JI submissions peak in October as ERU future in EU ETS uncertain
Submission of clean development mechanism (CDM) projects ahead of the phase III deadline are receding, according to figures from the UN's UNEP Risoe research body, but the number of joint implementation (JI) submissions has hit a record high.
"With a submission of only 61 new CDM projects (plus three resubmissions) in October we have really passed the peak of new submitted projects that started in June 2011," the report said.
The UN body noted that of the 61, only three projects are located in Burundi or a least developed country (LDC). From 2013 onwards, the EU Emissions Trading System (ETS) will accept only certified emission reductions (CERs) generated by CDM projects registered after phase II that are located in LDCs.
The new registrations brings the total number of projects in the CDM pipeline to 9,064, with 225 still in the registration phase.
The CDM executive board also has ramped up the number of registrations, as the deadline for non-LDC projects looms, as it approved the registration of 223 projects alone in October. This is the largest monthly number of registrations to date, according to UNEP Risoe.
The UNEP Risoe also revised upward its estimate of the number of certified emissions reduction (CER) carbon offsets to be issued by the end of this year.
"In October, 26.8m CERs were issued and the total issuance is now 1,036m CERs. If the average issuance in the last six months of 19.5m CERs continues in the last two months of 2012, we project a total issuance at the end of 2012 to 1,075m CERs (a little higher than the 1,067m CERs last month)," it said on its website.
On average, 92.3% of registered projects succeed in securing issuance.
While submissions have ebbed off on the CDM side, a record number of JI projects were submitted in October - most of them based in the Ukraine.
The rush comes after JI project developers condemned a European Commission proposal to ban this type of offset from the EU from projects registered after 31 December 2012 (see EDCM 29 October 2012).
In a briefing note, Deutsche Bank said on Friday that, on the one hand, the draft legislation does allow for the use of emission reduction units (ERUs) issued for cutting carbon before the end of 2012, even where these ERUs are issued by countries that have no post-2012 carbon-reduction targets, such as Russia. On the other hand, member states that have previously committed to issuing ERUs to installations that were not initially included in the ETS Directive's scope, but that have joined subsequently, such as after 1 January 2013, could breach the proposal's rules.
A total of 46 new projects was submitted, of which 44 were track-1 projects, with 40 in the Ukraine, three in Russia and one in Romania; while two were track-2 projects, also based in the Ukraine.
The UNEP Risoe added that 25 of the new Ukrainian projects are expected to generate 81m ERUs by the end of 2012.
This brings the number of projects in the JI pipeline to 612.
A total of 19m ERUs were issued for JI projects over the course of the month, and the UN body predicts that if the issuance average remains 25.9m in November and December, that 304m will have been issued by the end of 2012.
The submission of programme of activities' (PoA) projects was more modest, totalling seven in October. Less than half of these, or only two, were based in LDCs. The addition brings the number of projects in the PoA pipeline to 374, of which 327 are at validation, 45 are already registered, and five are still awaiting registration.
A third national appropriate mitigation action (NAMA) project, based in Chile, was submitted in October.
The low number of NAMA registrations may be down at least in part to the fact that NAMAs continue to be poorly understood.
"The new NAMA is the first in the group 'Other NAMAs for recognition'," UNEP Risoe said. "The NAMA has the title 'Clean Production Agreements in Chile' and is about Public-Private Clean Production Agreements." MLDB
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