Sustainability & Risk, GCAS, Sustainability

Implementation and metrics in carbon management

Assessment of emission reductions projects within the UNFCCC JI framework

Challenge

A Portuguese carbon fund wished to acquire 20M€ of carbon credits from several emission reduction projects under development in Russia. ADL performed a technical due diligence on the projects under analysis (one nitrous oxide emissions reduction and 3 methane emissions avoidance projects), in order to:

  • Validate the emissions reductions credits claimed by the project promoters
  • Assess if the carbon credits generated by those emission reductions were compliant with the JI standards.

Approach

  • Market Overview:
    • Nitric Acid production forecast for 2008 to 2012 period and gas distribution companies characterization and improvement plans
  • Technology Overview:
    • Emission reduction technology characterization and peer benchmark
    • Assurance of the technology reliability and measurement systems precision
    • Positioning regarding remaining technologies
  • Project Evaluation
    • Evaluation of the project’s implementation plan, the additionality claims, the efficiency and compliance of the monitoring processes and the emission reductions estimates

Value

ADL’s analysis concluded that the acquisition deal should be done but several key risks were identified, raising the need to set up close project monitoring procedures and hedging mechanisms to mitigate potential shortfalls in the emission reduction estimates

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