Voluntary Carbon Market Costs

The costs of the VCM process range depending on whether the project is micro, small or large scale.

Costs are incurred from:

• Writing the required documentation (Project Idea Note and Project Design Document)
• Auditing the documentation (called validation)
• Registration of the project (Rwandan projects are exempt from the registration fee)
• Monitoring of emissions reductions
• Writing the monitoring documentation (monitoring report)
• Auditing of the monitoring documentation (called verification)
• Issuance of VER fee (Rwandan projects are exempt).

VCM costs should be lower than CDM costs, particularly for micro scale projects.  The costs can be approximately $25,000 - $100,000.  However, it is very important to note that, sometimes, the VCM costs are not borne upfront by the project developer.  Depending on negotiations, a carbon consultancy company may cover all of the upfront costs and risks associated with the VCM documentation.  In exchange, the project developer will receive a lower price per carbon credit than if he/she completed the documentation and then sold the credits directly.

Revenue

The exact price per VER is unknown.  This is because most VERs are sold prior to operation of the project which means the price must be adjusted for a significant amount of risk.  Factors affecting the price of the VER are:
• Project type and complicity
• Project location
• Date of commissioning of the project
• Ease of demonstrating additionality for the project
• Reputation of the project developer in developing projects
• Ability of the project developer to complete the necessary monitoring requirements.
• VCM standard applied.
VERs sold prior to the operation of a project in Rwanda have an estimated worth of 4 – 9 euros.