Forwarding process for small-scale projects
Forwarding follows these steps:
- a forwarding request is submitted to the Executive Board in accordance with the statement of modalities of communication (MoC) for the project activity;
- the certified emission reductions (CERs) are forwarded by the CDM registry administrator to the account(s) specified in the forwarding request; and
- if an account holder requests notification, the holder of an account into which CERs are forwarded will be notified of the receipt of CERs.
Step 1: Forwarding request
A forwarding request, commonly known as a "request for distribution", is an instruction to the Executive Board which requests that CERs be transferred from the pending account to the holding account(s) of project participants or Parties.
Contents of a Forwarding Request
A forwarding request will consist of:
- a completed forwarding request form (F_CDM_FORWCERS);
- a code transmitted to participants at the point of issuance;
- the type of units to be forwarded (i.e. CERs, lCERS, or tCERs);
- the name and numeric identifier of each account to which units are to be forwarded; and
- the precise number of units to be forwarded to each account.
A forwarding request may specify allocation of units (CERs) to accounts in terms of percentages. The Executive Board has clarified that any CER which remains undistributed to Project Participants, as a result of rounding the percentage shares contained in a forwarding request to the nearest whole unit, shall be forwarded to an account specified in the forwarding request or, where no such account is specified, to an account for the Adaptation Share of Proceeds (EB 20, paragraph 70).
Requests for partial distribution are also allowed:
The Board agreed that requests for the partial distribution of CERs, tCERs and lCERs issued in a single transaction shall be allowed. The Board further agreed that information on undistributed units from a project activity, aggregated at the Party-level, is to be included in the monthly reports provided by the CDM registry to DNAs of respective Parties involved (EB 21, paragraph 70).
Form of Forwarding Request
The form for requesting forwarding of CERs from the pending account into a holding account is not made available on the CDM website. The forwarding request form is sent to the Focal Point via e-mail, along with confidential information needed to fill out the form, once CERs have been issued into the pending account.
Submission of Forwarding Request
The forwarding request must be executed and submitted in accordance with the MoC which has been submitted to the Executive Board in respect of the project activity. For example, if the MoC provides that only the signature of the focal point is required for forwarding requests, then a forwarding request which is signed by the focal point will be sufficient .
Step 2: Forwarding of CERs
After issuance of CERs into the pending account in the CDM registry, the CDM registry administrator will:
- Forward the quantity of CERs corresponding to the share of proceeds to cover administrative expenses and to assist in meeting costs of adaptation, in accordance with Article 12, paragraph 8, to the appropriate accounts in the CDM registry for holding and transferring such CERs; and
- Forward the remaining CERs to the registry accounts of project participants and Parties involved, in accordance with their request ( 3/CMP.1, Annex, paragraph 66; 3/CMP.1, Annex, Appendix D, paragraph 6(b) and (c)) .
Paragraph (b) above provides that CERs may only be forwarded to the temporary/permanent holding accounts of project participants and Parties involved in the project activity. The Executive Board will not instruct the CDM registry administrator to forward CERs to accounts held by entities that are not project participants in the project activity.
CERs may be forwarded to holding accounts in the CDM registry of entities authorised by non-Annex I Parties, however, a letter of approval is required to transfer CERs from such a holding account to accounts in national registries of Annex-I Parties (EB 25, paragraph 108).
Provided that letters of approval from relevant Annex I Parties have been submitted to the Executive Board, the CDM registry administrator will forward, on the request of authorised representatives, CERs, tCERs and lCERs to accounts in national registries belonging to entities authorised by non-Annex I Parties to participate in the project activity (EB 20, paragraph 71).
However, the UNFCCC Secretariat has confirmed that CERs may only be forwarded to the temporary/permanent holding accounts of registered project participants in the CDM registry or their corresponding accounts in the national registry of the Annex I country that authorised their participation in the CDM project. It is not possible for CERs to be forwarded from the CDM registry to an account held by an Annex I project participant in the national registry of an Annex I Party other than the Party that provided the Annex I approval.
Step 3: Notification of forwarded CERs
The practice of the CDM registry administrator is that once CERs have been forwarded from the Executive Board's pending account to a temporary holding account in the CDM registry, the primary representative of that account will receive notification by facsimile and post. This notification will contain:
- Confirmation of the number of CERs that have been transferred;
- The transaction number and date of the transaction;
- The project ID for which the CERs were issued; and
- The serial range of the issued CERs.
The same notification may or may not be provided by national registry administrators upon receipt of CERs in the national registry accounts of project participants (having been forwarded from temporary holding accounts or the Executive Board's pending account). Whether such notification is provided is at the discretion of each national registry administrator.