A registration fee is payable by project proponents in order to have a project considered for registration (EB 5, paragraph 23).
The registration fee is an upfront payment calculated based on the expected average annual net GHG removals by sinks for the project activity over its crediting period (EB 36, Annex 21). The amount paid as a registration fee is deducted from the share of proceeds for administration that is due at the time of the issuance of the first year's certified emission reductions (CERs). This was decided at EB 6:
The registration fee paid will be deducted from the share of proceeds for administration due at issuance of CERs (EB 6, Annex 5)
This was clarified further in the Guidance related to the registration fee for proposed A/R clean development mechanism project activities:
The registration fee shall be deducted from the share of proceeds for administrative expenses. In effect, the registration fee is an advance payment of the SOP-Admin for the net GHG removals by sinks achieved during the first year (EB 36, Annex 21, paragraph 6).
The Guidance related to the registration fee for proposed A/R clean development mechanism project activities was adopted at EB 36 Annex 21.
How much is the registration fee?
The registration fee for afforestation and reforestation (A/R) projects is based on the following:
- If the selected approach for addressing non-permanence is tCERs, the SOP-Admin is based on on the difference between the tCERs for which issuance is requested for a given verification period and the highest tCERs previously issued;
- If the selected approach for addressing non-permanence is lCERs, the SOP-Admin is based on difference between the lCERs for which issuance is requested for a given verification period added to the sum of all previous issuances and reversals, and the highest among the sums of the issuances and reversals since start of the project calculated for each previous verification period. All reversals mentioned above are negative numbers (EB 36, Annex 21, paragraph 2).
If the outcome of the calculations above is a positive number, then the registration fee is calculated using the following scale:
a. USD 0.10 per expected average annual net GHG removals by sinks for the first 15,000 t CO2 e;
b. USD 0.20 per expected average annual net GHG removals by sinks for any amount in excess of 15,000 t CO2 e (EB 36, Annex 21, paragraph 3).
The fee that is actually payable is based on an average of the estimated annual quantities of CERs that will be generated over the crediting period, as set out in the PDD and as validated by the DOE:
The registration fee shall be the share of proceeds applied to the expected average annual certified emission reductions for the proposed project activity over its crediting period, as identified in the project design document and as validated by the designated operational entity (DOE). (EB 54, Annex 29, paragraph 5).
The Executive Board has issued some qualifications to the above:
The maximum registration fee payable is capped at USD 350,000 (EB 36, Annex 21, paragraph 4).
No registration fee has to be paid for proposed project activities with expected average annual emissions reductions over the crediting period below 15,000 t CO2-equivalent (EB 54, Annex 29, paragraph 9).
Reimbursement of the registration fee
The Executive Board had initially stated that that the registration fee would be non-reimbursable (EB 5, paragraph 23). However, it has since clarified that:
If an activity is not registered, any registration fee above USD 30,000 shall be reimbursed (EB 36, Annex 21, paragraph 6).
The Executive Board had also initially stated that, in the case of voluntarily withdrawal, the registration fee is entirely non-refundable:
The Board further clarified that in cases where project activities have been withdrawn voluntarily by the project participants prior to registration the registration fee is non-refundable and that in the case of resubmission a new registration fee will have to be paid (EB 31, paragraph 81).
However, it has since specified that the full registration fee will be reimbursed if a DOE (or a project participant via a DOE) asks that a request for registration be withdrawn prior to its publication:
The registration fee shall be reimbursed in full if the designated operational entity withdraws the request for registration of the proposed project activity prior to date that the secretariat publishes the request for registration on the UNFCCC website. (EB 54, Annex 29, paragraph 12).
Exemption for least-developed countries
At its 3rd meeting, the Conference of the Parties serving as the meeting of the Parties to the Kyoto Protocol (COP/MOP) decided to exempt least developed countries from paying the registration fee and share of proceeds at issuance:
The Conference of the Parties serving as the meeting of the Parties to the Kyoto Protocol ...
Decides to abolish the payment of the registration fee and share of proceeds at issuance for clean development mechanism project activities hosted in least developed countries (2/CMP.3, paragraph 31).
In response to this decision, the Executive Board has clarified that:
No registration fee must be paid for proposed project activities hosted in least developed countries. The application of this exemption shall be based on the status of the country on the date of the publication of the request for issuance (EB 54, Annex 29, paragraph 10).