Carbon credits have generated significant discussion in recent months, unfortunately including a great deal of inaccurate information. EcoSecurities believes it is essential that the facts about carbon credits and the Clean Development Mechanism are widely known and well understood. This fact sheet helps to provide clarification on the CDM and EcoSecurities performance in the carbon market.

The Clean Development Mechanism (CDM) is the structure under the Kyoto Protocol which allows industrialised countries with a greenhouse gas (GHG) reduction commitment to invest in projects that reduce emissions in developing countries as an alternative to more expensive emission reductions in their own countries, with the goal of supporting large-scale reductions in international carbon emissions. Appendix 1 gives a detailed explanation of how the CDM works in practice.

The CDM is playing a crucial role in significantly reducing greenhouse gas emissions globally. As at April 23rd 2008 the CDM had achieved the following:

- 1,026 GHG emission reduction projects have been registered
- Over 135 million tonnes of CO2 have already been abated (the equivalent of taking nearly 25 million cars off the roads for a year *)
- The issuance of Certified Emission Reduction (CER) credits from registered projects through to 2012 is expected to total around 1.25 billion (equivalent to the annual CO2 emissions generated from more than 258 coal fired power stations*)

The CDM is also helping to facilitate the transfer of clean technology, to drive sustainability benefits and to provide other environmental improvements in developing countries.


EcoSecurities has pioneered the development of the carbon markets and has been involved in the development of many of the global carbon market’s most important milestones, including;

• Development of the first carbon offset certification system in the world in early 1997
• Developing, since 2001, of some of the first approved CDM methodologies
• Development of the first CDM project registered under the Kyoto Protocol, the NovaGerar Landfill Project in Brazil in 2004
• Structuring of the CDM component of the first project to receive CERs in the world, the La Esperanza hydroelectricity project in Honduras in 2005
• Becoming the first project developer to register 100 CDM projects in 2007

EcoSecurities’ achievements have resulted in the company:
• Becoming the first carbon project developer to join the World Business Council for Sustainable Development (WBSCD)
• Being recognised as one of the Top 30 quality providers of carbon offsets by an independent study carried out by Environmental Data Services (ENDs), which sampled 170 companies internationally
• Being ranked number 22 in CNBC European Business Magazine’s ‘Top 100 Low Carbon Pioneers’


- 437 CDM projects underway
- In 34 countries across the world from Mexico to Indonesia
- Using 18 different technologies
- With the potential to produce over 142 million CERs on a gross basis through to 2012 (the equivalent of taking more than 26 million cars off the roads for a year*)
- On a net basis, the portfolio of projects is capable of generating 122 million CERs ( equivalent to the annual CO2 emissions generated from more than 26 coal fired power stations*) through to 2012
- through to 2012, CDM project registrations now total 110, more than any other carbon project developer
- 110 registered projects have the capacity to reduce emissions by 29 million tonnes, the equivalent of the CO2 emissions produced from electrical energy consumption in over 3.8 million homes over one year *

EcoSecurities projects are making a real and positive environmental impact by enabling significant reductions in carbon emissions. In addition to emission reductions, there are also many other sustainable benefits that result from the implementation of a CDM project, and some of these benefits are highlighted in the projects below.



The Aguascalientes project reduces GHG emissions by collecting and flaring the LFG, which will generate 2-4MW of electricity to the regional grid, thus displacing fossil fuels used for electricity generation. Over the 10 year lifespan of the project, 1,625,926 t CO2e (tonnes of CO2 equivalent) are expected to be mitigated. Additional benefits of the project include; provision of local employment, significant reduction in local air pollution and a reduction in the risks of landfill explosions.

The Yuzaikou Hydroelectricity project is a small-scale run-of-river project near Rucheng Town in Hunan Province, China, with a total installed capacity of 15MW. The project is expected to supply 57,350 MWh of electricity per year which amounts to annual emissions reductions of 40,500 tCO2e per year. Yuzaikou offers several benefits to the local area: enabling Rucheng County to achieve self-sufficiency in energy supply, reducing dependency on fossil fuels for energy generation and reducing greenhouse gas emissions.


Irani is a renewable energy project, which consists of the construction and operation of a 9.43MW biomass generation plant that generates electricity required in the paper manufacturing process. It is expected that the project will reduce over 3 millions tCO2e through to 2012. Irani provides many additional benefits in addition to greenhouse gas emission reductions, including technology and skill transfer, conservation of natural resources and avoidance of the land filling of biomass.

EcoSecurities’ large portfolio of CDM projects is designed specifically to meet the delivery requirements of our customers. EcoSecurities CER net committed delivery schedule is as follows:

2008 0.4 million 2010 8.1 million 2012 4.4 million
2009 7.9 million 2011 5.1 million 2013 2.9 million


While the US is not a signatory to the Kyoto Protocol, the voluntary carbon markets in the country have developed rapidly in recent years as awareness of the problem of climate change has increased among consumers and businesses.

To date, EcoSecurities’ North America projects include landfill gas, anaerobic digestion and renewable energy. We verify our projects to standards such as the Voluntary Carbon Standard (VCS), the California Climate Action Registry and the Gold Standard, and all our projects are evaluated by independent third-party verifiers.

Carbon offsets are an integral mechanism for deploying clean technology to developing countries, and within the US. For example, dairy farms are installing anaerobic bio-digesters, and landfills and coal mines are capturing and combusting methane to generate electricity. As a complement to any US action, EcoSecurities believes that an international framework that supports the exchange of certified emission reductions (CERs) across markets is essential.

Allowing international offsets within a US cap-and-trade framework, like those generated through the CDM, can provide a variety of benefits domestically. According to a recent Environmental Data Services (ENDS) study, “the best quality offsets come from well-regulated systems… Based on a scoring system developed for this guide, credits from the Kyoto Protocol’s Clean Development Mechanism (CDM) emerge as the highest quality...” (cite: The ENDS Guide to Carbon Offsets. Environmental Data Services, 2008.)



In December 1997, 170 countries drafted the Kyoto Protocol during a meeting of the UNFCCC. The most important aspect of the Kyoto Protocol is the adoption of binding commitments by 37 developed countries and economies in transition (collectively called the Annex 1 countries) to reduce their greenhouse gas (GHG) emissions by an average of 5.2% below the year 1990 by the period 2008-2012. These commitments are differentiated by countries, with some required to reduce up to 8%, while others can even increase their emissions.

At the same time that the Protocol established binding commitments, it also approved the use of three “flexible mechanisms” for facilitating the achievement of these GHG emission reduction targets. These are:
1) Emissions Trading, allowing the international transfer of national allotments of emission rights, between different Annex 1 countries;
2) Joint Implementation, the creation of emissions reduction credits undertaken through transnational investment between countries and/or companies of the Annex 1 (industrialised countries); and,
3) The Clean Development Mechanism (CDM), a new mechanism resembling JI, which allows for the creation of Certified Emission Reduction (CER) credits in developing countries, regulated by the CDM Executive Board.


The CDM’s purpose is twofold: firstly, to assist developing countries (non-Annex I Parties) in making progress towards sustainable development and contributing to the UNFCCC’s objectives; and secondly, to assist developed countries and economies in transition (Annex I Parties) in achieving their emission reduction targets. Non-Annex I Parties are supposed to gain the economic, developmental and environmental benefits from implemented projects that generate Certified Emission Reductions (CERs) for export.

Key features of the CDM include:
• project activities must be additional to what would have happened in a ‘business as usual’ scenario;
• the CDM is open to participation by either private or public entities, or combinations of the two;
• projects must have the approval of the host government;
• CDM projects must be independently certified by Operational Entities accredited by the CDM Executive Board;
• The CDM has a mandate to use a portion of its proceeds to assist those countries which are particularly vulnerable to climate change to adapt to those changes.