Early Action Offset Projects
To ensure voluntary reductions receive appropriate credit and to help create an initial supply of offset credits for California’s Cap-and-Trade Program, the Compliance Offset Program allows for Early Action Offset Credits (EAOCs). These credits must meet requirements provided in section 95990 of the Cap-and-Trade Regulation and the Air Resources Board (ARB) requires these credits must not have been retired or used to meet another obligation.
The Climate Action Reserve has been approved to serve as an Early Action Offset Program. In this role, the Reserve can issue offset credits that may qualify as Early Action Offset Credits. These credits have been issued under the following ARB-approved voluntary offset protocols and may be eligible to transition to ARB Offset Credits to be used for compliance in the cap-and-trade program:
- Climate Action Reserve U.S. Livestock Project Protocol Versions 1.0 through 3.0
- Climate Action Reserve Urban Forest Project Protocol Versions 1.0 through 1.1
- Climate Action Reserve U.S. Ozone Depleting Substances Project Protocol Version 1.0
- Climate Action Reserve Forest Project Protocol Versions 2.1 and 3.0 through 3.2
In June 2013, ARB published a notice on its website regarding early action project guidance. The notice may be accessed here: http://www.arb.ca.gov/cc/capandtrade/offsets/offsets.htm
The Reserve is working closely with ARB to assist with its review of all Reserve-issued guidance relating to the Reserve’s four protocols that ARB adopted for early action. ARB retains final authority as to what guidance will be accepted for use in the compliance program.
When the Reserve was approved as an Offset Project Registry, it had issued over 11 million Climate Reserve Tonnes (CRTs) that may be eligible to qualify as Early Action Offset Credits. CRTs are not compliance instruments in the Cap-and-Trade Program. However, CRTs that meet the following requirements may be eligible to transition to ARB Offset Credits, which can be used for compliance:
- The credit vintage must be between January 1, 2005 and December 31, 2014.
- The project must be listed with the Reserve prior to January 1, 2014. The Reserve has released a policy memothat allows projects to be listed under the following protocol versions until this date, even if a new version of the protocol is released:
- Forest Project Protocol, Version 3.2
- Urban Forest Project Protocol, Version 1.1
- U.S. Livestock Project Protocol, Version 3.0
- U.S. Ozone Depleting Substances Project Protocol, Version 1.0
Please note that all CRTs/Early Action Offset Credits issued to projects that fall under the policy memo exception must undergo regulatory verification for conversion to ARB Offset Credits by February 28, 2015. All regulatory verification activities must be completed no later than September 30, 2015.
- The credits must meet the requirements of regulatory verification requirements found in section 95990(f).
- The credits must be active, i.e. not retired.
Early Action Forms
ARB has made forms available for the purposes of providing the information required by the Regulation. These forms are available on ARB’s website here.
Application for Listing an Early Action Project
Evaluation of Conflict of Interest for Early Action Project
Early Action Desk Review Findings
Request for Issuance of ARB Offset Credits for an Early Action Project
Process for Converting Climate Reserve Tonnes to ARB Offset Credits
- The entities (the Offset Project Operator, Authorized Project Designee, and any entity holding credits) that are seeking issuance of ARB Offset Credits are required to register with ARB.
- The early action offset project must be listed with ARB by submitting the required information per Section 95990(d) of the Regulation. ARB has made a form available for listing the early action offset project:
Listed projects will be posted on ARB’s website here: http://www.arb.ca.gov/cc/capandtrade/offsets/earlyaction/projects.htm
- The early action offset project undergoes regulatory verification per Section 95990(f) of the Regulation. It is required that a conflict-of-interest assessment is done prior to verification services commencing. Conflict of interest is assessed against parties that hold (at the time of submission of the conflict-of-interest- assessment to ARB) greater than 30 percent of the Early Action Offset Credits issued under each applicable data report year(s) being verified.
- The project successfully completes a desktop or full offset verification and receives a positive or qualified positive verification statement.
- ARB will make a determination if the early action offset credits meet the requirements of the Regulation. Within 10 days of making a determination ARB will notify the Reserve to cancel the early action offset credits in its registry.
- The Offset Project Operator, Authorized Project Designee or holder of the early action offset credits will request issuance of ARB offset credits from ARB. ARB has provided a form, the Request for Issuance of ARB Offset Credits for an Early Action Project, which may be used to submit this information.
- ARB will issue the ARB offset credits and notify the Offset Project Operator, Authorized Project Designee and holders that the credits have been issued.