Registration fee
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 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 Administration Share of Proceeds 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)
and clarified further in the Guidance related to the registration fee for proposed 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 emission reductions achieved during the first year (EB 37, Annex 20, paragraph 6).
The Guidance related to the registration fee for proposed clean development mechanism project activities was adopted at EB 37, Annex 20. This version of the document is Version 2 and replaces Version 1 at EB 23, Annex 35.
How much is the registration fee?
The registration fee which has applied since March 2006 (EB 23, paragraph 91) is calculated using the following scale:
- USD 0.10 per certified emission reduction issued for the first 15,000 tonnes of CO2 equivalent for which issuance is requested in a given calendar year;
- USD 0.20 per certified emission reduction issued for any amount in excess of 15,000 tonnes of CO2 equivalent for which issuance is requested in a given calendar year (EB 37, Annex 20, paragraph 1).
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:
The revised registration fee shall be the share of proceeds applied to the expected average annual emission reduction for the project activity over its crediting period (EB 37, Annex 20, paragraph 2).
For example, if the project is expected to generate 1,000,000 CERs over a ten-year crediting period:
- the average annual emission reduction quantity would be 100,000 CERs; and
- the registration fee payable would be USD 18,500, calculated as:
- USD 0.10 multiplied by 15,000 CERs, plus
- USD 0.20 multiplied by 85,000 CERs.
If the project had an increasing CER yield over time so that only 50,000 CERs were generated in each of the first two years and greater quantities were generated towards the end of the crediting period, the same registration fee would still be payable. However, the registration fee would be applied against each annual payment of the share of proceeds for administration until fully recovered. In this case, therefore, no further payment would be required in respect of the share of proceeds for administration until the third year of the crediting period.
The Executive Board has issued some qualifications to the above calculations:
The maximum registration fee payable is capped at USD 350,000 (EB 37, Annex 20, paragraph 3).
No registration fee has to be paid for CDM project activities with expected average annual emission reduction over the crediting period below 15,000 t CO2-equivalent (EB 37, Annex 20, paragraph 4).
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 37, Annex 20, paragraph 5).
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:
In cases where a DOE, or a project participant via a DOE, requests that a request for registration be withdrawn prior to the publication of this request the full amount of the registration fee will be
reimbursed (EB 41, paragraph 67).
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 and share of proceeds at issuance have to be paid for CDM project activities hosted in least developed countries. The exemption from these payments is determined at the date of registration of the project activity. In the event a country which hosts a project activity is categorized as a least developed countries after the date of registration, no share of proceeds is to be paid at any subsequent issuance (EB 37, Annex 20, paragraph 5).