- Rwanda DNA
- Climate Change
- Clean Development Mechanism
- Voluntary Carbon Market
- Carbon Market in Rwanda
- Project Approval Procedures
The costs of the CDM process are unfortunately quite high which can be a deterrent to smaller projects. 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 CER fee (Rwandan projects are exempt).
The costs can be approximately $65,000 - $150,000. However, it is very important to note that, sometimes, the CDM costs are not borne upfront by the project developer. Depending on negotiations, a carbon consultancy company can cover all of the upfront costs and risks associated with the CDM 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.
The exact price per CER is unknown. This is because most CERs 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 CER 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.
CERs sold prior to the operation of a project in Rwanda have an estimated worth of 8 – 12 Euros, for pre-2012 CERs, with varied pricing structures for post-2012, as the price of a CER after the Kyoto Protocol could be in any range. The price of secondary CERs, or those that have already been issued, is transparent. The price is market dependent, therefore fluctuating with supply and demand. The current price can be found from sources such as IDEA Carbon. In 2010, the price range has been approximately 11-14 Euros per CER but this is subject to change