Industrial N2O Projects Under the CDM: The Case of Nitric Acid Production

This research paper evaluates the environmental integrity of nitric acid projects under the Clean Development Mechanism (CDM), specifically examining risks of carbon leakage and baseline emission manipulation. The authors conclude that while the CDM successfully fostered abatement in a sector that previously lacked such practices, the current methodologies are complex and lead to significant credit issuance delays. The paper recommends transitioning to a common benchmarking approach for baseline emissions to simplify the process and safeguard against leakage.

• The Clean Development Mechanism (CDM) effectively encouraged the adoption of N2O abatement technologies in the nitric acid industry, which had not previously engaged in such practices. This resulted in the introduction of secondary and tertiary abatement technologies and monitoring standards in 63 plants across 11 Non-Annex-1 countries.
• There is no evidence of systematic manipulation of baseline emissions to maximize Certified Emission Reductions (CERs). The authors note that actions to increase N2O emissions typically decrease nitric acid production efficiency, which is counter-productive for plant operators. Furthermore, baseline emission factors for projects using secondary abatement (AM0034) are similar to those using tertiary abatement (AM0028), suggesting no aggregate manipulation.
• Baseline emissions for nitric acid plants exhibit significant variability both between different plants and across different monitoring periods at the same plant. This variability challenges the AM0034 methodology, which uses a single baseline campaign to set emissions factors for all subsequent crediting periods, potentially leading to the over- or underestimation of emission reductions.
• Nitric acid projects under the CDM face substantial delays in the issuance of credits, particularly those using the AM0034 methodology. For AM0034 projects, 77% of all monitoring reports are still awaiting issuance, and only 10 of 35 projects that submitted reports have received credits. Projects using tertiary treatment (AM0028) fare better, with 44% of monitoring reports still awaiting issuance.
• The risk of carbon leakage—where production shifts from non-CDM plants to CDM plants—is judged to be limited at current CER prices. This is partly because nitric acid plants are often locally operated and the product is primarily sold in regional markets, limiting international trade.
• The authors recommend replacing current baseline determination methods with a common benchmarking approach. They suggest an initial baseline emission rate between 4 and 5 kg N2O per tonne of nitric acid, which should decline over time to reflect technological improvements. This change would simplify methodologies, reduce transaction costs, and mitigate leakage risks.

APA

Kollmuss, A., & Lazarus, M. (2010). Industrial N2O Projects Under the CDM: The Case of Nitric Acid Production. Stockholm Environment Institute. https://www.sei.org/mediamanager/documents/Publications/Climate/sei-nitricacid-9nov2010.pdf

Chicago

Kollmuss, Anja, and Michael Lazarus. Industrial N2O Projects Under the CDM: The Case of Nitric Acid Production. Stockholm Environment Institute, 2010. https://www.sei.org/mediamanager/documents/Publications/Climate/sei-nitricacid-9nov2010.pdf.

Wikipedia

{{cite report |last1=Kollmuss |first1=Anja |last2=Lazarus |first2=Michael |title=Industrial N2O Projects Under the CDM: The Case of Nitric Acid Production |publisher=Stockholm Environment Institute |date=November 2010 |url=https://www.sei.org/mediamanager/documents/Publications/Climate/sei-nitricacid-9nov2010.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{kollmuss2010industrial, author = {Kollmuss, Anja and Lazarus, Michael}, title = {{Industrial N2O Projects Under the CDM: The Case of Nitric Acid Production}}, institution = {Stockholm Environment Institute}, year = {2010}, month = nov, url = {https://www.sei.org/mediamanager/documents/Publications/Climate/sei-nitricacid-9nov2010.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }