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Climate change Joint implementation and the clean development mechanism under the Kyoto Protocol Online version
Investing in a joint implementation project
New Zealand’s designated focal point
All countries wishing to participate in JI must appoint a designated focal point (DFP). The DFP serves as a point of contact and has the authority to approve participation in JI projects.
New Zealand’s DFP is the Carbon Markets team at the Ministry for the Environment. The contact details for the NZ DFP are:
| Postal address | Manager, Carbon Markets Ministry for the Environment PO Box 10362 Wellington 6143 New Zealand |
| projects@mfe.govt.nz | |
| Phone | +64 4 439 7400 |
| Fax | +64 4 439 7700 |
Joint Implementation activities are limited to Annex I Parties (developed countries that have ratified the Kyoto Protocol) that have quantitative greenhouse gas emissions reduction targets.
The emission reduction units generated by JI activities are issued out of the host party’s assigned amount. The JI mechanism is arranged into two verification systems: track 1 and track 2. Under track 1, a country that meets the specific eligibility requirements can verify its own JI projects in its own country and issue ERUs. Track 2 JI projects require verification by the JI Supervisory Committee.
For approval of JI projects, the NZ DFP considers it unnecessary to duplicate evaluations within processes that are the responsibility of the host party, accredited independent entity and the JI Supervisory Committee.
Letter of approval
Article 6 of the Kyoto Protocol requires the approval of a JI project by all Parties involved. Article 6.1 states that:
“... any Party included in Annex 1 may transfer to, or acquire from, any such Party emission reduction units resulting from projects ... provided that, any such project has the approval of the Parties involved.”
Project participants must be authorised to participate. Article 6.3 states that:
“A Party included in Annex 1 may authorise legal entities to participate, under its responsibility, in actions leading to the generation, transfer or acquisition under this Article of emission reduction units.”
When a New Zealand-based entity wishes to become an investor in a JI project activity, the role of the NZ DFP consists of two parts:
1. approval of the project
2. authorisation for the investor to participate.
Authorisation to participate in a JI project is given through a letter of approval to the investor. This letter is specific to the investor and project.
Criteria for eligible entities
Applications for letters of approval should only be made by:
1. Persons (individual and entities) qualified to open a holding account in the NZEUR as defined under regulation 3 of the Climate Change (Unit Register) Regulations 2008. Information on how to open an account in the NZEUR is available at https://www.eur.govt.nz/eats/nz/
2. Persons (individual and entities) that will be receiving the ERUs in the initial distribution from the national registries of the host party.
Types of Joint Implementation projects not eligible
The NZ DFP will not issue letters of approval for nuclear power plants and nuclear energy projects.
Before applying for a letter of approval
The following steps must be taken before you can apply for a letter of approval:
1. Check the type of JI project is eligible.
2. Check you fit the criteria for eligible entities.
3. Open a holding account with the NZEUR.
4. Check that the project has been approved by the host party.
5. If it is for a track 2 JI project, check there is a project design document suitable for submission to an accredited independent entity.1 If it is a track 1 project, a similar document should be available.
Applying for a letter of approval
For a letter of approval for a project under the track 1 procedure to be issued, the following documents in electronic and hard copy should be sent to the NZ DFP:
1. Letter of Approval Application (Appendix 1).
2. Joint Implementation Approval Application Form (Appendix 2).
3. A comprehensive document explaining the project. This could be a JI Supervisory Committee compliant project design document or a similar kind of document.
4. Host party letter of approval or similar.
5. A declaration of compliance with the host party and UNFCCC guidelines (Appendix 3).
For a letter of approval under the track 2 procedure to be issued, the following documents in electronic and hard copy should be sent to the NZ DFP:
1. Letter of Approval Application (Appendix 1).
2. Joint Implementation Approval Application Form (Appendix 2).
3. A project design document according to paragraph 31 of the JI guidelines or a more developed project design document.
4. Host party letter of approval.
5. A declaration of compliance with the host party and UNFCCC guidelines (Appendix 3).
Timeframes
The application for a letter of approval must be made after the project has host party approval. In addition, for track 2 projects, the JI Supervisory Committee’s standard project design document for the project must exist (a project design document submitted according to paragraph 31 of the JI guidelines is a minimum).
The NZ DFP will endeavour to process your application for a letter of approval within 10 working days of receiving the application. If the NZ DFP assesses the application to be incomplete, this timeframe will be extended.
Process for applying for a Joint Implementation letter of approval
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1 Paragraph 31 of the annex to decision 9/CMP.1 often referred to as JI guidelines.
