Compliance Offset Projects

ARB Compliance Offset Protocols

The Air Resources Board (ARB) has adopted five Compliance Offset Protocols that may be used to generate Registry Offset Credits (ROCs).  Registry Offset Credits are eligible to be transitioned to ARB as ARB Offset Credits.  Only ARB can issue ARB Offset Credits.

U.S. Forest Projects Compliance Offset Protocol
Livestock Projects Compliance Offset Protocol
Mine Methane Capture Compliance Offset Protocol
Ozone Depleting Substances Compliance Offset Protocol
Urban Forest Projects Compliance Offset Protocol

Submitting a Compliance Offset Project

Section 95975 of the Cap-and-Trade Regulation specifies the requirements for listing offset projects using ARB Compliance Offset Protocols.  Offset Project Operators/Authorized Project Designees can submit a compliance offset project by submitting the Offset Project Listing Information to the Climate Action Reserve.  The Reserve Administrator will pre-screen the Offset Project Listing Information for “completeness.”  Eligible projects will be listed on the Reserve as “Proposed Projects.”

  1. Open an account with the Reserve
  2. Register with ARB
  3. Create a new project in the Reserve system
    • Complete the “Project Setup” page
    • From the Manage Projects area, click “Upload Documents”
    • Follow the directions to upload the Offset Project Listing Information form, required attestations and the Designation of Authorized Project Designee form (optional)
  4. Pay the submission fee for your project
    • The system will invoice you once your documents have been uploaded and the project has been submitted
  5. Your submitted project will be reviewed and you will receive one of the following notifications:
    • Your project has been accepted and the project will be listed as a “Proposed Project” (initial crediting period) or “Proposed Renewal” (renewed crediting period)
    • Your Offset Project Listing Information is incomplete
    • The offset project is not accepted for listing

Timing for Submitting a Compliance Offset Project for Listing

A new offset project with an Offset Project Commencement date that occurs after December 31, 2006 but before January 1, 2015 can be submitted for listing at any time. A new offset project with an Offset Project Commencement date of January 1, 2015 or later must be submitted for listing within a year of the commencement date (or within a year of meeting the listing requirements for tribes – whichever is later). The maximum length of the initial reporting period is 24 months.

Projects that are submitted for an Initial Crediting Period must be submitted for listing no later than the date at which the first Offset Project Data Report is submitted, in addition to meeting the timing requirements described above. For additional requirements regarding project reporting, see the Offset Project Data Report Section below.

Projects submitted for a Renewed Crediting Period must submit the project for listing no earlier than 18 months and no later than nine months before the conclusion of the initial crediting period.

Project Forms

ARB has developed forms for use in the Compliance Offset Program.  These forms may be used by program participants for submitting information related to listing, reporting, verification and issuance of ARB Offset Credits.  These forms can be found on the Reserve website and ARB’s website at Compliance Offset Program Forms web page.

Designation of Authorized Project Designee

Section 95974 of the Cap-and-Trade Regulation allows the Offset Project Operator to authorize another entity to act on its behalf.  The Designation of Authorized Project Designee form can be used to grant this authorization in accordance with §95974 of the Cap-and-Trade Regulation.  This form should be submitted to the Reserve at the time of project listing.  An Offset Project Operator can only make changes to this form once within each calendar year. In order to complete the process for designating an Authorized Project Designee, a representative from the Authorized Project Designee must be present on the Offset Project Operator’s CITSS account.

Offset Project Listing Forms

Section 95975 of the Cap-and-Trade Regulation requires that certain information be submitted to an Offset Project Registry in order to list an offset project using a Compliance Offset Protocol.  These Offset Project Applications for Listing can be submitted to the Reserve and are found on ARB’s website.

Offset Project Data Reports

Section 95976(d) of the Cap-and-Trade Regulation details the offset project reporting requirements.  The Offset Project Data Report is the report prepared by the Offset Project Operator/Authorized Project Designee for each Reporting Period that provides the information and documentation required by the Cap-and-Trade Regulation and Compliance Offset Protocol.

An Offset Project Data Report (OPDR) must be submitted as follows:

  • within 24 months of listing (initial OPDR)
  • within 4 months of the conclusion of each Reporting Period
  • prior to the site visit

Since projects utilizing the Ozone Depleting Substances Compliance Offset Protocol may only have a single reporting period, they will submit one Offset Project Data Report per project, covering a maximum of 12 months of data. There is no minimum timeframe for an ODS reporting period.

Verification

In addition to the final detailed verification report required by the Cap-and-Trade Regulation (§95977.1), the following documents are required at different phases of the verification process.

Document Description
Notice of Offset Verification Services Per §95977.1(b)(1) of the Cap-and-Trade Regulation, the verification body must submit Notice of Offset Verification Services to ARB and an Offset Project Registry.  This form can be used to comply with this requirement.  The verification body should submit this form to ARB and the Reserve 30 calendar days prior to beginning any offset verification services.
Evaluation of Conflict Of Interest for Offset Projects Per §95979 of the Cap-and-Trade Regulation, before providing any offset verification services, the verification body must submit to ARB and the Reserve a conflict of interest self-evaluation.  This form can be used to comply with this requirement.  It should be submitted to the Reserve prior to verification activities commencing. ARB or the OPR has 30 calendar days to make their determination on whether or not to accept the Conflict of Interest evaluation.
Offset Verification Statement Per §95977.1(b)(3)(R) of the Cap-and-Trade Regulation, a verification body is required to issue an Offset Verification Statement for any Offset Project Data Report for which it has provided offset verification services.  This form can be used to comply with this requirement. Offset Verification Statements must be submitted within 11 months of the conclusion of the reporting period end date.

Process for Issuance of Registry Offset Credits

As an Offset Project Registry (OPR), the Climate Action Reserve will issue Registry Offset Credits (ROCs) to projects using the ARB Compliance Offset Protocols.  Registry Offset Credits are not compliance instruments in the California Cap-and-Trade Program and are only considered to be eligible credits that can be transitioned to ARB as ARB Offset Credits.

The steps to receiving Registry Offset Credits from the Reserve are as follows:

  1. List the offset project with the Reserve
  2. Achieve a Positive Offset Verification Statement or a Qualified Positive Offset Verification Statement by an ARB-accredited verification body and meet all deadlines specified in the Regulation (e.g. submission of Offset Project Data Report, completion of verification)
  3. The project successfully passes review by the Reserve; the Reserve’s review ensures that a project meets the requirements of the Regulation
  4. The Reserve makes a determination to issue Registry Offset Credits

Process for Converting Registry Offset Credits to ARB Offset Credits

Once Registry Offset Credits are issued, the Offset Project Operator/Authorized Project Designee has the option to have these credits issued as ARB Offset Credits.  The steps to be issued ARB Offset Credits are:

  1. The Offset Project Operator/Authorized Project Designee must submit reporting and verification documentation information to ARB. The Request for Issuance of ARB Offset Credits form can be used to facilitate this process. The information includes:a. Offset Project Operator/Authorized Project Designee attestations required per Sections 95975(c)(1) through 95975(c)(3) and per Sections 95981(d)(1) through 95981(d)(3) of the Regulation
    b. Offset project listing information that was submitted to the Reserve
    c. Offset Project Data Reports submitted to the Reserve (original and final)
    d. The Offset Verification Statement
    e. The verification body and lead verifier attestations required per Sections 95977.1(b)(3)(R)(4.)(b.), 95977.1(b)(3)(R)(4.)(e.) and 95977.1(b)(3)(R)(4.)(f.) of the Regulation
  2. ARB will make a determination within 45 days to issue ARB Offset Credits. ARB will notify the Reserve to cancel out the specified Registry Offset Credits it intends to issue as ARB Offset Credits.
  3. The Reserve will cancel the Registry Offset Credits within 10 business days and notify ARB of the cancellation immediately.
  4. When the Reserve has notified ARB that the credits have been cancelled, ARB will issue the ARB Offset Credits in the Compliance Instrument Tracking System Service (CITSS) within 15 calendar days.
  5. Within 15 days of issuance of ARB Offset Credits, ARB will notify the Offset Project Operator, Authorized Project Designee and any other designated third party of the issuance.
  6. ARB will transfer the ARB Offset Credits into the appropriate holding accounts within 15 working days of the notification.

Process for Transferring Projects to the Compliance Offset Protocols

Early action projects are eligible to transition to an ARB Compliance Offset Protocol in order to generate ARB Offset Credits.   To transition, the project must be submitted and successfully listed with an Offset Project Registry under a Compliance Offset Protocol by February 28, 2015. Early action projects are eligible to generate Early Action Offset Credits for greenhouse gas reductions or removal enhancements achieved through 2014, which must be verified by September 30, 2015. All early action reporting periods must then be listed with ARB by January 1, 2016. The deadline for completing conversion of Early Action Offset Credits to ARB Offset Credits is August 31, 2016.