5.1 What credits and methodologies are eligible for the second auction?
The third auction will target nitrous oxide (N2O) abatement from projects at nitric acid and caprolactam production plants (not adipic acid). The emission reductions must be qualified as Clean Development Mechanism Certified Emission Reductions (CERs) or Verified Carbon Standard Verified Carbon Units (VCUs). Eligible and ineligible methodologies are specified in the eligibility criteria.
5.2 Which geographies are eligible for the second auction?
Emission reductions must occur within a list of countries specified in the eligibility criteria. If a project reduces emissions in multiple countries, all countries must be included on this list.
5.3 What are the eligibility requirements for the monitoring and issuance periods?
To redeem a put option, emission reductions must be generated and issued after the Auction Date. The eligible monitoring and issuance periods are specified in the eligibility criteria.
5.4 Will ERs from projects that are not yet registered be eligible?
Auction winners do not have to specify the projects that will source emission reductions at the time of the auction. It is at the time of redemption that the put option owner must identify the projects and demonstrate that these projects meet the eligibility criteria. However, the PAF does require that the project host site exist at the time of the auction.
5.5 Will emission reductions from abatement projects that have operated before the auction date be eligible? If so, in which auction segment? Will new projects be eligible in both segments?
The PAF will issue PAFERNs specific to two auction segments: the “New Segment" and the "Open Segment."
The New Segment will sell PAFERNs that may be redeemed with eligible emission reductions from N2O abatement projects that have not purchased abatement technology before the Auction Date, meaning that the date on which the abatement Project first purchases a secondary or tertiary catalyst or abatement equipment at an existing host site must be at the earliest on the Auction Date. To determine the First Abatement Technology Purchase Date, a DOE will determine through Project records the date of the purchase of the Abatement Technology.
The Open Segment will sell PAFERNs that may be redeemed with eligible emission reductions generated after the auction date from N2O abatement projects that exist at the time of the auction or that are the result of new investments.
5.6 What if my project has a monitoring period that starts before the PAF eligible period but continues to generate emission reductions during the PAF eligible period?
Emission reductions will not be accepted from projects with a monitoring period start date prior to the Auction Date. A project owner may consider starting a new project monitoring period, which begins on or after the auction date. Additional information on generation and issuance periods can be found in the eligibility criteria.
5.7 Will emission reductions from projects that have had previous purchase agreements with the World Bank or others be eligible?
Yes, and conversely, having had a previous purchase agreement with the World Bank will not be a pre-condition. However, emission reductions with overlapping purchase agreements are not eligible. See question 5.8 below.
5.8 If I have an existing buyer under contract for some, but not all, of my emission reductions, can I still make use of the remaining ERs to redeem the PAFERNs?
Yes. While some ERs may be under contract, the unencumbered ERs can be used to redeem PAFERNs.
5.9 Why is the methodology relating to the reduction of nitrous oxide from adipic acid, (AM0021) ineligible?
The third auction will not include methodologies relating to N2O emissions from adipic acid production.
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This page is for information only. Please see the disclaimer:
THE FOLLOWING IS A SUMMARY OF THE WORLD BANK’S PROPOSED PLAN TO ISSUE PILOT AUCTION FACILITY EMISSION REDUCTIONS NOTES (“PAFERNS”). IT IS NOT AN OFFER TO SELL PAFERNS OR AN INVITATION TO OFFER TO BUY PAFERNS. THIS SUMMARY IS SEPARATE FROM, AND SHOULD NOT BE READ IN COMBINATION WITH, ANY FUTURE OFFER OR SALE OF PAFERNS, WHICH WILL BE MADE IN COMPLIANCE WITH APPLICABLE LAWS AND UNDER ENTIRELY SEPARATE LEGAL DOCUMENTATION AND OFFERING MATERIALS. THIS SUMMARY IS VERY HIGH LEVEL FOR SIMPLICITY AND LEAVES OUT MATERIAL INFORMATION AND THE LEGAL DOCUMENTATION THAT IS EXPECTED TO GOVERN THE PAFERNS. FURTHER, IT IS CURRENT ONLY AS OF THE DATE OF POSTING TO THIS WEBSITE AND IS LIKELY TO BECOME OUTDATED AS THE PAFERNS LEGAL DOCUMENTATION IS DEVELOPED. THE STRUCTURE, TIMING AND MECHANICS OF THE ACTUAL PAFERNS, IF AND WHEN THEY ARE ISSUED, ARE SUBJECT TO CHANGE. POTENTIAL INVESTORS MUST OBTAIN A COPY OF THE COMPLETE LEGAL DOCUMENTATION PURSUANT TO WHICH THE PAFERNS WILL BE ISSUED, INCLUDING THE WORLD BANK’S MAY 2008 PROSPECTUS RELATING TO ITS GLOBAL DEBT ISSUANCE FACILITY AND THE FINAL TERMS FOR ANY ISSUANCE OF PAFERNS. POTENTIAL INVESTORS SHOULD NOT RELY ON THIS SUMMARY. BEFORE MAKING ANY INVESTMENT DECISION, POTENTIAL INVESTORS MUST REVIEW THE COMPLETE LEGAL DOCUMENTATION (ONCE AVAILABLE).