10. GHG Removal and Emission Reduction Requirements
This section outlines the requirements to GHG removal and emission reduction credits issued on Regen Registry.
The Regen Registry attempts to follow the best practices as applied to carbon credit markets and Agriculture, Forestry and Other Land Use (AFOLU) carbon credits. The core GHG accounting principles laid out in ISO 14064 Part 2:2019[8] have informed this guide and are summarized below:
Relevance
Select the GHG sources, sinks and reservoirs (SSRs), data and methodologies appropriate to the needs of the intended user.
Completeness
Include all relevant GHG emissions and removals. Include all relevant information to support criteria and procedures.
Consistency
Enable meaningful comparisons in GHG-related information.
Accuracy
Reduce bias and uncertainties as far as is practical.
Transparency
Disclose sufficient and appropriate GHG-related information to allow intended users to make decisions with reasonable confidence.
Conservativeness
Use conservative assumptions, values, and procedures to ensure that GHG emission reductions or removal enhancements are not overestimated.
10.1. Adherence to GHG Accounting Principles
10.1.1. Boundary Selection
GHG project boundaries include a project’s physical boundary and implementation area (i.e. where the Project Activity takes place), the GHG sources, sinks, reservoirs (SSRs) considered, and the project duration.
The Protocol/Methodology establishes the criteria for the selection of relevant GHG SSRs, and procedures for quantifying GHG emissions.
The Project Proponent shall provide maps, Geographic Information System (GIS) shapefiles, and other relevant information to delineate the project physical boundary.
10.1.2. Relevance and Completeness
Project Proponent shall consider all relevant information that may affect the accounting and quantification of GHG emissions or reductions including all relevant SSRs.
The Program Guide and Protocol/Methodology include mechanisms to account for estimation uncertainty and carbon retention risk. See the Buffer Pool and Permanence sections for more details.
10.1.3. Consistency
The assumptions, methods, and data used in the Protocol/Methodology to quantify GHG reductions and removals rely on peer reviewed data that enables meaningful comparisons to other methods and data.
10.1.4. Accuracy
The Project Proponent shall reduce, as far as is practical, uncertainties related to the quantification of GHG emission reductions or removal enhancements.
10.1.5. Transparency
The Protocol/Methodology and Program Guide disclose sufficient and appropriate GHG-related information to allow all intended users to make decisions with reasonable confidence.
Regen Registry is built to provide public access to all key pertinent information related to GHG estimations such as project monitoring and verification reports.
10.1.6. Conservativeness
The Protocol/Methodology shall define assumptions and specify quantification methods and monitoring requirements to ensure that GHG emission reductions and removals are not overestimated.
10.1.7. Emission Reduction & Removal Factors
When estimating GHG emission reductions or removals, methodologies shall specify GHG emissions or removal factors that are:
Derived from a scientific peer-reviewed source
Appropriate for the GHG source or sink concerned
Account for uncertainty in the quantification method
10.1.8. Independently Verified
The baseline report, monitoring reports, and Project Plan are validated by a verifier approved by the Registry Agent, or Credit Protocol Admin (unless otherwise stipulated in the Credit Class).
10.1.9. Managing Data Quality
The Monitor shall follow the guidelines in the Protocol/Methodology and establish quality assurance and quality control (QA/QC) procedures to manage data and information, including the assessment of uncertainty in the Baseline and ongoing monitoring.
10.2. Additionality
The concept of additionality is often raised as a vital consideration for quantifying project-based GHG reductions. Additionality is a criteria that requires GHG reductions to only be recognized for project activities that would not have “happened anyway.”
While there is general agreement that additionality is important, its meaning and application remain difficult to define, frequently framed with imprecise language, and in many cases subject to interpretation.[9]
Greenhouse Gas Protocol Initiative, a multi-stakeholder partnership of businesses, NGOs, governments, and academics convened by the World Business Council for Sustainable Development (WBCSD) and the World Resources Institute (WRI), does not require demonstration of additionality, but instead recommends incorporating it as an implicit part of the procedures used to estimate baseline emissions[10]. Depending on the methodology, as appropriate for each context, this may be either a performance-based approach or a project-based approach, using either a static or a dynamic baseline, and takes into account different considerations and barriers to adoption.
Each Protocol/Methodology shall stipulate the relevant additionality requirements to that credit.
10.3. Leakage
Leakage is an increase in GHG emissions or decrease in sequestration outside the project boundaries that occurs because of the project’s actions.
Each Protocol/Methodology shall define the appropriate procedures to address leakage.
Over time, if certain land management activities have consistently been found to create substantial leakage across multiple projects, Regen Registry may remove those activities from the approved list of practices.
10.4. Permanence
In GHG accounting, permanence refers to the risk that a carbon reservoir may be subject to gradual long-term or sudden disruptive release that will reverse the benefit that occurred as a result of project implementation. GHG emissions reductions from terrestrial sources and sinks may not be permanent if a project has exposure to risk factors, such as intentional or unintentional events that result in emissions into the atmosphere of sequestered CO2e for which offset credits were issued. Terrestrial projects have the potential for GHG removals to be reversed upon exposure to risk factors, including both unintentional reversals (e.g. fire, flood, and insect infestation) and intentional reversals (e.g., landowners choosing to discontinue land management and/or participate in an activity that reverses the sequestration).[11]
Land use-based and forestry projects may require the Project Proponent to register covenants on their land and/or restrict land use for the duration of the Permanence Period as defined in the Credit Class. This approach is not financially viable for most Project Proponents as the covenant often results in a reduction in the market value of the land that is greater than the potential additional revenues from credit sales. Further, there is no length of time, short of perpetual, that is equated with the assurance of permanence, nor is there a sound scientific basis or accepted international standard around any number of years that equates to an emission reduction/removal being permanent.
Regen Registry requires that Permanence Periods are specified in each Protocol/Methodology. The Project Proponent has the following requirements as it relates to permanence assurances:
Allocate the additional amount specified in each Protocol/Methodology of each credit issuance (in addition to the Buffer Pool) to a dedicated Permanence Reversal Buffer; and
Register as necessary, under the requirements of the particular Protocol/Methodology, appropriate covenant(s) on the land from the Project Registration until the end of the permanence period specified in the Protocol/Methodology. See Section 7.9 (Managing Property Under Restrictive Permanence Covenants Obligation) for requirements surrounding restrictive covenants running with the land to meet permanence requirements. The Project Proponent states their choice in the Project Plan.
If the project is renewed, the Project Proponent will choose again a permanence assurance for the renewed project.
If the Project Proponent chooses the Permanence Reversal Buffer, at the end of the permanence period , the Project Proponent will conduct a permanence monitoring and verification round in order to verify carbon retention. See Permanence Reversal Buffer section for more details.
Each Protocol/Methodology can create alternative permanence requirements as appropriate.
10.5. Buffer Pools
Carbon sequestration projects have the potential for GHG removals to be reversed unintentionally or overestimated. The Buffer Pool serves as a tool to mitigate the general and project-specific risk factors, including the overall uncertainty risk in GHG estimations (on top of the portion accounted for already by the Approved Methodology). Buffer pool contributions shall be decided at the Credit Class level, and designed and implemented by Credit Protocol Admins. While Buffer Pools are primarily used in GHG emission reduction and removal projects, they can be applied to any type of ecological crediting program.
10.5.1. Types of Buffer Pools
Credit Protocol Buffer Pools are those which aggregate risk across all projects registered under a given Credit Protocol, meaning that all projects registered under given Credit Protocol contribute to and can pull from the same Buffer Pool in the event of a reversal.
Credit Class Buffer Pools can be created by Credit Protocol Admins, who will establish a dedicated account, over which it has sole operational management and control.
Credits held in Credit Protocol Buffer Pools may not be sold, transferred, retired, or disposed of until the end of a crediting period, permanence period, or project termination as specified below.
Project Specific Buffer Pools are those set up by individual projects and used to cover reversal events for a specific project.
Protocol/Methodology may require each project to have a Project Specific Buffer Pool in addition to a Protocol/Methodology Buffer to cover reversal events for a specific project. Project Specific Buffers must be managed by the Credit Protocol Admin, who shall have sole operational management and control.
If a Protocol/Methodology does not require a Project Specific Buffer Pool, Project Proponents may still choose to set one up.
10.5.2. Buffer Pool Contributions and Use
Each Protocol/Methodology shall specify any relevant Buffer Pool contributions as a percentage of credit issuance.
Credit Protocol Admins can dictate the amount of credits a project can use to cover a reversal event or loss at the end of the crediting term to ensure use of the Credit Protocol Buffer is shared equally between projects registered under a Protocol/Methodology.
The Registry Agent shall deposit credits into the dedicated Protocol/Methodologyor Project Specific Buffers upon issuance.
10.5.3. End of Crediting Term Processing
Upon the completion of the project and the final monitoring and verification, the Buffer Pool will be reconciled according to the end of project carbon stock level.
If the final project carbon stock level was above the level reported in prior monitoring and verification round:
The existing credit balance of Buffer Pool will be released to Project Proponent unless otherwise specified in the Protocol/Methodology.
If the final project carbon stock level was below the level reported in prior verification:
The gap will be withdrawn from the Buffer Pool and immediately canceled.
If the Buffer Pool balance does not cover the gap, the Project Proponent will have the following options to compensate for the carbon stock loss:
Renew the project and defer the payment to the next issuance(s).
Use non-transacted (sold) credit/other credits in Project Proponent’s Regen Registry account.
Purchase credits to compensate for the carbon loss. The Credit Protocol Admin must approve any credits purchased to compensate loss. These credits will be canceled upon purchase.
10.5.4. Premature Project Termination
In the event that the project prematurely terminates, the Credit Protocol Admin will follow a conservative approach and automatically cancelall the credits in the Buffer Pool associated with the project.
In a final verification report, where the end of project carbon stock level is available, similarly to 'End of Crediting Term Processing', if the Buffer Pool was insufficient to cover the gap in carbon stocks level then the Project Proponent will be required to purchase credits to compensate for the carbon loss.
If no final verification report is available, to be conservative, Credit Protocol Admins will assume a default loss of 10% in carbon stock level from prior levels and cancel credits accordingly. If the Buffer Pool was insufficient to cover that loss, the Project Proponent will be required to purchase credits to compensate for the carbon loss.
10.5.5. Overestimation of Credits Issued during Crediting Period
In the event that during the Crediting Term a Verification Report rating was Rejection on the grounds that the carbon stock level was overestimated, then:
The gap will be withdrawn from the Buffer Pool and immediately canceled.
If the Buffer Pool balance does not cover the gap, the Project Proponent will have the following options to compensate for the carbon stock loss:
Use non-transacted (sold) credit/other credits in Project Proponent’s Regen Registry account.
Purchase credits to compensate for the carbon loss.
10.5.6. Purchase of Credits to Compensate for Carbon Loss
In any event, per above, that the Project Proponent is required to purchase credits to compensate for carbon loss, these credits shall be from other projects with similar regional characteristics and co-benefits, either from Regen Registry or from Established Registries. The Credit Protocol Admin must approve any credits purchased to compensate loss. These credits will be canceled upon purchase.
10.6. Permanence Reversal Buffers
10.6.1. Types of Permanence Reversal Buffers
Credit Protocol Permanence Reversal Buffers are those which aggregate risk across all projects registered under a given Protocol/Methodology, meaning that all projects registered under given Credit Class contribute to and can pull from the same Buffer Pool in the event of a reversal.
Protocol/Methodology Permanence Reversal Buffers can be created by Credit Protocol Admins, who will establish a dedicated account, over which it has sole operational management and control.
Credits held in Protocol/Methodology Permanence Reversal Buffers may not be sold, transferred, retired, or disposed of until the end of a permanence periodor project termination as specified below.
Project Specific Permanence Reversal Buffers are those set up by individual projects and used to cover reversal events for a specific project.
Protocol/Methodology may require each project to have a Project Specific Permanence Reversal Buffers l in addition to a Protocol/Methodology Permanence Reversal Buffers Project to cover reversal events for a specific project. Project Specific Permanence Reversal Buffers must be managed by the Credit Protocol Admin, who shall have sole operational management and control.
If a Protocol/Methodology does not require a Project Specific Permanence Reversal Buffer, Project Proponents may still choose to set one up.
10.6.2. Permanence Reversal Buffer Contribution
In the event that Project Proponents choose to use the Permanence Reversal Buffer, the permanence pool must be specified by the Credit Protocol Admin.
In the event the Project Proponents choose not to use the Permanence Reversal Buffer and use other alternatives such as long term restrictive covenants, the permanence reversal buffer contributions will not be deducted from each credit issuance.
10.6.3. End of Permanence Period
Upon the completion of the permanence period an additional monitoring and verification round will occur and the Permanence Reversal Buffer will be reconciled with the carbon stock level at the last recorded monitoring event during the Crediting Term.
If the final GHG level was above the last recorded GHG level, the existing balance of Permanence Reversal Buffer will be released to Project Proponent.
If the final level was below the last recorded level:
The gap will be withdrawn from the Permanence Reversal Buffer and immediately retired. The remainder will be distributed to the Project Proponent.
If the Permanence Reversal Buffer balance does not cover the gap, the Project Proponent will have the following options to compensate for the gap:
Use non-transacted (yet-to-be-sold) credits in Project Proponent’s Regen Registry account.
Purchase credits to compensate for the gap in carbon stock. The purchased credits can be from Regen Registry, or from Established Registries.
10.6.4. Premature Project Termination
In the event that the project has ended prematurely, the Project Proponents are still contractually obligated to maintain the permanence requirements for each credit vintage sold.
Regen Registry will follow the same approach as the end of permanence period for carbon stock reconciliation - see Section 10.6.3 (End of Permanence Period).
If no monitoring and verification report was conducted at the end of the permanence period, in order to be conservative, the Credit Protocol Admin will assume a default loss of 10% in carbon stock level from last recorded level. If the Permanence Reversal Buffer was insufficient to cover that loss, the Project Proponent will be required to purchase credits to compensate for that loss.
10.6.5. Purchase of Credits to Compensate Carbon Loss
In any event, per above, that the Project Proponent is required to purchase credits to compensate for carbon loss, these credits shall be from other projects with similar regional characteristics and co-benefits, either from Regen Registry or from Established Registries.
10.7. Avoiding Double Counting
Double counting refers to situations where a single GHG emission reduction or removal is used more than once to demonstrate achievement of mitigation targets and/or pledges typically made by corporations/entities and countries. Double counting can occur either as double issuance, double sale, or double claiming.
Double claiming is of concern in international carbon trading and in determining Nationally Determined Contributions (NDC) under the Paris Agreement[12], when an emission reduction is counted once by the country of origin when reporting its emissions inventory, and again by the receiving country (or other entity) when justifying emissions above its pledged climate effort. In the absence of rules, a country of origin could reduce emissions to meet its pledged effort and transfer those to a recipient; the recipient could then claim those same reductions to meet its pledged effort. In that case, only one reduction has actually occurred, but it is being claimed twice. Analyses indicate that such double-claiming could eliminate the entire climate benefit of all the NDCs.[13]
Regen Registry has program rules and operational processes to mitigate these double counting risks. To avoid double claiming, all credits will be tracked on Regen Ledger, a custom-built ecological ledger leveraging blockchain technology (specifically the Cosmos SDK[14]), which provides public immutable records for transactions. The data on Regen Ledger is available for external scrutiny and validation and provides a digital audit trail for transactions, at any given point in time. Examples include who was issued credits and their location, who currently owns credits, when each credit was retired, and who claimed the GHG benefit and their location.
Double Issuance
1) A situation in which more than one carbon credit is issued for the same emissions or emission reductions.
2) The registration of the same project under two different carbon crediting programs or twice under the same program
On Regen Registry, for a given location, only one project applying for any CProtocol/Methodology with a GHG component, is registered and active.
Project Proponent will be required to commit to not claiming credits for the same land and emission reduction/removal concurrently on any other registry. Verifier will confirm this in the verification report prior to credit issuance.
Double Sale
An instance in which a single GHG reduction or removal is sold to more than one entity at a given time.
Credit ownership will be tracked on Regen Ledger, leveraging blockchain technology which prevents the possibility of double selling.
Double Claiming
An instance in which an issued credit is used by the same Buyer toward more than one target (e.g., under systems that are not linked, do not coordinate, or may have inconsistent rules for reporting and/or retirement).
Legal contracts will restrict Buyers from making multiple claims on any given credit.
Each retirement will record the exact time, location, beneficiary details and retirement amounts.
When any country or state approves the trading of carbon credits (along with the carbon claims associated with them), Regen Registry will adhere to guidelines as established by the United Nations Framework Convention on Climate Change (UNFCCC)[15] and Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA)[16] to prevent double counting towards NDC and CORSIA obligations respectively, and to ensure the environmental integrity of emissions reductions.
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