Crediting Period (P)

The definition of crediting period is set out in the CDM Glossary of Terms:

The crediting period for a CDM project activity is the period for which reductions from the baseline are verified and certified by a designated operational entity for the purpose of issuance of CERs (CDM Glossary of Terms Version 03).

Therefore, the crediting period is the duration of time selected by the project participants during which the CDM project activity will be implemented and greenhouse gas emission reductions (and consequently certified emission reductions (CERs)) will be generated.

Selecting a crediting period

The crediting period for a CDM project activity is selected by the project participants, and may be either:

  1. A 7-year crediting period, renewable twice; or
  2. A single 10-year crediting period.

3/CMP.1, Annex, paragraph 49 sets out the following:

Project participants shall select a crediting period for a proposed project activity from one of the following alternative approaches:

  1. A maximum of seven years which may be renewed at most two times, provided that, for each renewal, a designated operational entity determines and informs the Executive Board that the original project baseline is still valid or has been updated taking account of new data where applicable; or
  2. A maximum of 10 years with no option of renewal (3/CMP.1, Annex, paragraph 49).

This was later confirmed by the Executive Board in the Procedures for requesting post-registration changes to the start date of the crediting period (EB 52, Annex 59):

In accordance with paragraph 49 of the modalities and procedures for a clean development mechanism, the crediting period may last a maximum of seven or ten years from this start date in the case of renewable and non-renewable crediting period respectively (EB 52, Annex 59, paragraph 2).

Commencement of the crediting period

In general, the Executive Board will only issue CERs for a crediting period which commences after the date of registration of the relevant CDM project activity:

...certified emission reductions shall only be issued for a crediting period starting after the date of registration of a clean development mechanism project activity (17/CP.7, paragraph 12).

Historically, there have been some limited exceptions to this rule, which have now expired. These 'prompt start' exceptions are explained below.

The starting date and length of the first crediting period must be determined before registration, and this information must be included in the request for registration:

The starting date and length of the first crediting period has to be determined before registration (CDM Glossary of Terms Version 03).

At the point of requesting registration for a proposed project activity, DOEs shall ensure that project participants state the start date of the crediting period of the proposed project activity (EB 52, Annex 59, paragraph 1).

Only one start date for the crediting period can be specified, and this date must be selected without qualifications:

  1. Project participants shall specify only one start date for the crediting period, even in cases of phased implementation.
  1. Project participants shall state in the project design document the start date of the crediting period in the format dd/mm/yyyy, no qualifications, e.g. "expected", can be made to this date (EB 52, Annex 59, paragraphs 1 and 4).
  • Decision -/CMP.6 requested the EB to revise the procedures for registration to allow the effective date of registration and the possible start date of the crediting period to be the date on which a complete request for registration is submitted by the DOE where the project is registered automatically (-/CMP.6, paragraph 56).

  • End of the crediting period

    The crediting period can only continue whilst the project activity is operational:

    A crediting period shall not extend beyond the operational lifetime of the project activity (CDM Glossary of Terms Version 03).

    Requesting changes to the start date of a crediting period

    A request for a change to the start date of the crediting period can only be made where the start date is after the date of registration. In other words, projects claiming retroactive credits cannot request changes in the start date of the crediting period:

    Participants in projects for which the start date of the crediting period is prior to the date of registration (i.e. project claiming retroactive credits) cannot request changes in the start date of the crediting period (EB 52, Annex 59, paragraph 6).

    The procedures for requesting changes to the start date subsequent to the registration of a CDM project activity are set out in EB 52, Annex 59. Requests can be made to the secretariat according to the procedure set out in EB 52, Annex 59, paragraph 7:

    Participants of projects for which the start date of the crediting period is after the date of registration may:

    1. Inform the secretariat that the start date of the crediting period be moved to a date up to one year earlier than the one indicated in the PDD, provided that this date is not earlier than the date of registration of the project activity;
    2. Inform the secretariat to delay the start date of the crediting period by up to one-year;
    3. Make a request to the secretariat, via a DOE, that the start date of the crediting period be delayed by more than one year but no more than 2 years by submitting to the secretariat a confirmation from a DOE that no changes have occurred which would result in a less conservative baseline and that substantive progress mas been made by the project participants to start the project activity.(EB 52, Annex 59, paragraph 7).

    Note, EB 52, Annex 59, paragraph 8 provides that participants of projects hosted by a Least Developed Country may:

    1. Inform the secretariat to delay the start date of the crediting period by up to two years;
    2. Make a request to the secretariat, via a DOE, that the start date of the crediting period be delayed by more than two years but no more than four years, by submitting to the secretariat a confirmation from a DOE that no changes have occurred which would result in a less conservative baseline and that substantive progress has been made by the project participants to start the project activity."

    Requests to the secretariat to change the start date can only be made once for each registered project activity:

    Project participants may only make use of provisions of paragraph 7 and 8 once for each registered project activity (EB 52, Annex 59, paragraph 10).

    'Prompt start' - crediting periods established prior to registration

    As noted above, in general, the Executive Board will only issue CERs for a crediting period which commences after the date of registration of the relevant CDM project activity:

    ...certified emission reductions shall only be issued for a crediting period starting after the date of registration of a clean development mechanism project activity (17/CP.7, paragraph 12).

    However, an exception was made to this general rule to allow for the 'prompt start' of the CDM and promote market liquidity through the early generation and trading of CERs. Project activities that:

    • commenced before the first registration of a CDM project (which occurred on 18 November 2004), and
    • were submitted for registration before 31 December 2005 (or in certain circumstances, were not submitted for registration by this date but were registered by the Executive Board by 31 December 2006),

    were permitted to use a crediting period starting prior to the date of registration, but this crediting period could not begin earlier than 1 January 2000.

    This rule was developed in three stages. The Conference of Parties (COP) decided on 10 November 2001 at COP 7 to facilitate the prompt start of the CDM:

    The Conference of the Parties, ...

    1. Decides to facilitate a prompt start for a clean development mechanism by adopting the modalities and procedures contained in the annex below (17/CP.7, paragraph 1).

    To give effect to this the COP decided, at the same meeting, that:

    ...a project activity starting as of the year 2000, and prior to the adoption of this decision, shall be eligible for validation and registration as a clean development mechanism project activity if submitted for registration before 31 December 2005. If registered, the crediting period for such project activities may start prior to the date of its registration but not earlier than 1 January 2000 (17/CP.7 paragraph 13).

    The above decision provides that the crediting period for a CDM project activity may precede the date of registration if the project activity:

    • commenced on or after 1 January 2000 but prior to 10 November 2001; and
    • was submitted for registration before 31 December 2005.

    Following a recommendation of the Executive Board (EB 12, Annex 3, paragraph 2), the COP later decided that:

    ...a clean development mechanism project activity starting between the date of adoption of decision 17/CP.7 and the date of the first registration of a clean development mechanism project activity, if submitted for registration before 31 December 2005, may use a crediting period starting prior to the date of its registration (18/CP.9 paragraph 1(c)).

    The above decision provides that the crediting period for a CDM project activity may precede the date of registration if the project activity:

    • commenced on or after 10 November 2001, but before 18 November 2004; and
    • was submitted for registration before 31 December 2005.

    A limited exception was made to the 31 December 2005 deadline for submission of the request for registration:

    The Board agreed to the following exceptional provisions with regard to the deadline of 31 December 2005 that project participants may benefit from a crediting period starting prior to the date of registration:
    1. Requests have to be uploaded by DOEs through the UNFCCC CDM web site interface before 31 December 2005 @ GMT 24:00 (the transfer reference for the fee payment is forwarded to DOE/PP after this step is undertaken). The DOE shall indicate if the crediting period is to start prior to the date of registration.
    2. The related proof of payment shall be submitted by the project participants expeditiously through the DOE. A proof of payment shall be uploaded by a DOE on 20 January 2006 at the latest.
    3. The secretariat shall undertake its completeness check as soon as possible after a request has been uploaded by a DOE through the dedicated interface on a first come first serve basis. The check shall ensure that adequate documentation has been submitted (approval letters (authorization) by Parties, correct version numbers of documentation). The Board expects that such checks could be completed by the secretariat before 14 January 2006. The Board notes that the accreditation of DOEs may be questioned if the submission contains clearly inadequate documentation not corresponding to the guidance and guidelines provided by the Board.
    4. If the proof of payment is not received in time and/or the completeness check process is not concluded before 15 February 2006, the activity may only be considered for registration with a crediting period starting after the date of registration (EB 22, paragraph 74).

    A third exception was made by the Conference of the Parties serving as the meeting of the Parties (COP/MOP) at 7/CMP.1, allowing projects that were not registered by 31 December 2005 but were submitted for validation or had submitted a new methodology to claim retroactive credits, provided they were registered by 31 December 2006:

    The Conference of the Parties serving as the meeting of the Parties to the Kyoto Protocol, ...

    1. Decides that project activities that started in the period between 1 January 2000 and 18 November 2004 and have not yet requested registration but have either submitted a new methodology or have requested validation by a designated operational entity by 31 December 2005 can request retroactive credits if they are registered by the Executive Board by 31 December 2006 at the latest (7/CMP.1, paragraph 4).

    The date for registration was then extended by the Conference of the Parties serving as the meeting of the Parties (COP/MOP) at 1/CMP.2 until 31 March 2007.

    The Conference of the Parties serving as the meeting of the Parties to the Kyoto Protocol, ...

    4. Authorizes the Executive Board to extend the deadline for the submission for registration of the clean development mechanism project activities referred to in paragraph 4 of decision 7/CMP.1 from 31 December 2006 to 31 March 2007 (7/CMP.2, paragraph 4).

    Renewing a crediting period

    The Procedure for renewal of a crediting period of a registered CDM project activity (Version 5) was adopted at EB 46, Annex 11. This replaces earlier guidance at EB 43, Annex 13 (Version 4), EB 36, Annex 43 (Version 3), EB 33, Annex 60 (Version 2) and EB 28, Annex 40 (Version 1).

    The tool to asses the validity of the original/current baseline and to update the baseline at the renewal of a crediting period is a procedure to assess validity, compliance and impact found in Annex 1 to EB 46, Annex 11. A crediting period may be renewed if a DOE determines that the original baseline is still valid or has been updated:

    Project participants shall select a crediting period for a proposed project activity from one of the following alternative approaches:

    1. A maximum of seven years which may be renewed at most two times, provided that, for each renewal, a designated operational entity determines and informs the Executive Board that the original project baseline is still valid or has been updated taking account of new data where applicable (3/CMP.1, Annex, paragraph 49(a)).

    In order to apply for a renewal of the crediting period, project participants must update the PDD as follows:

    Project participants shall update those sections of the project design document (CDM-PDD) relating to the baseline, estimated emission reductions and the monitoring plan using an approved baseline and monitoring methodology as follows:

    1. The latest approved version of a baseline and monitoring methodology, applied in the original CDM-PDD of the registered CDM project activity, shall be used whenever applicable;
    2. If a baseline and monitoring methodology, applied in the original CDM-PDD, was withdrawn after the registration of the CDM project activity and replaced by a consolidated methodology, the latest approved version of the respective consolidated methodology shall be used;
    3. If the registered CDM project activity does not meet the applicability criteria of the options provided for by a) or b), due to their revision or due to the update of the baseline, the project participants shall either select another applicable approved methodology or request, through the DOE, a deviation from an approved methodology for the purpose of renewal of the crediting period (EB 36, Annex 43, paragraph 2).

    To demonstrate validity of the original baseline, an assessment of emissions that would have resulted from that scenario must be provided.

    The demonstration of the validity of the original baseline or its update does not require a reassessment of the baseline scenario, but rather an assessment of the emissions which would have resulted from that scenario (EB 43, Annex 13, paragraph 3).

    This updated PDD must then be forwarded to the DOE:

    Project participants shall notify the secretariat, by email or through a dedicated web interface, of their intention to request a renewal of a crediting period of the registered CDM project activity by submitting an updated CDM-PDD and informing of their selection of a DOE, within nine to six months prior to the date of expiration of the current crediting period (EB 36, Annex 43, paragraph 3).

    A new letter of approval is not required:

    For the purpose of renewal of the crediting period it is not necessary to obtain a new letter of approval from Parties involved (EB 36, Annex 43, paragraph 4).

    The secretariat will use best efforts to remind project participants that the crediting period is due for renewal, but ultimately it is the responsibility of the project participants to ensure this is done:

    The secretariat will make the best effort to inform project participants in advance of the period for requesting renewal of the crediting period in accordance with the registered modalities of communication. It remains under the responsibility of project participants to ensure that all actions are taken in accordance with these procedures in a timely manner (EB 36, Annex 43, paragraph 5).

    If notice to renew the crediting period is not received from project participants within 6 months of its expiry, CERs will not be issued for the period from the expiration date to the deemed renewal date:

    If the notification of the intention to request a renewal of a crediting period is not received by the secretariat six months prior to the date of expiration of the current crediting period, the project participant shall not be entitled to the issuance of certified emission reductions for the period from the expiration date of the current crediting period until the date on which the crediting period is deemed renewed (EB 36, Annex 43, paragraph 5).

    The DOE's opinion must address the validity of the original baseline, the impact of new policies and circumstances and the continued validity of the baseline:

    The DOE's validation opinion shall assess the validity of the original baseline or its update through an assessment of the following issues:

    1. an impact of new relevant national and/or sectoral policies and circumstances on the baseline taking into account relevant EB guidance with regard to renewal of the crediting period at the time of requesting renewal of crediting period; and
    2. the correctness of the application of an approved baseline methodology for the determination of the continued validity of the baseline or its update, and the estimation of emission reductions for the respective applicable crediting period (EB 43, Annex 13, paragraph 7).

    The request for renewal must be submitted using the F-CDM-REN form:

    A DOE shall submit a request for renewal of a crediting period of a registered CDM project activity using the form "Renewal of the crediting period of a registered CDM project activity" (F-CDM-REN) along with the updated project design document and validation report (EB 36, Annex 43, paragraph 7).

    Once the request has been submitted:

    • The secretariat will check the documentation is complete;

    • The secretariat will then make the request publicly available for a 4 week period; and

    • If there is no request for review, the crediting period will be deemed to be renewed.

    This is set out in EB 36, Annex 43, paragraphs 8-10:

    8. Upon receipt of a request for renewal of a crediting period of the registered CDM project activity the secretariat will determine whether all information and documentation requested in the FCDM-REN form has been provided by the DOE.

    9. Once the secretariat has determined that the request is complete it shall be made publicly available through the UNFCCC CDM web site for a period of four (4) weeks. The secretariat shall announce a request for renewal of a crediting period of the registered CDM project activity on the UNFCCC CDM web site and notify the requesting DOE, the project participants and the Designated National Authorities.

    10. Unless there is a request for review within four weeks after the publication of the request for renewal, the crediting period of the registered CDM project activity shall be< deemed renewed (EB 36, Annex 43, paragraphs 8-10).

    The procedures applying to a review of registration, as modified, apply also to a review of a request to renew a crediting period:

    The procedures to be applied for review of a request for renewal of a crediting period are those contained in Annex III to Decision 4/CMP.1 and following relevant clarifications (EB 36, Annex 43, paragraph 11).

    Note that 38/CMP.5 revoked Annex III to decision 4/CMP.1. However, the Executive Board will continue to apply Annex III until revised procedures are finalised.

    The renewed crediting period starts the day after the previous crediting period ends:

    The start date of the renewed crediting period is the first day after the ending date of the previous crediting period (EB 36, Annex 43, paragraph 12).

    For large-scale projects, the DOE that submits the request for a renewed crediting period may not perform verification for the renewed crediting period:

    Any DOE can be selected by project participants to perform this task, however for large scale projects the DOE that submits the request for renewal of the crediting period shall not perform verification for this the renewed crediting period (EB 36, Annex 43, footnote 2).

    Related Topics

    Starting date (P)

    Certified emission reductions (CERs)

    Project participants

    Executive Board