The validation report is a summary of the validation findings of the designated operational entity (DOE). It sets out whether, in the opinion of the DOE, the project is eligible to be registered as a CDM project. The validation report must be submitted as part of a request for registration of a proposed project activity.
3/CMP.1, Annex, paragraph 40(f) requires the DOE to:
Submit to the Executive Board, if it determines the proposed project activity to be valid, a request for registration in the form of a validation report including the project design document, the written approval of the host Party as referred to in subparagraph (a) above, and an explanation of how it has taken due account of comments received (3/CMP.1, Annex, paragraph 40(f)).
Within the report, the DOE must state their conclusion, give an overview of the validation activities and describe the dialogue between the DOE and the project participants.
The report shall:
- State the DOE's conclusions regarding the proposed CDM project activity's conformity with applicable CDM requirements;
- Give an overview of the validation activities carried out by the DOE in order to arrive at the final validation conclusions and opinion, including a general discussion of details captured by the validation protocol and conclusions related to CDM requirements;
- Reflect the results of the dialogue between the DOE and the project participants, as well as any adjustments made to the project design following stakeholder consultation. It shall reflect the responses to CARs and CLs, and discussions on and revisions to project documentation (EB 44, Annex 3, paragraph 165).
The validation report should also provide the following information:
- A summary of the validation process and its conclusions;
- All the DOE's applied approaches, "findings and conclusions, especially on: baseline selection, additionality, emission factors and monitoring";
- Information on the global stakeholders consultation carried out by the DOE prior to submitting the project for validation, including dates and how comments received have been taken into consideration by the DOE;
- A list of interviewees and documents reviewed;
- Details of the validation team;
- Information on quality control within the team/of the validation process;
- Appointment certificates or curricula vitae of the DOE's validation team members (EB 44, Annex 3, paragraph 166).
It is important that a DOE does not omit evidence that is likely to alter the validation opinion. If the opinion is negative the DOE must explain the reason for its opinion.
Once completed, the validation report must be provided to the project participants and the DOE must notify the Executive Board that a validation report has been issued.
The DOE must ensure that the project activity complies with the requirements of paragraph 37 of the CDM modalities and procedures and the Validation and Verification Manual (VVM). Each of the requirements are discussed in more detail below.
Requirement 1: Approval
The DOE must verify that the CDM project activity under validation has been provided with a letter of approval by the DNA.
The DOE shall determine whether the DNA of each Party indicated as being involved in the proposed CDM project activity in section A.3 of the PDD has provided a written letter of approval. The DOE shall determine whether each letter confirms that:
- The Party is a Party to the Kyoto Protocol;
- Participation is voluntary;
- In the case of the host Party, the proposed CDM project activity contributes to the sustainable development of the country;
- It refers to the precise proposed CDM project activity title in the PDD being submitted for registration (EB 44, Annex 3, paragraph 45).
The validation report must indicate the validity of the letter of approval.
The validation report shall, for each Party involved:
- Indicate whether a letter of approval has been received, with clearly referencing the letter itself and any supporting documentation;
- Indicate whether the DOE received this letter from the project participants or directly from the DNA;
- Indicate the means of validation employed to assess the authenticity if paragraph 48 above applies;
- Contain a clear statement regarding whether the DOE considers the letters are in accordance with paragraphs 45 - 48 above (EB 44, Annex 3, paragraph 49).
If there are any additional specifications included in the letter of approval the DOE must amend the validation report.
If letters of approval contain additional specification of the project activity, such as the PDD version number, then the request for registration shall be made on the basis of the documents specified in the letter. If a letter of approval refers to a specific version of the validation report and the DOE therefore is unable to submit this precise version of the validation report, the DOE shall take one of the following options:
- Insert a statement in the validation report to indicate that the final letter of approval has not been received and that a request for registration will not be submitted until it has been received;
- Update the validation report to reflect the receipt of the letter of approval. If this option is chosen, validation report major number shall remain unchanged and the minor number shall be increased. The validation report shall contain confirmation that this is the only change that has been made to the version referred to in the letter of approval (EB 44, Annex 3, paragraph 50).
Requirement 2: Participation
The DOE must confirm that the project participants are correctly referred to in the PDD and their participation has been approved by the DNA.
The DOE shall confirm that the project participants are listed in tabular form in section A.3 of the PDD and that this information is consistent with the contact details provided in annex 1 of the PDD. The DOE shall determine whether the participation of each project participant has been approved by at least one Party involved, either in a letter of approval or in a separate letter specifically to approve participation. The DOE shall confirm that no entities other than those approved as project participants are included in these sections of the PDD (EB 44, Annex 3, paragraph 52).
The DOE shall ensure that the approval of participation has been issued from the relevant DNA and if in doubt shall verify with the DNA that the approval of participation is valid for the proposed project participant (EB 44, Annex 3, paragraph 53).
If a project participant has withdrawn prior to registration, the DOE must provide a letter from the withdrawn project participant and address this issue in the validation report.
The Board agreed that where a project participant listed in the PDD published at validation is not included in the PDD submitted for registration, the DOE shall provide a letter from the withdrawn project participant confirming its voluntary withdrawal from the proposed project activity, and address this issue in its validation report (EB 30, paragraph 41).
Requirement 3: Project Design Document
The DOE must determine whether the PDD complies with the applicable CDM requirements and insert a statement regarding compliance in the validation report.
The validation report shall contain a statement regarding the compliance of the PDD with relevant forms and guidance (EB 44, Annex 3, paragraph 56).
Requirement 4: Project Description
The DOE must confirm the description of the CDM project activity in the PDD provides a sufficient understanding of the proposed project activity.
The DOE shall confirm that the description of the proposed CDM project activity as contained in the PDD sufficiently covers all relevant elements, is accurate and that it provides the reader with a clear understanding of the nature of the proposed CDM project activity (EB 44, Annex 3, paragraph 59).
If the project involves an existing facility or utilises existing equipment, the DOE must conduct a physical site inspection for certain CDM project activities to confirm the description in the PDD.
For proposed CDM project activities in existing facilities or utilizing existing equipments, the DOE shall conduct a physical site inspection to confirm that the description in the PDD reflects the proposed CDM project activity for the following types of CDM project activities unless other means are specified in the methodology:
- Large scale projects;
- Non-bundled small scale projects with emission reductions exceeding 15,000 tonnes per year;
- Bundled small scale projects, each with emission reductions not exceeding 15,000 tonnes per year; in such case the number of physical site visits may however be based on sampling, if the sampling size is appropriately justified through statistical analysis (EB 44, Annex 3, paragraph 60).
For other project activities not referred to above, the DOE may undertake validation using available designs and feasibility studies and may conduct comparison analysis when needed. If the DOE so chooses. It may conduct a physical site visit.
For all other proposed CDM project activities not referred to in paragraphs 59 - 61, the DOE shall undertake the validation by reviewing available designs and feasibility studies and may conduct comparison analysis to equivalent projects, as appropriate. The DOE may conduct physical site visit to assess the plan. For proposed CDM project activities for which the DOE does not undertake a physical site inspection this shall be appropriately justified (ED 44, Annex 3, paragraph 62).
If CDM project activity alters an existing installation or process, the DOE must ensure the project description clearly states the differences to the pre-project situation.
Requirement 5: Baseline and monitoring methodology
The DOE must ensure that the baseline and monitoring methodologies selected by the project participants comply with methodologies approved by the CDM Executive Board.
To achieve this the DOE must compare the submitted methodology with the actual text of the applicable version of the methodology and verify it's content has been correctly interpreted in the PDD. The DOE may cross check the PDD against other sources if it is aware that comparable information is available.
The DOE shall determine whether the methodology is correctly quoted and applied by comparing it with the actual text of the applicable version of the methodology available on the UNFCCC CDM website (EB 44, Annex 3, paragraph 69).
A selected approved methodology applies to the project activity if the applicability conditions of the methodology are met and the project activity is not expected to result in emissions other than those allowed by the methodology. The DOE shall determine whether the choice of methodology is justified and the project participants have shown that the project activity meets each of the applicability conditions of the approved methodology or any tool or other methodology component referred to therein. This shall be done by validating the documentation referred to in the PDD and by verifying that its content is correctly quoted and interpreted in the PDD. If the DOE, based on local and sectoral knowledge, is aware that comparable information is available from sources other than that used in the PDD, then the DOE shall cross check the PDD against the other sources to confirm that the project activity meets the applicability conditions of the methodology (EB 44, Annex 3, paragraph 70).
The DOE may request clarification, revision or deviation of the methodology if it is unable to make a determination or finds the proposed CDM project activity does not comply with the applicability conditions of the methodology. In cases of revision or deviation, the DOE must not submit a request for registration until the CDM Executive Board has approved the changes.
The DOE must clearly describe the validation steps taken to assess information in the PDD against the applicability conditions. It must also include information concerning greenhouse gas emissions that contribute to more than 1% of the overall expected average annual emission reductions that are not addressed by the applied methodology.
For each applicability condition listed in the approved methodology selected, the DOE shall clearly describe in the validation report the steps taken to assess the relevant information contained in the PDD against these criteria. The validation report shall include an unambiguous validation opinion regarding the applicability of the selected methodology to the proposed CDM project activity (EB 44, Annex 3, paragraph 75).
The validation report shall contain information regarding greenhouse gas emissions occurring within the proposed CDM project activity boundary as a result of the implementation of the proposed CDM project activity which are expected to contribute more than 1% of the overall expected average annual emissions reductions, which are not addressed by the applied methodology (EB 44, Annex 3, paragraph 76).
The DOE must determine whether the project boundary in the PDD is correct and meets the requirements of the selected baseline methodology. In addition, the DOE must confirm all sources and GHGs have been included in the project boundary and descriptions of how the validation of the project boundary was performed should be included in the validation report.
In respect of baseline identification, the DOE must confirm the procedure used to identify the most reasonable baseline scenario has been correctly applied. This includes confirmation that no reasonable alternative scenario has been excluded. To reach this determination, the DOE must consider whether all applicable CDM requirements have been taken into account, including relevant nation and sectoral policies.
The DOE shall determine whether the baseline scenario identified is reasonable by validating the assumptions, calculations and rationales used, as described in the PDD. It shall ensure that documents and sources referred to in the PDD are correctly quoted and interpreted. The DOE shall cross check the information provided in the PDD with other verifiable and credible sources, such as local expert opinion, if available (EB 44, Annex 3, paragraph 83).
The DOE shall determine whether all applicable CDM requirements have been taken into account in the identification of the baseline scenario for the proposed CDM project activity, including "relevant national and/or sectoral policies and circumstances." Drawing on its knowledge of the sector and/or advice from local experts, the DOE shall confirm that all relevant policies and circumstances have been identified and correctly considered in the PDD, in accordance with the guidance by the CDM Executive Board (EB 44, Annex 3, paragraph 84).
The DOE must clearly describe in the validation report the steps taken to assess the baseline and provide an opinion on the following:
- All the assumptions and data used by the project participants are listed in the PDD, including their references and sources;
- All documentation used is relevant for establishing the baseline scenario and correctly quoted and interpreted in the PDD;
- Assumptions and data used in the identification of the baseline scenario are justified appropriately, supported by evidence and can be deemed reasonable;
- Relevant national and/or sectoral policies and circumstances are considered and listed in the PDD;
- The approved baseline methodology has been correctly applied to identify the most reasonable baseline scenario and the identified baseline scenario reasonably represents what would occur in the absence of the proposed CDM project activity (EB 44, Annex 3, paragraph 86).
The DOE must also clearly describe equations applied in the PDD and shall provide an opinion on whether:
- All documentation used by project participants as the basis for assumptions and source of data is correctly quoted and interpreted in the PDD;
- All values used in the PDD are considered reasonable in the context of the proposed CDM project activity;
- The baseline methodology has been applied correctly to calculate project emissions, baseline emissions, leakage and emission reductions;
- All estimates of the baseline emissions can be replicated using the data and parameter values provided in the PDD (EB 44, Annex 3, paragraph 91).
Requirement 5: Additionality of a project activity
The DOE must critically assess evidence used to verify a project participant's demonstration of additionality.
Prior consideration of the CDM
The DOE must confirm the start date of the project activity, reported in the PDD, is in accordance with the "Glossary of CDM terms". If the start date is not in accordance with the glossary, the DOE is required to raise a Corrective Action Request (CAR).
The DOE shall confirm that the start date of the project activity, reported in the PDD, is in accordance with the "Glossary of CDM terms"22. If the reported date is not in accordance with the glossary, the DOE shall raise a CAR to ensure that the start date is correctly reported in a revised PDD. In particular, for project activities that require construction, retrofit or other modifications, the date of commissioning cannot be considered the project activity start date (EB 44, Annex 3, paragraph 97).
For projects that start on or after 2 August 2008 and have not been published for global stakeholder consultation, the DOE must ensure the project participants have informed the host party DNA or the UNFCCC secretariat of their intention to seek CDM status.
For a new project activity with a start date on or after 2 August 2008 and for which PDD has not been published for global stakeholder consultation or a new methodology proposed to the Executive Board before the project activity start date, the DOE shall ensure by means of confirmation from the DNA or UNFCCC secretariat that PPs had informed the Host Party DNA and/or the UNFCCC secretariat in writing of the commencement of the project activity and of their intention to seek CDM status. If such a notification has not been provided by the project participants the DOE shall determine that the CDM was not seriously considered in the decision to implement the project activity (EB 44, Annex 3, paragraph 99).
For projects with a start date before 2 August 2008 DOE's should assess the project participant's prior consideration of the CDM through document reviews.
For an existing project activity with a start date before 2 August 2008, for which the start date is prior to the date of publication of the PDD for global stakeholder consultation, the DOE shall assess the project participant's prior consideration of the CDM through document reviews and shall satisfy following requirements:
- Evidence that must indicate that awareness of the CDM prior to the project activity start date, and that the benefits of the CDM were a decisive factor in the decision to proceed with the project.
- Evidence to support this would include, inter alia, minutes and/or notes related to the consideration of the decision by the Board of Directors, or equivalent, of the project participant, to undertake the project as a proposed CDM project activity.
- Reliable evidence from project participants that must indicate that continuing and real actions were taken to secure CDM status for the project in parallel with its implementation. Evidence to support this should include, inter alia, contracts with consultants for CDM/PDD/methodology services, Emission Reduction Purchase Agreements or other documentation related to the sale of the potential CERs (including correspondence with multilateral financial institutions or carbon funds), evidence of agreements or negotiations with a DOE for validation services, submission of a new methodology to the CDM Executive Board, publication in newspaper, interviews with DNA, earlier correspondence on the project with the DNA or the UNFCCC secretariat (EB 44, Annex 3, paragraph 100).
The validation report must provide the following:
- Describe the DOE's validation of the project activity start date provided in the PDD;
- Describe the evidence for prior consideration of the CDM (if necessary) that was assessed;
- Provide a clear validation opinion regarding whether the proposed CDM project activity complies with the requirements of EB41 (EB 44, Annex 3, paragraph 102).
Identification of alternatives
The DOE must assess the list of alternatives given in the PDD to determine the most realistic baseline scenario and ensure that:
- The list of alternatives includes as one of the options that the project activity is undertaken without being registered as a proposed CDM project activity;
- The list contains all plausible alternatives that the DOE, on the basis of its local and sectoral knowledge, considers to be viable means of supplying the outputs or services that are to be supplied by the proposed CDM project activity;
- The alternatives comply with all applicable and enforced legislation (EB 44, Annex 3, paragraph 104).
If investment analysis has been used to demonstrate additionality, the PDD must provide evidence that the CDM project activity is not feasible without the revenue from the sale of CERs and is not the most economically or financially attractive alternative.
This can be shown using one of the following approaches:
Demonstrate that the proposed CDM project activity would produce no financial or economic benefits other than CDM-related income. Document the costs associated with the proposed CDM project activity and the alternatives identified and demonstrate that there is at least one alternative which is less costly than the proposed CDM project activity;
The proposed CDM project activity is less economically or financially attractive than at least one other credible and realistic alternative;
The financial returns of the proposed CDM project activity would be insufficient to justify the required investment (EB 44, Annex 3, paragraph 107).
The accuracy of the financial calculations must be verified through an assessment of all parameters, assumptions, computations, feasibility reports, public announcements, financial reports and sensitivity analysis.
To verify the accuracy of financial calculations carried out for any investment analysis, the DOE shall:
- Conduct a thorough assessment of all parameters and assumptions used in calculating the relevant financial indicator, and determine the accuracy and suitability of these parameters using the available evidence and expertise in relevant accounting practices;
- Cross-check the parameters against third-party or publicly available sources, such as invoices or price indices;
- Review feasibility reports, public announcements and annual financial reports related to the proposed CDM project activity and the project participants;
- Assess the correctness of computations carried out and documented by the project participants;
- Assess the sensitivity analysis by the project participants to determine under what conditions variations in the result would occur, and the likelihood of these conditions (EB 44, Annex 3, paragraph 109).
The suitability of any benchmark applied in the investment analysis must also be confirmed.
To confirm the suitability of any benchmark applied in the investment analysis, the DOE shall:
- Determine whether the type of benchmark applied is suitable for the type of financial indicator presented;
- Ensure that any risk premiums applied in determining the benchmark reflect the risks associated with the project type or activity;
- Determine whether it is reasonable to assume that no investment would be made at a rate of return lower than the benchmark by, for example, assessing previous investment decisions by the project participants involved and determining whether the same benchmark has been applied or if there are verifiable circumstances that have led to a change in the benchmark (EB 44, Annex 3, paragraph 110).
In addition, if project participants rely on values from Feasibility Study Reports (FSR) approved by national authorities DOEs are must ensure:
- The FSR has been the basis of the decision to proceed with the investment in the project, i.e. that the period of time between the finalization of the FSR and the investment decision is sufficiently short for the DOE to confirm that it is unlikely in the context of the underlying project activity that the input values would have materially changed;
- The values used in the PDD and associated annexes are fully consistent with the FSR, and where inconsistencies occur the DOE should validate the appropriateness of the values;
- On the basis of its specific local and sectoral expertise, confirmation is provided, by cross-checking or other appropriate manner, that the input values from the FSR are valid and applicable at the time of the investment decision (EB 44, Annex 3, paragraph 111).
More specifically, the validation report should:
- Describe in detail how the parameters used in any financial calculations have been validated;
- Describe how the suitability of any benchmark applied has been assessed;
- Confirm whether the underlying assumptions are appropriate and the financial calculations are correct (EB 44, Annex 3, paragraph 112).
If a barrier analysis has been used to demonstrate additionality, the PDD must demonstrate the proposed CDM project activity faces barriers that prevent the implementation of this type of project and do not prevent the implementation of at least one of the alternatives.
Issues that have a clear direct impact on the financial returns of the project cannot be considered barriers and should be assessed by investment analysis. However, this does not refer to:
- Risk related barriers, for example risk of technical failure, that could have negative effects on financial performance, or
- Barriers related to the unavailability of sources of finance for the project activity (EB 44, Annex 3, paragraph 114).
The DOE should apply a twp step process to assess barrier analysis.
The DOE shall apply a two-step process to assessing the barrier analysis performed, as follows:
- Determine whether the barriers are real. The DOE shall assess the available evidence and/or undertake interviews with relevant individuals (including members of industry associations, government officials or local experts if necessary) to determine whether the barriers listed in the PDD exist. The DOE shall ensure that existence of barriers is substantiated by independent sources of data such as relevant national legislation, surveys of local conditions and national or international statistics. If existence of a barrier is substantiated only by the opinions of the project participants, the DOE shall not consider this barrier to be adequately substantiated. If the DOE considers, on the basis of its sectoral or local expertise, that a barrier is not real or is not supported by sufficient evidence, it shall raise a CAR to have reference to this barrier removed from the project documentation;
- Determine whether the barriers prevent the implementation of the project activity but not the implementation of at least one of the possible alternatives. Since not all barriers present an insurmountable hurdle to a project activity being implemented, the DOE shall apply its local and sectoral expertise to judge whether a barrier or set of barriers would prevent the implementation of the proposed CDM project activity and would not equally prevent implementation of at least one of the possible alternatives, in particular the identified baseline scenario (EB 44, Annex 3, paragraph 115).
The validation report should provide an assessment of each barrier listed in the PDD and an overall determination of the credibility of the barrier analysis performed.
Common practice analysis
Common practice analysis should be carried out as a credibility check of the other available evidence used by the project participants to demonstrate analysis. It complements the investment analysis or barrier analysis.
The validation report should provide details regarding:
- How the geographical scope of the common practice analysis has been validated;
- How the DOE has undertaken an assessment of the existence of similar projects;
- How the DOE has assessed the essential distinctions between the proposed CDM project activity and any similar projects that are widely observed and commonly carried out;
- Confirmation by the DOE that the proposed CDM project activity is not common Practice (EB 44, Annex 3, paragraph 119).
Requirement 6: Monitoring plan
The DOE must apply a two step process to assess the compliance of the monitoring plan with an approved monitoring methodology and its means of implementation.
The DOE shall apply a two-step process to assessing compliance with this requirement, as follows:
- Compliance of the monitoring plan with the approved methodology. The DOE shall:
- By means of document review, identify the list of parameters required by the selected approved methodology;
- Confirm that the monitoring plan contains all necessary parameters, that they are clearly described and that the means of monitoring described in the plan complies with the requirements of the methodology;
- Implementation of the plan. The DOE shall, by means of review of the documented procedures, interviews with relevant personnel, project plans and any physical inspection of the proposed CDM project activity site in accordance with paragraphs 59-62, assess whether:
- The monitoring arrangements described in the monitoring plan are feasible within the project design;
- The means of implementation of the monitoring plan, including the data management and quality assurance and quality control procedures, are sufficient to ensure that the emission reductions achieved by/resulting from the proposed CDM project activity can be reported ex post and verified (EB 44, Annex 3, paragraph 121).
The validation report should:
- State the DOE's opinion of the compliance of the monitoring plan with the requirements of the methodology;
- Describe the steps undertaken to assess whether the monitoring arrangements described in the monitoring plan are feasible within the project design;
- State the DOE's opinion of the project participants ability to implement the monitoring plan (EB 44, Annex 3, paragraph 122).
Requirement 7: Sustainable Development
The DOE must report whether the host party's DNA confirmed the contribution of the project to the sustainable development goals of the CDM. This may be reported with the DOE's assessment of the validity of the host party's approval.
Requirement 8: Local stakeholder consultation
The DOE must ensure there has been adequate engagement with local stakeholders and project participants have taken due account of any comments received.
The DOE shall, by means of document review and interviews with local stakeholders as appropriate, determine whether
- Comments by local stakeholders that can reasonably be considered relevant for the proposed CDM project activity, have been invited;
- The summary of the comments received as provided in the PDD is complete;
- The project participants have taken due account of any comments received and have described this process in the PDD (EB 44, Annex 3, paragraph 127).
The validation report should:
- Describe the steps taken to assess the adequacy of the local stakeholder consultation;
- State the DOE's opinion on the adequacy of the local stakeholder consultation (EB 44, Annex 3, paragraph 128).
Requirement 9: Environmental impacts
The DOE must confirm whether project participants have undertaken an analysis of environmental impacts.
The validation report shall describe whether the project participants have undertaken an analysis of environmental impacts and, if required by the host Party, an environmental impact assessment in accordance with procedures as required by the host Party (EB 44, Annex 3, paragraph 131).
Assessment of information
It is the DOE's responsibility to ensure the project activity complies with the relevant requirements set out in the CDM modalities and procedures, the methodology chosen and any guidance issued by the CDM Executive Board before submitting a request for registration.
To do this, the DOE must use objective evidence to assess the completeness and accuracy of the claims and assumptions made in the PDD. This can be achieved using the auditing techniques set out below:
The DOE shall apply standard auditing techniques to assess the correctness of the information provided by the project participants, including, where appropriate, but not limited to:
- Document review, involving:
- Review of data and information to verify the correctness, credibility and interpretation of presented information;
- Cross checks between information provided in the PDD and information from sources other than that used, if available, and if necessary independent background investigations
- Follow-up actions (e.g., on site visit and telephone or email interviews), including:
- Interviews with relevant stakeholders in the host country, personnel with knowledge of the project design and implementation;
- Cross-check of information provided by interviewed personnel (i.e. by checking sources or other interviews) to ensure that no relevant information has been omitted from the validation;
- Reference to available information relating to projects or technologies similar to the proposed CDM project activity under validation; and
- Review, based on the approved methodology being applied, of the appropriateness of formulae and correctness of calculations (EB 44, Annex 3, paragraph 33).
If the DOE identifies issues in the PDD that need further elaboration to confirm the project activity meets the CDM requirements, it must report these in the validation report. The issues may be raised by way of a Corrective Action Request (CAR), Clarification Request (CL) or Forward Action Request (FAR). In the report, the nature of the issues raised must be clearly explained in a transparent and unambiguous manner, indicating any resulting changes in the PDD.
The DOE shall report on all CARs, CLs and FARs in its validation report. This reporting shall be undertaken in a transparent and unambiguous manner that allows the reader to understand the nature of the issue raised, the nature of the responses provided by the project participants, the means of validation of such responses and clear reference to any resulting changes in the PDD or supporting annexes (EB 44, Annex 3, paragraph 39).
Part of the validation process involves stakeholder consultation. The DOE must make the PDD of the project activity publicly available, using the latest version of the "Procedures For Processing And Reporting On Validation Of CDM Project Activities". Any comments received in relation to the PDD must be reported in the validation report. Details of actions taken to consider the comments must be included however the DOE does not need to enter into a dialogue with the party that made the comment.
If comments are not sufficiently substantiated or indicate that the project activity does not comply with the CDM requirements, then the DOE shall request further clarification from the entity providing the comment. However, the DOE is not required to enter into a dialogue with Parties, stakeholders or NGOs that comment on the CDM requirements. If no additional information or substantiation is provided in response to a request for clarification, the DOE shall proceed to assess the comments as originally provided (EB 44, Annex 3, paragraph 42).