The International Civil Aviation Organization (ICAO) adopted a global carbon offsetting mechanism, Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA), to address GHG emissions from international aviation beyond reductions to be achieved from advancements in fuel efficiency, technology, operations and infrastructure. CORSIA aims to stabilize net GHG emissions from international civil aviation at 2020 levels and reduce net GHG emissions to half of what they were in 2005 by 2050.
The offsetting requirements of CORSIA will apply from 2021 and be implemented in phases. From 2021 until 2026, only flights between countries that volunteer to participate in the pilot and/or first phase will be subject to offsetting requirements. From 2027, all international flights will be subject to offsetting requirements, with an exemption for flights to and from Least Developed Countries, Small Island Developing States, Landlocked Developing Countries, and states that represent less than 0.5 percent of international revenue tonne kilometers (an industry metric measuring the volume of freight, calculated by multiplying the weight in metric tons by the kilometers traveled).
For more information, please visit ICAO’s CORSIA website: https://www.icao.int/environmental-protection/CORSIA/Pages/default.aspx
Reserve offsets meet CORSIA criteria
To ensure the environmental integrity of CORSIA, the ICAO Council adopted emissions unit eligibility criteria that provide a robust framework for the evaluation of offset programs and project types.
Below are the eligibility criteria and how the Reserve meets them. Click here for a flyer.
CORSIA EMISSIONS UNIT ELIGIBILITY CRITERIA
Program Design Elements: At the program level, ICAO should ensure that eligible offset credit programs meet the following design elements:
1. Clear Methodologies and Protocols, and their Development Process: Programs should have qualification and quantification methodologies and protocols in place and available for use as well as a process for developing further methodologies and protocols. The existing methodologies and protocols as well as the process for developing further methodologies and protocols should be publicly disclosed.
The Reserve develops rigorous, regulatory-quality standards for offset projects with the participation of a multi-stakeholder workgroup and public comment process. Information on the protocol development process is publicly available on our website.
2. Scope Considerations: Programs should define and publicly disclose the level at which activities are allowed under the program (e.g., project-based, program of activities, etc.) as well as the eligibility criteria for each type of offset activity (e.g., which sectors, project types, or geographic locations are covered).
Reserve protocols clearly define the GHG reduction project, employing performance standards for additionality and strict eligibility criteria, including for project activities and geographic locations.
3. Offset Credit Issuance and Retirement Procedures: Programs should have in place procedures for how offset credits are: (a) issued; (b) retired or cancelled; (c) subject to any discounting; and, (d) the length of the crediting period and whether that period is renewable. These procedures should be publicly disclosed.
The Reserve offsets program includes procedures for how offset credits, called Climate Reserve Tonnes (CRTs), are issued, transferred, and retired. The conservative accounting methodologies include appropriate discount factors, set crediting periods, and rules for renewal.
4. Identification and Tracking: Programs should have in place procedures that ensure that: (a) units are tracked; (b) units are individually identified through serial numbers: (c) the registry is secure (i.e., robust security provisions are in place); and (d) units have clearly identified owners or holders (e.g., identification requirements of a registry). The program should also stipulate (e) to which, if any, other registries it is linked; and, (f) whether and which international data exchange standards the registry conforms with. All of the above should be publicly disclosed information.
Reserve offsets contain unique serial numbers and are tracked through a secure, transparent, publicly accessible online registry platform.
5. Legal Nature and Transfer of Units: The program should define and ensure the underlying attributes and property aspects of a unit, and publicly disclose the process by which it does so.
6. Validation and Verification procedures: Programs should have in place validation and verification standards and procedures, as well as requirements and procedures for the accreditation of validators and verifiers. All of the above-mentioned standards, procedures, and requirements should be publicly disclosed.
The Reserve requires independent third-party verification by an accredited verification body. Reserve protocols include verification standards and procedures. Verification training courses and successful completion of verification exams are required. Verification standards, procedures and requirements are all posted on and accessible from the Reserve website (or something to this effect).
7. Program Governance: Programs should publicly disclose who is responsible for administration of the program and how decisions are made.
The Climate Action Reserve staff and Board of Directors are listed on our website, and Board meetings are open to the public. Program rules and procedures are publicly disclosed, and new guidance or rule changes are widely communicated.
8. Transparency and Public Participation Provisions: Programs should publicly disclose (a) what information is captured and made available to different stakeholders; and (b) its local stakeholder consultation requirements (if applicable) and (c) its public comments provisions and requirements, and how they are considered (if applicable). Conduct public comment periods and transparently disclose all approved quantification methodologies.
The Reserve program is conducted in a transparent manner. Protocol, program, and project information is available to the public. The Reserve conducts public comment periods for protocol development and significant protocol updates and responds to all public comments received.
9. Safeguards System: Programs should have in place safeguards to address environmental and social risks. These safeguards should be publicly disclosed.
The Reserve requires offset projects to be in material compliance with all applicable laws, including environmental regulations, and individual protocols contain requirements designed specifically to ensure environmental and social safeguards.
10. Sustainable Development Criteria: Programs should publicly disclose the sustainable development criteria used, for example, how this contributes to achieving a country’s stated sustainable development priorities, and any provisions for monitoring, reporting and verification.
All Reserve projects contribute to SDG 13, climate action. Methane-related projects, such as livestock, manure digestion, landfill gas capture, and mine methane capture, contribute to SDG 7, generation of clean, renewable energy. Forestry, grassland, and agricultural projects all contribute to SDGs 14 and 15, enhancing life below water and on land through nutrient reduction and watershed protection. Urban forest projects contribute to SDGs 3 and 11, enhancing well-being and sustainable cities.
All Reserve projects that wish to report their alignment with the United Nation’s Sustainable Development Goals must complete the SDG Reporting Tool.
11. Avoidance of Double Counting, Issuance and Claiming: Programs should provide information on how they address double counting, issuance and claiming in the context of evolving national and international regimes for carbon markets and emissions trading.
The Reserve’s verification, issuance, and retirement procedures; eligibility requirements; and rigorous and conservative quantification methodologies ensure that emissions reductions are not double counted, issued, or claimed.
Carbon Offset Credit Integrity Assessment Criteria: There are a number of generally agreed principles that have been broadly applied across both regulatory and voluntary offset credit programs to address environmental and social integrity. These principles hold that offset credit programs should deliver credits that represent emissions reductions, avoidance, or sequestration that:
1. Are additional.
The Reserve only registers projects that can demonstrate to yield surplus GHG reductions that are additional to what would have occurred in the absence of a carbon offset market. Projects must meet stringent performance standards and not be required by any laws or regulations.
2. Are based on a realistic and credible baseline.
The determination of baselines in Reserve protocols is based on research in prevailing science, policy, and business practices. The baselines are realistic, defensible, conservative to a “business as usual” emissions trajectory, and publicly disclosed.
3. Are quantified, monitored, reported, and verified.
Reserve protocols contain rigorous rules covering quantification, reporting, and verification. Emission reductions are calculated in a manner that is conservative and transparent, project documents are publicly available for review, and ex-post verification by accredited and trained verification bodies is required.
4. Have a clear and transparent chain of custody.
CRTs have a clear and transparent chain of custody. Each CRT is assigned a unique serial number, and the transaction of credits over time is tracked in a transparent, publicly accessible system.
5. Represent permanent emissions reductions.
CRTs represent GHG reductions, avoidance, or sequestration that are permanent. For project types that may experience a risk of reversal, the risk is addressed through long term monitoring, legal obligations, and a combination of a risk buffer pool, discount factors, and reversal reporting and compensation procedures.
6. Assess and mitigate against potential increase in emissions elsewhere.
Reserve protocols contain measures to assess and mitigate the potential for material leakage. Based on an evaluation of the leakage potential for each project activity, the discount factor is determined and applied to the calculation of baseline emissions.
7. Are only counted once towards a mitigation obligation.
The Reserve ensures that its offset credits represent real GHG emissions reductions that are not double counted. Emissions reductions are independently verified to be registered only with the Reserve and counted once, are issued unique serial numbers, and are tracked in a transparent system.
8. Do no net harm.
The potential social and environmental impact of the project activity is assessed during the protocol development process and protocol types that may result in harm are not adopted. Projects must abide by all applicable laws and regulations and additional social and environmental safeguards are included as necessary.
Eligibility criteria should apply at the program level, as the expertise and resources needed to develop and implement ICAO emissions criteria at a methodology and project level is likely to be considerable.
1. Eligibility Criterion: Carbon offset programs must generate units that represent emissions reductions, avoidance, or removals that are additional. Additionality means that that the carbon offset credits represent greenhouse gas emissions reductions or carbon sequestration or removals that exceed any greenhouse gas reduction or removals required by law, regulation, or legally binding mandate, and that exceed any greenhouse gas reductions or removals that would otherwise occur in a conservative, business-as-usual scenario. Eligible offset credit programs should clearly demonstrate that the program has procedures in place to assess/test for additionality and that those procedures provide a reasonable assurance that the emissions reductions would not have occurred in the absence of the offset program. If programs pre-define certain activities as automatically additional (e.g., through a “positive list” of eligible project types), then they have to provide clear evidence on how the activity was determined to be additional. The criteria for such positive lists should be publicly disclosed and conservative. If programs do not use positive lists, then project’s additionality and baseline setting should be assessed by an accredited and independent third-party verification entity and reviewed by the program.
Additionality is a critically important criterion for carbon offsets. The Reserve’s standardized protocols are developed with extensive research into existing data and studies on the project activity, including whether any laws and regulations governing the project activity exist, current common practices, barriers to the implementation of the proposed project type, and financial characterization for a typical project. The Reserve analyzes whether standardized additionality and baseline determinations are possible and develops quantification methodologies for emissions reductions using standard baseline assumptions, emission factors, and monitoring methods that ensure additionality and baseline emissions are assessed credibly and accurately.
2. Eligibility Criterion: Carbon offset credits must be based on a realistic and credible baseline. Offset credits should be issued against a realistic, defensible, and conservative baseline estimation of emissions. The baseline is the level of emissions that would have occurred assuming a conservative “business as usual” emissions trajectory i.e., emissions without the emissions reduction activity or offset project. Baselines and underlying assumptions must be publicly disclosed.
Reserve protocols rely on sound scientific methods to determine baselines and quantify emission reductions. The Reserve has prioritized project types for which well-developed and vetted GHG quantification methods already exist, and developed protocols through public, transparent, multi-stakeholder processes with participation and public comments from leading experts in academia, science, nonprofit, business, and government agencies.
3. Eligibility Criterion: Carbon offset credits must be quantified, monitored, reported and verified. Emissions reductions should be calculated in a manner that is conservative and transparent. Offset credits should be based on accurate measurements and quantification methods/protocols. Monitoring, measuring, and reporting of both the emissions reduction activity and the actual emissions reduction from the project should, at a minimum, be conducted at specified intervals throughout the duration of the crediting period. Emissions reductions should be measured and verified by an accredited and independent third-party verification entity. Ex-post verification of the project’s emissions must be required in advance of issuance of offset credits; Programs that conduct ex-ante issuance (e.g., issuance of offset units before the emissions reductions and/or carbon sequestration have occurred and been third-party verified) should not be eligible. Transparent measurement and reporting is essential, and units from offsetting programs/projects eligible in a global MBM should only come from those that require independent, ex-post verification.
The Reserve offsets program features conservative and transparent accounting principles, monitoring requirements, independent third-party verification by verification bodies that are accredited to ISO standards, and that have successfully completed protocol-specific verification training provided by the Reserve, and ex-post verification for offset issuance.
4. Eligibility Criterion: Carbon offset credits must have a clear and transparent chain of custody within the offset program. Offset credits should be assigned an identification number that can be tracked from when the unit is issued through to its transfer or use (cancellation or retirement) via a registry system(s).
All offsets (CRTs) created within the Reserve are assigned a unique serial number to eliminate double counting of CRTs as well as provide a pedigree for each offset created. The unique serial numbers associated with the CRTs persists as the CRTs are transferred between account holders and retired. The unique serial number contains identifiers for the project country, project ID, project type, project developer ID, project state abbreviation, vintage, batch number, and unit serial block.
5. Eligibility Criterion: Permanence – Carbon offset credits must represent emissions reductions, avoidance, or carbon sequestration that are permanent. If there is risk of reductions or removals being reversed, then either (a) such credits are not eligible or (b) mitigation measures are in place to monitor, mitigate, and compensate any material incidence of non-permanence.
In keeping with internationally-accepted best practice, the Reserve defines the permanence of an emission reduction or removal enhancement as prevention of CO2 from the atmosphere for 100 years. Ongoing monitoring and verification are required to help ensure permanence. Recognizing that reversals can occur, the Reserve requires identification and quantification of the risk of reversal and the contribution of a portion of issued credits determined by the risk rating to be placed in a buffer pool account. Unintentional reversals are compensated through the buffer pool account. Intentional reversals require compensation by the project owner through the retirement of issued CRTs.
6. Eligibility Criterion: A system must have measures in place to assess and mitigate incidences of material leakage. Offset credits should be generated from projects that do not cause emissions to materially increase elsewhere (this concept is also known as leakage). Offset credit programs should have an established process for assessing and mitigating leakage of emissions that may result from the implementation of an offset project or program.
Reserve protocols require an assessment of the potential for leakage and includes discount factors in protocol equations to account for leakage. In some cases, additional monitoring occurs to determine whether and to what extent leakage must be accounted for.
7. Eligibility Criterion: Are only counted once towards a mitigation obligation. Measures must be in place to avoid:
a) Double issuance (which occurs if more than one unit is issued for the same emissions or emissions reduction).
b) Double use (which occurs when the same issued unit is used twice, for example, if a unit is duplicated in registries).
c) Double claiming (which occurs if the same emissions reduction is counted twice by both the buyer and the seller (i.e., counted towards the climate change mitigation effort of both an airline and the host country of the emissions reduction activity)). In order to prevent double claiming, eligible programs should require and demonstrate that host countries of emissions reduction activities agree to account for any offset units issued as a result of those activities such that double claiming does not occur between the airline and the host country of the emissions reduction activity.
The Reserve protects against the various forms of double counting through several mechanisms:
- Double issuance is avoided through the selection of project types for protocol development (to avoid activities with ambiguous ownership or accounting boundaries), through protocol development (setting the GHG assessment boundary and rules for ownership), and through rigorous and transparent registry procedures (ensuring no reporting period is credited more than once on any registry).
- Double use is avoided through rigorous and transparent registry procedures, including public issuance and retirement reports and credit serialization.
- Double claiming is avoided in the same manner as double use. In addition, when credits are qualified as eligible for use in CORSIA, it may be necessary for the Reserve to take additional steps to ensure that the GHG emission reductions are not also claimed by the host country. Such steps will be publicly disclosed in the registry so that users may always know the status of any credits and their usability as offsets for CORSIA.
8. Eligibility Criterion: Carbon offset credits must represent emissions reductions, avoidance, or carbon sequestration from projects that do no net harm. Offset projects should not violate local, state/provincial, national or international regulations or obligations. Offset programs should show how they comply with social and environmental safeguards and should publicly disclose which institutions, processes, and procedures are used to implement, monitor, and enforce safeguards to identify, assess and manage environmental and social risks.
The Reserve always seeks to ensure that the projects it registers not only help to mitigate climate change, but also avoid causing environmental or social harms more broadly. To this end, all projects are required to pass a “regulatory compliance” test demonstrating that they are in material compliance with applicable laws. Some protocols (e.g., forestry) have additional environmental and social “safeguard” criteria as well. The Reserve’s environmental and social safeguard policy states:
- As always, project activities may not directly cause significant environmental or social harms. Such activities will either be declared ineligible, or the Reserve will refuse to issue credits for reductions achieved when harms were occurring.
- In some cases, the Reserve may impose restrictions or penalties for harms associated with project activities but not directly caused by them. This will only occur, however, if the harms: (1) occur in the vicinity of the project; and (2) are caused by an individual or entity that – according to the relevant protocol – is required to be involved in implementing project activities.