CDM in crisis: largest company for validation and verification of projects abandons mechanism

Writen on 21/02/2014

The price of Certified Emission Reductions (CERs), known as “carbon credit” from Clean Development Mechanism (CDM) of the United Nations, decreased 90% since 2007, currently trading at only € 0.40/t . Such value becomes the projects almost unfeasible (reducing emissions of greenhouse gases), causing fewer interested developers in the mechanism.

The lack of perspective of changing this crisis scenario is the reason given by DNV GL - the largest company of projects validation and verification - thus pulling out of CDM, announced last week.

“The number of projects decreased to less than 10% comparing to the previous year. As a result of this decline, DNV GL recorded a decline in the activities. The current workload is no longer enough to support the amount of highly skilled employees who are required to validate the designs”, says a statement released by the company.

According to Mr Gareth Phillips - chairman of the Project Developers Forum – this situation is tough for CDM.

“Few signs could be more representative of the collapse of carbon market infrastructure. The CDM was responsible for engaging the majority of developing countries and a significant part of private sector in climate action and the mechanism is still a positive tool. If we lose CDM, it will be a major setback”, he explained.

According to 2012 data, DNV GL had already validated and verified 2833 CDM projects, 24% from the total number of the mechanism initiatives.

The company confirms that it will continue to review the projects already validated and verified, but it will not accept new CDM clients. The intention now is to work only with regional initiatives such as emission trading schemes of the European Union and California.

 

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