The Carbon Project Cycle
At this stage the project developer checks if the proposed improved cookstove technology is eligible under different carbon methodologies. Different carbon standards have different eligibility criteria. A feasibility study is conducted to estimate how many carbon credits the project is going to generate, how much revenue will likely result from the sale of those credits, and how much it is going to cost to develop the project. All this information can be summarized in a business plan.
Additionally, the project developer can prepare a Project Idea Note (PIN). This step is not compulsory, but recommended to inform the Designated National Authority (DNA) of the host country and to start exploring co-financing opportunities.
|Cookstove project developer, supported by consultants (if necessary, for local studies)||1~3 months||10,000~20,000 USD|
A local stakeholder consultation must be organized to inform the local target population and other relevant national stakeholders about the project and give them the opportunity to share their comments and feedback on the project. The project developer must invite all the stakeholders linked to the project to participate in this consultation by conducting a physical meeting and/or over electronic media.
All received comments need to be addressed and sometimes require changes to the carbon project design. For Gold Standard projects, the Sustainable Development Matrix and Sustainability Monitoring Plan must also be discussed during the Local Stakeholder Consultation.
|Cookstove project developer, local people of project area||3~4 months||1,000~2,500 USD|
The Project Design Document (PDD) contains all information necessary to calculate the future emission reductions resulting from the project. One of the most important aspects is a description of the baseline scenario. The PDD describes the traditional cooking devices and fuels which have been in use prior to the implementation of the project, and the resulting GHG emissions.
The efficiency of the baseline stove and the project stove must also be evaluated, through published literature or by means of performance field tests (such as Water Boiling Tests, Controlled Cooking Tests or Kitchen Performance Tests). The PDD also includes the monitoring plan with details on parameters that will be monitored during the crediting period, and the frequency of each monitoring procedure. The monitoring plan plays a very important role: future verification of the project will need to follow the monitoring plan to the letter in order to successfully issue carbon credits.
For Gold Standard certification, a GS Passport must be prepared, including a “Do no harm assessment”, Sustainable Development Matrix, and Sustainability Monitoring Plan. For Social Carbon certification, the social, human, financial, natural, biodiversity, technology and carbon resources must be assessed in a specific document; whereas for the Women's Carbon Standard, the specific parameters that project developers should focus on are income and assets, time, education and knowledge, leadership, food security and health.
|Carbon consultant/carbon project developer||2~4 months||30,000~50,000 USD|
Host country approval
Once the PDD is completed, it can be submitted to the Host Country’s DNA to obtain the Letter of Approval (LoA) to establish that the project is in line with national regulations. The DNA is an entity appointed by the national government for the purpose of checking a proposed project activity or PoA against relevant national rules and regulations, and confirming its compliance with the host country’s applicable sustainability criteria. The DNA prepares and constantly updates the framework for evaluating projects and manages the entire host country approval process.
In the case of a CDM certification, the LoA is compulsory for registration, whereas for voluntary standards such as Gold Standard and Verified Carbon Standard, it is not mandatory. The screening process and host country requirements, as well as application form templates and documents to be submitted vary from country to country. In addition to the PDD and other regulatory approval documents, the national DNA may also ask for project information in their prescribed format. Some host country DNAs may require the project developer to demonstrate its contribution to sustainable development of the local area.
A list of DNAs across the world is available at the UNFCCC CDM website.
|Designated National Authority (DNA)||3~6 months||N/A|
The completed PDD and other required documentation according to the certification standard targeted is to be submitted to a Designated Operational Entity (DOE) for the project validation. Under most carbon standards, the design documents like PDD need to be publicly accessible for a considerable period of time, during which time Parties, stakeholders and observers can submit comments on it.
The principal role of a DOE is to check the consistency of the carbon project documentation with relevant rules and guidelines of the carbon standard, based on site-visits and a review of the submitted documentation. The DOE conducts on-site visits and follow-up interviews with project stakeholders for the resolution of outstanding issues. The validation is concluded with the Validation Opinion, which is the DOE’s written conclusion regarding its validation of the project activity. If the Validation Opinion is positive, the project “has been validated”.
|Designated Operational Entity (DOE)||4~6 months||10,000~20,000 USD|
Registration is the step where a project is officially accepted by a carbon standard. The design documentation like PDD, Validation Report containing the Validation Opinion and calculation spreadsheets are submitted to the regulatory body of the carbon standard for requesting registration. A Modalities of Communication (MoC) statement from (or signed by) all project participants in a prescribed format must also be submitted. It designates one or more focal point entities to communicate on behalf of other project participants with the regulatory body. Registration fees (which are different under various standards, see here for CDM and here for the GS) also need to be paid.
Successful project registration occurs after a positive assessment of all the carbon documentation by the regulatory body officials. Once a project is registered in a carbon registry, it makes it eligible to issue and trade carbon credits.
|Regulatory Authority of the carbon standard||3~6 months||depending on project size|
Monitoring and monitoring report
Monitoring follows the monitoring plan, which sets out the exact procedures to be used by project developers for the monitoring of, and by DOEs for verification of the amount of GHG emission reductions from the project activity. Monitoring procedures usually track the usage of a representative sample of the stoves by end-users. This needs to be carried out for the entire project crediting period (lifetime of the carbon project, can be either 21 years – 7 years, twice renewable – or 10 years once).
A quality control system must also be implemented to ensure the efficiency of the disseminated stoves. At the end of each monitoring period, a monitoring report is prepared by the project developer to assess the monitored parameters for the period, and summarize the emission reductions that have occurred during that particular monitoring period. The monitoring report also includes the monitoring of all sustainable development parameters such as those requested by Gold standard, Social Carbon or Women's Carbon Standard.
|Cookstove project developer (monitoring), carbon consultant/carbon project developer (monitoring report)||14~28 months (depending on verification interval)||15,000~25,000 USD|
Once the monitoring report is completed, it is submitted to a Designated Operational Entity (DOE) for verification. Verification is the periodic independent evaluation by a DOE of monitored GHG emission reductions that have occurred as a result of a project activity. The DOE will review the monitoring report and confirm the values of the monitored parameters and indicators presented in the monitoring report through a site visit.
Furthermore, the DOE will also check if the monitoring activities carried out by the project developer are in line with what the monitoring plan specifies in the registered PDD. Verification is concluded when the DOE issues the Verification Report, which also includes the Verification Opinion. If the Verification Opinion is positive, the project “has been verified” for that monitoring period and can proceed to request issuance of carbon credits.
|Designated Operational Entity (DOE)||4~6 months||5,000~15,000 USD|
Issuance of ERs
Issuance is the final step where the amount of carbon credits generated by a project is officially approved and issued by the carbon standard. In other words, this step makes the carbon credits ready to be sold, generating carbon revenues for the project.
The documentation like Monitoring Report, Verification Report containing the Verification Opinion, and calculation spreadsheets are submitted to the regulatory body of the carbon standard for requesting issuance. Issuance fees (which are different under various standards, see here for CDM and here for the GS) also need to be paid. Certified Emission Reductions (CERs) or Verified Emission Reductions (VERs) are issued into the account of the project developer or an entity nominated by the project developer for receiving the credits. The project developer can then engage potential buyers to sell the carbon credits. If a forward sales contract is already in place, then the carbon credits are delivered to the buyer upon issuance.
|Regulatory Authority of the carbon standard||3~6 months||depending on project size|