Prior Consideration of the CDM and Additionality

The requirement for CDM revenues to alleviate any barriers to implementation of the project activity does not appear to exist. The feasibility of implementing the project activity was presented to the relevant authorities in the Host Party and approvals were all obtained by May 2018. There is no evidence to show if the feasibility of the project activity depended on availability of CDM revenues and whether the relevant authorities were provided such information for evaluation prior to approvals.

The major investment decision undertaken thereafter in the form of EPC contract signing was completed in July 2018. This investment commitment did not require any support from CDM revenues, rather normal project financing methods appear to be sufficient to implement the project.

The local stakeholder process was conducted as part of IEE/EIA process in February 2018, apparently without providing any information to the stakeholders about CDM intent for the project activity (Section E of the PDD has no relevant information). 

Section F of the PDD has no information, and it is not clear if the CDM DNA is even aware about this project activity being submitted for validation from the Host Party.

The Prior Consideration for the CDM was submitted in November 2018, after all of the above major investment decisions and activities completed without consideration of CDM revenue and its need to assist the implementation of the project activity.

Hence, use of the 'positive list' to demonstrate additionality is counter to basic requirements of CDM to assist implementability of project activities that are not viable in the first place.

The PP is a Korean entity with a registered address in Korea (Appendix 1 of the PDD). Currently, international emission offsets are allowed for use in the Korean ETS market if a Korean party is involved in the project. Overall, it seems that the PP had an after-thought once the project activity started getting implemented and is trying to profit by mis-using provisions of both CDM and the Korean ETS systems.

Public Funding
If indeed the offsets are intended to be imported in the Korean ETS system, the issues that arise are: (1) will the revenue generated be not considered public funding, (2) without any knowledge of those monies being submitted to the relevant authorities in the Host Party, is the Host Party not being deprived of revenues that could have been used in meeting its sustainable development goals, and (3) how is double counting being avoided in the context of the Paris Agreement commitments by both the Host Party and South Korea?

Copy and Paste
The PDD contents appear to be almost word-for-word in most respects to PDDs from two other project activities, respectively, by the same PP and under implementation in Vietnam. So, there is no uniqueness between any two of the three project activities by the same PP. This appears to be a gross mis-use of the CDM framework for profit making rather that use of CDM to genuinely support development of technologies that face barriers to implementation in specific circumstances.

The DOE and the CDM EB is requested to seriously scrutinize the CDM eligibility of all three projects by the PP.