What a good PDD looks like?

Carbon Management ServiceWhat a good PDD looks like?andWhat are the experiences in validation of CDM projects?Beijing – March 31, 2006Cuiyun ZhangTÜV Industrie Service GmbHTÜV SÜD GroupTÜV SÜD Industrie Serv ice GmbH2006-3-3 1 1

TÜV SÜD Carbon Management ServiceBackgroundTÜV SÜD Holding AG:> 11.500 employees active world wide in the field of inspection and auditingCarbon Management Service:Interdisciplinary team (economists, natural sciences, engineers) and a pool ofexpertsBasic idea:• know-how in plant engineering and energy management,• experiences in industry and• competencies in strategy consulting and risk management→ offering to the market as a qualified certification organisationServices• Validation, verification and certification of GHG projects (national/JI/CDM)• Verification and certification of emission inventories (EU-Directive)• Certification of energy from renewable sources• Knowledge management (www.netinform.net)TÜV SÜD Industrie Serv ice GmbHAbteilung: 2006-3-3 1 2

ExpectationsProject description:• Comprehensive and clear description of the project activity• Enfolding description of the current situation and the future situation• please use drawings• describe clearly the project location and the applied technology• keep in mind national regulations/host country eligibility (e. g. EIA) criteria!Methodology:• Extensive, complete, transparent discussion of the applicability criteria• Address all aspects of the applicability criteria (inclusive footnotes)• follow strictly the methodology• discuss all deviations from the methodologyTÜV SÜD Industrie Serv ice GmbHAbteilung: 2006-3-3 1 3

ExpectationsPDD:• Use the current valid PDD format• Please add all additional information as annexes to the PDD• PDD should be complete with starting the validation processData/Information in the PDD:• all data/information has to be sourced• only official sources (e. g. IPCC) can be accepted• give references for all used data• consider all aspects (e. g. in the financial analysis)• do not work with speculations/un-sourced information and fictions• all calculations have to be conservative try (and this has to be demonsstrated)TÜV SÜD Industrie Serv ice GmbHAbteilung: 2006-3-3 1 4

Hurdles and obstaclesThe most important ones:• project identification• development of PDD• validation• Letter of Approval• registration• project implementation• verificationFurther hurdles:• financing• contracts• trading / transactionTÜV SÜD Industrie Serv ice GmbHAbteilung: 2006-3-3 1 5

ValidationExperiences:- Limited knowledge about the process and the requirements onthe project developers side- Result: large number of revised PDD versions- Timing: more than expected (3-9 month, although in the idealcase only 8 weeks)Potential solutions:- More transparency and information in advance has to beprovided by DOEs- higher requirements for acceptance of draft PDDs- more information can be obtained in the Validation andVerification Manual (VVM) – www.vvmanual.infoTÜV SÜD Industrie Serv ice GmbHAbteilung: 2006-3-3 1 8

Deficits in the Local Stakeholder ProcessThe project should be presented not only to local authorities but theactual local stakeholders (neighbours).Appropriate media to do so should be used.Otherwise the local stakeholder process is not very elaborated andlimited to support from local and regional authorities.In order to take potential comments into account the stakeholderprocess should take place early in advance.TÜV SÜD Industrie Serv ice GmbHAbteilung: 2006-3-3 1 11

Observations: Global Stakeholder ProcessStakeholders and Parties contribute rarely to the global stakeholderprocess.The chance to comment on projects is mainly only taken byaccredited observer organisations as environmental NGOs.Most comments given are negative. The number of comments for JIprojects is lower than for CDM projects.TÜV SÜD welcomes all comments and takes them in its conclusioninto account.TÜV SÜD Industrie Serv ice GmbHAbteilung: 2006-3-3 1 12

Thank you for your attention!Racher, ZHANG CuiyunTel. ++89-21-6141 0126 (direct line)cuiyun.zhang@tuv-sud.cnwww.netinform.netTÜV SÜD Industrie Serv ice GmbHAbteilung: 2006-3-3 1 14