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Certified Emission Reductions (CERs) coming from the Clean Development Mechanism (CDM) projects are not only interesting for government parties under the Kyoto Protocol, who need to meet their emission reduction targets by 2012, but also for private companies covered by the EU Emissions Trading Scheme (EU ETS), which are allowed to use CERs to comply with part of their EU ETS reduction requirements.

This paper analyses a sample of CDM projects in China in terms of the barriers they face and their impact on lead times and CER generation. It also evaluates three key aspects of project design: additionality argumentation, stakeholder participation and expected sustainability benefits.

It is found that:

• small-scale CDM projects in China might be facing more technological and financial barriers than large ones
• the amount of CERs forecasted changes as projects progress from validation to registration and issuance, due to new standardised baseline information published by China’s DNA and to barriers related to the new technologies
• over-performance of some projects could be caused by underestimation of the plant load factor in the project design documents
• delays in the expected start of the crediting period are also observed, caused by delays in the DNA approval, the CDM registration, the acquisition of governmental permits, the use of new baseline and monitoring methodologies, or difficulties in achieving financial closure
• all projects in the sample follow the Tool for the demonstration and assessment of additionality. They all argue having investment barriers, but only half perform a complete investment analysis. Other barriers mentioned are technological, unsuitable infrastructure, organisational and prevailing practice
• several of the projects do not provide sufficient information on the consultation methods
• in none of the projects are the contributions to sustainable development described quantitatively
• possible negative environmental impacts are a matter of concern for stakeholders in most projects, but are addressed by developers
• the expectation most commonly expressed by stakeholders is the creation of local employment, which is also the sustainability benefit most commonly offered by CDM projects
  

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