Page 1 /120 Validation and Verification Manual Version 2 December 2006 Page 2 /120 The purpose of the Validation and verification manual (VVM) is to represent an independent state-of-the-art manual describing approaches and practices to be applied jointly by Designated Operational Entities (DOEs) and Independent Entities (IEs). The VVM has developed into a well-established tool to support the DOEs/IEs important role as partners of the UNFCCC and other regulatory bodies in ensuring a credible market for emission credits. The new ISO 14064 Standards have been developed on the basis of the earlier version of this VVM and the principles contained in the World Business Council for Sustainable Developments GHG protocol in a process oriented manner. The VVM builds on existing UNFCCC requirements and is not intended to add any new requirements to the validation and verification process. The VVM must not be used without due consideration of its limitations. In particular, it is the responsibility of the individual DOE to adapt the VVM guidelines, procedures and templates to ensure that they fit perfectly with: (a) the policies and procedures for validation and verification that the respective DOE is likely to have. (b) the specific circumstances of each project in relation to the relevant CDM or JI requirements as provided and interpreted by the competent Kyoto Protocol bodies. Such adaptation can include eliminating or adding items to the VVM validation protocols and verification checklists (c) Specific rulings or guidance given by the CDM executive Board or the JI Supervisory Committee. The VVM is expected to evolve and be updated over time in line with a growing body of project experience. Det Norske Veritas (DNV) has lead the development of this Validation and Verification Manual (VVM), with support of the World Bank, IETA and the DOE Forum. Input to this revision is also provided by IETA, TV SdDeutschland, TV Rheinland, TV Nord, SGS, PwC South Africa, Perry Johnson, JQA, JCI, JACO, BVQI and AENOR. This version replaces the previous version of the manual issued in 2004. December 2006. Validation and Verification Manual: Preface Page 3 /120 Updates of the VVM The VVM will need further development as rules in the CDM and JI develop. CDM EB and JI supervisory committee decisions and guidance will likely have a future impact on the content of the VVM. Hence, any DOE seeing a need for update/adjustment/addition of a VVM relevant issue should take the lead in developing guidance on the issue with the support of other DOEs/AEs and IEs. Revisions to the VVM will thereafter be gathered and issued at regular intervals. Aiming to have as many DOEs utilise the VVM toolbox as possible, The DOE/AE Coordination Forum will take a leading role in future coordination, further development and dissemination of the VVM. Page 4 /120 This Validation and Verification Manual has been developed for the use of validation and verification of greenhouse gas (GHG) projects according to Art. 6 and 12 of the Kyoto Protocol (JI and CDM). Its content is drawn on experiences gathered to date by many project developers and third party validators/ verifiers. The purpose of the Validation and Verification Manual is to provide guidelines for the validation and verification process, serve as a tool for third party validators/ verifiers, and present templates for validation and verification reports. The Validation and Verification Manual shall: guarantee the quality and ensure transparency of the validation and verification process to enhance trust in the work of third party validators/ verifiers, and allow third party validators/ verifiers to work in a consistent manner, promoting fair and equal treatment of projects The manual is based on the Kyoto Protocol, the Marrakech Accords and relevant CDM Executive Board and JI Supervisory Committee decisions. The Validation and Verification Manual comprises: a guideline for validation and verification activities generic protocols/ checklists for validation and verification of CDM/JI projects, templates for validation and verification reports. The VVM does not exempt third party validators / verifiers from following the developments regarding further guidance and standards for validation and verification. The methodologies presented in this manual for validation and verification of GHG emission reduction projects are intentionally applicable for all types of projects. However, necessary adjustments and amendments, as applicable, should be made in order to allow for the particularities of individual projects. Report Templates Protocols/ Checklists Guidelines Validation and Verification Manual: Introduction Page 5 /120 Differences between JI Determination and CDM Validation JI Determination Criteria Participation Requirements Baseline Setting Project Additionality Environmental Impacts Monitoring JI Determination Process Part 4: Initial Verification Initial Verificat