Coal Power in the CDM: Issues and Options

The report examines the CDM methodology ACM0013 used to award emission reduction credits to coal projects in India and China. It finds that the methodology is systematically flawed, leading to an estimated 250% over-crediting of Certified Emission Reductions (CERs). The authors argue that most projects are non-additional because the transition to supercritical and ultra-supercritical technology is already driven by rising coal prices and national policies. Furthermore, the report highlights a low signal-to-noise ratio where factors other than boiler technology significantly impact efficiency, making verifiable emission reductions difficult to estimate. The authors conclude that using climate finance to support coal investments may undermine global climate goals and suggest sectoral crediting as a more robust alternative.

• The ACM0013 methodology and its application result in substantial overestimation of emission reductions, potentially leading to over-crediting on the order of 250%. The authors estimate that the coal project pipeline would yield 132 million CERs instead of the projected 451 million.
• Coal projects in the CDM pipeline are likely non-additional, meaning they would have proceeded without CDM support. The transition to supercritical technology in India and ultra-supercritical technology in China is already well underway due to rising coal prices and government mandates.
• Systemic flaws in ACM0013 include the use of outdated historical data for the Option 2 baseline and the use of inappropriately high emission baselines under Option 1, where subcritical technology is identified as the alternative despite its decline in use.
• Indian coal projects are found to inflate the benefits of switching from subcritical to supercritical technology, claiming improvements of at least 11% on average, while market specifications suggest improvements are likely only 2-4%.
• The methodology suffers from a low signal-to-noise ratio because variables other than boiler technology—such as cooling technology, pollution abatement equipment, and fuel quality—can affect unit efficiency by 7% or more, making it difficult to verify if CERs are actually due to boiler improvements.
• The standard CDM additionality procedures, specifically the common practice test, are ineffective for coal in India and China because the test excludes projects already registered or applying for CDM approval, which encompasses nearly all supercritical and ultra-supercritical units in these regions.

APA

Lazarus, M., & Chandler, C. (2011). Coal Power in the CDM: Issues and Options. Stockholm Environment Institute. https://www.sei.org/mediamanager/documents/Publications/Climate-mitigation-adaptation/SEI-WP-2011-02-Coal-in-CDM-ES.pdf

Chicago

Lazarus, Michael, and Chelsea Chandler. Coal Power in the CDM: Issues and Options. Stockholm Environment Institute, 2011. https://www.sei.org/mediamanager/documents/Publications/Climate-mitigation-adaptation/SEI-WP-2011-02-Coal-in-CDM-ES.pdf.

Wikipedia

{{cite report |last1=Lazarus |first1=Michael |last2=Chandler |first2=Chelsea |title=Coal Power in the CDM: Issues and Options |publisher=Stockholm Environment Institute |date=November 2011 |url=https://www.sei.org/mediamanager/documents/Publications/Climate-mitigation-adaptation/SEI-WP-2011-02-Coal-in-CDM-ES.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{lazarus2011coal, author = {Lazarus, Michael and Chandler, Chelsea}, title = {{Coal Power in the CDM: Issues and Options}}, institution = {Stockholm Environment Institute}, year = {2011}, month = nov, url = {https://www.sei.org/mediamanager/documents/Publications/Climate-mitigation-adaptation/SEI-WP-2011-02-Coal-in-CDM-ES.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }