CDM-EB78-A04-AMEN

Standard

Amendment to version 05.0 of the CDM validation and verification standard

Version 01.0

TABLE OF CONTENTS                                                                                                          Page

1....... Amendments introduced in the CDM validation and verification standard related to carbon dioxide capture and storage project activities 3

Appendix 1..... Amendments to the “Clean development mechanism validation and verification standard (version 05.0)”. .................................... 4

1. Amendments introduced in the CDM validation and verification standard related to carbon dioxide capture and storage project activities

1. This document contains the amendments adopted by the Executive Board of the clean development mechanism (CDM) (hereafter referred to as the Board) at its seventy-eighth meeting, to the CDM validation and verification standard (VVS) (v.05.0) (CDM-EB65-A05-STAN). This document will be consolidated in a revised version of the VVS.

2. The entry into force of this document is with immediate effect.

Appendix 1. Amendments to the “Clean development mechanism validation and verification standard (version 05.0)”

1. Change to Section 1: Introduction

1. The following paragraph shall read as follows:

1.         The Conference of the Parties serving as the Meeting of the Parties to the Kyoto Protocol (hereinafter referred to as the CMP), at its first session, established the basis of the regulatory framework for the clean development mechanism (hereinafter referred to as the CDM) to implement Article 12 of the Kyoto Protocol through the following:

(a)       Annex to decision 3/CMP.1: Modalities and procedures for a clean development mechanism;

(b)       Annexes to decision 4/CMP.1, including annex II: Simplified modalities and procedures for small scale clean development mechanism project activities;

(c)       Annex to decision 5/CMP.1: Modalities and procedures for afforestation and reforestation project activities under the clean development mechanism;

(d)       Annex to decision 6/CMP.1: Simplified modalities and procedures for small scale afforestation and reforestation project activities under the clean development mechanism;

(e)       Decision 7/CMP.1;

(f)        Decision 10/CMP.7: Modalities and procedures for carbon dioxide capture and storage in geological formations as clean development mechanism project activities.

2. Changes to Section 2: Scope and applicability

2. The following paragraphs shall read as follows:

7.         Principles in chapter 5 and requirements in chapters 6, 7 and 9 apply to any type of CDM project activities and as applicable, to CDM PoAs. In addition, requirements in chapters 8 and 10 specifically apply to small-scale (SSC) project activities, large scale afforestation/reforestation (A/R) project activities, small scale A/R project activities, carbon dioxide capture and storage (CCS) project activities and PoAs.

3. Changes to Section 7: General validation requirements

3. The following paragraphs shall read as follows:

20.       In carrying out its validation work, the DOE shall:

(a) Determine whether the proposed project activity complies with the requirements of paragraph 37 of the CDM M&Ps (with the exception of paragraph 37 (c) for CCS project activities), the applicability conditions of the selected methodology and guidance issued by the Board;

(b) Assess the claims and assumptions made in the project design document (PDD). The evidence used in this assessment shall not be limited to that provided by the project participants.

4. Changes to Section 8: Specific validation requirements

4. The following paragraphs shall read as follows:

149.     For certain specific validation activities such as SSC, A/R, CCS and PoA, the DOE shall comply with the general validation requirements described in the sections above as well as those that follow, including the simplified modalities and procedures for small scale project activities, the modalities and procedures for afforestation and reforestation project activities17, the modalities and procedures for carbon dioxide capture and storage in geological formations as clean development mechanism project activities18 and Standards for PoA.

17. See decision 5/CMP.1, annex.

18. See decision 10/CMP.7, annex.

5. Introduction of Section 8.4 bis: CCS project activities in Section 8. Specific validation requirements

5. The following new paragraphs shall be inserted under the new section:

8.4 bis.             CCS project activities

1. The DOE shall determine whether specific requirements as defined in the modalities and procedures for CCS project activities have been followed, including:

(a) Participation requirements for CCS project activities;

(b) Selection and characterization of the geological storage site;

(c) Risk and safety assessment;

(d) Environmental and socioeconomic impact assessment;

(e) Liability;

(f) Requirements for financial provision;

(g) Monitoring for CCS project activities;

(h) Project boundary for CCS project activities;

(i) Authorization for CCS project activities.

8.4 bis.1          Participation requirements for CCS project activities

8.4 bis.1.1       Validation requirement

1. The DOE shall determine whether the participation requirements as set out in section 4.1.bis of the Project cycle procedure are satisfied.

8.4 bis.1.2       Means of validation

2. The DOE shall determine whether:

(a) The host Party has submitted the expression of its agreement to the UNFCCC secretariat to allow the implementation of CCS project activities on its territory;

(b) The host Party has established laws and/or regulations which meet the requirements set out in section 4.1.bis of the Project cycle procedure.

8.4 bis.1.3       Reporting requirements

3. The DOE shall describe how the host Party’s laws and/or regulations meet the requirements set out in section 4.1.bis.2 of the Project cycle procedure.

8.4 bis.2          Selection and characterization of the geological storage site

8.4 bis.2.1       Validation requirement

4. The DOE shall determine whether:

(a) The geological storage site has been characterized and selected in accordance with section 11.bis.4 of the Project standard; and

(b) The conditions set out in section 11.bis.4 of the Project standard have been fulfilled.

8.4 bis.2.2       Means of validation

5. The DOE shall , determine whether:

(a) The selection and characterization of the geological storage site fulfils the requirements set out in section 11.bis.4, paragraphs 4–6 of the Project standard;

(b) All the steps mentioned in section 11.bis.4, paragraph 7 of the Project standard have been performed for the project activity;

(c) Relevant information is used for the selection and characterization of the geological storage site, in accordance with section 11. bis.4, paragraph 8 of the Project standard.

8.4 bis.2.3       Reporting requirements

6. The DOE shall describe all the steps taken, and sources of information used to validate the PDD. The DOE shall describe how it has determined that the evidence assessed is credible, where appropriate.

7. The DOE shall also describe how the requirements set out in section 11.bis.4 of the Project standard have been fulfilled.

8.4 bis.3          Risk and safety assessment

8.4 bis.3.1       Validation requirement

8. The DOE shall determine whether the risk and safety assessment has been carried out:

(a) In accordance with the laws and regulations of the host Party, as applicable; and

(b) The provisions set out in section 11.bis.6 of the Project standard.

8.4 bis.3.2       Means of validation

9. The DOE shall  determine whether:

(a) The risk and safety assessment has been carried out in accordance with the laws and regulations of the host Party;

(b) All the requirements set out in section 11.bis.6 of the Project standard have been met for the project activity;

(c) The five steps for assessing the potential risk of the CCS project activity, as set out in section 11.bis.6 of the Project standard, have been followed.

8.4 bis.3.3       Reporting requirements

10. The DOE shall indicate whether the project participants have undertaken a risk and safety assessment in accordance with the laws and regulations as required by the host Party.

11. The DOE shall describe how the requirements set out in section 11.bis.6 of the Project standard have been fulfilled.

8.4 bis.4          Environmental and socioeconomic impact assessment

8.4 bis.4.1       Validation requirement

12. The DOE shall confirm that the environmental and socioeconomic impact assessment has been carried out:

(a) In accordance with the laws and regulations of the host Party, as applicable; and

(b) In accordance with the provisions set out in section 11.bis.10 of the Project standard.

13. The DOE shall determine whether the results of the assessments referred to in paragraphs 8 and 12 above confirm the technical and environmental viability of the proposed CCS project activity.

8.4 bis.4.2       Means of validation

14. The DOE shall:

(a) Determine whether the environmental and socioeconomic impact assessment has been carried out as per the requirements mentioned in the paragraphs above;

(b) Determine whether the results of the risk and safety assessment and environmental and socioeconomic impact assessment confirm the technical and environmental viability of the proposed CCS project activity.

8.4 bis.4.3       Reporting requirements

15. The DOE shall:

(a) Describe how the environmental and socioeconomic impact assessment complies with the laws and regulations of the host Party;

(b) Describe how it has assessed the requirements set out in section 11.bis.10 of the Project standard are met for the project activity;

(c) Describe how it has validated the compliance of the detailed description of the planned monitoring and remedial measures to address any environmental and socioeconomic impacts identified in accordance with the procedures as required by the host Party;

(d) State whether the results of the assessments confirm the technical and environmental viability of the proposed CCS project activity.

8.4 bis.5          Liability

8.4 bis.5.1       Validation requirement

16. The DOE shall determine whether the allocation and transfer of liability have been agreed:

(a) In accordance with the laws and regulations of the host Party, as applicable; and

(b) In accordance with the requirements set out in section 11.bis.9 of the Project standard.

8.4 bis.5.2       Means of validation

17. The DOE shall  determine whether, in accordance with the requirements mentioned above:

(a) The allocation and transfer of liability has been agreed;

(b) The proposed allocation and transfer of liability is feasible and implementable.

8.4 bis.5.3       Reporting requirements

18. The DOE shall:

(a) Describe how the proposed allocation and transfer of liability complies with the requirements mentioned in section11.bis.9 in the Project standard;

(b) Describe how it assessed whether the allocation and transfer of liability is feasible and implementable;

(c) Confirm that the obligation of liability shall reside with the project participant(s) during the operational phase and any time thereafter until a transfer of liability to the host Party has been effected.

8.4 bis.6          Requirements for financial provision

8.4 bis.6.1       Validation requirement

19. The DOE shall determine whether financial provisions have been put in place by the project participants in accordance with the requirements set out in section 11.bis.8 of the Project standard.

8.4 bis.6.2       Means of validation

20. The DOE shall :

(a) Confirm that the project participants have established financial provisions in accordance with the requirements mentioned above;

(b) Confirm that the financial provision is sufficient to cover all aspects defined in section 11.bis.8 of the Project standard;

(c) Confirm that the type and amount of financial provision is described in the PDD;

(d) Confirm that the financial provision shall, in accordance with the laws and regulations of the host Party, be transferable to the host Party upon fulfilment of all obligations of the project participants in accordance with the CCS-related requirements in the Project standard and the laws and regulations of the host Party, or upon insolvency of the project participants.

8.4 bis.6.3       Reporting requirements

21. The DOE shall:

(a) Describe the steps taken to assess the relevant information contained in the PDD against the criteria set out in section 11.bis.8 of the Project standard;

(b) Describe how the financial provision is sufficient to cover all aspects defined in section 11.bis.8 of the Project standard;

(c) Describe the type and amount of the financial provision;

(d) Describe the sources of information used to confirm how the financial provision shall be transferred to the host Party, upon fulfilment of all obligations of the project participants in accordance with CCS-related requirements in the Project standard and the laws and regulations of the host Party, or upon insolvency of the project participants;

(e) Confirm that the financial provision is guaranteed to be transferable to the host Party upon insolvency of the project participant(s).

8.4 bis.7          Monitoring for CCS project activities

8.4 bis.7.1       Validation requirement

22. The following applies instead of paragraph [54] of the Project standard:

23. The DOE shall confirm that the provisions in the PDD for monitoring, including the monitoring plan, are in accordance with the selected methodology, the requirements set out in section 11.bis.7 of the Project standard and all other applicable CDM rules and requirements.

8.4 bis.7.2       Means of validation

24. The DOE shall apply a two-step process to meet the requirement mentioned in paragraph 23 above:

(a) In order to assess the compliance of the monitoring plan with the CCS modalities and procedures, the DOE shall:

(i) Identify the list of parameters, information, provisions for history matching and numerical models used to characterize the geological storage site required as set out in section 11.bis.7 of the Project standard by means of a document review;

(ii) Confirm that the description of the monitoring plan contains all necessary parameters, information, provisions for history matching and numerical models used to characterize the geological storage site and that the means of monitoring described in the plan complies with the requirements of section 11.bis.7 of the Project standard;

(b) In order to assess the implementation of the plan the DOE shall, by means of reviewing the documented procedure, interviewing relevant personnel, reviewing project plans and any physical inspection of the proposed project activity site, determine whether:

(i) The monitoring arrangements described in the monitoring plan are feasible within the project design;

(ii) The means of implementation of the monitoring plan, including the data management and quality assurance and quality control procedures, are sufficient to ensure that the monitoring plan is in accordance with section 11.bis.7 of the Project standard and in all other CDM rules and requirements and the parameters can be reported ex post and verified.

25. The DOE shall use official sources and its local and sectoral expertise to confirm that the project participants have provided the description and analysis of the environmental conditions in the area of geological storage site prior to any storage of carbon dioxide in accordance with paragraph 24 above.

8.4 bis.7.3       Reporting requirements

26. The DOE shall:

(a) State its opinion on the compliance of the described monitoring plan with the requirements of section 11.bis.7 of the Project standard;

(b) Describe the steps taken to assess whether the monitoring arrangements described in the monitoring plan are feasible within the project design;

(c) State its opinion on the project participants’ ability to implement the described monitoring plan;

(d) State its opinion on the description and analysis of environmental conditions in the area of the geological storage site prior to any storage of carbon dioxide.

8.4 bis.8          Project boundary for CCS project activities

8.4 bis.8.1       Validation requirement

27. The DOE shall confirm that the PDD description of the project boundary of a CCS project activity includes all above-ground components, including, where applicable, the following:

(a) The installation where the carbon dioxide is captured;

(b) Any treatment facilities;

(c) Transportation equipment, including pipelines and booster stations along a pipeline, or offloading facilities in the case of transportation by ship, rail or road tanker;

(d) Any reception facilities or holding tanks at the injection site;

(e) The injection facility;

(f) Subsurface components, including the geological storage site and all potential sources of seepage, as determined during the characterization and selection of the geological storage site.

28. The DOE shall also confirm that the project boundary of a CCS project activity also encompasses the vertical and lateral limits of the carbon dioxide geological storage site that are expected when the carbon dioxide plume stabilizes over the long term during the closure phase and the post-closure phase.

8.4 bis.8.2       Means of validation

29. The DOE shall confirm the project boundary based on the documented evidence and shall corroborate it by a site visit.

30. The DOE shall confirm that the project boundary covers all the relevant elements in accordance with section 11.bis.5 of the Project standard.

8.4 bis.8.3       Reporting requirements

31. The DOE shall describe how the validation of the project boundary has been performed, by detailing the documentation assessed (e.g. an engineering design report) and by describing its observations during the site visit undertaken (i.e. observations of the physical site or equipment used in the process).

8.4 bis.9          Approval and authorization for CCS project activities

8.4 bis.9.1       Validation requirement

32. The DOE shall determine whether the project participants have received written confirmation by the DNA of the host Party of the following:

(a) That the right to store carbon dioxide in, and gain access to, the proposed geological storage site has been conferred to the relevant project participants;

(b) That the host Party agrees to the financial provision, in accordance with section 11.bis.8 of the Project standard, described in the project design document;

(c) That the host Party accepts the allocation of liability as proposed in the project design document and the transfer of liability referred to in section 11.bis.9 of the Project standard;

(d) Whether the host Party accepts the obligation to address a net reversal of storage in the situation referred to in section 8.4 of the Project cycle procedure.

8.4 bis.9.2       Means of validation

33. The DOE shall confirm that the approval of participation has been issued from the relevant DNA and covers all the points mentioned in paragraph 32 above. If the DOE is in doubt, it shall verify with the DNA that the approval is valid for the proposed CDM project participants.

8.4 bis.9.3       Reporting requirements

34. The validation report shall, for each participant:

(a) Indicate whether the participation has been authorized by a host Party mentioning all the conditions as specified in the paragraph above;

(b) Describe the means of validation employed to support the conclusions.

6. Introduction of Section 10.2 bis.           CCS project activities in Section 10. Specific verification requirements

6. The following new paragraphs shall be inserted under the new section:

10.2 bis.        CCS project activities

1. In accordance with section 11.bis.10 of the Project standard, the DOE contracted by the project participants to perform the verification shall:

(a) Determine whether monitoring was conducted in accordance with the monitoring plan and the provisions for monitoring set out in section 11.bis.7 of the Project standard;

(b) Determine whether the site development and management plan is being adhered to;

(c) Determine whether any significant deviations were observed during history matching and whether, in such a case, a recharacterization of the geological storage site, an update of the risk and safety assessment, an update of the environmental and socioeconomic impact assessments, a revision to the project boundary, and a revision to the monitoring plan have been conducted, as necessary, in accordance with the CCS-related provisions set out in the Project standard;

(d) Determine whether seepage occurred from the geological storage site of the CCS project activity during the verification period;

(e) In the case that such seepage occurred:

(i) Determine whether the remedial measures and plans described in the risk and safety assessment were implemented and effective;

(ii) Determine whether a net reversal of storage occurred as a result of the seepage;

(f) In the case that a net reversal of storage occurred, quantify the amount of the net reversal of storage that occurred as a result of the seepage;

(g) Determine whether there have been any unintentional transboundary effects;

(h) Where applicable, determine whether the geological storage site has been successfully closed.

2. The DOE shall check, for each verification period, whether the project participants have carried out history matching and, where necessary, updated the numerical models used to characterize the geological storage site by conducting new simulations using the monitored data and information. The numerical models shall be adjusted in the event of significant deviations between observed and predicted behaviour.

3. Where the information prepared in accordance with section 11.bis.7 of the Project standard indicates that the geological storage site no longer meets the requirements set out in section 11.bis.4 of the Project standard, the DOE shall provide a negative opinion on validation and/or verification.

4. The initial verification and certification of a CCS project activity may be undertaken at a time selected by the project participants. Subsequent verification and certification reports shall be submitted to the Executive Board not later than five years after the end of the previous verification period. Verification and certification shall continue beyond the end of the last crediting period of the proposed CCS project activity and shall only cease after the monitoring of the geological storage site has been terminated in accordance with the conditions for the termination of monitoring, as set out in section 11.bis.7 of the Project standard.

10.2.bis.1       Issuance of certified emission reductions for CCS project activities

5. A certification report submitted for a verification period during the crediting period shall constitute a request to the Executive Board for issuance of certified emission reductions (CERs) equal to the verified reductions in anthropogenic emissions by sources of GHGs that have occurred as a result of the registered CCS project activity.

6. A certification report submitted for a verification period after the end of the last crediting period shall not constitute a request for issuance but shall provide, where applicable, information on the amount of any net reversal of storage that occurred during the verification period as a result of seepage from the geological storage site of a CCS project activity, in accordance with the Project standard and Project cycle procedure and any decisions of the Executive Board.

7. The last certification report, submitted after the monitoring of the geological storage site has been terminated in accordance with the conditions for the termination of monitoring, as set out in section 11.bis.7 of the Project standard, may constitute a request to forward any remaining CERs in the reserve account established for the purpose of accounting for any net reversal of storage to the registry accounts of the Parties and project participants involved.

7. Introduction of Section 11.2 bis:            Renewal of crediting period of CCS project activities in Section 11. Renewal of crediting period

7. The following new paragraphs shall be inserted under the new section:

11.2 bis.        Renewal of crediting period of CCS project activities

1. In accordance with section 11.bis.7 of the Project standard, the DOE shall determine whether the project participants have carried out the following updates to ensure that they meet the requirements related to CCS project activities:

(a) Recharacterize the geological storage site, in accordance with section 11.bis.4 of the Project standard;

(b) Revise the project boundary;

(c) Update the risk and safety assessment, in accordance with section 11.bis.6 of the Project standard;

(d) Update the environmental and socioeconomic impact assessments;

(e) Revise the monitoring plan, in order to improve the accuracy and/or completeness of data and information, taking into account observed deviations determined during history matching, changes to the project boundary, changes to the risk and safety assessment, changes to the environmental and socioeconomic impact assessments, new scientific knowledge and improvements in the best available technology;

(f) Update the site development and management plan, taking account of the results of the activities described in subparagraphs a–e above, where appropriate.

2. Where the information prepared in accordance with paragraph 1 above indicates that the geological storage site no longer meets the requirements set out in section 11.bis.4 of the Project standard, the issuance of CERs shall cease and the DOE shall issue a negative validation opinion.

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Document information

Version

Date

Description

01.0

4 April 2014

EB 78, Annex 4

Initial adoption.

This amendment includes provisions related to carbon dioxide capture and storage.

Decision Class: Regulatory
Document Type: Amendment
Business Function: Issuance, Registration
Keywords: budget, carbon capture and storage, crediting period, environmental impacts, geological storage site, host party, issuance of CERs, liability, monitoring plan, project activities, project boundary, risk and safety assessment, validation, verification