What are small-scale projects?

Projects registered as small-scale CDM projects are entitled to use the simplified modalities and procedures for small-scale CDM project activities set out in 4/CMP.1, Annex II.

In order to use these simplified modalities and procedures, a project activity must meet the eligibility requirements:

To use simplified modalities and procedures for small-scale CDM project activities, a proposed project activity shall:

  1. Meet the eligibility criteria for small-scale CDM project activities set out in paragraph 6 (c) of decision 17/CP.7;
  2. Conform to one of the project categories in appendix B to this annex;
  3. Not be a debundled component of a larger project activity, as determined through appendix C to this annex (4/CMP.1, Annex II, paragraph 12).

The eligibility criteria (requirement (a)) and project categories (requirement (b)) are discussed below. More information on bundling and debundling is contained in the next section.

Eligibility criteria in paragraph 6(c)

There are three types of projects referred to in paragraph 6(c) of decision 17/CP.7. These types have since been amended by 1/CMP.2, paragraph 28.  The updated small-scale project types are as follows:

  1. Type (i): renewable energy project activities with a maximum output capacity equivalent to up to 15 megawatts (or an appropriate equivalent);
  2. Type (ii): energy efficiency improvement project activities which reduce energy consumption, on the supply and/or demand side, by up to the equivalent of 60 gigawatt hours per year; and
  3. Type (iii): other project activities that both reduce anthropogenic emissions by sources and directly emit less than 60 kilotonnes of carbon dioxide equivalent annually (17/CP.7, paragraph 6(c) as amended by 1/CMP.2, paragraph 28).

More information on each of these project types is set out later in this section.

Project categories

Simplified baseline and monitoring methodologies have been developed for 14 small-scale project activity categories:

Simplified baseline and monitoring methodologies have been developed for 14 small-scale CDM project activity categories relating to types (i) to (iii). They are presented in appendix B. This list shall not preclude other types of small-scale CDM project activities. If a proposed small-scale CDM project activity does not fall into any of the categories in appendix B, the project participants may submit a request to the Executive Board for approval of a simplified baseline and/or monitoring plan developed bearing in mind provisions in paragraph 16 below (4/CMP.1, Annex II, paragraph 10).

The following table, showing the 14 project types, is extracted from 4/CMP.1, Annex II, Appendix B:

Project types Project categories
Type (i): Renewable energy projects A. Electricity generation by the user/household
B. Mechanical energy for the user/enterprise
C. Thermal energy for the user
D. Electricity generation for a system
Type (ii): Energy efficiency improvement projects E. Supply-side energy efficiency improvements - transmission and distribution activities
F. Supply-side energy efficiency improvements - generation
G. Demand-side energy efficiency programmes for specific technologies
H. Energy efficiency and fuel switching measures for industrial facilities
I. Energy efficiency and fuel switching measures for buildings
Type (iii): Other project activities J. Agriculture
K. Switching fossil fuels
L. Emission reductions in the transport sector
M. Methane recovery

These categories are reviewed at least once a year and updated as necessary:

The Executive Board shall review and amend, as necessary, appendix B at least once a year (4/CMP.1, Annex II, paragraph 17).

Any such amendments to appendix B will not apply retroactively:

Any amendments to appendix B shall apply only to project activities registered subsequent to the date of amendment and shall not affect registered CDM project activities during the crediting periods for which they are registered (4/CMP.1, Annex II, paragraph 18).

These three project types are mutually exclusive - that is, project activities that contain more than one component must meet the eligibility criteria relevant to each component.  It is not sufficient that a project activity come within the Type (i) limits for its renewable energy component if it exceeds the Type (iii) limits for its agricultural component:

The Board agreed that the three types of project activities outlined in decision 17/CP.7, paragraph 6 (c), are mutually exclusive. In a project activity with more than one component that will benefit from simplified CDM modalities and procedures, each component shall meet the threshold criterion of each applicable type, e.g. for a project with both a renewable energy and an energy efficiency component, the renewable energy component shall meet the criterion for "renewable energy" and the energy efficiency component that for "energy efficiency" (4/CMP.1, Annex II, paragraph 7).
The Board reaffirmed that, as stipulated in the simplified modalities and procedures for small-scale CDM project activities, the three types of eligible small-scale project activities are mutually exclusive and that project participants submitting new categories of projects should first consider whether these belong to type I (renewable energy projects), to type II (energy efficiency improvements) and, if not eligible under the two previous types, to type III (other small-scale CDM project activities) (EB 20, paragraph 57).

Where a project activity comprises multiple components of the same type, the combined size of the components must not exceed the limits set out above:

The Board agreed that the sum of the size of components of a project activity belonging to the same type (capacity for type I, energy savings for type II and emission reductions for type III) should not exceed the limits for small-scale CDM project activities as stated in paragraph 28 of the decision - /CMP.2 (e.g. the limit for methane recovery component is 60 ktCO2e/yr and the limit for the electricity production component is 15 MW output capacity) (EB 28, paragraph 56).

Application of CDM modalities and procedures

The CDM modalities and procedures for large-scale projects apply to small-scale projects, except those contained in paragraphs 37-60 (which relate to validation, registration and monitoring). Simplified modalities and procedures, contained in paragraphs 12 - 39 of 4/CMP.1, Annex II, apply instead:

The CDM modalities and procedures shall apply to small-scale CDM project activities except for its paragraphs 37 to 60. The following paragraphs 12 to 39 apply instead. Appendix A to this annex should replace, as appropriate, provisions in appendix B of the CDM modalities and procedures (4/CMP.1, Annex II, paragraph 11).

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