CDM project registration rush before December cutoff

The countdown is almost over! It is commonly agreed upon that a project which has not received domestic approval before February is highly unlikely to be registered before the cut-off date of 31 December 2012.

For the record, the UN’s main credit outlet, the European Trading Scheme, decided that projects registered after the 31st of December 2012 shall only come from Least Developed Countries. This was presented as a move to rebalance the geographical development of all CDM projects. The final objective also seems to try to curb the over-supply of emission reduction project credits.

Source: eCO2data.com project registration pipeline

Taking into account this new constraint, project developers have, for the last few months, rushed to get their non-LDC projects validated and registered. According to the opposite graph, it takes on average at least 127 days to get a project registered. Most importantly, there are few credit buyers ready and willing to take the risk of signing any Emission Reduction Purchase Agreements (ERPA) given the uncertainty of getting the project registered on time, and thus missing eligibility for the European market.

And yet, some project developers are now considering more and more PoAs (Programme of Activities). Such projects present fewer eligibility questions, and recent figures demonstrate a growing interest in this specific project group: 24 PoAs are in validation and 14 in registration.

Alexis Poullain is a carbon market analyst at eCO2market. This article originally appeared in the 25 January 2012 edition of eCO2abacus, our free weekly carbon newsletter. Sign up to receive future editions in your inbox.

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