Under the proposed EP III, the borrower will be required to undertake an “alternatives assessment” wherever Greenhouse Gas (GHG) emissions for a project are anticipated to be more than 100,000 tonnes of CO2 equivalent per annum.This may coincide with any alternatives analysis required by a regulating permitting process. Once completed, the borrower must provide evidence of “technically and financially feasible and cost-effective options” to reduce GHG during the design, construction and operation of the project. Alternatives analysis is already required by the IFC Performance Standards which are incorporated by reference into the EP framework.
Under the draft EP III, for all Category A and (“as appropriate”) Category B projects (in all countries) the borrower will be required to report greenhouse gas emission levels during the operational phase for projects emitting over 100,000 tonnes of CO2 equivalent annually.
This requirement can be satisfied by regulatory requirements or voluntary reporting mechanisms like the Carbon Disclosure Project. The borrower must quantify direct emissions from the facilities owned or controlled within the physical project boundary (referred to as “Scope 1 emissions”) as well as indirect emissions associated with the off-site production of energy used by the project (referred to as “Scope 2” emissions).