Issuance fee

A fee, also known as the Administration Share of Proceeds, is charged upon issuance of temporary certified emission reductions (tCERs) and long-term certified emission reductions (lCERs). The issuance fee for afforestation and reforestation (A/R) projects is based on the following:

  1. 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;
  2. 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 issuance fee is calculated using the following scale:

  1. USD 0.10 per expected average annual net GHG removals by sinks for the first 15,000 t CO2 e;
  2. 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).

This replaces an earlier decision of the Executive Board which recommended that the Administration Share of Proceeds be set at USD 0.20 per tCER or lCER issued (EB 21, Annex 26, paragraph 2).

The Executive Board has confirmed that issuance of tCERs and lCERs shall only occur once the Administration Share of Proceeds has been received in each year:

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

Decides ... that the issuance of certified emissions reductions ... shall be effected only when the share of proceeds to cover administrative expenses has been received (7/CMP.1, paragraph 37).

Registration fee

The registration fee is an upfront payment of the estimated amount due for the Administration Share of proceeds for the first year of the project. 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 tCERs or lCERs. 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)

and clarified further at EB 36:

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 five year verification period (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.  This version of the document is Version 2 and replaces Version 1 at EB 23, Annex 35.

Reduced rate for small-scale afforestation and reforestation (A/R) projects

Small-scale afforestation/reforestation projects are entitled to a reduced registration fee, as compared to large-scale projects:

... small-scale afforestation and reforestation project activities under the clean development mechanism shall be entitled to a reduced level of the non-reimbursable fee for requesting registration and a reduced rate of the share of proceeds to cover administrative expenses of the clean development mechanism (14/CP.10, paragraph 1(e)).

This decision was confirmed by the COP/MOP in 6/CMP.1:

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

Decides to confirm and give full effect to any actions, including measures to facilitate the implementation of afforestation and reforestation project activities under the clean development mechanism, taken pursuant to decision 14/CP.10 (6/CMP.1, paragraph 1).

The COP/MOP has requested that the Executive Board set the fee that is to be payable for small-scale afforestation/reforestation:

The Executive Board shall stipulate a reduced level of the non-reimbursable fee for requesting registration and... a reduced rate of the share of proceeds to cover administrative expenses for small-scale afforestation and reforestation project activities under the CDM (6/CMP.1, paragraph 13).

The Executive Board has now determined that:

No registration fee has to be paid for CDM A/R project activities with expected average annual net GHG removals by sinks over the crediting period below 15,000 t CO2-equivalent (EB 23, Annex 35, paragraph 5).

This applies only to the registration fee and not to ongoing issuance fees.

Related Topics

Administration Share of Proceeds

Adaptation Share of Proceeds

Executive Board

Certified emission reductions (CERs)

Registration fee (SSC A/R)

Issuance fee (P)

Issuance fee (SSC)

Issuance fee (A/R)

Issuance fee (PoA)