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Idea & Requirements

During many talks with prospective clients we experienced that sometimes there is a serious lack of understanding concerning central aspects of the UNFCCC approach. These misunderstandings lead to false predictions and misleading expectations!

We like to transparently share some insight from our perspective to enhance your awareness of the potential the UNFCCC approach offers as well as of the challenges that might occur.

1. To Your Consideration! 

In the following section we try to explain the central idea of the UNFCCC approach.

The UNFCCC's Intention - What?

Please, understand that the UNFCCC is MAINLY interested in SUPPORTING emission reducing projects by granting financial support for voluntarily emission reduction! In the broader sense of its meaning the term "emission reduction" means the reduction of many kinds of pollution and waste introduced into our environment which can be reduced by the usage of modern technology!

Thus, the UNFCCC

  1. boosts the usage of latest and proven technologies for whatever usage (biomass, biogas, wind power, photovoltaic, recycling, to name a view),
  2. optimizes the selection process during your planning phase as neutral external experts evaluate your chosen technology and let you know if more efficient systems are available and economically reasonable. Furthermore, the UNFCCC approach helps you
  3. directly to reduce your operative costs because of more efficient technologies used!

As a result the UNFCCC approach not only offers the potential of

direct financial support but also optimizes your project's technology platform!

To get an overview what type of projects are being supported please take a look at the statistics page of the UNFCCC.

The UNFCCC Support - How?

The UNFCCC supports your project by issuing so called Carbon Credits. Each carbon credit represents one ton of CO2 emission that is being reduced by your project! To simplify comparison any kind of emission and reduction of emissions is being calculated to the lowest denominator CO2!

The term "Credits" might be very misleading
especially when translated as the financial term "credit"!  

Carbon Credits have nothing to do with a credit line although your project might qualify for being funded by the UNFCCC based Carbon Trading. Actually, the credits are better to be translated as certificates. These certificates allow you to sell them on a couple of specialized Carbon exchange and thus gain financial support for your project.

  • This financial support is in contrast to a credit line non-refundable! Thus, it is granted money for your project.

  • To calculate the CO2 credits the UNFCCC calculates the emission difference between your project’s emissions when it is being realized with classic technologies (= aka "Baseline") and the (reduced) emission level of your project with enhanced technologies (aka "Project Scenario")! This difference or offset in CO2 tons per year are the credits which might be given to you when you work with optimized technologies.

  • Is the money for free? Well, sort of! You are qualified to sell Carbon Credits or more precisely "Reduction Certificates" when your project actively reduces its emissions. To transform these carbon credits you can sell them internationally on various specialized stock exchanges. Depending on your project the price range varies approximately between EUR 0,7 and EUR 13,- (as of December 2013). For current CO2 credit prices see for example the ticker at www.carbontradexchange.com.

IMPORTANT!

The granted and sold carbon credits are no credit or loan
but YOUR money to invest into your project!

From an investor’s perspective it is very important that UNFCCC projects are being calculated for a period life time of either 10 years or 7 years whereby the later can be prolonged two times and thus may reach a total life span of 21 years! Thus, you multiply the carbon credits amount by 10 years or up to 21 years!

Your Support Potential - How Much?

The amount of achievable credits depends on your project’s specifics, significantly!  Please, see once again the UNFCCC's statistics page to get an idea how much carbon emission reduction credits (CERs) have been issued and are about to being issued every year. 

  

 

On the UNFCCC’s database of validated projects you see real life examples of projects and their achieved CO2 credits! You can search the database for projects which are equivalent in size and topic to yours!

Please, keep in mind that the stated reductions are a one year's amount and

therefore have to be multiplied by the life period of the project!

UNFCCC Shall Not Be Your First Source of Funds!

Important Facts!

The money given via Carbon Selling is NO CREDIT it is also NO GRANT!
It is non-refundable money which is given to you to realize the emission reduction enhancements!

100% financing of a project via Carbon Selling most likely is not possible!

The achievable funds depend solely on the amount of emission reduction.

 

Some technologies offer more efficiency potential than others and thus can generate more financial means for your project!


Hence, the UNFCCC support should be seen as an incentive

  • to use latest technology,
  • to reduce emissions
  • to save the environment and
  • to become more cost efficient!

Non-monetary Benefits to take into consideration!

  • Marketing Effect
    You can “label” your project as an “UNFCCC compliant project” under the regulations of the United Nations sub-organization on Climate Change!

  • First Mover Advantage
    You become more attractive to clients and business partners as you become a technology and environment leader in your sector! Why? You use latest technology and therefore optimize cost efficiency as well as emission efficiency!

  • Enhanced Cost Efficiency & Use Latest Technology
    UNFCCC programs are much less cost intensive and more efficient than Non-UNFCCC projects when it comes to energy consumption!

  • Image Enhancement for YOU and Your country!
    Becoming green is “cool” and follows a worldwide trend. Thus, you will be treated as a testimonial 

Conclusion!

Despite a UNFCCC approach generates the set of stated benefits fort you and your project we like to stress that your project should be funded mainly by other means and resources than UNFCCC Carbon Credits! Why?

 

A UNFCCC approach takes time.

 

 

The preparation of the UNFCCC documentation costs money!

 

 

The achievable credits are normally not covering the entire project's volume

 

2. Requirements

To qualify for participation in the UNFCCC and to make the process as efficient for you as possible we suggest to meet the following requirements:

Reduction Potential

Only Emission Reduction Projects are Qualified!

You need a project which will reduce its emissions by optimizing its technological base in comparison to the currently used techniques at your project's site. This implies that you voluntarilyswitch over to more efficient solutions and by that optimize the energy consumption and energy usage of your project.

By that you actively reduce your project's emissions which are caused by generating the needed energy for your project! Furthermore, reducing the emitting of solid, fluid or gas waste additionally offers potential to generate a sustainable " carbon offset".

The sum of all emission reductions are being calculated as tons of CO2 and reflect the difference between the "Baseline" and your "Project Scenario" emission level! This difference is at stake for carbon emission reduction certificates

The US Environment Protection Agency offers an incredible Greenhouse Gas Equivalencies Calculator! The following equivalences are given:

  1t of ... = t CO2
  Methane (CH4) 21 t
  Nitrous Oxide (N2O) 310 t
  Hydrofluorocarbon gases (HFC-23) 11.700 t
  Perfluorocarbon gases (CF4) 6.500 t
  Sulfur Hexafluoride (SF6) 23.900 t

 

The next requirement you need to meet is an adequate technological documentation of your project!  

Technical Documentation

In-Depth Technological Documentation is Mandatory! 

The decision if your project meets the requirements to benefit from UNFCCC support via the Carbon Trading Scheme is taken exclusively on basis of your documentation. The UNFCCC has set up and refines continuously a so called PDD (Project Description Document) Template which can be freely accessed at the UNFCCC document repository. Even better, the UNFCCC regulations force each project initiator to make the PDD publicly available via the UNFCCC Validation database.

From our UNFCCC experts' experience you need a thoroughly set up technical description and a solid business plan based financial concept. Amongst others the following items are of significant relevance:

  1. Technical description of technical core components (motors, filters, devices, ...) of your project
  2. How much energy is consumed over time?
  3. Where does the energy comes from (nuclear, coal, gas, wind, photovoltaic, ...)?
  4. How much emission is generated over time?
  5. How are emissions treated (recycled, released to environment, ...)?
  6. Effects on the environment (endangering, supporting, ...)?
  7. Effects of your project on society (danger potential, jobs generated, ...)

Based on questions like these the PDD is being set up showing the potential offset of your project!

The UNFCCC Executive Board decides on this document whether to approve your project or to reject it! 

Keep in mind that most projects are rejected by the Executive Board
due to lack of documentation!

Another vital requirement is timing.


Timing

Do the Right Thing at the Right Time!

Concerning your participation as a UNFCCC project initiator timing is of significant importance! Already started projects are always very tricky to align with the UNFCCC guidelines as important technological decision already have been made and perhaps orders for devices and tools also have been set by you. To interfere with these decisions impose sometimes significant disturbance and financial loss!

Best starting point to go for a UNFCCC approach is when you are still in planning phase or
you are almost about to start your project and before ordering technological components!

Based on your planning external experts can double check the efficiency of your technological basis and in case of further optimization potential can suggest to exchange a device by a more efficient one! This, is a direct benefit of the UNFCCC approach for your project to reduce emissions of various kinds! 

 

Worldwide Best Practice Experienced Experts are an Important Criterion!

As each project has its very individual criteria it is important to possess access to experts who are not only experienced in the respective technical area of your project but also are trained and experienced to compare your technological approach against worldwide best practice technologies!

Finally, we highly suggest to team up with a professional support.

Professional Support

Why Not to Do Everything on Your Own?

In accordance with UNFCCC regulations you can enter into the whole UNFCCC project process on your own, without any third party's support! Nonetheless, we do not suggest to take this direction as it might bear significant drawbacks as for example:

  • Lack of Process Knowledge: The UNFCCC approach is a delicate step by step procedure which is quite complex when it comes to detailed steps. Experienced experts who successfully passed these steps already save your project valuable time and costs.

  • Lack of Documentation Quality: The PDD has to be formulated in English and has to describe your projects technical details appropriately! Beside the language challenge it is also a matter of knowledge to equilibrate the depth of each chapter! Here experienced experts clearly have an advantage.

  • Lack of Methodology: Beside your project's technology the PDD also has to clearly explain the so called Baseline scenario, the emission level of your project based on a certain UNFCCC methodology. This is an extremely delicate task as it directly influences your project's offset (saving of emissions)!

Experienced technicians who also know the UNFCCC methodological approach by heart

save your project's money and your time!

Hence, we highly suggest to team up with an expert who has successful experience in conducting UNFCCC projects. Due to Cubidor's partnership with German ProfEC GmbH a German based company with a list of more than 80 successfully realized UNFCCC projects we are in the position to offer you the needed quality and experience!

If you now feel comfortable to proceed with a UNFCCC support and you like to get into contact with us, please use our UNFCCC form to provide us the necessary information.