CDM offset assessors face fresh criticism

Companies tasked with evaluating projects for the UN-backed Clean Development Mechanism (CDM) offsetting scheme performed even worse than last year, according to a damning new report.

The study from green group WWF and German-based research body Oeko-Institute repeated an analysis of found that Designated Operational Entities (DOEs) - the organisations responsible for rating CDM projects - that was undertaken last year.

It concluded once again that some DOEs were failing to adequately audit and register projects in line with the CDM's rules and warned that the issue could become more pronounced as project verification requirements tighten.

The Clean Development Mechanism (CDM) was developed as part of the Kyoto Accord and allows industrialised nations to assist developing countries with the financing of carbon emission reduction projects and then count the emission reductions as credits towards their own carbon targets.

Under the scheme, DOEs are appointed to assess those projects for inclusion in the CDM framework and ensure they are delivering real and quantifiable emission reductions.

The report, entitled 2010 Rating of Designated Operational Entities (DOEs) accredited under the Clean Development Mechanism, gauged the performance of the five major emission auditors by analysing the percentage of projects that they approved that were automatically registered by the CDM Executive Board, compared to those classified as needing further review, or rejected altogether.

"Generally, the rating for all DOEs continues to be relatively low due to the high number of projects being rejected, reviewed or requested to take corrective action," the report concluded. "Overall, the share of projects that are automatically registered decreased even further from 41 per cent in the 2009 rating to 36 per cent in the 2010 rating."

Germany's TUEV-Nord scored the highest grade, as it did last year, registering a D on the report's scorecard. TUEV-Sud's score decreased from a D to an E+, although the scores of two other DOEs - SGS and DNV - increased from an E to an E+ and an F to an E+ respectively.

The report also noted that three of the five DOEs assessed, Tuev-Sued, SGS-UK and DNV, have been temporarily suspended from rating CDM projects in the last two years.

Poorly-skilled personnel, a lack of independent review procedures, and a disregard for internal procedures were all highlighted as the main cause for the large number of project approvals that required corrections.

The report is the latest in a in line of criticisms for the CDM scheme, which has been repeatedly accused of failing to deliver the scale of emission reductions promised by project developers.

Most recently, a coalition of green groups operating under the banner CDM Watch alleged that a number of firms have been " gaming" the system and increasing emissions of greenhouse gases HCFC-22 and HFC-23 in order to then generate revenue through the CDM.