What is debundling?
Debundling is defined in 4/CMP.1, Annex II, Appendix C (Decision tree for determining the occurrence of debundling) as follows:
Debundling is defined as the fragmentation of a large project activity into smaller parts (4/CMP.1, Annex II, Appendix C, paragraph 1; EB 47, Annex 32, paragraph 1).
All guidance relating to debundling has now been drawn together in the Guidelines on the Assessment of de-bundling for SCC project activities (Version 02) (EB 47, Annex 32).
The debundling rules provide that where a project activity is properly characterised as a small part of a large project activity (rather than a separate small-scale project activity), the project activity shall not be entitled to use the simplified modalities and procedures for small-scale projects.
A small-scale project activity that is part of a large project activity is not eligible to use the simplified modalities and procedures for small-scale CDM project activities. The full project activity or any component of the full project activity shall follow the regular CDM modalities and procedures (4/CMP.1, Annex II, Appendix C, paragraph 1; EB 47, Annex 32, paragraph 1).
An attempt to register this type of project as a small-scale project and thereby take advantage of the simplified modalities and procedures is sometimes referred to as "illegal debundling".
However, if the combined size of proposed small-scale project activities that are deemed to be debundled components of a large-scale activity does not exceed the limits for that type of small-scale project, the bundle will be eligible to use the simplified modalities and procedures:
If a proposed small-scale project activity is deemed to be a debundled component in accordance with paragraph 2 above, but total size of such an activity combined with the previous registered small-scale CDM project activity does not exceed the limits for small-scale CDM project activities as set in paragraph 6 (c) of the decision 17/CP.7, the project activity can qualify to use simplified modalities and procedures for small-scale CDM project activities (4/CMP.1, Annex II, Appendix C, paragraph 3; EB 47, Annex 32, paragraph 3).
Identifying debundled projects
Illegally debundled projects are identified according to the following rule:
A proposed small-scale project activity shall be deemed to be a debundled component of a large project activity if there is a registered small-scale CDM project activity or an application to register another small-scale CDM project activity:
- With the same project participants;
- In the same project category and technology/measure; and
- Registered within the previous 2 years; and
- Whose project boundary is within 1 km of the project boundary of the proposed small-scale activity at the closest point (4/CMP.1, Annex II, Appendix C, paragraph 2; EB 47, Annex 32, paragraph 2).
If a designated operational entity (DOE) assesses two projects taking place within one kilometre of each other and with the same project participants, it must explain why the project activities are not debundled components of a large-scale project activity:
The Board agreed that in cases where a DOE has, in assessing the possibility that a small scale project is a debundled component of a large scale project activity, determined that two or more project activities are taking place within one kilometer of each other and with the same project participants:
- The DOE shall ensure that these projects are described in the PDD and that the validation report contains specific details on how it has been determined that the project activities are not a debundled component of a large scale project activity (EB 30, paragraph 37; EB 47, Annex 32, paragraph 4).
Type (i) project activities that are supplying energy to the same user and are submitted within two years of each other will be considered to be illegally debundled, even if the project activities are in different categories:
The DOE shall consider the project activities to be a debundled component of a large scale project activity even in cases where they are taking place in different project categories, if the project activities are type 1 project activities providing energy to the same user and are registered, or submitted for registration, with 2 years of each other (EB 47, Annex 32, paragraph 4(b)).
Transport sector exceptions
For transport sector project activities with mobile boundaries, the distance criterion does not apply:
The Board clarified that a proposed small-scale transport sector project activity involving boundaries/sources that are mobile, shall be deemed to be a debundled component of a large project activity if there is a registered small-scale CDM project activity or an application to register another small-scale CDM project activity:
- With the same project participants; and
- In the same project category and technology/measure; and
- Registered within the previous 2 years (EB 35, paragraph 58; EB 47, Annex 32, paragraph 5).
This decision was intended to take account of the fact that it is difficult to enforce a distance criterion on projects with mobile boundaries. However, the literal effect of this decision is that two small-scale transport sector projects, implemented on different continents by the same project entity within a two-year period, will be classified as illegally debundled projects.
The above clarification thereby excludes the condition to check that the project boundary is within 1 km of the project boundary of the proposed small-scale activity at the closest point (EB 35, paragraph 59; EB 47, Annex 32, paragraph 6).
The modified criteria for determining occurrences of debundling for transport sector project activities also apply to project activities registered as part of a programme of activities:
The above clarification ... is also applicable to the guidance for determining the occurrence of debundling under a programme of activities (PoA) (EB 35, paragraph 59).
Programme of Activities
For the purposes of registration of a PoA, a proposed small-scale CPA of a PoA shall be deemed to be a de-bundled component of a large-scale activity if there is already an activity that has the same implementer or managing authority as a large-scale PoA of the same technology or measure and is within 1km of the boundary of the proposed small-scale PoA. However, if the total size of the CPA does not exceed the limits for small-scale CDM and small-scale A/R project activities, the CPA of a PoA can qualify to use simplified modalities and procedures:
7. For the purposes of registration of a Programme of Activities (PoA), a proposed small-scale CPA of a PoA shall be deemed to be a de-bundled component of a large-scale activity if there is already an activity, which satisfies both conditions (a) and (b) below:
(a) Has the same activity implementer as the proposed small-scale CPA or has a coordinating or managing entity, which also manages a large-scale PoA of the same technology/measure, and;
(b) The boundary is within 1 km of the boundary of the proposed small-scale CPA, at the closest point.
8. If a proposed small-scale CPA of a PoA is deemed to be a debundled component in accordance with paragraph 2 above, but the total size of such a CPA combined with a registered small-scale CPA of a PoA or a registered CDM project activity does not exceed the limits for small-scale CDM and small-scale A/R project activities as set out in Annex II of the decision 4/CMP.1 and 5/CMP.1 respectively, the CPA of a PoA can qualify to use simplified modalities and procedures for small-scale CDM and small-scale A/R CDM project activities.
9. If each of the independent subsystems/measures (e.g. biogas digester, solar home system) included in the CPA of a PoA is no greater than 1% of the small-scale thresholds defined by the methodology applied, than that CPA of a PoA is exempted from performing de-bundling check i.e. considered as being not a de-bundled component of a large- scale activity. (EB 47, Annex 32, paragraphs 7-9)
The following diagram shows a decision tree for determining the occurrence of debundling (EB 47, Annex 32):
