitoring. Risks can also be reduced by choosing a more conservative option in the event of
encountered uncertainties, e.g. by selecting the lowest emission value from an uncertainty range of emission values
for a baseline scenario.
In the following pages, examples are given of risks encountered during the validation of baseline studies and
monitoring plans of CDM projects related to the following:
1. Accuracy of baseline emissions
2. Uncertainty of external data sources used
3. Coverage of leakage in the baseline scenario
4. Baseline emission assumptions
5. Accuracy of emission calculations in the monitoring plan
Part 1:
Generic
Guidelines
Part 2:
CDM
Validation
Part 3:
SSC
Validation
Part 4:
JI Determination
Part 5:
Part 6:
Initial
Periodic
Verification Verification
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Risk Example (1): Accuracy of emissions in the baseline
Example of risks classified in High, Moderate and Low risk categories.
High
Moderate
Low
The accuracy of the emissions in the selected
baseline is low. Emissions are estimated or
calculated.
Example: A baseline scenario was based on
emissions determined from a registration system
of a production unit. The systems of registration
was weak and/or the documented systems were
lacking.
To reduce the risks substantive data testing was
required in order to verify the emission level per
tonne of product produced.
The accuracy of the emissions in the selected
baseline is limited, but the impact of this issue on
the overall emission level was equally limited
(<5%).
Example: The measuring devices for the coal
consumption in the baseline of a fuel switch
project were old and not very accurate. As a
result of this the estimated error in the baseline
emission data was ±5%.
The reported emission data for the baseline was
reduced by 5% to compensate this inaccuracy.
The accuracy of the emissions in the selected
baseline is limited but the impact of this issue on
the overall emission levels is negligible (<1%).
Risk Example (2): Uncertainty of external data sources
High
Moderate
External unverified data sources are used. An
error in these data would have a material impact
(>5%) on the baseline emissions.
External unverified data sources are used . An
error in these data would have a limited impact
(<5%) on the emissions on the baseline
emissions.
Example: IPCC default values for the carbon
content and the net calorific value of coal were
used for the calculation of baseline emissions of
a fuel switch combustion project. No check was
made whether these values were applicable for
the type of coal used in this specific case.
To reduce this risk, the project proponent was
requested to provide analyses from the coal used
by the project.
Example: In a wind farm project the produced
electricity will replace a similar amount of fossil
fuel based electricity. The national emission data
that were used for calculating the baseline
emissions have never been verified. This could
have a material impact on the calculated
baseline emissions .
.
Part 1:
Generic
Guidelines
Part 2:
CDM
Validation
Part 3:
SSC
Validation
Part 4:
JI Determination
Part 5:
Part 6:
Initial
Periodic
Verification Verification
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Low
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External unverified data sources are used. An
error in these data would have a negligible
impact (< 1%) on the baseline emissions.
Example: Default values from the “Cement
industry GHG protocol” were used for the
determination of the CO2 emissions of the
decarbonisation of limestone in a cement plant.
Checking the analyses of the raw materials used
in the project showed that the real data gave
comparable results with the default values.
© Copyright 2004 IETA/PCF
Page 25
Risk Example (3): Coverage of leakage
Example of risks classified in High, Moderate and Low risk categories.
High
Moderate
Leakage has not been included in the baseline
study and material leakage can be expected in
the project. (>5% of project emissions).
Example: As the result of a fuel switch project
(from coal to gas) a waste stream that used to be
blended with coal before combustion is now landfilled. This leads to additional landfill emissions.
Low
Leakage has not been included and limited
(<5%) leakage is expected.
Leakage has not been included, but the effects of
leakage are negligible (<1%).
Example: In a fuel switch project, coal is replaced
by natural gas. However the natural gas pipeline
system is not well maintained and substantial
leakage of gas occurs from this system. The
supply chain of both 1) coal for the baseline
scenario and 2) gas for the project scenario have
been excluded from the scope of the project.
Example: The use of biomass as fuel in a project
leads to additional transport. If this transport is
material the additional transport emissions
should be included in the project scenario. The
project developers made an estimation of the
impact of this issue on the overall emissions,
showing that the impact on the presented
emission reductions will be less than 1%.
Risk Example (4): Baseline emissions assumptions
High
Moderate
There is insufficient evidence for parts of the
baseline emissions existence.
Example: The baseline scenario of a bio-fuel
project has been based on the assumption that
the wood cuttings are landfilled, and thus leading
to methane emissions. During the validation sitevisit it appeared that the bio-fuel material was not
land filled but used for the production of
chipboard. As a result of this, no evidence was
found for more than 40% of the assumed
baseline emissions.
Part 1:
Generic
Guidelines
Part 2:
CDM
Validation
Part 3:
SSC
Validation
Part 4:
JI Determination
Low
There is insufficient evidence for parts of the
baseline emissions existence, which have a
limited impact on the baseline emissions (<5%).
Example: In a landfill gas recovery project one
assumed that landfill gas was emitted to the
atmosphere in the baseline. During the validation
site-visit it appeared that during the warm
season some of the gas was flared to reduce
odour . Therefore in the most likely baseline,
flaring had to be taken into account. Since only a
part of the gas was expected to be flared, the
impact of this issue on the baseline emissions
was limited.
Part 5:
Part 6:
Initial
Periodic
Verification Verification
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The amount of emission reductions is uncertain
due to an uncertain baseline situation. This has
no impact on the accuracy of emission
reductions, as the emission variations will be
covered through the monitoring plan.
Example: A cement plant might produce at lower
production levels or even be shut down for
economical reasons. Consequently, the
projected emission reductions will not occur.
However, this does not affect the risk of
misstating the emission reductions because the
production level is one of the monitoring
parameters of the monitoring plan.
© Copyright 2004 IETA/PCF
Page 26
Risk Example (5): Accuracy of emissions in monitoring plan
Example of risks classified in High, Moderate and Low risk categories.
High
Moderate
Low
The monitoring plan is designed in a way that it is
expected to generate material inaccurate
emission data for the project emissions during the
crediting period, due to lack of emission
parameters.
Examples:
1) Critical parameters are estimated or calculated
instead of measured
2) the measuring frequency is low.
3) The landfill gas production of a landfill gas
recovery system will be continuously measured
but analysing the methane concentration of the
landfill gas is not included in the monitoring plan.
The monitoring plan has been developed in such
a way that it is expected to generate material
inaccurate emission data for the project
emissions during the crediting period, having a
limited impact on the project emissions
Responsibilities for the monitoring tasks have not
yet been defined in the monitoring plan, because
the project organisation still has to be formed.
Part 1:
Generic
Guidelines
Part 2:
CDM
Validation
Part 3:
SSC
Validation
Part 4:
JI Determination
Example: According to the monitoring plan the
fuel consumption and heat production of a
biomass boiler will be registered by the process
computer of the installation. Nothing was said
about back-up procedures of these data or about
making monthly printouts of the registered data.
Part 5:
Part 6:
Initial
Periodic
Verification Verification
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CDM Validation Criteria
The validator shall test and when possible confirm that the
project design meets the following criteria:
 UNFCCC criteria: The Kyoto Protocol Article 12 criteria,
the modalities and procedures for the CDM (Marrakech
Accords) and the relevant decisions by the CDM Executive
Board. UNFCCC criteria include, but are not limited to:
• Participation Requirements
• Project Design Document
• Project Additionality
• Sustainable Development and Approval by Parties
Involved
• Baseline Methodology and Project Baseline
• Monitoring Methodology and Plan – Coverage of
Emission Sources
• Monitoring Practise and GHG Data Management

Part 1:
Generic
Guidelines
Host Party criteria: National CDM requirements, including
sustainable development priorities, and potential specific
requirements contained in, for example, the preliminary
approval by Designated National Authority or project
agreements between involved parties.
Part 2:
CDM
Validation
Part 3:
SSC
Validation
Part 4:
JI Determination
Part 5:
Part 6:
Initial
Periodic
Verification Verification
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The validator is expected to identify and
determine the appropriate criteria for
project validation based on the technical
nature of the project, the presented project
design documentation as well as any
background study performed in advance of
the validation. The project design is
assessed against these criteria and the
result of this should be recorded in the
validation protocol.
The CDM is still evolving and clarifications
on the CDM requirements are provided by
the CDM Executive Board at its meetings.
Hence, the validator shall keep up to date
with the latest CDM Executive Board
decisions.
Host Party criteria shall be identified on a
project and country specific basis.
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Participation Requirements
Participation in a CDM project activity shall be
voluntary.
Parties participating in the CDM shall designate a
national authority for the CDM.
A Party not included in Annex I may participate in a
CDM project activity if it is a Party to the Kyoto
Protocol.
CDM modalities & procedures, paragraph 28 - 30
The validator shall also determine whether the host Party
voluntarily participates in the project. This is verified by
checking that the project has been approved by the host
Party’s Designated National Authority.
The project has the written approval of the
designated national authorities of each party
involved.
The sponsor country shall be identified, and the written
approval of the project by the host Party (in the form of at
LoA, MoU or LoI) will be necessary for project
registration.
CDM modalities & procedures, paragraph 40 (a)
Part 1:
Generic
Guidelines
The validator shall determine whether the host Party is
eligible to host a CDM project activity and verify that:
 The host Party has ratified the Kyoto Protocol
 The host Party has designated a national authority
for the CDM
 The sponsor Party has been identified.
Part 2:
CDM
Validation
Part 3:
SSC
Validation
Part 4:
JI Determination
Part 5:
Part 6:
Initial
Periodic
Verification Verification
The validator shall also determine whether the sponsor
party is in compliance with Kyoto Protocol Article 5 and 7
(The requirements for national communication and
keeping national GHG inventories).
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Project Design Document
The project design documentation used as a basis for validation shall be complete and comprehensive enough to
give an accurate picture of the project and its baseline. The documentation shall follow the structure and criteria
given in the UNFCCC CDM-PDD template and be approved by the project proponent for its completeness before it is
presented to the validator.
The Project Design Document (PDD) may be supported by additional documentation, such as:
– Baseline study
– Monitoring plan
Project Design Document
This document shall include, but not be limited to:
 Project Summary
 Baseline Methodology
 Duration of the Project Activity/ Crediting Period
 Monitoring Methodology and Plan
 Calculation of GHG emission reductions, using conservative assumptions for estimating emission reductions
 Environmental Impacts
 Stakeholder Comments
This document shall also provide the validator with sufficient information of the technical features of the project, and
other relevant information about the project.
For more details of the content, please refer to the UNFCCC CDM-PDD template.
Part 1:
Generic
Guidelines
Part 2:
CDM
Validation
Part 3:
SSC
Validation
Part 4:
JI Determination
Part 5:
Part 6:
Initial
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Baseline Methodology and Project Baseline
The validator shall determine whether the baseline methodology employed by the project to determine the project’s
baseline is previously approved by the CDM Executive Board. If the validator determines that the project intends to
use a new baseline methodology, the new methodology must be submitted for approval by the CDM Executive
Board.
CDM modalities & procedures, paragraph 38
The baseline of a CDM project activity is the scenario that reasonably represents the anthropogenic emissions in the
absence of the proposed project activity. [..]
CDM modalities & procedures, paragraph 44
In choosing a baseline methodology for a project activity,
project participants shall select from among the following
approaches:
 Existing actual or historical emissions, as
applicable; or
 Emissions from a technology that represents an
economically attractive course of action, taking into
account barriers to investment; or
 The average emissions of similar project activities
undertaken in the previous five years, in similar
social, economic, environmental and technological
circumstances, and whose performance is among
the top 20 per cent of their category.
A baseline shall be established:
 in a transparent and conservative manner
regarding the choice of approaches,
assumptions, methodologies, parameters,
data sources, key factors and additionality,
and taking into account uncertainties;
 on a project specific basis;
 taking into account relevant national and/or
sectoral policies and circumstances, such as
sectoral reform initiatives, local fuel
availability, power sector expansion plans,
and the economic situation in the project
sector.
CDM modalities & procedures, paragraph 45
CDM modalities & procedures, paragraph 48
Part 1:
Generic
Guidelines
Part 2:
CDM
Validation
Part 3:
SSC
Validation
Part 4:
JI Determination
Part 5:
Part 6:
Initial
Periodic
Verification Verification
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Additionality of a Project Activity
Emission reduction shall be additional to any
that would occur in the absence of the
certified project activity.
A CDM project activity is additional if anthropogenic emissions of
greenhouse gases by sources are reduced below those that would
have occurred in the absence of the registered CDM project
activity.
Kyoto Protocol, Article 12
CDM modalities & procedures, paragraph 43
The assessment of the additionality of a project activity shall determine whether there is sufficient evidence that
demonstrates that the CDM project activity itself is not a likely baseline scenario. Additionality may be demonstrated by:
(a) a flow-chart or series of questions that lead to a narrowing of potential baseline options;
(b) a qualitative or quantitative assessment of different potential options and an indication of why the non-project
option is more likely;
(c) a qualitative or quantitative assessment of one or more barriers facing the proposed project activity:
 Investment barrier: a financially more viable alternative to the project activity would have led to higher
emissions;
 Technological barrier: a less technologically advanced alternative to the project activity involves lower risks due
to the performance uncertainty or low market share of the new technology adopted for the project activity and so
would have led to higher emissions;
 Barrier due to prevailing practice: prevailing practice or existing regulatory or policy requirements would have
led to implementation of a technology with higher emissions;
 Other barriers: without the project activity, for another specific reason identified by the project participant, such
as institutional barriers or limited information, managerial resources, organizational capacity, financial resources,
or capacity to absorb new technologies, emissions would have been higher;
(d) an indication that the project type is not common practice in the proposed area of implementation, and not
required by a Party’s legislation/regulations.
Part 1:
Generic
Guidelines
Part 2:
CDM
Validation
Part 3:
SSC
Validation
Part 4:
JI Determination
Part 5:
Part 6:
Initial
Periodic
Verification Verification
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Sustainable Development and Approval of Parties Involved
CDM shall assist Parties not included in Annex I in
achieving sustainable development.
Kyoto Protocol, Article 12
The DOE shall receive written approval of voluntary
participation from the designated national authority of each
Party involved, including confirmation by the host Party
that the project activity assists it in achieving sustainable
development.
CDM modalities & procedures, paragraph 40 (a)
The validator shall assess whether the social and environmental impacts of a project are sufficiently addressed and
whether the project is in line with sustainable development criteria defined by the host Party. Moreover, the validator
shall verify that the host Party has confirmed that the project assists in achieving sustainable development.
If sustainable development criteria are elaborated and accepted by the host Party, a discussion on how the project
complies with the sustainable development criteria shall be included in the project’s PDD. If no sustainable
development criteria are defined, the validator shall assess the project’s compliance with the host Party’s current
sustainable development priorities if these are defined.
The DOE shall confirm that comments by local
stakeholders have been invited, a summary of the
comments received has been provided, and a
report to the DOE on how due account was taken
of any comments has been received.
CDM modalities & procedures, paragraph 37 (b)
Part 1:
Generic
Guidelines
Part 2:
CDM
Validation
Part 3:
SSC
Validation
Part 4:
JI Determination
Part 5:
Part 6:
Initial
Periodic
Verification Verification
The validator shall assess the appropriateness of the local
stakeholder consultation process performed by the project
proponent. In particular, the validator shall determine
whether:
 relevant local stakeholders have been consulted,
 a summary of the comments received provided,
 due account has been taken of any comments
received.
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Assessment of Environmental Impacts
Project participants shall submit to the DOE
documentation on the analysis of the environmental
impacts of the project activity. If those impacts are
considered significant by the project participants or the
host Party, project participants shall have undertaken
an environmental impact assessment in accordance
with procedures as required by the host Party.
CDM modalities & procedures, paragraph 37 (c)
The validator shall determine whether an assessment
of the environmental impacts of the project is required
by national legislation. If so, the validator shall verify
that the assessment of the environmental impacts has
been carried out in accordance with national
requirements and that the assessment of the
environmental impacts has been approved by the
relevant national authority.
Where no legal requirements exist, the analysis of the
environmental impacts of the project activity should be
reviewed by the validator to ensure this is in line with
the CDM-PDD. The coverage of such a review has
not been formally decided yet, but the validator should
review that all relevant impacts have been identified
and are properly taken into account in the project.
Part 1:
Generic
Guidelines
Part 2:
CDM
Validation
Part 3:
SSC
Validation
Part 4:
JI Determination
Part 5:
Part 6:
Initial
Periodic
Verification Verification
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Monitoring Methodology and Plan
Coverage of Emission Sources
The validator shall determine whether the monitoring methodology employed by the project is previously approved
by the CDM Executive Board. If the validator determines that the project intends to use a new monitoring
methodology, the new methodology shall be submitted for approval by the CDM Executive Board.
CDM modalities & procedures, paragraph 38
A monitoring plan shall provide for the collection and
archiving of all relevant data necessary for determining:
 anthropogenic emissions by sources of
greenhouse gases occurring within the project
boundary during the crediting period;
 the baseline of anthropogenic emissions by
sources of greenhouse gases within the project
boundary during the crediting period;
 increased anthropogenic emissions by sources of
greenhouse gases outside the project boundary
that are significant and reasonably attributable to
the project activity during the crediting period.
A monitoring plan shall provide for the collection and
archiving of information related to the environmental
impacts of the project, if those impacts are considered
significant by the project parties or the host Party.
CDM modalities & procedures, paragraph 53
Part 1:
Generic
Guidelines
Part 2:
CDM
Validation
Part 3:
SSC
Validation
Part 4:
JI Determination
Part 5:
Part 6:
Initial
Periodic
Verification Verification
The validator shall assess whether the monitoring plan
provides for the monitoring of the relevant project and
baseline GHG emission indicators and whether it
addresses all other factors that should be monitored
over the project lifetime, including social and
environmental sustainability indicators.
This includes an assessment of the proposed system
boundary with regard to whether the proposed
boundaries for accounting project and baseline GHG
emissions, respectively, include all significant sources
of GHG emissions and all relevant GHG gases. A test
of materiality may be used to assess to which extent
important GHG emissions may be omitted.
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Monitoring Methodology and Plan
Monitoring Practise and GHG Data Management
A monitoring plan shall reflect good practise.
CDM modalities & procedures, paragraph 54 (b)
The validator shall assess the proposed GHG data
management, control and reporting systems, e.g.
instructions, procedures, record keeping systems,
assumptions, technical equations, models and other
means that support complete, accurate and
conservative CER estimates. This shall confirm that
project quality control procedures and operations reflect
best practices and enable verification of GHG emission
reductions that are sound, credible and provide an
adequate basis for a successful completion of periodic
verifications.
Validation of the monitoring plan requires a thorough
and comprehensive assessment of known risks and
uncertainties related to emission reductions. The
validation shall ensure that identified risks and
uncertainties related to emission reductions are
sufficiently addressed by the monitoring plan.
Part 1:
Generic
Guidelines
Part 2:
CDM
Validation
Part 3:
SSC
Validation
Part 4:
JI Determination
Part 5:
Part 6:
Initial
Periodic
Verification Verification
The validator shall determine whether:
 the proposed system for monitoring reflects good
monitoring practise
 the monitoring plan provides for complete, accurate
and real measurements of achieved emission
reductions
 the monitoring plan provides for conservative
monitoring of baseline, when applicable, taking into
account data uncertainty.
A monitoring plan shall provide for:
 quality assurance and control procedures for the
monitoring process;
 procedures for the periodic calculation of the
reductions of anthropogenic emissions by sources
by the proposed CDM project activity, and for
leakage effects;
 documentation of all steps involved in the
calculations of emission reductions.
CDM modalities & procedures, paragraph 53
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Means of Verification
The validation requires the use of a set of
means that shall be used to identify and
determine
risks
related
to
project
implementation and GHG reductions. To
sustain a risk-based assessment, these means
shall be used both during the desk reviews and
the follow-up interviews. The methods
employed shall particularly focus on the
accuracy of provided information and the
credibility of the selected project baseline. The
validation protocol shall provide guidance as
well as document the results of the validation
activities.
Part 1:
Generic
Guidelines
Part 2:
CDM
Validation
Part 3:
SSC
Validation
Part 4:
JI Determination
Part 5:
Part 6:
Initial
Periodic
Verification Verification
• Document Review
– Review of data and information to confirm the
correctness of presented information
– Cross-checks between information provided in the
project design documentation and information from
independent background investigations
• Follow-up Interviews
– On site
– Via telephone
– Via email
Interviews shall include relevant stakeholders in the host
country, personnel responsible for project design and
implementation, and other stakeholders as applicable.
• Cross-check of information provided by interviewed
personnel, i.e. by source check or other interviews
• Comparison with projects or technology that have similar
or comparable characteristics
• Test of the correctness of critical formulas and calculations
• Witness and comparisons of similar projects in the host
country
• Comparison between baseline factors and project
performance factors to confirm comparability and
consistency in the use of the MP
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Page 37
The Validation Process
The main steps in a successful CDM project validation are shown in this flow diagram. The different layers may be
seen as representing the validation preparations, the validation itself and at last the results of the validation process.
The box colour represents the party responsible for the activity.(Green for project proponent, orange for the validator,
blue for the CDM EB). For most of the activities the guidelines provide links to issues that give further and detailed
explanation and guidance on the validation process. Project proponents may select a two-step validation approach as
described on the next page.
Develop Project
Documentation
Validator
Selection
EB Approval of
Methodologies
Baseline & Monitoring
Methodology Check
Document
Review
Resolution of Corrective
Action Requests
Part 1:
Generic
Guidelines
Part 2:
CDM
Validation
Part 3:
SSC
Validation
Part 4:
JI Determination
Part 5:
Part 6:
Initial
Periodic
Verification Verification
Validation Contract
Establishment
Validation Team
Selection
Public Stakeholder Comment
Process (30 days)
Background
Investigations
Final Validation
Report and Opinion
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Draft Validation
Report
Follow-up
Interviews
EB Registration
of project
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© Copyright 2004 IETA/PCF
Page 38
Baseline and Monitoring Methodology Check
The validator shall check whether the baseline and
monitoring methodologies employed by the project is
previously approved by the CDM Executive Board (EB).
If the validator determines that the project intends to use
new baseline and monitoring methodologies, the new
methodologies shall be submitted for review and approval
by the CDM EB. The validator shall check whether
documents are complete, i.e. the draft CDM-PDD shall as a
minimum include complete sections A to E as well as
annexes 3 and 4 describing the new baseline and
monitoring methodology, respectively. Then the validator
shall forward, without further analysis, the proposed new
methodology to the UNFCCC secretariat using the propose
new methodology form (F-CDM-PNM).
The secretariat forwards the documentation to the EB and
the Methodology Panel and makes the proposed new
methodology publicly available on the UNFCCC CDM web
site and invites public inputs for a period of 15 working
days. The Methodology Panel, taking into consideration
public comments and the recommendations by the desk
reviewers, prepares its recommendation regarding the
approval of the proposed new methodology to the EB. The
EB considers and eventually approves a proposed new
methodology at the next meeting following the receipt of the
recommendation regarding the approval of the proposed
new methodology by the Methodology Panel.
Part 1:
Generic
Guidelines
Part 2:
CDM
Validation
Part 3:
SSC
Validation
Part 4:
JI Determination
Part 5:
Part 6:
Initial
Periodic
Verification Verification
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Two-steps validation approach :
1. An initial validation of the CDM project, including
a complete assessment of the proposed
baseline and monitoring methodologies, prior to
the submission of new methodologies to the EB
for review and approval.
2. A final validation of the project baselines and
monitoring plans, taking into account the CDM
Executive Board’s comments on the proposed
baseline and monitoring methodologies, after
EB approval of the new methodologies.
The advantage of the two-steps approach is that new
methodologies are thoroughly reviewed by the
validator prior to the submission to the EB. However,
the two-steps approach requires two stakeholder
consultation processes, one during phase 1 and one
during phase 2, as comments by Parties,
stakeholders and NGOs shall be invited after the
baseline and monitoring methodologies applied by a
project are approved.
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© Copyright 2004 IETA/PCF
Page 39
Project
Participants
(PP)
Submit PDD with
proposed new baseline
and monitoring
methodology to DOE
DOE
(or AE)
Check PDD for
completeness and
submit PDD to
Secretariat using
F-CDM-NM
UNFCCC
Secretariat
EB Approval of Methodologies
Forward PDD to
EB and Meth
Panel and make
PDD publicly
available
Upon request,
provide
additional
technical
information
Submit, through DOE
and Secretariat,
clarifications to the Meth
Panel (clarifications
shall include revisions in
annexes 3 and 4 of the
PDD in highlighted form)
If methodology is not
approved, may
resubmit revised
methodology in next
round
10 working days
If methodology is
approved, perform
valdiation
max 4 months
Meth Panel
5 weeks
Select two
Experts
Expert 1 submits
recommendation
(F-CDM-Nmex)
Expert 2 submits
recommendation
(F-CDM-Nmex)
5 working days
Prior to making a
recommendation, the
Meth Panel may
request, through the
Secretariat and DOE,
additional technical
information from PP
Meet and make a
preliminary
recommendation and
submit, through the
Secretariat and DOE,
preliminary
recommendation to
PP
If recommendation is
in favour of approval
or if PP do not
provide clarifications,
the recommendation
shall be considered
as a final
recommendation
Consider
clarifications at
its next meeting
and prepare its
final
recommedation
Executive
Board (EB)
10 working days
Approve
or not approve
methodology at
its next
meeting
Approve
or not approve
methodology at
its next
meeting
Public
15 days
Part 1:
Generic
Guidelines
Part 2:
CDM
Validation
Part 3:
SSC
Validation
Comment
(F-CDM-Nmpu)
Part 4:
JI Determination
Part 5:
Part 6:
Initial
Periodic
Verification Verification
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© Copyright 2004 IETA/PCF
Page 40
Document Review
The document review shall establish to what degree the presented project design documentation
(PDD), including the baseline study and the monitoring plan, meet the established validation criteria.
The document review shall comprise, but not be limited to, an evaluation of the following:
• the documentation is complete and comprehensive and follows the structure and criteria given in the UNFCCC CDMPDD template
• the baseline and monitoring methodologies are justified and appropriate for the specific project
• the assumptions for the baseline are conservative and appropriate
• the description of the baseline development has considered technological, political, socio-demographic,
environmental and legal trends of relevance to the project
• additionality of the project is sufficiently demonstrated in the PDD
• all aspects related to direct and indirect emissions, including leakage, are captured in the project design
documentation and potentially claimed emission reductions
• the calculation of GHG emission reductions is appropriate and uses conservative assumptions for estimating
emission reductions
• local stakeholder consultation has been carried out and comments are taken into account in the project design
• the technical features of the project, as well as other information about the project has been sufficiently addressed.
• the monitoring plan clearly identifies the frequency of, responsibility and authority for monitoring, measurement and
data recording activities and sufficiently describes quality control/ quality assurance/ management control procedures
Part 1:
Generic
Guidelines
Part 2:
CDM
Validation
Part 3:
SSC
Validation
Part 4:
JI Determination
Part 5:
Part 6:
Initial
Periodic
Verification Verification
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© Copyright 2004 IETA/PCF
Page 41
Background Investigation
To supplement documentation provided from the
project proponent, the validator will normally have to
identify other sources that can provide background
information for the validation. Focus for this should be
to identify issues that are potentially of relevance to
the project. Such background studies are particularly
important if the project is in an industrial or public
sector that has not hosted a project of this character
before, or if the validator has limited experience with
particular
host
country
circumstances.
The
background study should evaluate the political and
legal,
environmental,
socio-demographic
and
technological policies, circumstances and trends
applicable to the specific project. A background
investigation through a host country visit is
encouraged for projects where host country or sectorspecific information is not obtained through prior
validation of projects.
The background study shall enable a risk-based
validation, thus the validator should emphasise on
issues that might incur risks related to successful
project implementation or accomplishment.
Part 1:
Generic
Guidelines
Part 2:
CDM
Validation
Part 3:
SSC
Validation
Part 4:
JI Determination
Part 5:
Part 6:
Initial
Periodic
Verification Verification
Examples of issues that might prove useful as
background information for project validation:
– Project technology
– Environmental legislation in the host country
– UNFCCC acceptance and registration of similar
projects
– Previous established agreements, Memorandums
of Understanding or Letters of Intent between the
project proponent and the host Party
– Sustainable development priorities in the host
country
– Macro-economic trends in the host country
– Political aspirations in the host country, such as
energy policies and waste management policies.
– Identification of data sources and data availability
– Issues related to project implementation impacts,
such as despatch patterns, marginal power plants,
grid factors etc. and gas distribution network
coverage for energy projects
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© Copyright 2004 IETA/PCF
Page 42
Follow-up Interviews
The assessment performed during a GHG project validation shall enable the validator to arrive at a conclusion
regarding the reasonableness of project presumptions. This assessment shall include theoretical as well as
practicable considerations, and also give an opinion on critical factors related to the project baseline.
Follow-up interviews with host country project
stakeholders may prove useful or even necessary in
order to discuss and validate issues related to project
baseline and additionality. For discussions related to
the technical implementation or financing of the
project, follow-up interviews with the project developer
may also be beneficial.
Discussions with the host Party’s designated national
authority in order to understand and validate issues
related to sustainable development is important for
CDM projects. Unless local validators are used for
project validation, a thorough understanding of such
complex issues may be difficult to achieve through
other means.
Follow-up interviews are a prerequisite if the validator
does not find sufficient or complete information or
evidence via other means of verification. Interviews
may be performed face-to-face or via telephone.
Part 1:
Generic
Guidelines
Part 2:
CDM
Validation
Part 3:
SSC
Validation
Part 4:
JI Determination
Part 5:
Part 6:
Initial
Periodic
Verification Verification
A site visit may prove useful for some projects, such
as refurbishment of existing installations and energy
efficiency projects. A site visit may not be required for
green-field projects, but will need be considered.
Desk review vs. visit to host country
A validation based on a desk review only, including
telephone interviews with host country project
stakeholders, may be used as a cost-effective way for
validation of a project when the project context is well
known and the project’s additionality is proven by
similar projects in the same environment.
A validation based on a desk review only will usually
require that similar projects have been validated and
previously achieved registration with the UNFCCC,
and that the implementation of these projects have not
changed the additionality of the proposed project.
Hence, a well-documented project proposal with
reference to prior projects of the same character might
cause the validator to choose not to incur the extra
costs related to a host country visit.
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© Copyright 2004 IETA/PCF
Page 43
Stakeholder Consultation Process
The validator shall make the project design document of
the project under consideration publicly available and
invite Parties, stakeholders and UNFCCC accredited
NGOs to comment on the validation requirements within
30 days. Comments received during the 30 day
stakeholder consultation process shall be made publicly
available.
The invitation for comments shall be open and
transparent in a way that allows to receive comments
from regional stakeholders. The CDM-EB decided that
the PDD and comments from Parties, stakeholder and
NGOs shall be made available through the validator’s
website, with a link to this site from the UNFCCC
website. Only if a validator has no website or no
possibility to link the documents to another site, they will
be made public using the UNFCCC website and server.
The validator shall take into account the comments
received and shall demonstrate how due account was
taken in the validation process of the comments
received. The validator is not required to enter into a
dialog with Parties, stakeholders or NGOs
commenting on the validation requirements. However,
if comments are not sufficiently substantiated, the
validator may request further clarifications on the
comments received.
To ensure a transparent validation process, the
validator may include the comments received and how
the validation has taken due account of the comments
received in a separate appendix to the validation
report. Issues brought up by stakeholders may be
further discussed and elaborated in the project’s
validation protocol
The DOE shall:
a) establish a web site where PDDs shall be made
publicly available in PDF format through a link to the
UNFCCC CDM web site; or
b) Make PDDs directly publicly available in PDF format
on the UNFCCC CDM web site.
CDM-EB-09 Annex 7
Part 1:
Generic
Guidelines
Part 2:
CDM
Validation
Part 3:
SSC
Validation
Part 4:
JI Determination
Part 5:
Part 6:
Initial
Periodic
Verification Verification
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© Copyright 2004 IETA/PCF
Page 44
Draft Validation Report
The draft validation report should facilitate the joint
effort between the project proponent and the
validator to develop and document answer(s) and
conclusions to requirements which are considered
applicable for CDM projects. The independent
validation exercise and subsequent discussions
given in the report shall enable the project proponent
to address any concerns the validator may have
raised related to the project, and how these may be
clarified. The report should also give an overview of
the scope of the validation and the conclusions for
individual requirements.
The draft validation report should give an overview of
the efforts deployed by the validator in order to arrive
at the draft validation findings. It should build on the
transparency principles, and particularly indicate the
implications of corrective action requests identified
during the validation.
The draft validation report shall include a general
discussion of details captured by the validation
protocol, and clearly state the conclusions relate to
each of the general issues required for successful
validation.
The content of a draft validation report may look like this:
1 Introduction
1.1 Objective
1.2 Scope
1.3 GHG Project Description
2 Methodology
2.1 Review of Documents
2.2 Follow-up Interviews
2.3 Resolution of Outstanding Issues
3 Preliminary Validation Findings
3.1 Project Design
3.2 Baseline
3.3 Monitoring Plan
3.4 Calculation of GHG Emissions
3.5 Environmental Impacts
3.6 Comments by Local Stakeholders
4 Comments by Parties, Stakeholders and NGOs
5 References
Appendix 1: Validation Protocol
There is a CDM validation report template available for outline and
further explanation of the validation report content.
Part 1:
Generic
Guidelines
Part 2:
CDM
Validation
Part 3:
SSC
Validation
Part 4:
JI Determination
Part 5:
Part 6:
Initial
Periodic
Verification Verification
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Clarifications and Corrective Action Requests
A validation may identify issues related to the project’s baseline, implementation or operations that need to be further
elaborated, researched or added to meet UNFCCC or host Party requirements and achieve credible emission
reductions. There will be different ways of reporting such results. However, it is imperative that these issues are
transparently identified, discussed and concluded in the validation report and opinion. Non-compliance with project
requirements, or the identification of a risk to successful fulfilment of the particular project’s objectives have been
termed ”Corrective Action Request" .
A Corrective Action Request is issued where:
a) mistakes have been made in assumptions or the
project documentation which directly will influence
on project results;
b) the requirements deemed relevant for validation of
a project with certain characteristics have not been
met; or
c) there is a risk that the project would not be
registered by the UNFCCC or that emission
reductions cannot be verified and certified.
The validator shall make sure that all Clarification
Requests and Corrective Action Requests are
reported and elaborated in the conclusion of the draft
validation report.
A Clarification Request is issued where information is
insufficient, unclear or not transparent enough to
establish whether a requirement is met.
After the presentation of Clarifications or Corrective
Action Requests in the draft validation report the
project proponent will
have to respond to the
corrective action and clarification requests
and
barring exceptions resolve the issue before a final
validation opinion is formulated by the validator.
Every exception shall be justified.
Part 1:
Generic
Guidelines
Part 2:
CDM
Validation
Part 3:
SSC
Validation
Part 4:
JI Determination
Part 5:
Part 6:
Initial
Periodic
Verification Verification
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Also minor issues, i.e. those which do not represent a
risk of changing the validation conclusions, shall be
brought to the attention of the project proponent for
consideration. However, minor issues may not
necessarily be presented as a part of the validation
opinion.
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© Copyright 2004 IETA/PCF
Page 46
Validation Protocol
A generic protocol for the validation of CDM projects
has been developed to facilitate cost-effective and
comprehensive validation of CDM projects. These
protocols may prove useful as a starting point in
identifying generic as well as specific criteria for
individual projects. For cost-effective and systematic
validations of CDM projects, the protocol may be used
as the documented backbone of a transparent
validation process.
The protocol may also be used during the validation
process to assist the validator to keep track of:
-
issues to be further verified/ checked,
-
issues to be clarified by the project parties,
-
issues to be corrected by the project parties
In order to fulfil the requirement for transparency, both
the original comments in the draft validation protocol
(which shall be submitted together with the draft
validation report) as well as the final comments made
after subsequent discussions with the project proponent
and other project participants and updating of project
documentation shall be included in the validation
protocol.
An example of how a validation protocol may be
structured is explained on the next page.
The generic CDM, JI and Small-Scale validation
protocols (with requirements and checklist questions)
can be found in separate files.
NB!
Dependent on individual project circumstances and the
detail of the project documentation, the relevant
protocol has to be amended to ensure its
applicability for individual projects.
Part 1:
Generic
Guidelines
Part 2:
CDM
Validation
Part 3:
SSC
Validation
Part 4:
JI Determination
Part 5:
Part 6:
Initial
Periodic
Verification Verification
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© Copyright 2004 IETA/PCF
Page 47
Validation Protocol Legend
Table 1
Mandatory Requirements for Clean Development Mechanism (CDM) Activities
REQUIREMENT
The requirements the
project must meet.
Table 2
Ref
CONCLUSION
Cross Reference to Checklist (Table 2)
Reference to the legislation
or agreement where the
requirement is found.
This is either acceptable based on evidence provided (OK),
or a Corrective Action Request (CAR) of risk or noncompliance with stated requirements.
To ensure a transparent process, this refers to
the relevant checklist questions in Table 2 to
show how the specific requirement is validated.
Requirements Checklist
CHECKLIST QUESTION
Ref.
MoV
COMMENTS
The various requirements in Table 1
are linked to specific checklist
questions the project shall meet. The
checklist is organised in different
sections, following the CDM-PDD
structure. Each section is then
further sub-divided. The lowest level
constitutes a checklist question
Reference to
documents
where the
source to the
checklist
question or
item is
found.
The means of
verification explains
how conformance with
the checklist question is
investigated, i.e.
through document
review (DR) or
interview (I).
The section is used to
elaborate and discuss
the checklist question
and/or the
conformance to the
question. and to
explain the
conclusions reached.
Table 3
This is either acceptable based on
evidence provided (OK), or a
Corrective Action Request (CAR)
or a Clarification Request (CL)
Whenever a CAR or CL is issued,
table 3 shall be used to describe
how the findings have been
resolved and concluded.
Final Conclusions
The final conclusion
of the validation shall
be documented as
either OK , CAR or
CL. This is based on
the resolution of
outstanding issues as
elaborated in Table 3.
Resolution of Corrective Action and Clarification Requests
Draft report clarifications and
corrective action requests by
validation team
If the conclusions from the draft
validation are either a Corrective Action
Request or a Clarification Request,
these shall be listed in this section.
Part 1:
Generic
Guidelines
Draft Conclusions
Part 2:
CDM
Validation
Part 3:
SSC
Validation
Part 4:
JI Determination
Ref. to checklist question in
table 2
Reference to the checklist
question number in Table 2
where the CAR or CL is
explained.
Part 5:
Part 6:
Initial
Periodic
Verification Verification
Summary of project owner response
The responses given from the project
proponent or other project participants
during the communications with the
validation team shall be summarised in
this section.
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Validation team conclusion
This section shall summarise the Validation
Team responses and final conclusions. The
conclusions shall also be included in Table 2, in
the section called “Conclusions Final”.
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Page 48
Resolution of Corrective Action Requests
After the corrective action requests stated in the draft
validation report are acknowledged by the project
proponent, these will have to to be resolved.
The requests can be resolved or "closed out" by the
project proponent by modifying the project design and by
rectifying and updating the project design documentation.
If this is not done in the final stages of the validation, it
may cause the project not be recommended for
UNFCCC registration, or cause the expected emission
reductions not to be subsequently verified and certified.
However, such a choice shall be reflected as a
qualification in the final validation opinion.
Conversely, a validation with no (remaining) corrective
action requests could still end up not producing the
expected emission reductions. Some issues will only be
possible to clarify fully during detailed design, e.g. after
an investment decision has been made. Other issues
may even be unclear until an ex post (i.e. for the time
emission reductions have been achieved) verification and
certification has established if and how many CERs the
project actually has generated.
Part 1:
Generic
Guidelines
Part 2:
CDM
Validation
Part 3:
SSC
Validation
Part 4:
JI Determination
Part 5:
Part 6:
Initial
Periodic
Verification Verification
Corrective action requests may lead to amendments
to the projects monitoring plan, or adjustments of the
selected project baseline. Corrective action requests
may also require further investigation of issues that
are not considered or appropriately addressed in the
project documents.
It is the responsibility of the project proponent to
respond to the corrective action requests identified by
the validator in a timely manner. However, as some
issues may only be verified during or after project
implementation, it shall be clearly documented in the
project design documentation how these requests will
be addressed. For this as well as for all other
changes as a result of the validation, the nature and
location of changes shall be clearly identified in the
revised project design documentation.
All changes shall be approved by the project
proponent before submitted to the validator for final
review.
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Final Validation Report
The final validation report should reflect the results from the
dialogue and any adjustments made to the project after the
draft validation report was submitted. It will in its appearance
look much like the draft validation report, but will now reflect
the responses to corrective action and clarification requests,
discussions and revisions of project documents. Thus, the
final validation report should give the final conclusions
regarding the projects conformance with relevant UNFCCC
requirements (especially each requirement of the CDM
modalities & procedures, paragraph 37). The validation report
may raise issues that need to be subsequently addressed
during project implementation.
The final validation report shall include a validation opinion
which either forms the basis for UNFCCC registration of the
project or which explains the reason for non-acceptance if the
project is judged not to fulfil validation requirements.
The validation report shall give an overview of the approach
employed by the validator in order to arrive at the final
validation conclusions and opinion.
It shall particularly
indicate the implications of any remaining corrective action
requests not resolved during the validation. Apart from this,
the general discussion of details captured by the validation
protocol and conclusions related to project requirements shall
be included in the final report. The DOE shall employ
necessary quality assurance procedures to ensure the
correctness of the report and opinion.
Part 1:
Generic
Guidelines
Part 2:
CDM
Validation
Part 3:
SSC
Validation
Part 4:
JI Determination
Part 5:
Part 6:
Initial
Periodic
Verification Verification
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The content of a validation report may look like this:
1 Introduction
1.1 Objective
1.2 Scope
1.3 GHG Project Description
2 Methodology
2.1 Review of Documents
2.2 Follow-up Interviews
2.3 Resolution of Outstanding Issues
3 Validation Findings
3.1 Project Design
3.2 Baseline
3.3 Monitoring Plan
3.4 Calculation of GHG Emissions
3.5 Environmental Impacts
3.6 Comments by Local Stakeholders
4 Comments by Parties, Stakeholders and NGOs
5 Validation Opinion
6 References
Appendix 1: Validation Protocol
The final validation report shall be made publicly
available upon transmission to the EB.
CDM modalities & procedures, paragraph 40 (g)
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Validation Opinion
After completed validation, a validation opinion shall
be provided by the validator. The validation opinion
shall either form the basis for UNFCCC registration
of the project or shall explain the reason for nonacceptance if the project is judged not to fulfil the
requirements for validation. In addition, the opinion
will be an important decision factor for project
proponents whether to proceed or not with the
project.
This opinion shall include:
 Summary of the validation methodology and
process and the applied validation criteria
 Statement on project components/issues not
covered in the validation engagement
 Summary of the validation conclusions
 Statement on the likelihood of emission
projections
 Liability statement with regards to the validity
of the validation opinion
The validation opinion shall confirm that the project
meets stated criteria and that the methods
presented in the project design documentation are
acceptable and have been correctly applied.
Part 1:
Generic
Guidelines
Part 2:
CDM
Validation
Part 3:
SSC
Validation
Part 4:
JI Determination
Part 5:
Part 6:
Initial
Periodic
Verification Verification
Possible validation outcomes:
A. Unqualified validation opinion
An unqualified validation opinion is issued if the review and
further assessment of the project design, the baseline and
monitoring plan concluded that the project complies with all
UNFCCC and host Party requirements. This means that all
corrective action requests presented in the draft validation
report were satisfactorily resolved.
B. Qualified validation opinion
A qualified validation opinion will be issued when the project
meets all UNFCCC and host Party requirements, but does not
meet criteria given to provide for consistent project
operations, monitoring and reporting. The project developer
shall rectify such issues prior to project commencement, and
the initial verification or first periodic verification shall
determine whether qualifications stated in the validation
opinion have been sufficiently addressed.
C. Denial of validation
A denial of validation shall be clearly expressed when the
validator is unable to obtain sufficient and appropriate
evidence which could confirm that UNFCCC or host Party
requirement are met, or where evidence show that such
requirement are not met. Hence, the validator will conclude
that the project cannot be validated.
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Examples of Validation Opinions
Unqualified validation opinion
“XYZ Verification Ltd. has performed a validation of the ABC project in Country X. The validation was performed on
the basis of UNFCCC criteria and host Party criteria, as well as criteria given to provide for consistent project
operations, monitoring and reporting.
The review of the project design documentation and the subsequent follow-up interviews have provided the validation
team with sufficient evidence to determine the fulfilment of stated criteria. In our opinion, the project meets all relevant
UNFCCC requirements for the CDM and all relevant host Party criteria.
XYZ Verification Ltd. has received a confirmation by the host Party that the project activity assists it in achieving
sustainable development.
By displacing fossil fuel-based electricity with electricity generated from a renewable source, the project results in
reductions of CO2 emissions that are real, measurable and give long-term benefits to the mitigation of climate change.
An analysis of the investment and technological barriers demonstrates that the proposed project activity is not a likely
baseline scenario. Emission reductions attributable to the project are hence additional to any that would occur in the
absence of the project activity. Given that the project is implemented as designed, the project is likely to achieve the
estimated amount of emission reductions.
Following the endorsement of the project by the Country X Designated National Authority, the project will hence be
recommended by XYZ Verification Ltd. for registration with the UNFCCC.
Qualified validation opinion
“…The validation has revealed that the procedures for monitoring and reporting are not yet sufficiently developed. The
lack of such procedures may represent a risk for emission reductions not being verified and certified. Satisfactory
procedures should hence be developed prior to project implementation. …”
Individual DOEs may apply their own “language” and own terms to express their validation opinions.
Part 1:
Generic
Guidelines
Part 2:
CDM
Validation
Part 3:
SSC
Validation
Part 4:
JI Determination
Part 5:
Part 6:
Initial
Periodic
Verification Verification
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Page 52
Unresolved Issues
Although the majority of the modalities and procedures
for the CDM are in place, the CDM is still not fully
operational. As a consequence, a project may not yet
fulfil all relevant validation criteria at the time the
validation is concluded and a qualified validation opinion
is issued.
This may be due to one or more of the reasons below:
 The host Party has not yet defined sustainable
development requirements or other requirements
applicable for CDM projects;
 The host Party has not yet established or
designated a national authority to approve (or
reject) CDM project activities;
 The modalities for including afforestation and
reforestation activities under the CDM are not yet
in place.
Part 1:
Generic
Guidelines
Part 2:
CDM
Validation
Part 3:
SSC
Validation
Part 4:
JI Determination
Part 5:
Part 6:
Initial
Periodic
Verification Verification
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It must be kept in mind that a validation only can tell
something about the project’s likelihood to comply
with requirements and to succeed at a certain point in
time and under given circumstances.
For the verifier, the validation report will hence be one
of the inputs used for verification of emission
reductions, and any changes that have occurred
since validation and that have impact on the claimed
emission reductions shall therefore be considered.
If factors that impact project performance change
after validation, such changes shall be brought to the
attention of the verifier.
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Page 53
Part Three:
Small Scale CDM Validation Guidelines
Content:
 Small Scale Project Activity
Categories
 Differences between Small-scale
and other CDM projects
 The Validation Process for SmallScale Projects
Part 1:
Generic
Guidelines
Part 2:
CDM
Validation
Part 3:
SSC
Validation
Part 4:
JI Determination
Part 5:
Part 6:
Initial
Periodic
Verification Verification
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For the validation of small scale
CDM projects the same criteria
and process apply as for CDM
validations with the exception of
some key differences.
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Page 54
Small-Scale Project Categories
Type I: Renewable energy projects (Capacity < 15 MW):
I.A Electricity generation by the user
I.B Mechanical energy for the user
I.C Thermal energy for the user
I.D Renewable electricity generation for a grid
Type II: Energy efficiency improvement projects (Energy Efficiency Improvement <15 GWh per year)
II.A Supply side energy efficiency improvements - transmission and distribution
II.B Supply side energy efficiency improvements - or generation
II.C Demand-side energy efficiency programmes for specific technologies
II.D Energy efficiency and fuel switching measures for industrial facilities
II.E Energy efficiency and fuel switching measures for buildings
Type III: Other project activities (Direct Project Emissions < 15 kilotonnes of CO2equivalents)
III.A Agriculture
III.B Switching fossil fuels
III.C Emission reductions by low-greenhouse gas emitting vehicles
III.D Methane recovery and avoidance.
For the above small-scale project categories simplified baselines and monitoring methodologies shall be employed.
Part 1:
Generic
Guidelines
Part 2:
CDM
Validation
Part 3:
SSC
Validation
Part 4:
JI Determination
Part 5:
Part 6:
Initial
Periodic
Verification Verification
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Page 55
Differences between Small-Scale and other CDM Projects
Different requirements related to the project design:
•
Shall use the simplified baseline and monitoring methodologies specified for the project category or
propose changes to simplified baselines and monitoring methodologies, or propose additional project
categories for consideration by the EB.
•
Shall provide an explanation to show that the project activity would otherwise not be implemented due to
the existence of one or more barriers:
– Investment barriers
– Technological barriers
– Barriers due to prevailing practice
– Other barriers
•
Project boundary is limited to the physical project activity.
•
Leakage shall be considered for biomass projects and as required for individual project categories
•
Use the Simplified PDD for Small-Scale CDM Project Activities
•
Documentation on the analysis of environmental impacts is only necessary if required by the host Party
•
The project participants may propose changes to the simplified baseline and monitoring methodologies or
propose additional project categories for consideration in writing directly to the CDM Executive Board.
Different requirements related to the validation:
•
Ensure that the project complies with one of the small-scale project categories and qualifies to employ the
baseline and monitoring methodology of this project category
•
Make use of the small-scale validation protocol that takes into account the specific requirements for small
scale projects
Part 1:
Generic
Guidelines
Part 2:
CDM
Validation
Part 3:
SSC
Validation
Part 4:
JI Determination
Part 5:
Part 6:
Initial
Periodic
Verification Verification
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Page 56
The Validation Process for Small-Scale Projects
The main steps in a successful validation of small-scale projects are shown in this flow diagram. The different tiers
may be seen as representing the validation preparations, the validation itself and at last the results of the validation
process. The box colour represents the party responsible for the activity (Green for the project proponent, orange for
the validator, blue for the CDM EB). The guidelines provide in the CDM Validation Guidelines will be valid also for the
validation of small-scale projects. The difference between validation of small-scale projects and other projects is
described on the previous page. Links to the generic validation guidelines that give further and detailed explanation
and guidance on the validation process are provided for the relevant activity boxes below.
Develop Project
Documentation
Validator
Selection
Validation Contract
Establishment
Validation Team
Selection
Public Stakeholder Comment
Process (30 days)
Document
Review
Part 1:
Generic
Guidelines
Part 2:
CDM
Validation
Background
Investigations
Follow-up
Interviews
Resolution of Corrective
Action Requests
Final Validation
Report and Opinion
Part 3:
SSC
Validation
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Part 4:
JI Determination
Part 5:
Part 6:
Initial
Periodic
Verification Verification
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Page
Draft Validation
Report
EB Registration
of project
Next
Page
© Copyright 2004 IETA/PCF
Page 57
Part Four: JI Determination Guidelines
Content:

JI Determination Actors

Differences between JI Determination
and CDM Validation

JI Determination Criteria
• Participation Requirements
• Baseline Setting
• Additionality of project activity
• Environmental Impacts
• Monitoring

If the host Party does not meet these criteria, the
verification procedure under the Article 6 Supervisory
Committee apply (Second track JI). These
verification procedures provide for the determination
of a JI project activity and the verification of ERUs by
an independent entity accredited by the Article 6
Supervisory Committee.
JI Determination Process
For the determination of JI the same
means of verification and process
apply as for CDM validations with the
exception of some key differences.
Part 1:
Generic
Guidelines
Part 2:
CDM
Validation
Part 3:
SSC
Validation
Part
Part 4:
4:
JI
JI DeterDetermination
mination
Part 5:
Part 6:
Initial
Periodic
Verification Verification
If the host Party meets all eligibility criteria related to
the transfer and acquisition of ERUs as stated in the
Marrakech
Accords
(Guidelines
for
the
implementation of Article 6), the host Party is allowed
to apply their own procedures for approving JI
projects and for verifying emission reductions from
an JI project (First track JI). Nonetheless, a host
Party that meets all criteria may elect to use the
verification procedure under the Article 6 Supervisory
Committee, or an acquiring Party may request use of
this procedure.
These guidelines apply to projects that use the
verification procedure under the Article 6
Supervisory Committee apply (Second track).
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Page 58
JI Determination Actors
Involved actors
JI Supervisory
Committee
Project Entity
Project participants
Validation Contract Parties
Project
Proponent
Consultants
Contractual relationships
Communication channels
during validation
Independent
Entity
Parties
Stakeholders,
Accredited Observers
Host Party
Designated
Focal Point
Note: The above diagram reflects a contractual model where the project proponent is independent from the project entity.
The frame for “project participants” only shows an example. Other relationships are possible, such as a direct contractual
relationship between project entity and the independent entity.
Part 1:
Generic
Guidelines
Part 2:
CDM
Validation
Part 3:
SSC
Validation
Part
Part 4:
4:
JI
JI DeterDetermination
mination
Part 5:
Part 6:
Initial
Periodic
Verification Verification
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Page 59
Difference between JI Determination
and CDM Validation
Different requirements related to the project design:
•
Determination (for CDM projects this is named Validation) is not required if the host
Party complies with the eligibility requirements according to Decision 16/CP.7,
paragraph 21
•
No requirement for contribution to sustainable development in the host Party
•
No requirements for local stakeholder consultations. However a Party involved must
have national guidelines in place including the consideration of stakeholders'
comments, paragraph 20 (b).
Different requirements related to the determination:
•
Make use of the JI Determination Protocol that takes into account the requirements
as stated above
•
No approval of baseline and monitoring methodologies is required
•
Note that guidance for JI baseline methodologies, comparable to para. 48 of the
CDM M&P, has yet to be defined.
Part 1:
Generic
Guidelines
Part 2:
CDM
Validation
Part 3:
SSC
Validation
Part
Part 4:
4:
JI
JI DeterDetermination
mination
Part 5:
Part 6:
Initial
Periodic
Verification Verification
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Page 60
JI Determination Criteria
The independent entity shall test and when
possible confirm that the project design meets
the following criteria:


UNFCCC criteria: The Kyoto Protocol
Article 6 criteria, the guidelines for the
implementation of Article 6 (Marrakech
Accords) and the relevant decisions by the
JI Supervisory Committee;
Host Party criteria: National requirements
and
potential
specific
requirements
contained in, for example, the preliminary
approval by the host Party or project
agreements between involved parties.
NB. The official starting year for JI projects is in
2008. The regulatory process for JI has not yet
commenced and methodologies for JI and the
"determination" process are subject to future
guidance by the appropriate Convention bodies.
Part 1:
Generic
Guidelines
Part 2:
CDM
Validation
Part 3:
SSC
Validation
Part
Part 4:
4:
JI
JI DeterDetermination
mination
Part 5:
Part 6:
Initial
Periodic
Verification Verification
The independent entity is expected to identify and
determine the appropriate criteria for project
determination based on the technical nature of the
project, the presented project design documentation
as well as any background study performed in
advance of the validation. The project design is
assessed against these criteria and the result of this
is recorded in the determination protocol.
UNFCCC criteria include
• Participation Requirements
• Project Additionality
• Environmental Impacts
• Baseline Setting
• Monitoring
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Page 61
Participation Requirements
Parties participating in JI shall designate a focal point
for approving JI projects and have in place national
guidelines and procedures for approving JI projects.
JI determination is mandatory if the host Party does
not meet the eligibility requirements as described
(paragraph 21). The secretariat maintains a publicly
accessible list of Parties that meet these
requirements. JI determination is optional for those
host Parties that meet the requirements.
Legal entities participating in JI may only transfer or
acquire ERUs if the authorizing party is eligible to do
so at that time.
Guidelines for the implementation of Article 6,
paragraph 20 - 29
The project shall have the written approval of the
designated national authorities of each party
involved.
Guidelines for the implementation of Article 6,
paragraph 33 (a)
Part 1:
Generic
Guidelines
Part 2:
CDM
Validation
Part 3:
SSC
Validation
Part
Part 4:
4:
JI
JI DeterDetermination
mination
Part 5:
Part 6:
Initial
Periodic
Verification Verification
A host or acquiring Party may only issue, transfer or
receive ERUs upon meeting the following requirements:
- The Party is a party to the Kyoto Protocol
- Its assigned amount has been calculated and
recorded in accordance with the modalities for the
accounting of assigned amounts
- The Party has in place a national registry in
accordance with Article 7, paragraph 4
Guidelines for the implementation of Article 6,
paragraph 21
The independent entity shall determine whether the host
Party voluntarily participates in the project. This is verified
by checking that the project has been approved by the
Parties involved.
The sponsor country shall be identified and the approval of
the project by the host Party (in the form of at LoA, MoU or
LoI) will be necessary for project registration.
The validator shall also determine whether the
sponsor/acquiring parties are in compliance with Kyoto
Protocol Article 5 and 7 (The requirements for national
communication and keeping national GHG inventories).
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Page 62
Baseline Setting
The baseline for a JI project is the scenario that
reasonably represents the GHG emissions that
would occur in the absence of the proposed project.
A baseline shall cover emissions from all the six
gases, the applicable sectors and source
categories, and removals by sinks as listed in
Annex A of the Kyoto Protocol, within the project
boundaries.
Project participants shall justify their choice of
baseline.
Guidelines for the implementation of Article 6,
Appendix B
A baseline shall be established:
 in a transparent manner regarding the choice of
approaches, assumptions, methodologies, parameters,
data sources, and key factors;
 taking account of uncertainties and using conservative
assumptions
 on a project specific basis and/or using a multi-project
emission factor
 taking into account relevant national and/or sectoral
policies and circumstances, such as sectoral reform
initiatives, local fuel availability, power sector expansion
plans, and the economic situation in the project sector.
Guidelines for the implementation of Article 6, Appendix B
The validator shall determine whether the baseline is appropriate and in accordance with the criteria above.
Guidelines for the implementation of Article 6, paragraph 33c and Appendix B
Part 1:
Generic
Guidelines
Part 2:
CDM
Validation
Part 3:
SSC
Validation
Part
Part 4:
4:
JI
JI DeterDetermination
mination
Part 5:
Part 6:
Initial
Periodic
Verification Verification
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Page 63
Additionality of Project Activity
Any such project provides a reduction in
emissions by sources, or an enhancement of
removals by sinks, that is additional to any
that would otherwise occur.
A JI project activity shall result in a reduction of anthropogenic
emissions by sources or an enhancement of anthropogenic
removals by sinks that is additional to any that would otherwise
occur.
Kyoto Protocol, Article 6
Guidelines for the implementation of Article 6, paragraph 31
The assessment of the additionality of a project activity shall determine whether there is sufficient evidence that
demonstrates that the JI project activity itself is not a likely baseline scenario. Additionality may be demonstrated by
(a) a flow-chart or series of questions that lead to a narrowing of potential baseline options;
(b) a qualitative or quantitative assessment of different potential options and an indication of why the nonproject option is more likely;
(c) a qualitative or quantitative assessment of one or more barriers facing the proposed project activity:
 Investment barrier: a financially more viable alternative to the project activity would have led to higher
emissions;
 Technological barrier: a less technologically advanced alternative to the project activity involves lower risks
due to the performance uncertainty or low market share of the new technology adopted for the project
activity and so would have led to higher emissions;
 Barrier due to prevailing practice: prevailing practice or existing regulatory or policy requirements would
have led to implementation of a technology with higher emissions;
 Other barriers: without the project activity, for another specific reason identified by the project participant,
such as institutional barriers or limited information, managerial resources, organizational capacity, financial
resources, or capacity to absorb new technologies, emissions would have been higher;
(d) an indication that the project type is not common practice in the proposed area of implementation, and not
required by a Party’s legislation/regulations.
Part 1:
Generic
Guidelines
Part 2:
CDM
Validation
Part 3:
SSC
Validation
Part
Part 4:
4:
JI
JI DeterDetermination
mination
Part 5:
Part 6:
Initial
Periodic
Verification Verification
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Page 64
Environmental Impacts
The project participants shall submit to the accredited
independent entity documentation on the analysis of the
environmental impacts of the project activity in
accordance with procedures as determined by the host
Party.
If those impacts are considered significant by the project
participants of the host Party, the project participants
shall have undertaken an environmental impact
assessment as required by the host Party.
The independent entity shall assess whether the
environmental impacts of a project are sufficiently
addressed, whether the project is in line with
environmental
legislation,
procedures
and
requirements defined by the host Party, and whether
an environmental impact assessment is required and
sufficiently carried out.
Guidelines for the implementation of Article 6,
paragraph 33
Part 1:
Generic
Guidelines
Part 2:
CDM
Validation
Part 3:
SSC
Validation
Part
Part 4:
4:
JI
JI DeterDetermination
mination
Part 5:
Part 6:
Initial
Periodic
Verification Verification
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Page 65
Monitoring
As part of the project design document, a monitoring plan shall provide for the collection and archiving of all relevant
data necessary for determining:
 anthropogenic emissions by sources of greenhouse gases occurring within the project boundary during the
crediting period;
 the baseline of anthropogenic emissions by sources of greenhouse gases within the project boundary during
the crediting period;
 increased anthropogenic emissions by sources of greenhouse gases outside the project boundary that are
significant and reasonably attributable to the project activity during the crediting period.
A monitoring plan shall also provide for the collection and archiving of information related to the environmental
impacts of the project, in accordance with procedures required by the host Party, where applicable.
The monitoring plan shall provide for:
 Quality assurance and control procedures
 Procedures for periodic calculation of the above anthropogenic emissions
 Documentation of all steps involved in the calculations above
Guidelines for the implementation of Article 6, Appendix B
The independent entity shall assess whether the monitoring plan provides for the monitoring of the relevant project and
baseline GHG emission indicators and whether it addresses all other factors that shall be monitored over the project lifetime,
including environmental indicators as applicable.
This includes an assessment of the proposed system boundary with regard to whether the proposed boundaries for
accounting project and baseline GHG emissions, respectively, include all significant sources of GHG emissions and all
relevant GHG gases. A materiality test may be used to assess to which extent important GHG emissions may be omitted.
The independent entity shall also assess the proposed GHG data management, control and reporting systems, e.g.
instructions, procedures, record keeping systems, assumptions, technical equations, models and other means that support
accurate and conservative ER estimates.
Part 1:
Generic
Guidelines
Part 2:
CDM
Validation
Part 3:
SSC
Validation
Part
Part 4:
4:
JI
JI DeterDetermination
mination
Part 5:
Part 6:
Initial
Periodic
Verification Verification
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Page 66
The JI Determination Process
The main steps in a successful determination are shown in this flow diagram. The different layers may be seen as
representing the determination preparations, the determination itself and at last the results of the process. The box
colour represents the party responsible for the activity (Green for the project proponent, orange for the independent
entity, blue for the JI Supervisory Committee). Most of the guidelines provided in the CDM Validation Guidelines will
be valid also for the JI determination process, including the Means of Verification to be used during determination.
The difference between validation of CDM projects and JI determination and the specific JI determination criteria are
described in the pages above. Links to the CDM validation guidelines that give further and detailed explanation and
guidance are provided for each relevant activity in the flow diagram.
Develop Project
Documentation
Selection of
Independent Entity
Determination
Contract
Establishment
Determination
Team Selection
Public Stakeholder
Comment Process (30 days)
Document
Review
Background
Investigations
Resolution of Corrective
Action Requests
Part 1:
Generic
Guidelines
Part 2:
CDM
Validation
Part 3:
SSC
Validation
Part
Part 4:
4:
JI
JI DeterDetermination
mination
Part 5:
Part 6:
Initial
Periodic
Verification Verification
Follow-up
Interviews
Final Determination
Report and Opinion
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Draft Determination
Report
Supervisory Committee
Registration of project
Next
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Page 67
Part Five: Initial Verification Guidelines
During the Initial Verification, the verifier will review
that all operations are implemented and installed
as planned and that all physical features of the
project are in place. One important purpose of the
initial verification is to confirm that the monitoring
system is in place and fully functional.
The project parties can, based on a cost-benefit
analysis, choose whether an initial verification is
carried out
a) as a separate activity prior to the project
commencing its regular operations, or
b) as an integrated part of the first periodic
verification.
Content:
 Initial Verification Actors
 Initial Verification Objective
 Initial Verification Scope
 Initial Verification Process
 Desk Review
 On-site Assessment
 Draft Initial Verification Report
• Initial Verification Checklist
 Final Initial Verification Report
A separate initial verification prior to the project
entering into regular operations is not a mandatory
requirement. Performing an initial verification as
part of the first periodic verification may result in
reduced verification costs, but bears the risk that
emission reductions generated in the period from
project start to the first periodic verification may not
be verified.
Part 1:
Generic
Guidelines
Part 2:
CDM
Validation
Part 3:
SSC
Validation
Part 4:
JI Determination
Part 5:
Part 6:
Initial
Periodic
Verification Verification
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• Initial Verification Statement
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Page 68
Initial Verification Actors
Involved actors
Project Entity
Initial Verification Contract Parties
Project
Proponent
Verifier
Solid lines indicate contractual relationships. Dashed lines indicate communication channels during verification.
Note: The above diagram reflects a contractual model where the project proponent is independent from the project entity.
Other relationships are possible, such as a direct contractual relationship between project entity and the verifier.
Part 1:
Generic
Guidelines
Part 2:
CDM
Validation
Part 3:
SSC
Validation
Part 4:
JI Determination
Part 5:
Part 6:
Initial
Periodic
Verification Verification
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Page 69
Initial Verification Objectives
The objective of an initial verification is to verify that the project is implemented as planned, to
confirm that the monitoring system is in place and fully functional, and to assure that the
project will generate verifiable emission reductions.
The are several purposes of the initial verification process:
 to ensure that the project has been implemented as planned, that the monitoring system is
in place and that the project is ready to generate and record GHG emission reductions;
 to assess adjustments and amendments to the monitoring plan that may have become
necessary during the detailed design and construction of the project (Please note that the
CDM and JI modalities do not give guidance on handling changes to previous validated
monitoring plans);
 to provide assurance of generation of high quality emission reductions and clear the way
for project commissioning.
Part 1:
Generic
Guidelines
Part 2:
CDM
Validation
Part 3:
SSC
Validation
Part 4:
JI Determination
Part 5:
Part 6:
Initial
Periodic
Verification Verification
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Page 70
Initial Verification Scope
The initial verification should typically address the following
aspects:
• Remaining issues and qualifications from validation/
determination: Especially for projects which are not yet
registered at CDM-EB or JI-SB, there might be some
outstanding issues which have been identified in the
validation report
• Project implementation: To assess the appropriate
implementation is the core of the initial verification.
• External data sources: Especially for data of baseline
emissions there might be the necessity to include external
data sources.
• Environmental and social indicators: A Monitoring Plan
may comprise the determination of environmental and/or
social indicators which could be necessary to evaluate the
success of the project activity.
• Management and operational system: In order to ensure
a successful operation of a project and the credibility and
verifiability of the emission reductions achieved, the project
should have a well defined management and operational
system.
Part 1:
Generic
Guidelines
Part 2:
CDM
Validation
Part 3:
SSC
Validation
Part 4:
JI Determination
Part 5:
Part 6:
Initial
Periodic
Verification Verification
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If the initial verification is carried out as a separate
activity prior to the project commencing its regular
operations, the initial verification:
• will not verify emission reductions generated,
• is not required to publish the monitoring
records or the verification report,
• does not require a certification report,
• is a dry-run in the context of monitoring and
reporting routines,
• ensures the generation of verifiable data of
consecutive verifications,
• antedates all extra steps of the first periodic
verification related to project implementation
and management system.
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The Initial Verification Process
The main steps in a successful initial verification is shown in this flow diagram. The different layers may be seen as
representing the initial verification preparations, the initial verification itself and at last the results of the initial
verification process. The box colour represents the party responsible for the activity (Green for the project proponent,
orange for the verifier, yellow for project operator).
Verifier
Selection
Desk
Review
Verifier Contract
Establishment
On-Site
Assessment
Corrective Action
(if applicable)
Part 1:
Generic
Guidelines
Part 2:
CDM
Validation
Part 3:
SSC
Validation
Part 4:
JI Determination
Part 5:
Part 6:
Initial
Periodic
Verification Verification
Verification
Team Selection
Draft Initial
Verification Report
Final Initial
Verification Report
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Page 72
Desk Review
During the initial desk review the verification team should become familiar with the project in order to get the possibility
to compare the situation on-site with the situation described by underlying documentation. At least the following
documents shall be reviewed:
 the last revision of the PDD and attached documents,
 the last revision of the validation report,
 the written management manual (if applicable),
 operation licenses of local authorities (if applicable).
Other documents, such as process flow diagrams, technical drawings and manuals of equipment suppliers, may be
reviewed as well.
A special focus shall be given to the monitoring plan and the monitoring methodology (both part of the PDD) which
e.g. will comprise information concerning requirements on the quality of metering equipment, and quality assurance
procedures and links to national or international standardization systems. The verifier shall make himself familiar with
the applied monitoring technologies and the applied standards. Measurement equipment might be used for project
performance parameters as well as for baseline emission indicators or environmental and social performance
indicators.
The management system should be evaluated in the context of generation and reporting of emission reductions.
Part 1:
Generic
Guidelines
Part 2:
CDM
Validation
Part 3:
SSC
Validation
Part 4:
JI Determination
Part 5:
Part 6:
Initial
Periodic
Verification Verification
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On-Site Assessment (1)
The assessment performed during an initial verification shall enable the verifier to arrive at a conclusion
regarding the readiness of a project to start with the generation of high quality emission reductions. As such, it is
indispensably to have an inspection on site in order to verify that the project is implemented in accordance with
the PDD.
• The on-site assessment shall include an investigation of whether all relevant equipment is installed and works
as anticipated.
• Discussions with local stakeholders might be necessary to check the achievement of environmental and social
impacts which should already be reached during construction phase.
• The operating staff shall be interviewed and observed in order to check the risks for inappropriate operation
and data collection procedures of the project.
• Information flows for generating, aggregating/collating and reporting the selected monitored parameters shall
be reviewed.
• Metering equipment shall be checked and positions of counters have to be recorded in order to prepare for the
next periodic verification.
• The project owners have to provide evidence that demonstrates that all metering equipment is calibrated.
• The required processes, routines and documentations shall be audited to check their proper application.
Part 1:
Generic
Guidelines
Part 2:
CDM
Validation
Part 3:
SSC
Validation
Part 4:
JI Determination
Part 5:
Part 6:
Initial
Periodic
Verification Verification
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On-Site Assessment (2)
During the Initial Verification the auditor shall pay particular attention to:
•
Open issues indicated in Validation Report, especially in projects which are not yet registered at CDM-EB
or JI-SB, there might be some outstanding issues which should have been indicated by the validation
report.
Status of the implementation of the project
Reliability of internal data, sources and ways in which the data have been collected, calculated, processed,
aggregated and stored should be part of initial verification
Reliability of the external data, also access to such data and a proof of data quality should be part of initial
verification. Moreover, the entity delivering such data should be audited (if required needed)
Environmental and Social Indicators
The completeness of the monitoring plan
The correct implementation of GHG Management and operational system
The relevant aspects related to the development of the Initial verification as well as the verification
conclusions must be clearly explained to the client during opening and closing sessions.
•
•
•
•
•
•
•
Part 1:
Generic
Guidelines
Part 2:
CDM
Validation
Part 3:
SSC
Validation
Part 4:
JI Determination
Part 5:
Part 6:
Initial
Periodic
Verification Verification
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Draft Initial Verification Report
The draft initial verification report shall give an overview of the approach employed by the verifier in order to arrive at
the initial verification conclusion. Apart from that, the general discussion of details captured by the initial verification
checklist and the conclusions related to project requirements shall be included in the report.
The draft initial verification report shall particularly indicate the implications of any remaining issues related to the
implementation or operation that need to be further elaborated, researched or added to meet the requirements and
ensure the delivery of credible emission reductions. There will be different ways of reporting such results. However, it
is imperative that these issues are transparently identified, discussed and concluded in the initial verification report.
The findings of the initial verification are either Corrective Action Requests or Forward Action Requests.
A Corrective Action Request (CAR) is issued, where:
 there is a risk that emission reductions cannot be
verified at a later periodic verification, and
 where immediate actions by the project parties are
necessary to ensure a later verification of
generated emission reduction.
A Forward Action Request (FAR) is issued, where:
 the actual status requires a special focus on this
item for the first periodic verification, or
 an adjustment of the MP is recommended.
In the context of FARs, risks have been identified, which
may endanger the delivery of high quality CERs in the
future, i.e. by deviations from standard procedures as
defined by the monitoring plan. As a consequence such
aspects shall receive a special focus during the next
consecutive verification.
Part 1:
Generic
Guidelines
Part 2:
CDM
Validation
Part 3:
SSC
Validation
Part 4:
JI Determination
Part 5:
Part 6:
Initial
Periodic
Verification Verification
The verifier shall make sure that all Corrective Action and
Forward Action Requests, including an indication of the
party responsible for requested actions, are reported and
elaborated in the conclusion of the draft initial verification
report. Also minor issues, i.e. those which do not
represent a risk of changing the initial verification
conclusions, shall be brought to the attention of the project
proponent for consideration. However, minor issues may
not necessarily be presented as a part of the initial
verification statement.
After the presentation of the draft initial verification report,
the project proponent will have to respond to the
Corrective Action and Forward Action Requests and if
possible resolve these issues before a final verification
statement is formulated by the verifier. It is the
responsibility of the project proponent to respond to the
CARs and FARs identified by the verifier in a timely
manner. All changes shall be approved by the project
proponent before submitted to the verifier for final review.
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Initial Verification Checklist
The results of the initial verification may be documented using the initial verification checklist. Dependent on
individual project circumstances and the detail of the project documentation, the relevant checklist has to be
amended to ensure its applicability for individual projects. The checklist is available as a separate file.
Checklist Example
OBJECTIVE
Ref.
COMMENTS
Concl.
C Implementation of the project
This part is covering the essential checks during the on-site
inspection at the project’s site, which is indispensably for an
initial verification
C.1 physical components
Check the installation of all required facilities and
equipment as described by the PDD.
C.2 Project boundaries
Check whether the project boundaries are still in
compliance with the ones indicated by the PDD.
C.3 Metering systems
Check whether the required metering systems have been
installed. The meters have to comply with appropriate
quality standards applicable for the used technology.
C.4 Data uncertainty
How will data uncertainty be determined for later
calculations of emission reductions? Is this in compliance
with metering equipment?
Part 1:
Generic
Guidelines
Part 2:
CDM
Validation
Part 3:
SSC
Validation
Part 4:
JI Determination
Part 5:
Part 6:
Initial
Periodic
Verification Verification
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Final Initial Verification Report
The final initial verification report shall reflect the results from
the dialogue and any adjustments made to the project after the
draft initial verification report was submitted. It will in its
appearance look much like the draft initial verification report,
but will now reflect the response to corrective action requests,
discussions and revisions to project documents e.g the
management system documentation. Hence, the final initial
verification report shall give the final conclusions regarding the
projects readiness to start operation and generation of
emission reductions.
The initial verification statement can be issued, and will
determine how the project proponent will proceed with the
project. Before awarding a positive (unqualified) initial
verification statement all findings indicated with a CAR should
be resolved. FARs will need to be addressed during the first
periodic verification.
The initial verification report will typically
include the following information:
1 Introduction
1.1 Objective
1.2 Scope
1.3 GHG Project Description
2 Methodology
3 Initial Verification Findings
3.1 Remaining issues, CARs, FARs from
previous validation
3.2 Project Implementation
3.3 External data
3.4 Environmental and Social Indicators
3.5 Management and Operational System
4 Initial Verification Statement
5 References
Appendix 1: Initial Verification Checklist
For further details, the Initial Verification Report
Templates can be found in a separate file.
Part 1:
Generic
Guidelines
Part 2:
CDM
Validation
Part 3:
SSC
Validation
Part 4:
JI Determination
Part 5:
Part 6:
Initial
Periodic
Verification Verification
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Initial Verification Statement
After completed initial verification, an initial verification
statement shall be provided by the verifier to the project
proponent. A positive initial verification statement forms
the basis to start the monitoring of emission reductions.
In addition the statement will be an important factor for
the project proponent in the contractual relationship with
the project entity.
The initial verification statement shall include an
explanation of:
• initial verification scope, methodology and process
• remaining issues from validation
• initial verification engagement conclusion
• liability statement on the initial verification
engagement
The initial verification statement shall give the final
verdict of the project in terms of the compliance of its
implementation vs. the approved PDD, the readiness to
start operation and likeliness to deliver high quality
emission reduction.
Part 1:
Generic
Guidelines
Part 2:
CDM
Validation
Part 3:
SSC
Validation
Part 4:
JI Determination
Part 5:
Part 6:
Initial
Periodic
Verification Verification
Initial Verification Outcomes
A. Unqualified initial verification statement
An unqualified initial verification statement will be issued
when the review of the project documentation and the
on-site assessment have proven that the project is ready
for starting operation and no further adjustments have to
be made. There might be aspects, which are not in
compliance with the expected progress of the project
implementation, but which can be rectified until the first
periodic verification. Such aspects will not directly impact
the quality of emission reductions.
B. Qualified initial verification statement
A qualified initial verification statement will be issued
when there is a risk that emission reductions cannot be
verified at a later periodic verification, and where actions
by the project parties are necessary to ensure a later
verification of generated emission reduction. Hence, the
verifier will conclude that the project is not ready to
generate verifiable emission reductions.
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Part Six: Periodic Verification Guidelines
Content:




Periodic Verification Objective
Periodic Verification Actors
Risk-based Verification Approach
Verification Principles
 Periodic Verification Process
 Desk Review
 On-Site Assessment
 Verification Report
 Compliance with Monitoring
Plan
 Materiality
 Quality of Evidence
Part 1:
Generic
Guidelines
Part 2:
CDM
Validation
Part 3:
SSC
Validation
Part 4:
JI Determination
Part 5:
Part 6:
Initial
Periodic
Verification Verification
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• Verification Findings
• Verification Statement
• Certification
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Periodic Verification Objective
Verification is the periodic independent review and ex post determination by the Designated
Operational Entity / Independent Entity of the monitored reductions in GHG emissions
during the defined verification period.
The objective of the periodic verification is:
– to verify that actual monitoring systems and procedures are in compliance with the
monitoring systems and procedures described in the monitoring plan,
– to evaluate the GHG emission reduction data and express a conclusion with a
high, but not absolute, level of assurance about whether the reported GHG
emission reduction data is “free” of material misstatements,
– the reported GHG emission data is sufficiently supported by evidence, i.e.
monitoring records.
If no prior initial verification has been carried out, the objective of the first periodic verification
also includes the objectives of the initial verification.
Part 1:
Generic
Guidelines
Part 2:
CDM
Validation
Part 3:
SSC
Validation
Part 4:
JI Determination
Part 5:
Part 6:
Initial
Periodic
Verification Verification
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Page 81
Periodic Verification Actors
Involved actors
CDM Executive
Board/
JI Supervisory
Committee
Project Entity
Verification Contract Parties
Project
Proponent
Verifier
Solid lines indicate contractual relationships. Dashed lines indicate formal communication channels necessary to
complete the verification.
Note: The above diagram reflects a contractual model where the project proponent is independent from the project
entity. Other relationships are possible, such as a direct contractual relationship between project entity and the verifier.
Part 1:
Generic
Guidelines
Part 2:
CDM
Validation
Part 3:
SSC
Validation
Part 4:
JI Determination
Part 5:
Part 6:
Initial
Periodic
Verification Verification
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Risk-based Verification Approach
The verifier shall familiarise himself/herself with the project by
– reviewing the PDD, including the monitoring plan and the validation report,
– reviewing the monitoring records that sustain claimed emission
reductions,
– reviewing any other information on the project and project operator.
The key reporting risks related to claimed emission reductions are identified
and it is assessed to which extend the project operator’s control systems are
adequate for mitigating these key reporting risks.
Key reporting risks that are not sufficiently addressed by the project operator’s
control system represent residual risks areas where detailed audit testing is
necessary. Key issues in verification is verification of correct use of emission
factors, accurate fuel consumption estimates, correct use of conversion factors
and consistency in aggregation of emissions data
In addition, other areas that have material impact on the amount of emission
reductions may be selected for detailed audit testing. Material impact is defined
as issues that will have an impact of more than 5% of the claimed emission
reductions.
.
Issues
that may cause risk for material misstatement of emission reductions
should be identified through the use of a project-specific checklist. The verifier
should ensure that the checklist cover all necessary specific project
requirements that have impact on project performance.
A score-card has been developed to assist the verifier in identifying reporting
risks and to assess the control systems in place to mitigate these risks. Score is
assigned as follows:
• Full - all best-practice expectations are implemented.
• Partial - a proportion of the best practice expectations are implemented
• Limited - little or none of the expected system component are in place.
For more information, refer to table 1 of the Periodic Verification Checklist.
Part 1:
Generic
Guidelines
Part 2:
CDM
Validation
Part 3:
SSC
Validation
Part 4:
JI Determination
Part 5:
Part 6:
Initial
Periodic
Verification Verification
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Understanding the Project
Monitoring Plan
Monitoring
records
GHG emission
reduction data
Identify key reporting risks
Understand control systems
in place to manage risks
Identify areas of
residual risk
Detailed audit testing of residual
risk areas and random testing of
other areas
Verification
Statement
Forward Action
Requests
© Copyright 2004 IETA/PCF
Page 83
Verification Principles
The verification shall consider both quantitative
and qualitative information on emission
reductions.
Quantitative data comprises the monitoring
reports submitted to the verifier by the project
entity.
Qualitative data comprises information on
internal management controls, calculation
procedures, procedures for transfer, frequency
of emissions reports, review and internal audit
of calculations/data transfers
Quantitative
data
Compliance with
monitoring plan
Materiality /
Accuracy
Verification
Statement
Information on
emission reduction
The audit conclusion is based on the
interaction of four key verification principles:
1. Compliance with monitoring plan
2. Materiality / Accuracy
3. Coverage
4. Quality of evidence
Quality of
evidence
Coverage
Qualitative
data
Part 1:
Generic
Guidelines
Part 2:
CDM
Validation
Part 3:
SSC
Validation
Coverage is identified in the project design
and is validated during project validation.
Hence, coverage is generally not revisited
during verification.
Audit team
Site / Project
Part 4:
JI Determination
Part 5:
Part 6:
Initial
Periodic
Verification Verification
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Compliance with Monitoring Plan
The verifier shall determine whether
 the monitoring plan is properly implemented and
followed by relevant personnel;
 all indicators stated in the monitoring plan are
sufficiently monitored and updated as applicable,
i.e.:
• project emission indicators,
• baseline emission indicators,
• leakage indicators,
• sustainable development indicators fro
CDM projects;
The verifier shall also determine whether the
monitoring plan is still applicable or whether the
monitoring plan shall be revised to allow for any
changes that may have occurred since validation
and that have impact on the project.
Revision to the monitoring plan may be necessary if:
 external sources of data is no longer available
or is published in a different format,
 project operations have changed.
 the responsibilities and authorities for monitoring
and reporting are in accordance with the
responsibilities and authorities stated in the
monitoring plan.
In addition, the verifier shall also assess whether
 the proposed monitoring frequency is sufficient to
show the full range of variations,
 the accuracy of equipment used for monitoring is
sufficient and regularly controlled and calibrated,
 monitoring results are consistently recorded,
reviewed and approved.
Part 1:
Generic
Guidelines
Part 2:
CDM
Validation
Part 3:
SSC
Validation
Part 4:
JI Determination
Part 5:
Part 6:
Initial
Periodic
Verification Verification
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Page 85
Materiality
Materiality is a test used to assess to which extent
emission reduction data may be misstated. Data can be
checked for errors by checking:
 spreadsheet formulas and connections,
 that factors are used consistently with
recommended methods or guidelines,
 for manual transposition errors between data sets
 uncertainty of technology (e.g. metering),
 appropriateness of default data where specific
source data is lacking.
Emission reductions with material misstatements
shall be discounted based on the verifier’s ex-post
determination of the achieved emission reductions.
The verifier is liable for the emission reductions verified
and certified. If a review by the CDM Executive Board/
JI Supervisory Committee reveals that excess CERs/
ERUs were issued, the verifier, who has falsely verified
and certified excess CERs/ ERUs, shall acquire an
amount of CERs/ ERUs equal to the excess CERs/
ERUs and transfer this amount to a cancellation
account.
Part 1:
Generic
Guidelines
Part 2:
CDM
Validation
Part 3:
SSC
Validation
Part 4:
JI Determination
Part 5:
Part 6:
Initial
Periodic
Verification Verification
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Materiality is the professional judgement of the
validator or verifier whether an individual or
aggregation of omissions, misrepresentations or
errors that effects management’s GHG assertion
will reasonably influence the intended users
decisions.
(ISO/WD 14064)
“Materiality” is an expression of the relative
significance or importance of any individual matter
in the context of the project or baseline
emissions.
(modified from UKETS)
Example: Material (or significant) uncertainty can
be defined as, e.g., 1% of total CO2e for regular
projects and 5% for small scale project.
(UNEP/OECD/IEA 2001)
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Accuracy
Reported emission reductions may be uncertain due to:
 technological limitations, i.e. inherent uncertainties
associated with the methods used to measure emission
indicators;
 lack of source data, i.e. use of default data which has been
derived based on certain assumptions/conditions and which
will therefore have varying applicability in different situations.
The verifier may choose to discount emission reductions for
technical uncertainties, if appropriate, in her/his ex-post
determination of the achieved emission reductions. Uncertainty
should be explored with the site personnel, based on their
knowledge and experience. High risk parameters or source data
(i.e. those with a significant influence on the reported data, such
as monitoring equipment) should be reviewed for uncertainties.
Part 1:
Generic
Guidelines
Part 2:
CDM
Validation
Part 3:
SSC
Validation
Part 4:
JI Determination
Part 5:
Part 6:
Initial
Periodic
Verification Verification
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Misstatements can be the result of errors:
 Calculation errors (e.g. inappropriate
factors, assumptions)
 Lack of clarity within the
methods/guidelines for determining
GHG emissions or baselines
 Data management weaknesses e.g.
manual transposition errors
The CDM and JI modalities do not include
any guidance on treatment of uncertainties.
However, verifiers may base their
conclusion on other relevant guidance such
as the guidelines for the monitoring and
reporting of GHG emissions in the EU
emission trading scheme, which addresses
uncertainty matters, i.e.:
- General treatment of uncertainty
- Uncertainty and calculation
- Uncertainty and measurement
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Page 87
Quality of Evidence
When verifying GHG information the auditor shall verify that
there is a clear audit trail for the reported emission reductions.
The auditor shall also obtain sufficient and appropriate audit
evidence. Evidence includes a complete audit trail including
source documents the basis for assumptions, and other
information underlying the GHG data.
Operational records to sustain claimed emission may include,
but are not limited to:
• Fuel purchase records,
• Fuel consumption records,
• Invoices for sold heat,
• Invoices for sold electricity,
• Laboratory analysis.
Issues to address when assessing audit evidence include:
• whether the evidence is of sufficient quantity and
appropriate quality;
• professional judgement on the reliability of the evidence;
• the source and nature of the evidence (external/internal,
oral, documented).
Part 1:
Generic
Guidelines
Part 2:
CDM
Validation
Part 3:
SSC
Validation
Part 4:
JI Determination
Part 5:
Part 6:
Initial
Periodic
Verification Verification
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Audit evidence is the information obtained by
the auditor in arriving at the conclusions on
which the verification statement is based. This
involves reviewing the adequacy of the data
collection
systems/management
controls.
Evidence includes source documents and
records underlying the GHG information as well
as corroborating information from other
sources.
If the verification can not obtain sufficient
evidence for the reported emission reductions
or part of the reported emission reductions,
these emission reductions shall not be verified
and certified.
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The Periodic Verification Process
The main steps in a successful project verification is shown in this flow diagram. The different layers may be seen as
representing the verification preparations, the verification itself and at last the results of the verification process. The
box colour represents the party responsible for the activity (Green for the project proponent, yellow for the validator,
red for other parties).
Verifier
Selection
Verifier Contract
Establishment
Verification
Team Selection
Desk Review, including
publicising the monitoring report
Verification
Report
On-Site
Assessment
Certification and
publicising of
Certification Report
Issuance of CERs by
Executive Board
Host Party to
issue ERUs
Part 1:
Generic
Guidelines
Part 2:
CDM
Validation
Part 3:
SSC
Validation
Part 4:
JI Determination
Part 5:
Part 6:
Initial
Periodic
Verification Verification
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Desk Review
During the desk review, the verification team should become familiar with the project in order to be able to compare
the situation and status on-site with the situation as described in underlying documentation. At least the following
documents shall be reviewed in this step:






the last revision of the PDD and attached documents, including the most recent monitoring plan,
the last revision of the monitoring report, including the claimed emission reductions for the project,
the last revision of the validation/ determination report and/or the last revision initial verification report,
the last revision of the previous periodic verification report (as applicable),
the written management manual (as applicable),
operation licenses of local authorities (as applicable).
Other documents, such as process flow diagrams, technical drawings, manuals of equipment suppliers, performance
records, may be reviewed as well.
The verifiers knowledge of the industry and the
business issues faced by the project are of outmost
importance in determining the areas and focus for
the verification. This should help the verifier to
focus on key risks relevant to the potential emission
reductions of the specific project.
Publicise the Monitoring Report
As part of the verification, the designated operational
entity shall make the monitoring report, received from
the project participants, publicly available.
CDM modalities & procedures, paragraph 62
Guidelines for the implementation of Article 6,
paragraph 36
Part 1:
Generic
Guidelines
Part 2:
CDM
Validation
Part 3:
SSC
Validation
Part 4:
JI Determination
Part 5:
Part 6:
Initial
Periodic
Verification Verification
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On-site Assessment
During the verification, the verifier investigates onsite, using a risk-based approach. The verifier will
typically follow the audit trails and data sets on site
for the specific indicators, and cross check with the
existing monitoring plan and records.
Key Focus Areas for On-Site Assessments:
An on-site assessment shall focus on the
following key areas:
• Information flows for generating,
aggregating/collating and reporting the
selected monitoring parameters
• Calculations and assumptions made in
determining the GHG data
• Controls in place to prevent, or detect and
correct any significant errors or omissions
in the selected monitoring parameters
reported
Part 1:
Generic
Guidelines
Part 2:
CDM
Validation
Part 3:
SSC
Validation
Part 4:
JI Determination
Part 5:
Part 6:
Initial
Periodic
Verification Verification
Planning the site visit:
The verifier shall prepare the site visit by:
• assessing all relevant information and make a draft
determination of the on-site audit activities,
• organise the logistical aspects of the visit, including the
agenda and whom to interview.
On-site activities:
Keeping in mind the principles of materiality and quality of
evidence, typical activities on-site include:
• Introduction meeting, explain objectives of the
verification,
• Interviews with data co-ordinators, process engineers
and other key personnel at site,
• Review of performance records and collection of
measurements,
• Check of monitoring equipment and observations of
monitoring practices,
• Interviews with local project stakeholders, as
applicable,
• Specific testing and calculation checks to be done on
high risk, material data sources and data management
issues,
• Close-out meeting presenting the results and findings.
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Verification Report
The content of the verification report may look like this:
A draft verification report shall provide the project
proponent with any concerns and conclusions related to
the claimed emission reductions. The project proponent
will have the possibility to address the concerns and
supply relevant additional information before a final
verification report is provided.
Building on the transparency principle, the verification
report shall give an overview of the verification process
deployed by the verifier in order to arrive at the
verification conclusions. All verification findings shall be
clearly identified and justified.
1
Introduction
1.1 Objective
1.2 Scope
1.3 GHG Project Description
2
Methodology
3
Verification Findings
3.1 Remaining Issues, CARs, FARs from
Previous Validation or Verification
3.2 Project Implementation
3.3 Completeness of Monitoring
3.4 Accuracy of Emission Reductions
Calculations
3.5 Quality of Evidence to Determine Emission
Reductions
3.6 Management System and Quality
Assurance
4
Project Scorecard
5
Verification Statement
6
References
The final verification report shall:
• give an overview of the scope of the verification,
• include a general discussion of details captured by
the verification protocol, and
• clearly state the conclusions related to the
verification and the verified amount of emission
reductions in a verification statement.
Annex 1: Periodic Verification Checklist
The final verification report shall be provided to the Project Participants, the Parties involved and the CDM Executive
Board. In addition the report shall be made publicly available.
CDM modalities & procedures, paragraph 62h
Part 1:
Generic
Guidelines
Part 2:
CDM
Validation
Part 3:
SSC
Validation
Part 4:
JI Determination
Part 5:
Part 6:
Initial
Periodic
Verification Verification
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Verification Findings
Findings established during the verification may be that:
i)
The verification is not able to obtain sufficient evidence for the reported emission reductions or part of the
reported emission reductions. In this case these emission reductions shall not be verified and certified;
ii)
The verification has identified material misstatements in the reported emission reductions. In this case
emission reductions with material misstatements shall be discounted based on the verifiers ex-post
determination of the achieved emission reductions.
The term “Forward Action Request” shall be used in the verification report, when:
–
the actual project monitoring and reporting requires attention for the next consecutive verification period,
or
–
an adjustment of the MP is recommended.
In the context of FARs, risks have been identified, which may endanger the delivery of high quality CERs in the
future, e.g.. by deviations from standard procedures as defined by the MP.
As a consequence such aspects shall receive a special focus during the next consecutive verification.
A FAR may originate from lack of data sustaining claimed emission reductions.
Part 1:
Generic
Guidelines
Part 2:
CDM
Validation
Part 3:
SSC
Validation
Part 4:
JI Determination
Part 5:
Part 6:
Initial
Periodic
Verification Verification
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Verification Statement
After completed verification, a verification statement shall be provided by the verifier to the project proponent.
The verification statement will be part of the final verification report and shall be made publicly available.
This verification statement shall include:
• the scope of the verification
• the period of the verification
• conclusions of the verification, including the verified amount of emission reductions for the given period
• liability statement with regards to the accuracy of the verification statement
• statement of confidentiality
The verification statement shall give the final verdict of the project in terms of the completeness, comparability,
accuracy and correctness of the reported GHG emission reductions. The verification statement should therefore
include a high level of assurance. For CDM projects, the verification statement will be the basis for the certified
emission reductions as described in the next page.
Example of Verification Statement
“XYZ Verification Ltd. has been engaged by Project Proponent XYZ to verify the emission reductions
achieved by ABC-project in x-land.
This verification engagement was carried out during the period of dd-mm-yyyy to dd-mm-yyyy.
Based on the information we have seen and evaluated, it is our opinion that XX tonnes of CO2 have
been abated by the project during the period dd-mm-yyyy to dd-mm-yyyy”.
Part 1:
Generic
Guidelines
Part 2:
CDM
Validation
Part 3:
SSC
Validation
Part 4:
JI Determination
Part 5:
Part 6:
Initial
Periodic
Verification Verification
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Example, Verification Statement
Below is presented an example of a verification statement. As this is meant to be an example, it must be expected that
individual verifiers word a verification statement to suit their own procedures as well as the project itself.
Introduction
XYZ Verification Ltd has been engaged by ABC Project Developer to examine the greenhouse gas (GHG) emission and the calculations of GHG emission reductions
reported from the ABC Project for the period, equating to xx.xxxx tonnes of CO2 equivalents.
Our opinion relates to the project’s GHG emissions and resulting GHG emissions reductions reported for the year ended dd-mm-yyyy and related to the validated and
registered project baseline, and its associated documents. We express no opinion on baseline methodology of the project nor on the Project Design Document nor on
any projections regarding GHG emission performance. We express no opinion on applied emission factors published by the official and recognised sources in
COUNTRY.
Responsibilities of the ABC Project management of ABC Project Developer and XYZ Verification Ltd.
The management of the ABC Project is responsible for the preparation of the GHG emissions data and the reported GHG emissions reductions on the basis set out
within the project Monitoring and Verification Plan dd-mm-yyyy. The development and maintenance of records and reporting procedures in accordance with that plan,
is the responsibility of the management of the ABC Project.
It is our responsibility to express an independent GHG verification opinion on the GHG emissions from the project for the year ended dd-mm-yyyy and on the
calculation of GHG emission reductions from the project for the year ended dd-mm-yyyy based on the verified emissions for the yyyy compared with the valid dd-mmyyyy and approved baseline for the same period.
Basis of GHG verification opinion
Our verification approach was based on the requirements as defined under the Kyoto Protocol, Marrakech accord, as well as those defined by the CDM Executive
board.
Our approach is risk-based, drawing on an understanding of the risks associated with reporting GHG emissions data and the controls in place to mitigate these. Our
examination includes assessment, on a test basis, of evidence relevant to the amounts and disclosures in relation to the project’s GHG emission and the calculations of
GHG emission reductions for the year ended yyyy.
We planned and performed our work to obtain the information and explanations that we considered necessary to provide sufficient evidence for us to give reasonable
assurance that the amount of GHG emission and the calculation of the GHG emission reductions for the year ended yyyy, prepared on the basis of the Monitoring and
Verification Plan dd-mm-yyyy, are fairly stated.
We conducted our verification having regard to the Project Design Document including the ABC Project’s Monitoring and Verification Plan dd-mm-yyyy and the applied
baseline as registered for the project. This assessment included:
•• collection of evidence supporting the reported data
•• checking whether the provisions of the Monitoring and Verification Plan dd-mm-yyyy, were consistently and appropriately applied
•We have verified whether the information included in the attached appendix representing the project baseline is current and has been correctly extracted from the
Project Design Document, that the emissions reduction achieved has been determined by correctly subtracting emissions for yyyy ended dd-mm-yyyy from the baseline
figure for the comparable period.
Opinion
In our opinion, ABC Project Developer’s GHG emissions for the ABC Project in yyyy as reported in DEF Reference Report, prepared on the basis of ABC Projects
Monitoring and Verification Plan dd-mm-yyyy, are fairly stated.
The GHG emission reductions were calculated correctly on the basis of the Project Design Document and the ABC Projects Monitoring and Verification Plan and the
applied emission factors for the production of electricity in COUNTRY published by the UVW Research Centre. We have not audited the Project Design Document and
the emissions factors for the production of electricity in COUNTRY published by the UVW Research Centre.
[Locaton], dd-mm-yyyy
Partner/Director]
Part 1:
Generic
Guidelines
Part 2:
CDM
Validation
Part 3:
SSC
Validation
XYZ Verification Ltd
Part 4:
JI Determination
Part 5:
Part 6:
Initial
Periodic
Verification Verification
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Certification
Certification of CDM projects and CERs
For CDM projects, the designated operational entity shall certify in writing that the project activity has achieved the
verified amount of emission reductions that would not have occurred in the absence of the CDM project activity in the
specified time period.
The designated operational entity shall inform the project participants, the Parties involved and the Executive Board of
its certification decision in writing. This shall be done immediately upon completion of the certification process. The
certification report shall be made publicly available.
The certification report shall constitute a request for issuance to the Executive Board of CERs equal to the verified
amount of emission reductions.
CDM modalities & procedures, paragraph 63 & 64
JI projects and ERUs
For JI determination projects, the emission reductions are not certified. When the independent entity has made a
determination of the emission reductions, this determination shall be made publicly available through the secretariat,
together with an explanation of its reasons. The determinations is deemed final 15 days after the date it is publicised,
unless either a Party involved or three of the members of the Supervisory Committee request a review of the
determination.
Guidelines for the implementation of Article 6, paragraph 38 & 39
Part 1:
Generic
Guidelines
Part 2:
CDM
Validation
Part 3:
SSC
Validation
Part 4:
JI Determination
Part 5:
Part 6:
Initial
Periodic
Verification Verification
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Updates of the VVM
The VVM will need further development as rules in the CDM and JI develop.
CDM EB and JI supervisory committee decisions and guidance will likely have a future
impact on the content of the VVM. Hence, any OE seeing a need for
update/adjustment/addition of a VVM relevant issue should take the lead in developing
guidance on the issue with the support of other DOEs/AEs.
Revisions to the VVM will thereafter be gathered and issued at regular intervals.
Aiming to have as many DOE’s utilise the VVM toolbox as possible, IETA will take a
leading role in future coordination, further development and dissemination of the VVM.
Part 1:
Generic
Guidelines
Part 2:
CDM
Validation
Part 3:
SSC
Validation
Part 4:
JI Determination
Part 5:
Part 6:
Initial
Periodic
Verification Verification
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