Authorization forinternational transfer ofemission reduction
credits
15 March 2023

Support on carbon asset development process
Country-level authorization including a CA commitment, as needed*“Issued”
Units“Registered”
Project

Environmental integrity
assessment;
MRV

Project’s outline
PDD drafting

Using theapproved
Standard

PDD
validation

Under theapproved
Standard

Under theapproved
Standard

Registration

Project
listedin DMS

Project starts;
MO periodicverification; requestof issuance

Data Management System (DMS)
Records information on projects.
NOTES• Authorization would ideally take place at an earlier stage to provide greatercertainty to the project developer. This could take place before validation,but our view is to consider country-level authorization after the validation
stage to provide more project information to the host country.
• Countries may choose to endorse voluntary market claims (optional).

“Authorized”
Units

Project
Data listed
in theRegistry

Issuance(in theRegistry)Country-levelauthorization

Register/Transaction Registry
Records unit/project-level information

Transacts with anotherRegistry
Option to move to
trading platform fortransactions

Trading Platform (e.g.
Exchange) Marketplace whereassets are traded.

Climate Data Action Trust (CAD Trust) Reflects publicly
available information from registers/transaction registries
at the unit and project level.

2Support on establishing policy framework
Contents - Framework
Guidingprinciples• Scope and obligations• Environmental integrity• Sustainable Development• Alignment with Art 6.2 Guidance and CMA
Guidance

Framework for
eligible
mitigation
outcomeactivities• MO development process• Validation and registration• Monitoring and reporting• Verification and issuance• Eligible entities for independent assessment

Framework forapproval andauthorization• Approval of activities• Activity participants• Authorization for the purposes of Art 6.3 ofthe PA

Issuance ofmitigation
outcomes• Prerequisites for creation of MOs• Creation of MOs• Registry and tracking

Corresponding
adjustments• Corresponding adjustments and reporting ofITMOs

DNA,penalties, andappeals• Governance• Penalties• Appeals committee

Schedules - Specifics
1.
2.
3.
4.

Definitions
EI requirements
SD criteria
Eligible activity types and sectoral
scopes
5. Eligible methodologies and standards
for ex-ante estimation & the process
for approval of new methodologies
6. MO development process
7. Validation, MRV
8. Requirements for activity participants
9. Issuance
10. Eligibility criteria and/orapproval/accreditation process forindependent entities
11. Authorization requirements
12. Prerequisites for MOs (vintage,metrics, etc.)
13. Registry procedures
14. Reporting procedures
15. Functions of the DNA and relevant
ministry

Inputs for Schedules
•
•
•
•
•
•

Approach Papers andassociated discussions with
the Climate Market Club
Experience with pilots, PMR,etc.
National circumstances
Domestic requirements
National climate strategies
Final Article 6.2 Guidance••••3

Support on authorization process
The policy framework provides a basis for participation by domestic entities

Authorization of Mitigation Outcomes for NDC or International Transfer
1

Identify
CA requirements• Depending on the Paris
Agreement, country andunderlying standard’s
requirements and buyer
preferences, the project ownerwill identify whether a project’s
associated MOs need CA.
• Unless there is a policy thatdefines the type and scope ofmitigation activities that areeligible for NDC or internationaltransfer, project developers may
have to individually request forhost country approval andauthorization.

Country issues a letter ofApproval/ Authorization• The host government would
provide authorization based on
its own institutional and/ or policy
framework.
2• The host country may choose to
grant authorization for theissuance of a specific volume ofMOs from a project or sector.
• Authorization would ideally takeplace at an earlier stage toprovide greater certainty to theproject developer.

Record the need for CA
and apply CA• The country’s registry will
publish information on how
carbon assets are used, once
carbon assets are issued,authorized (if needed) andtransferred to another party.
3• Countries need an initial report
indicating the method chosen
for CAs, annual reporting of(indicative) CAs and biennial
reporting of (indicative) CAs
within the Biennial
Transparency Reports (BTRs).

• Authorization must be obtained
before first transfer.

4

Questions that countries should consider
Timing Issue
structuring the authorization process and timing of approval/ authorization (after validation/ verification/ flexible
timelines)
Should we establish process requirements for all markets? How to align the process with different market
requirements, if the case be?
Should authorization happen with each transfer or can there be ‘thresholds’ on volumes and time period?
Contents of the Authorization
What are the minimum elements to be authorized? Cooperative approach, specific use, and participants?
Revocation of the Authorization
The Article 6.2 guidance indicates that any “changes to earlier authorizations” would need to be reported under theRegular Information reporting. What would such changes be and what would be the implications?
Revocation vs Not implementing Corresponding adjustment
OthersWould period of authorization be the same as NDC period? How would the in-between vintages be treated?
Reflections on the development of positive lists and whether it is intended that these sectors/ technologies would beapproved automatically
Suggestions on incorporating progress with NDC implementation in the authorization process
Any issues with the terminology and the approach suggested?
5

Delivered underPartnership for Market Implementation Facility (PMIF)
The two-fold objective of the PMIF is to contribute to the acceleration of global decarbonization efforts by:•Assisting client countries design and deploy explicit carbon pricing policies appropriate to theirdomestic context and compatible with their sustainable development priorities; and•Catalyzing the development of the next generation of international carbon markets.

PMIF will partner with relevant stakeholder groups to deliver assistance under four pillars:
Advisory and Analytics at country-level: Strengthen capacities
for development and implementation of domestic carbon pricing
instruments

Knowledge services: Develop the knowledge base on carbon
pricing instruments and facilitate knowledge exchange throughvariety of modalities and products

Innovation: Assist countries to identify and implement bestpractice approaches and, where relevant, achieve compatibility
in design to support the development of international carbon
markets

Advocacy services: Policy discussions at various levels - withpractitioners, policy-makers and other relevant stakeholders - on
the role of carbon pricing as a key climate policy instrument

Official Use

Thank You!
Program links & resources:• Partnership for Market Implementation (PMI) - https://pmiclimate.org/• Partnership for Market Readiness (PMR) – https://thepmr.org/• Carbon Pricing Leadership Coalition (CPLC) - https://www.carbonpricingleadership.org/• Climate Warehouse - https://www.theclimatewarehouse.org/• Networked Carbon Markets - https://www.worldbank.org/en/topic/climatechange/brief/globallynetworked-carbon-markets• Innovate4Climate - https://www.innovate4climate.com/• Pilot Auction Facility - https://www.pilotauctionfacility.org/

Official Use

Additional Slides

Letter of Authorization contents example – Ghana
Mandate for Authorization• Name of authorizing entity and institutional arrangement• Cooperative approachPre-conditions for Authorization• Mitigation activity participants having satisfied all the pre-conditions and considered the technical recommendations
from Ghana’s Art 6.2 Committee on the mitigation activity
Authorization Statement• Grants formal Authorization of the ITMOs generated from the project• Guarantees recognition of the ITMOs and their use
Implications of Authorization & Confirmations• Confirms the host country’s participation in the cooperative approach• Commits to transfer the amount of authorized, verified, and positively examined ITMOso ITMOs generated in respect of mitigation from 2021 ~ NDC implementation period up to 2030
• Commits to apply corresponding adjustment (accounting method) and not to use ITMOs for its own NDC
Unforeseen Circumstances
Possibility of Increasing Ambition
9Authorization Statement – Ghana

Published by Ghana through the Carbon Market Office to the UNFCCC

10Country process for ITMO authorization example 2 – Jordan
Process for ITMO authorization

Process for registration and authorization of Article 6.2 activities, using domestic MRV

11Country process for ITMO authorization example 2 – Jordan
Process for registration and authorization of Article 6.2 activities, using international crediting standard MRV

12Country process for ITMO authorization example 3 – India
Publication of Positive List of mitigation activities for Article 6.2
I.

GHG Mitigation Activities:
1. Renewable energy with storage (only stored component)
2. Solar thermal power
3. Off- shore wind
4. Green Hydrogen
5. Compressed bio-gas
6. Emerging mobility solutions like fuel cells
7. High end technology for energy efficiency
8. Sustainable Aviation Fuel9. Best available technologies for process improvement in hard to abate sectors
10. Tidal energy, Ocean Thermal Energy, Ocean Salt Gradient Energy, Ocean Wave Energy andOcean Current Energy
11. High Voltage Direct Current Transmission in conjunction with the renewal energy projects

II. Alternate Materials:
12. Green Ammonia
III. Removal Activities:
13. Carbon Capture Utilization and Storage
Unknowns: the country process for ITMO authorization that India will follow, if there will be any restrictions on vintage, volumes, etc.
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