SEI Response to Criticism Raised about the SEI Working paper on Adipic Acid CDM Projects

The Stockholm Environment Institute (SEI) defends its findings that adipic acid CDM projects maintain a strong competitive advantage and risk carbon leakage. SEI argues that even when accounting for lower primary CER prices and Chinese taxes, CDM revenues remain significant. It further contends that the higher plant utilization rates in CDM plants compared to non-CDM plants, particularly in Asia, indicate that CDM incentives—rather than just regional economic shifts or anti-dumping measures—prevented production cuts during the global financial crisis. To mitigate leakage, SEI proposes aligning CDM baseline emissions factors with the more stringent standards used in Joint Implementation (JI) projects.

• CDM revenues provide adipic acid plant owners with a significant competitive advantage, even when using conservative estimates for primary Certified Emission Reduction (CER) prices and accounting for Chinese taxes. If primary CER prices are assumed to be 9.5 EUR and a 30% Chinese CER tax on N2O projects is applied, revenues would still exceed 500 EUR per ton of adipic acid, which is several times the typical plant-by-plant production cost variation of approximately 120 EUR.
• Data suggests that CDM incentives contributed to higher plant utilization rates during the economic downturn of the late 2000s, particularly in Asia. In 2008, Asian CDM plants had a utilization rate of 90% compared to 58% for non-CDM plants; in 2009, these figures were 85% and 45%, respectively. SEI argues that without CDM revenue, these plants would likely have reduced production levels similarly to non-CDM plants.
• Anti-dumping tariffs imposed by China in November 2009 on imports from the US, EU, and South Korea (ranging from 5% to 35.4%) did not cause the observed discrepancy in plant utilization, as the gap between CDM and non-CDM plants was already evident in 2008. SEI warns that these measures could actually exacerbate carbon leakage by further incentivizing production shifts to Chinese CDM plants or increase N2O emissions if production shifts to non-abating Chinese plants.
• To reduce the risk of carbon leakage while maintaining project viability, SEI recommends that the CDM methodology adopt a more stringent baseline emissions factor similar to that of Joint Implementation (JI) projects. Under JI, credits are only granted for emissions reductions above 90%, reflecting that 90% abatement is common practice; applying this to CDM would likely stop carbon leakage for this project type.

APA

Kollmuss, A., & Lazarus, M. (2010). SEI Response to Criticism Raised about the SEI Working paper on Adipic Acid CDM Projects. Stockholm Environment Institute. https://www.sei.org/mediamanager/documents/Publications/Climate/sei-responsetocriticism-adipic-acid12-9-10.pdf

Chicago

Kollmuss, Anja, and Michael Lazarus. SEI Response to Criticism Raised about the SEI Working paper on Adipic Acid CDM Projects. Stockholm Environment Institute, 2010. https://www.sei.org/mediamanager/documents/Publications/Climate/sei-responsetocriticism-adipic-acid12-9-10.pdf.

Wikipedia

{{cite press release |last1=Kollmuss |first1=Anja |last2=Lazarus |first2=Michael |title=SEI Response to Criticism Raised about the SEI Working paper on Adipic Acid CDM Projects |publisher=Stockholm Environment Institute |date=December 2010 |url=https://www.sei.org/mediamanager/documents/Publications/Climate/sei-responsetocriticism-adipic-acid12-9-10.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@misc{kollmuss2010sei, author = {Kollmuss, Anja and Lazarus, Michael}, title = {{SEI Response to Criticism Raised about the SEI Working paper on Adipic Acid CDM Projects}}, publisher = {Stockholm Environment Institute}, year = {2010}, month = dec, url = {https://www.sei.org/mediamanager/documents/Publications/Climate/sei-responsetocriticism-adipic-acid12-9-10.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }