📄ICR Requirement Document v6.0
Summary
ICR serves as a framework for climate projects of any size, promoting environmental integrity through accelerating credible action and ensuring credibility, consistency, and transparency in quantification, monitoring, reporting, validation, and verification
Introduction
To achieve the goals of the Paris Agreement to limit global warming to 1.5 degrees Celsius, the global community needs to reach Net-zero emissions no later than 2050. The goal that was set in 2015, almost a decade later, the world is falling behind its goals with emissions still rising. Immediate climate action is imperative to transition the world to a low-carbon economy. The need grows more urgent by the day, as evidenced in Working Group I's contribution to the Sixth Assessment Report[1] by the Intergovernmental Panel on Climate Change (IPCC) and further emphasized in the latest Synthesis Report published in March 2023 based on findings of the April 2022 report by Working Group III's Climate Change 2022: Mitigation of Climate Change[2]. Although the primary focus of governments and corporations should focus on reducing emissions, establishing a credible carbon market mechanism is paramount to support the goals of the Paris Agreement and those of the United Nations for Sustainable Development. The voluntary carbon market has the potential to significantly accelerate efforts to mitigate climate change and achieve the goals of the Paris Agreement.
Carbon credits enable organizations to compensate for emissions by financing the avoidance/reduction of emissions from other sources or removing greenhouse gases from the atmosphere, thus contributing to the transition to global Net-zero. Carbon credits can also support emerging climate technologies by providing financial incentives and enabling earlier market entry and accelerate innovation seeking financing. Financing can then enable deployment of emerging innovative methods, in a more competitive position against carbon-intensive alternatives. Therefore, it is urgent to enable emerging technologies to enter the voluntary carbon market to access finance that will help deploy these solutions. Such global deployment can decrease the rate at which emerging economies need to rely on fossil-fueled solutions to meet their energy needs. The investments needed to scale emerging low-carbon technologies do not meet today's markets' risk and return expectations. An effective and adaptable carbon market can facilitate capital flows to these technologies through carbon accounting mechanisms established on the principles that emerged in initiatives such as the Clean Development Mechanism and the Kyoto protocol.
ICR is a greenhouse gas (GHG) program and an initiative in Iceland established to facilitate financing climate projects while safeguarding environmental integrity and contributing to a sustainable and low-carbon economy by relying on international standards systems, conformity assessment, and assurance systems. The ICR serves as a platform for climate projects of any size where environmental integrity is promoted with credibility, consistency, and transparency of quantification, monitoring, reporting, validation, and verification.
ICR recognizes the need to scale and accelerate credible decarbonization of the economy, with climate financing for climate projects avoiding or reducing GHG emissions and sequestering or removing GHG from the atmosphere. ICR also recognizes the need to bring prominent technologies and nature-based solutions to light that have yet to establish a methodology according to the CDM or other GHG programs but need the financial support of the emerging carbon markets to be viable. Therefore, the ICR is based on ISO standards, resulting in a more effective and efficient review of emerging methodologies. ICR sets particular emphasis on decarbonizing energy production and utilization and technological development for carbon removal projects and includes sectors that have not participated in this emerging global carbon market.
ICR's mission is to build confidence in the carbon market for investors, insurance companies, project developers, validation and verification bodies (VVBs), accreditation bodies, corporations, the environmental community, authorities, and the public. The goal is to facilitate the necessary scaling of the voluntary carbon markets and the underlying climate solutions and utilize the market mechanism for real climate impacts. By that, financing climate projects viable for a fast transition to a low-carbon economy can be accelerated.
Objective
The objectives of ICR are to:
provide accessible requirements structured around ISO 14064-2, applicable to all types of climate-related mitigation projects, facilitate and promote transparency by all parties involved in the VCMs, corporates, project proponents, VVBs, market participants and general public;
ensure the quality and consistency of project design descriptions and monitoring reports prepared by project proponents submitted to ICR during the project cycle;
ensure consistency and quality of validation and verification reports prepared by VVBs submitted to ICR during the project cycle;
promote efficiency, effectiveness, integrity, traceability and transparency of climate projects;
promote innovation and the development of emerging technology and climate solutions, facilitating a fast transition to a low-carbon economy.
Promote collaboration and partnerships to drive progress and broaden the reach of our initiatives.
Reference standards
ICR requirement document is structured to be consistent with principles, requirements, and guidance of:
International Organization for Standardization (ISO) standards, ISO 14064-2, ISO 14064-3, ISO 14065, and ISO 14066.
Clean Development Mechanism/Joint Implementation (CDM/JI) emerged during the Kyoto protocol.
ISO standards for GHG accounting and assurance provide clarity and consistency for quantifying, monitoring, reporting, and validating and verifying GHG mitigation outcomes and support sustainable development through a low-carbon economy and benefit organizations, project proponents, and interested parties. Specifically, the use of the ISO 14060 family of standards:
Enhances the environmental integrity of GHG quantification.
Enhances the credibility, consistency, and transparency of GHG quantification, monitoring, reporting, verification, and validation.
Facilitates the development and implementation of GHG management strategies and plans.
Facilitates the development and implementation of mitigation actions through GHG emission mitigations.
Facilitates the ability to track performance and progress in reducing GHG emissions and/or increase in GHG removals.
All contain consistent general requirements for quantifying GHG mitigations that result from project-based activities, including requirements for:
Establishing GHG accounting boundaries.
Estimating baseline emissions.
Determining project-case emissions.
Monitoring project activities.
ISO and WBCSD/WRI are generally consistent in their requirements but have different structures and terminologies. ICR relies on terminology from either or all standards, depending on context. Further, CDM and other GHG programs set out principles regarding additionality and crediting mechanisms. In general for the ICR program, climate projects and emerging climate solutions shall conform to the requirements of ISO 14064-2 Greenhouse gases — Part 2: Specification with guidance at the project level for quantification, monitoring and reporting of greenhouse gas emission reductions or removal enhancements, and validation of projects and methodologies and verification of GHG emission mitigation outcomes shall be according to current versions of ISO 14064-3 Greenhouse gases — Part 3: Specification with guidance for the verification and validation of greenhouse gas statements, ISO 14065 General principles and requirements for bodies validating and verifying environmental information and ISO 14066 Greenhouse gases — Competence requirements for greenhouse gas validation teams and verification teams. Together these standards are built on establishing credibility and trust in the project activities and impacts the climate solution brings based on international standards, conformity assessment and accreditation.
Methodologies and tools
A methodology refers to a systematic approach or set of procedures used to quantify and measure GHG emission mitigations. These methodologies provide a standardized framework for estimating, monitoring and verifying emission mitigations, allowing for consistent and comparable results across different projects. In addition to methodologies tools have been developed to assist further as supplementary guidelines or procedures that support the application of methodologies. They provide detailed instructions on specific aspects of project development and monitoring. These methodologies and tools typically prescribe procedures for projects to follow for establishing baseline, data collection, quantification, monitoring, and reporting of GHG emission mitigations for projects ex-ante and ex-post.
GHG programs generally require projects to follow specific methodologies for the implementation of climate projects that projects need to conform to for eligibility under the GHG program to promote consistency and accountability. Methodology development and approval by GHG programs can however delay implementation and decelerate scaling of climate action where solutions cannot utilize VCMs to support the implementation of impactful solutions.
ICR approves the application of all relevant CDM methodologies and tools as CDM is a mechanism with strong foundation under the Kyoto Protocol and continues to be recognized under the Paris Agreement. Methodologies and tools developed under the CDM are widely accepted and used in various carbon markets and mechanisms worldwide, providing a benchmark for best practices.
ISO 14064-2
As the climate closes upon tipping point there is an urgent need for an effective and progressive response to the urgent threat of climate change based on the current best available scientific knowledge. At the same time, there’s a call for the standardization of VCMs to enhance comparability and consistency.
ISO is an independent, non-governmental international organization with a membership of 171[3] national standards bodies. ISO brings together experts to share knowledge and develop voluntary, consensus-based, market-relevant international standards through its members. International organizations, governmental and non-governmental, in liaison with ISO, take part in the work of developing standards. Standards are developed by sector-specific experts. ISO produces documents supporting scientific knowledge transformation into tools that will help address climate change. ISO standards, therefore, support innovation and provide solutions to global challenges such as climate change.
Development of the ISO 14064-2 started in the early 2000s with the aim of providing tools to support the implementation of the Kyoto Protocol and other climate-related initiatives, officially published in 2006. ISO 14064-2, last updated in 2019, provides principles and requirements for determining baselines, and monitoring, quantifying, and reporting of project emissions. It focuses on GHG projects or project-based activities specifically designed to reduce GHG emissions and/or enhance GHG removals. To provide a platform for climate actions that haven't a go-to approved methodology and support accelerated deployment of prominent climate solutions, ICR allows registration of projects that conform to ISO 14064-2 and the requirements herein, providing them with access to VCMs with the issuance of carbon credits prior to or in parallel to methodology development and approval. At the same time, providing a framework to follow for development and approval of new methodologies.
Scope
This document specifies principles and requirements and provides guidance at the project level for the quantification, monitoring and reporting of activities intended to cause greenhouse gas (GHG) emission mitigations intending to register the project with the International Carbon Registry (ICR) and issue international carbon credits (ICCs). It includes requirements for planning a GHG project, identifying and selecting GHG sources, sinks and reservoirs (SSRs) relevant to the project and baseline scenario, monitoring, quantifying, documenting and reporting GHG project performance and managing data quality. ISO 14064-2 is indispensable for applying this document.
Normative references
ICR definitions
ICR process requirements
ICR methodology requirements
ICR methodology approval process
ICR approved methodologies and tools
ISO 14064-2, Greenhouse gases — Part 2: Specification with guidance at the project level for quantification, monitoring and reporting of greenhouse gas emission reductions or removal enhancements.
ISO 14064-3, Greenhouse gases — Part 3: Specification with guidance for the verification and validation of greenhouse gas statements
ISO 14065, General principles and requirements for bodies validating and verifying environmental information
ISO 14066, Greenhouse gases — Competence requirements for greenhouse gas validation teams and verification teams
Terms and definitions
For the purposes of this document, the terms and definitions given in the ICR definitions apply in addition definitions and acronyms from ISO 14064-2 and ISO 14064-3 apply. If there exists inconsistency in definitions, ICR definitions prevail.
Principles
The principles of the ICR program are adapted from WBCSD/WRI, CDM, and ISO 14064-2 and ISO 14064-3. All climate projects shall strive to follow these principles, and methodology development shall adopt these as fundamental principles. Applying the principles is crucial to safeguarding GHG-related information as a true and fair account. The principles are the basis for and will guide the application of the requirements in the ISO 14064-2, ISO 14064-3 and of this document resulting in impactful climate projects and solutions.
Relevance - Use data, methods, criteria, and assumptions that are appropriate for the intended use of reported information.
Completeness - Consider all relevant information that may affect the accounting and quantification of GHG emission mitigations.
Consistency - Enable meaningful comparisons in GHG-related information.
Accuracy - Reduce bias and uncertainties as far as is practical/cost-effective.
Transparency - Provide clear and sufficient information for reviewers to assess the credibility and reliability of GHG emission mitigations claims.
Conservativeness - Use conservative assumptions, values, and procedures to ensure that GHG emission mitigations are not over-estimated.
Impartiality – Impartial validation and verification of GHG emission mitigations by a competent accredited 3rd party organization.
ICR sets further out requirements consistent with the CDM and other GHG programs facilitating registration of climate projects and issuances of carbon credits that can be traded and used by organizations to contribute to climate actions, to compensating for, and offsetting GHG emissions.
General requirements
Climate projects eligible for registration and issuance of ICCs shall include physical action/implementation or prevent actions that lead to increase in GHG emissions.
Projects shall not be implemented due to statutory requirements in the host country, or they are systematically not enforced, and non-compliance with those requirements is widespread in the host country. They shall comply with all applicable statutory requirements and do not cause net environmental or socio-economic harm. Projects shall deliver real, measurable, and additional GHG emission mitigation outcomes compared to their baseline.
GHG emission mitigations recognized as ICCs equal to one metric ton of carbon dioxide equivalent (CO2-e) avoided, reduced, sequestered, or removed. After projects are registered, ICCs may be issued based on the amount GHG avoided, reduced, sequestered, or removed and reported by the project proponent according to ICR process requirements and validated and verified by an approved VVB following ISO 14064-3 and ICR validation and verification specifications. ICCs may be ex-ante credits or ex-post credits. Ex-ante ICCs represent validated estimation of GHG emission mitigations in the future and ex-post ICCs represent verified impacts based on historical information. Only ex-post credits can be retired for offsetting emissions.
General
Projects shall conform to all requirements included herein, the requirements set out in ISO 14064-2[4], and follow the ICR process requirements and other referenced requirements and procedures.
While designing, implementing, and monitoring a project activity or any activities within a multiple project activity, the project proponents shall consider and use any applicable standards, methodologies, methodological tools, guidelines, and other regulatory documents available. All criteria and procedures applied shall be based on best practices, on the basis of the best available scientific knowledge, and technical advancements, are scientifically proven and/or peer-reviewed.
Unless stated otherwise, requirements and principles provided in this document apply both to stand-alone projects and project activities included in multiple project activity. Requirements for projects shall be read in terms of both stand-alone projects and a project activity included under a multiple project activity. Additional requirements for project activities included under a multiple project activity are provided in section 7.
Project proponents shall use the most recent version of ICR templates for readability and consistency.
Documentation
Project proponents applying to have a project activity registered with the ICR shall prepare a project design description (PDD) or project design description and monitoring report (PDDMR) using the most recent version of the applicable PDD or PDDMR template and have it validated by an approved VVB.
When completing the PDD or PDDMR, the project proponent shall provide all necessary information and documentation to demonstrate the conformity of the project activity with all applicable requirements herein and the requirements of ISO 14064-2.
The project proponent planning to issue ex-post ICCs for GHG emission mitigations achieved by the implemented registered project activity shall prepare, for each monitoring period, a monitoring report (MR) using the most recent version of the ICR monitoring report template and have it verified by an approved VVB.
When completing the MR, the project proponents shall provide all necessary information and documentation to demonstrate the conformity of the implemented registered project activity and monitored GHG emission mitigations to all applicable requirements herein, ISO 14064-2 and the validated PDD.
When completing the PDD, PDDMR or MR, the project proponent shall follow the instructions outlined in the templates. Note, the instructions should not be considered to be exhaustive.
Eligibility criteria
All projects that lead to GHG emission mitigations, conforming to requirements herein and ISO 14064-2 are eligible for registration. Projects may follow methodologies and apply tools, e.g. approved methodologies and tools in order to facilitate implementation, subject to conformity to the requirements herein and ISO 14064-2.
All projects with a crediting start date after 1. January 2020 are eligible for registration with ICR subject to conformity to other requirements. Projects with a start date earlier than 24 months before registration shall demonstrate historical additionality (section 4.4.1) from its implementation and continuance of additionality at validation.
Methodologies, modules and tools
Projects validated and verified following an approved methodology are eligible if they conform to the current version of this document and the current version of the applied methodology, following transitional requirements provided by the relevant GHG program. Approved methodologies, modules and tools are:
Methodologies, modules, and tools valid and active under the Clean Development Mechanism.
Methodologies, modules, and tools developed by ICR and approved through the methodology approval process.
New methodologies, modules, and tools developed by methodology developers and approved through the methodology approval process.
Approved methodologies are listed in the ICR approved methodologies, modules and tools document. When project proponents apply a methodology, they shall demonstrate their applicability. Project proponents may also rely upon other methodologies developed under other GHG programsthat are endorsed by ICROA, CORSIA or ICVCM, or establish criteria and procedures for quantification of GHG emission mitigationsif their applications demonstrate conformity to the requirements herein and ISO 14064-2. All criteria and procedures applied shall be based on best practices, on the basis of the best available scientific knowledge, and technical advancements and are scientifically proven and/or peer reviewed.
Project proponents may propose new methodologies for approval in order to facilitate the implementation of projects and their documentation. For a methodology to be approved, it shall be validated for conformity to ISO 14064-2 and the ICR methodology requirements by an approved VVB and for conformity to the requirements herein as further outlined in the ICR methodology requirement document.
Crediting
ICCs may be issued when projects have been validated on an ex-ante basis (i.e., after validation of project and estimation on GHG emission mitigation outcomes) subject to demonstration of additionality level 4b or insurance cover by a licensed insurance company. The insurance cover shall be in kind. Insurance eligibility criteria are provided in Appendix II. Ex-ante ICCs cannot be used for offsetting purposes until the GHG emission mitigations have been verified, i.e. there is no option for retiring ex-ante ICCs. Ex-post ICCs represent verified GHG emission mitigations and only for GHG emission mitigations within the monitoring period. Ex-post ICCs can be retired and used for offsetting or for other environmental claims supported by the retirement.
Ex-ante ICCs are converted to ex-post ICCs subject to verification of GHG emission mitigation outcomes reported in a MR. All ICCs have a unique serial identifier with embedded information identifying the project type, location, sector, project id, vintage, and other environmental and non-environmental attributes. The unique serial identifier persists as ICCs are transferred between accounts or are retired.
The process of issuing and converting ex-ante ICCs to ex-post ICCsis described in detail in the ICR process requirements.
Crediting start date
The project crediting start date is the date when activities that result in GHG emission mitigations have been implemented, the project's operations start and GHG emission mitigations begin.
Crediting period
Crediting period for project activities is a conservative estimate of the technical lifetime of the installed technologies or implemented measures and associated impacts or a maximum of 5 years. The crediting period may be renewed at a maximum of twice, or a maximum of 10 years with no option of renewal. Regarding project activities involving CDR or AFOLU, the crediting period is a conservative estimate of the technical lifetime of the installed technologies or implemented measures and associated impacts, with a maximum of 15 years. The crediting period may be renewed at a maximum of twice.
Renewal of crediting period
Project proponents may apply at the end of the current crediting period to renew the crediting period, subject to conformity to all future requirements, update of the PDD/PDDMR, re-evaluating baseline scenarios using tools and methodologies in effect at the time of renewal, and validation by an approved VVB.
Adjustment
Projects shall, where applicable, deposit ICCs (ex-ante and ex-post) to adjustment accounts if risks of non-performance, non-permanence and non-corresponding adjustment.
Non-performance
The risk of non-performance of projects registered with ICR is addressed with an adjustment account held and operated by ICR. Projects issuing ICCs ex-ante, not covered by an insurance for non-performance risk, shall deposit to the adjustment account irrespective of sector and project type adjustment credits subject to risk assessment on non-performance. To determine adjustment account contribution ICR conducts a risk assessment of non-performance of projects, utilizing insurance quality underwriting criteria. Risk factors considered include counterparty, country and project specific risk that could lead to non-performance of the validated project. Factors include but are not limited to:
track record of the project proponent and developer;
financial and KYC/B assessment of the project proponent and developer and implementation partners;
natural catastrophe risk modelling;
supply chain disruption;
country risk, including land ownership rights, community engagement and benefit sharing, fraud and corruption indices, and wider political and regulatory risk considerations, for example across expropriation, confiscation, export license cancellation, contract frustration, war/terror/civil unrest; and
technical risks which may vary by project type.
Irrespective of the risk assessment, the contribution shall never be less than 2% of issued ex-ante ICCs and shall not exceed 10% of issued ex-ante ICCs. To conduct the assessment ICR may rely on external risk advisors.
Where an event occurs that is likely to result in a non-performance event, the project proponent shall notify ICR within 30 days of discovering the likely event in a non-performance event report using the ICR non-performance event report template. The proponent shall prepare a provide a conservative estimate of the non-performance impacts to any ex-ante ICCs issued due to the non-performance of the project and submit to ICR.
If monitoring results in lower GHG emission mitigations than estimated in the PDD or PDDMR and the validation report the project proponent shall report separately in a non-performance report using the ICR non-performance report template. If the non-performance is ongoing the project proponent shall revise the PDD and have validated.
Non-performance events are discussed further in section 8.5.1.1 in the ICR process requirements.
Non-permanence
Non-permanence risk adjustment is discussed in section 6.8.2
Non-corresponding adjustment
Non-corresponding adjustments relating to double claims are discussed under section 5.10 and addressed under the ICR Article 6.2 procedures.
Project types
All project types are eligible to be registered with ICR. If project proponents apply a methodology in other geographic locations than its applicability, they shall demonstrate its relevance with regards to the requirement herein and the requirements of ISO 14064-2.
Ownership
Full and uncontested legal ownership to represent, control and operate projects and any transferable instruments issued shall be demonstrated. If the ownership of legal title to GHG emission mitigations is transferred from the project beneficiaries, it shall be demonstrated. When the project proponent has issued ICCs and transfers via the ICR platform, he transfers the legal title to corresponding GHG emission mitigations, see also section 5.8.
Double counting, issuance and claiming
Projects registered with ICR shall not issue instruments for the same GHG emission mitigations with another GHG program or scheme, e.g. renewable energy certificates.
Projects registered with other GHG programs may apply to transfer registration to ICR or be jointly registered. When registering with ICR, all previous documentation regarding the project activities shall be made available for ICR and the VVB and the project shall complete at a minimum a gap validation. The project shall not issue ICCs for the same monitoring period as have or will be issued in the corresponding GHG program or scheme. The ICR process requirements represent requirements for transitioning from other GHG programs.
If the project boundary overlaps with a project of a similar nature registered with the ICR program or another GHG program, the project proponent shall demonstrate that there is no double counting of impacts.
The project proponent shall not account for any GHG emission mitigations resulting from the project activities for any ICCs retired by another organization for their own GHG reporting. For any public reporting of GHG emissions, the project proponent shall publicly report the baseline emissions but may report separately on any instruments issued from the project activities. If the project proponent intends to report publicly actual GHG emissions he shall retire ICCs and account for the benefit associated with the project implementation. The project proponent shall issue a statement for GHG accounting and double counting due to participation of the project under the ICR program and for each monitoring period.
Other benefits (SDGs)
The project proponent should demonstrate how the project activity is consistent with the sustainable development goals (SDG) objectives of the host country.
Information on any claimed contributions to sustainable development goals shall be demonstrated using section 2 of ICR ESES-SD tool and summarized in the PDD. All claimed contributions shall be monitored, validated and verified.
International transfers
Where GHG emission mitigations will be used for reporting purposes under the accounting rules set out by the Paris Agreement or other emission trading programs (such as CORSIA) operating under the accounting framework of the Paris Agreement (international transfer), they shall conform to all relevant requirements of that market, including measures to prevent double claiming, i.e. corresponding adjustment. Project proponents shall provide evidence that the GHG emission mitigations generated by their project, and used for reporting, have fully conformed (or will conform) with all relevant market requirements. This evidence shall be utilized to designate ICCs that meet the specific market criteria.
Additional requirements and processes applicable for projects applying for eligibility of international transfers are provided for in the ICR Article 6.2 procedures.
Risk assessment
The project proponent shall conduct a risk assessment of the project’s implementation and operation and implement actions to reduce any risks identified. The project proponent in its risk assessment shall consider the following:
Project design
Environmental and socio-economic safeguards
Boundary (and application of a methodology)
Baseline determination (and application of methodology)
Additionality (and application of additionality tools)
GHG SSR relevant to the baseline scenario and conservativeness
GHG SSR relevant to the project and conservativeness
GHG emission mitigations quantification and conservativeness.
Leakage
Non-performance
Non-permanence (where relevant)
Non-corresponding adjustments (where relevant)
Monitoring
Project design
This section is intended to align with the structure of section 6 of ISO 14064-2. All requirements are in addition to the requirements of ISO 14064-2.
General requirements
Projects may be designed as a single project or as a multiple project activity.
Requirements set out in this section apply to all project activities, including those under multiple project activities that seek to be registered under ICR.
For submission of projects to ICR for the purpose of registration, project proponents shall design the project according to the requirements of ISO 14064-2, the requirements herein, and, where applicable, the requirements of the applied methodology. For demonstration of conformity project proponents may rely on relevant current good practice guidance tools[5].
If applying an approved methodology, the application shall be according to the requirements provided and application of approved tools and modules referred to, subject to section 6.12.
When more than one methodology is applied to a project or multiple project activities are included in the PDD, the PDD shall specify each activity separately. Applicability conditions, demonstration of additionality, determination of the baseline scenario, quantification, and permanence risk assessment (where applicable) shall be applied separately to each project activity unless applied methodologies refer to the same tools. The project proponent shall consider all cross effects of applying different methodologies.
Where the requirements and procedures provided for in an applied methodology, module, or tool conflict with the requirements herein and/or ISO 14064-2 and regarding the registration process, ICR requirements, and ISO 14064-2 take precedence. Any conflicts shall be addressed in the PDD or PDDMR.
Describing the project
For submitting projects to ICR, the project proponent shall use the ICR project design description template or the ICR project design description and monitoring report template to provide details of the project and its GHG emission mitigations, including schematics, specifications, and a description of how the project activity mitigates GHG emissions. The project proponent shall follow the instructions in the template and section 6.2 in ISO 14064-2.
The project proponent shall provide a detailed description of the geographical boundary of the project activities and the physical location of facilities as applicable to project activities. The physical boundary shall be documented with GPS coordinates. The project proponent shall provide maps, shapefiles, and other relevant information to delineate the project boundary as applicable.
All GHG emission mitigations shall be expressed in t CO2-e.
If deviations have been applied for a project that has been validated and is no longer consistent with the validated PDD or PDDMR and the validated estimated GHG emission mitigations, the project proponent shall have the project re-validated for it to be eligible to issue ex-post (or additional) ICCs subject to verification.
The project proponent shall provide details on whether the implementation involvesreduction, avoidance or destruction (RAD) of GHG emissions, if it removes and sequesters CO2 (CDR), or is a hybrid project including both RAD and CDR, along with the appropriate sector of the project implementation.
The project shall be implemented and operated following and conforming to the PDD or PDDMR. The project proponent shall indicate any short-term deviations from the PDD or PDDMR, applied methodologies, other applied documents, or permanent changes to the registered project activity. All deviations shall be reported in an updated version of the PDD and validated under subsequent verification.
Safeguards
Project proponents shall identify and evaluate the project's potential environmental and socio-economic impacts arising from the project activities. The project proponent shall avoid or minimize potential risk of any identified negative impacts.
The project proponent shall recognize, respect, and support local property rights and not infringe on private or public property. The project proponent shall not relocate people off their lands without consent, and when relocation occurs, it shall be carried out with just and fair compensation.
Project proponents shall use the ICR tool for environmental and socio-economic safeguards and sustainable development to address any negative environmental and social impact associated with the project implementation and monitor ongoing operation using the ICR Environmental and Socio-Economic Safeguards Monitoring report template for each monitoring period. Considering all environmental and socio-economic safeguards the project shall result in net-positive contributions to environmental and socio-economic impacts.
The project proponent shall consider input from local stakeholder consultation on the environmental and socio-economic impact assessment.
Additional certification standards may be applied to demonstrate social-economic and environmental benefits beyond GHG emission mitigations.
Local stakeholder consultation (LSC)
The project proponent shall identify and engage with local stakeholders during the project design and implementation of the project activities.
In identifying local stakeholders, the project proponent shall consider:
Population likely impacted by the project activities;
Legal or traditional rights to access and use territories and resources, including collective and/or conflicting rights, held by local populations;
Social, economic and cultural diversity within local population and differences and interactions between identified populations;
Any significant changes anticipated in the makeup of affected population during the project lifetime;
Anticipated changes in well-being under the baseline scenario, including impacts on resources deemed important by the local population.
Locations of population, indigenous peoples, local communities, customary rights holders, and areas outside the project boundary, expected to be affected by the project.
Locations of territories and resources owned by individuals or to which they have customary access.
Any obstacles to stakeholder engagement, such as literacy, geographical location, access to electricity or telecommunication.
During the LSC the project proponent shall safeguard and respect inclusiveness, cultural diversity and knowledge. The LSC shall include at minimum:
Presentation about the PDD/PDDMR, implementation, impacts, risk assessment and effect on local stakeholder groups.
Presentation about the assessment of environmental and socio-economic safeguards.
Relevant statutory requirements in the host country(ies), e.g. workers’ rights, environmental legislation.
Presentation about impacts on property rights.
Presentation about benefit sharing where relevant.
Registration process and involvement of VVBs.
Information about ongoing communication, grievance mechanism and consultation.
Where not relevant the project proponent shall demonstrate irrelevance.
All projects shall undergo a minimum of 30-day public comment period with local stakeholders and the project proponent shall implement a process of continuous communication. The project proponent shall respond to all comments received and demonstrate mitigation actions implemented. Stakeholders may continue to submit comments during the crediting period, which shall be considered during subsequent verification. The project proponent shall conduct the consultation in the local language.
Identifying GHG SSRs relevant to the project (boundary)
The project proponent shall describe, identify, and assess relevant GHG SSRs to the project and the baseline scenario and determine if they are controlled, related, or affected by the project (leakage), and if they shall be included or excluded. Any grounds for exclusion shall be demonstrated and justified. The project proponent may follow or rely on a methodology to determine the project boundary.
Determining the GHG baseline
The baseline scenario represents activities and GHG emissions that are most likely to occur in the absence of the project activity. The project proponent shall select or establish, describe, and apply criteria and procedures to identify, determine, and justify the GHG baseline scenario. The baseline scenario shall be accurately determined so that an accurate comparison can be made between the GHG emissions that would have occurred under the baseline scenario and the GHG emission mitigations achieved by project activities. In developing the baseline scenario, project proponents shall justify assumptions, values, and procedures so that the most plausible baseline scenario leads to a conservative estimation of GHG emission mitigations.
When applying a methodology, the project proponent should establish and describe the baseline scenario according to the applied methodology's requirements and justify any deviations from the methodology unless a more conservative baseline is established.
Project proponents should check that the data needed to determine the baseline scenario is available before attempting to identify the baseline scenario. Available data shall be relevant, reliable, and verifiable and may involve industry, country, regional, and local information. All sources for obtaining necessary information shall be documented.
Additionality
The concept of additionality is a vital consideration for quantifying project-based GHG emission mitigation. Additionality represents a net environmental benefit and real mitigation of GHG emissions additional to the baseline scenario. Additionality shall be demonstrated with a positive outcome of a project-specific additionality test or applying a standardized test. Applying a standardized test the result shall result in aligning with the levels below transparently.
Table 1: Guidelines for additionality
ICR defines additionality as a multilevel principle, ranging from level 1 to level 5:
Level 1 additionality –ISO 14064-2 GHG emissions additionality
GHG emission mitigations shall be additional to the baseline scenario. ISO 14064-2 addresses additionality as the project proponent shall select or establish, justify, and apply criteria and procedures for demonstrating that the project results in GHG emission mitigations that are additional to what would occur compared to the determined GHG baseline scenario.
Level 2 additionality – Statutory additionality
The project shall be additional to statutory requirements, or statutory requirements are systematically not enforced if imposed. Project proponents may apply either Level 2a or Level 2b additionality criteria based on whether the project exceeds statutory requirements or operates within a context of non-enforcement.
Level 2a additionality – Statutory additionality
The project shall implement activities that go beyond statutory requirements. The project is statutory additional if its implementation and/or operation is not required by statutory requirements requiring implementation and operation or requiring implementation of similar measures that would result in the same levels of GHG emission mitigations in the host country.
Level 2b additionality – Non-enforcement additionality
The project is non-enforcement additional if its implementation and/or operation is subject to statutory requirements that are systematically not enforced and where non-compliance with those requirements is widespread in the host country without consequences.
Level 3 additionality – Technology, institutional, common practice additionality
The project shall implement climate actions that are subject to barriers to implementation or accelerate the deployment of technology or activities.
The project is technological, institutional, or common practice additional if it faces significant organizational, cultural, social, or technological barriers to implementation, where carbon market incentives are essential in overcoming these barriers. These barriers may be a lack of trained personnel, supporting infrastructure for implementation, logistics for maintenance, and lack of knowledge on practices. The project activity may lead to accelerated technology deployment that would unlikely have occurred otherwise. If an action can demonstrate the promotion of an accelerated deployment of a technology that would otherwise face difficulties and have slower penetration, then it is assumed that the increased rate results in increased GHG emissions mitigations.
Level 4 additionality – Financial additionality
Financial additionality is a criterion to assess the additional environmental benefits of a climate project seeking support or financing within a climate mitigation framework. It determines whether the project's GHG emission mitigations would not have occurred without the financial incentives or support provided by the GHG program. Project proponents may apply either Level 4a or Level 4b additionality criteria based on the specific financial circumstances of their project.
Level 4a additionality – Financial additionality I
The projects are considered level 4a additional if it faces financial limitations that can be mitigated by revenues from the sale of carbon credits where carbon credit revenues are reasonably expected to incentivize the implementation of the project or carbon credit revenues are important in maintaining the projects' operations' ongoing financial viability post-implementation.
The project is Level 4a financially additional if the project activity results in higher costs or relatively lower profitability than would have otherwise occurred in the baseline scenario and the project activities are not common practice in the project’s geographical area.
Level 4b additionality – Financial additionality II
The project is considered level 4b additional if it faces significant financial limitations that can be mitigated or avoided by revenues from the sale of carbon credits, where carbon credit revenues are the major or only source of revenues. Carbon credit revenues are a precondition for the implementation of the project and/or carbon credits revenues are essential in maintaining the project operations and ongoing financial viability post-implementation and the project activities are not common practice in the project’s geographical area.
Level 5 additionality – Policy additionality
The project is considered level 5 additional if it meets level 4 and its implementation lies outside the scope of the climate action strategy towards the host country's NDCs or GHG emissions or removals are not included in the host-country national GHG inventory.
Additionality Test
The project proponents shall demonstrate the project's additionality and, at a minimum, meet level 1, and either 2a or 2b. It shall also meet one additional level from 3, 4 or 5. However, the project may demonstrate if it conforms to other additionality levels. When applying a methodology, the project proponent should follow additionality testing guidelines. Irrespective if an applied methodology stipulates automatic additionality, applies activity or performance method or refers to positive lists, projects shall demonstrate additionality, unless an ICR approved methodology has demonstrated additionality according to this section within the methodology documentation.
For additionality testing, project proponents may rely on the latest version of: CDM Tool for demonstration and assessment of additionality; Combined tool to identify the baseline scenario and demonstrate additionality; and referred tools or other tools from a recognized origin. For policy additionality, the project proponent shall rely on and refer to the host country's current NDCs. Projects are labeled with their additionality levels in the ICR registry platform.
Identifying GHG SSRs relevant to the baseline scenario
The project proponent shall identify GHG SSRs relevant to the project baseline and its boundary to the extent possible. This means applying conservative assumptions, GHG emission factors, and calculation methods, taking criteria and procedures according to section 6.3 in ISO 14064-2 into account, or following the applied methodology.
The project proponent shall justify any exclusion of any GHG SSRs. GHG emission factors shall be 100-year GWP values from the Intergovernmental Panel on Climate Change (IPCC). The project proponent shall use GWP values from IPCC’s fifth assessment report (AR5) or later unless it can justify the use of earlier GWP values.
Selecting GHG SSRs for monitoring or estimating GHG emissions and removals (GHG emission mitigations)
The project proponent shall follow the applied methodology or establish and apply criteria and procedures for selecting GHG SSRs for monitoring. When establishing criteria and procedures, the project proponent should consider and follow Annex A.3.2.1 in ISO 14064-2.
Quantifying GHG emissions and/or removals
GHG emission mitigations achieved by the project activity and addressing leakage (GHG SSRs affected by the project) lay the foundation for the volume of ICCs that can be issued. The project proponent shall follow a methodology to quantify GHG emission mitigations or establish criteria and procedures for the quantification. The quantification shall include all GHG SSRs identified and all GHGs and shall be reported in t CO2-e.
The project proponent shall estimate GHG emission mitigations for selected GHG SSRs separately for:
each relevant GHG for each GHG SSRs relevant for the project;
each GHG SSRs relevant for the baseline scenario.
Net GHG emissions and/or removals generated by the project activities shall be quantified and reported.
Quantifying GHG emission reductions and removal enhancements (GHG emission mitigations)
Based on criteria from section 6.7, the project proponent shall select and follow criteria from a methodology or establish criteria and procedures for quantifying aggregated GHG emission mitigations during the implementation and operation of the project to undertake ex-post calculations of GHG emission mitigations. The project proponent shall describe all steps to be undertaken, resulting in quantification as the net difference between the baseline and the project considering leakage. The project proponent shall provide ex-post calculation and quantification of GHG emission mitigations for each monitoring period.
The project proponent shall provide ex-ante projections for each monitoring period in the PDD or PDDMR and for the total projections for the GHG emission mitigations for the crediting period.
The quantification shall convert all GHGs to t CO2-e.
All ex-ante estimates and ex-post calculations shall be converted to CO2-e using GWP values from the IPCC AR5 unless earlier GWP values can be justified.
Leakage
Potential sources of leakage (affected GHG SSRs), as identified in section 6.3, and the location of areas where leakage could occur shall be identified, accompanied by a description of any appropriate mitigation measures. Any leakage assessment shall be conservative, shall not account for positive leakage, and shall be subtracted from the quantification of GHG emission mitigations of the project. Any potential leakage identified shall be monitored. All leakage shall be deducted from the total GHG emission mitigations of the project.
Non-permanence
The project proponent shall define the permanence of the GHG emission mitigations. However, the minimum term of permanence shall be 50 years after the end of the last crediting period.
Project proponents implementing AFOLU projects and CDR subject to a risk of reversal shall deposit non-tradable adjustment ICCs to cover unforeseen losses in carbon stocks or be covered by an insurance policy by a licensed insurance company for any non-permanence events. The insurance cover shall be in kind. Insurance eligibility criteria are provided in Appendix II.
If not covered by an insurance policy a proportion of GHG emission mitigations issued as ICCs (ex-ante or ex-post) shall be transferred to an adjustment account to protect registered projects with the ICR program from unexpected reductions in carbon stocks or increases in emissions. The ICR non-permanence adjustment account serves as a reserve to address any future reversals, safeguarding the integrity and permanence of the verified GHG emission mitigations climate benefits achieved by projects registered. The adjustment account is managed by ICR.
To determine non-permanence risk adjustment contribution ICR conducts a risk assessment of non-permanence of projects, utilizing insurance quality underwriting criteria. Risk factors considered include counterparty, country and project specific risk that could result in under-performance and/or reversal, leading to non-permanence. Factors include but are not limited to:
track record of the project proponent and developer;
financial and KYC/B assessment of the project proponent and developer and implementation partners;
natural catastrophe risk modelling;
supply chain disruption;
country risk, including land ownership rights, community engagement and benefit sharing, fraud and corruption indices, and wider political and regulatory risk considerations, for example across expropriation, confiscation, export license cancellation, contract frustration, war/terror/civil unrest; and
technical risks which may vary by project type.
To conduct the assessment ICR may rely on external risk advisors from the insurance industry.
Irrespective of the risk assessment, the contribution shall never be less than 10% of issued ICCs for AFOLU projects and 2% for CDR (non-AFOLU) and shall not exceed 20% of issued ICCs for AFOLU projects and 5% for CDR (non-AFOLU).
Where an event occurs that is likely to result in a non-permanence event, the project proponent shall notify ICR within 30 days of discovering the likely event in a non-permanence event report using the ICR non-permanence event report template. Where instruments have previously been issued, the project proponent shall prepare a non-permanence event report including a conservative estimate of the reversal of previously verified GHG emission mitigations due to losses in carbon stocks from the project, based on monitoring of the area affected by the event, and submit to ICR.
At the next verification, subsequent to the non-performance event, the monitoring report shall restate the reversals from the non-permanence event and calculate net GHG emission mitigations for the monitoring period in accordance with the quantification procedures provided in the PDD. More details about non-permanence events are provided in the ICR process requirements.
Managing data quality
The project proponent shall ensure that data and information are maintained securely and retrievable and implement measures to prevent loss of data. The project proponent shall establish and implement quality management procedures to manage data and information.
Monitoring the GHG project
The impacts of project activities on identified GHG SSRs shall be monitored in order to determine the net GHG emission mitigations and for the purpose of issuing ex-post ICCs or activating already issued ex-ante ICCs. The project proponent shall develop a monitoring plan for the project. The monitoring plan shall include details on monitoring parameters identified in section 6.6, GHG SSR identified and according to section 6.6 and/or be in line with the applied methodology and the requirements of ISO 14064-2.
All data and information related to the monitoring of the GHG project shall be recorded and documented following procedures established according to section 6.10 of ISO 14064-2 and the established monitoring plan.
If the project has other environmental and/or social benefits being verified, the monitoring plan shall also outline measurements or otherwise obtain, record, compile, and analyze data and information important for quantifying and reporting impacts on relevant environmental and/or social impacts, the monitoring plan may refer to other sections of the PDD or PDDMR.
According to the monitoring plan, the project proponent shall provide monitoring results to the VVB. Project proponents shall use the monitoring report template for reporting. The monitoring report shall include schedules, roles and responsibilities, equipment, resources, and methodologies to obtain, estimate, measure, calculate, compile and record GHG data and other information for the project and GHG emission mitigations. This shall be considered for monitoring of other benefits of the project, i.e. section 5.9 and 6.2.1.
The frequency of monitoring and verification for projects that have been validated, registered and issued ex-ante ICCs shall be annual, for AFOLU projects, the monitoring and verification frequency may be up to five years.
Documenting the GHG project
The project proponent shall continuously document records of evidence of project conformity to the criteria. The documentation shall be available and accessible to the VVB or ICR upon request for at least three years after the end of the last crediting period.
Deviation
Projects may deviate from procedures set out in methodologies where alternative methods may be more efficient and where the deviation will achieve the same level of accuracy or are more conservative. The project proponent shall demonstrate how deviation from the applied methodology will result in the same level of accuracy. When applying or relying on methodologies for demonstrating conformity to the criteria the project proponent shall report any deviation.
Any short-term deviations from the monitoring plan, applied methodologies, other applied documents, or permanent changes to a validated project activity shall be reported following update of documentation for VVB for validation, and further submission to ICR.
If a deviation has been applied to a project and the deviation affects the relevance of the established criteria and procedures for the quantification of GHG emission mitigations, the project's additionality, or the suitability of the baseline scenario, the project proponent shall explain and justify the deviation in an updated PDD and request for revalidation. If the deviation doesn't affect the applicability of the established criteria and procedures for the quantification of GHG emission mitigations, the project's additionality, or the suitability of the baseline scenario, and the project still conforms to the criteria for validation, the project proponent shall describe and justify the deviation in the MR.
Multiple project activities
General
Project proponents may group several projects to represent a bundled or grouped project.
For submission of a bundled or grouped project to ICR for the purpose of registration, the project proponent shall design it in accordance with the requirements of ISO 14064-2, the requirements herein, and where applicable, the requirements of applied methodology.
The project proponent shall use the ICR project design description template or ICR project design description and monitoring report template for submitting a grouped project to ICR. The PDD or PDDMR shall provide details of all project activities included in the multiple project activities and its GHG emission mitigations, including schematics, specifications, and how the project mitigates GHG emissions. The project proponent shall follow the instructions provided in the template.
The spatial boundary for multiple project activities shall be defined, and geographic coordinates for each project activity shall be provided to delineate the grouped project boundary. The project proponent shall provide a delineation of the project area where project activities are not isolated to single or multiple geographic coordinates.
Bundling of projects
More than one proposed project activity may be bundled and registered as a single project activity applying the same methodology and/or technology.
For a bundle of proposed project activities:
The project proponent shall prepare a single PDD or PDDMR covering all project activities in the bundle or separate PDDs or PDDMRs, each of which corresponds to each project activity in the bundle;
The project activities in the bundle may apply the same baseline. The project proponent shall justify the use of the same baseline, considering the particular situation for each project activity in the bundle;
If the project activities in the bundle use different baselines and the project proponent apply sampling approach, then it shall address specificities of different baselines, including the proportionate representative samples of each baseline used;
The project proponent shall prepare a common monitoring plan in the single PDD or PDDMRs or separate monitoring plans in the separate PDDs or PDDMRs.
All proposed project activities in the bundle shall have the same crediting period (i.e. the same start date and duration of the crediting period).
The maximum aggregate size of a bundled project shall not exceed 250.000 t CO2-e/yr.
A single VVB may validate the bundle of project activities and verify GHG emission mitigations.
Monitoring
For registered bundle of project activities, the project proponent shall prepare for each monitoring period
A single monitoring report covering all project activities in the bundle, if a single PDD for the bundle was prepared; or
Multiple separate monitoring reports each corresponding to each project activity in the bundle if a separate PDD was prepared for the bundled projects.
If the project proponent prepares separate monitoring reports for a registered bundled project activity, each project activity shall be included in only one of the monitoring reports and all the monitoring reports shall collectively contain all monitoring results of all project activities in the bundle.
All project activities shall use the same monitoring period.
Grouped project activities
Eligibility criteria for inclusion of additional project activities
Eligibility criteria shall be established for inclusion of new project activities instances post registration of the grouped project.
The eligibility criteria shall include conditions, specifications, and requirements for inclusion, corresponding to the requirements herein, ISO 14064-2, and any applied methodologies. All project instances shall be subject to the determined baseline scenario in the project description and additionality characteristics consistent with the original project activities. When establishing eligibility criteria, all requirements herein, ISO 14064-2, and methodology specific requirements shall be considered and followed. Guidelines for project instances on demonstrating conformity may be established, e.g. additionality.
Description of project activities under the grouped project
As part of the grouped project, the project proponent shall include a detailed generic description of the type of project activities that are included in the grouped project. Common elements and characteristics shall be described, and eligibility for inclusion of project instances established according to section 7.3.1.
When describing the project activity, the project proponent shall conform to requirements set out for project design in section 6 for the grouped project design and for all instances of projects included in the grouped project at validation.
If a grouped project involves application of multiple methodologies as well as multiple sectoral scopes, each project activity shall be separated in the PDD and eligibility criteria established for each activity.
Project activities within a grouped project may vary in terms of ownership, location, boundary, start date, duration, level of additionality, baseline, relevant GHG SSRs, leakage, permanence risk, and specific technology applied. If there are variations in any of the aforementioned factors, they shall be stated and justified in the generic description of project activities that are included under the grouped project and in the eligibility criteria.
The grouped project shall consider measures and management of centralized data collection and monitoring of the grouped project according to sections 6.9 and 6.10.
Inclusion of project activities post registration
For inclusion of a project activity post registration of the grouped project, a description of the proposed project activity(ies) shall be included in the monitoring report. The description shall demonstrate conformity to the already registered group project's eligibility criteria. The project instance shall conform to the requirements of ISO 14064-2, the requirements of this document, and the requirements of applied methodology (where applicable).
The project instance shall be validated for conformity to the eligibility criteria and other applicable requirements of ISO 14064-2 and the requirements herein.
The start date shall be the same as the original grouped start date or later.
The PDD shall be updated if the new project instance includes a new project proponent.
Monitoring
For registered grouped project activity, the project proponent shall prepare for each monitoring period a single monitoring report covering all project activities in the grouped project. All project activities shall use the same monitoring period.
Validation and/or verification of the GHG project
Validation and verification are two important concepts in the context of climate projects.
Validation is a third-party independent assessment of the validity and accuracy of the PDD to the validation criteria. Validation is the process of evaluating the reasonableness of the assumption, limitations, and methods that support the statement of the GHG emission mitigation outcomes of the implementation of the project and its activities and a project's conformity to the ICR requirements and ISO 14064-2.
Verification is a third-party independent assessment involving the process of evaluating and independently determining if the GHG emission mitigations and implementation of the project ex-post and its activities reported in a MR, conforms to the ICR requirement document and ISO 14064-2 based on historical data and information to ensure that the claimed GHG emission mitigations in form of ICCs are accurate and in line with the PDD.
Details about validation and verification and eligibility of VVB are available in ICR validation and verification specifications.
Validation
All projects are subject to validation. The validation report shall be made public.
Validation shall be completed within two years of pre-registration of the project.
Projects may deviate from the validated project design description in order to accommodate changing circumstances post-validation. All such deviations shall be described and assessed by VVB during the subsequent verification for conformity to the requirements herein and ISO 14064-2. The PDD shall be updated accordingly.
The project proponent shall inform the ICR of any adverse validation opinion and is ineligible for registration until implementation of corrective actions and the VVB has closed any non-conformities and provided an unmodified or modified validation opinion.
Verification
All projects are subject to verification of the implementation of projects and GHG emission mitigation outcomes. The verification report shall be made public. The first verification can be conducted at the same time as validation.
The project proponent shall inform the ICR of any adverse verification opinion and is ineligible for issuance or conversion of ex-ante ICCs to ex-post ICCs until corrective action is taken and the VVB has closed any non-conformities and provided an unmodified or modified verification opinion.
If the project implementation has deviated from the validated project design description, the VVB shall be informed to determine if the deviations are material.
Appendix I – Document History
Appendix II – Insurance Eligibility Criteria
ICR only approves insurance products that meet the following minimum requirements:
A.II.1 Requirements for the insurance company
The insurance company shall have an investment grade credit rating and a valid license to operate.
A.II.2 Requirements for the insurance policy
The insurance policy shall provide comprehensive coverage against under or non-performance, non-permanence, non-corresponding adjustment or other risks being insured for leading to a shortfall in delivery, either as a standalone “all risks” policy or as a suite of policies that cover the key categories of risk, at minimum risks identified under ICR risk assessment, for example:
Unavoidable risk: for example, natural catastrophe, business interruption
Avoidable risk: for example, fraud, negligence, insolvency, abandonment
The insurance policy shall have a clear loss trigger event that is aligned to the ICR program, such as a monitoring or verification event.
The insured party and/or loss payee can be:
The project proponent: to cover their risk of failing to meet delivery expectations, reversals or double claim.
A third party: investor, lender or buyer; covering their risk of delivery expectations, reversals or double claim
ICR: to safeguard its ability to make good, losses across underperforming projects, thus safeguarding the integrity of the ICR program.
A.II.3 Requirements for insurance claim payment
Insurance claims can be paid in either financial or ‘in-kind’ compensation.
For insurance claims paid ‘in kind’, the process to ensure suitable fungibility with high integrity criteria is as follows:
The insurance company shall provide to ICR a clear procedural and governance framework outlining how they will source and assess replacement carbon credits, including “required” and “comparison” attributes of replacement carbon credits.
Required attributes shall include at minimum instruments from an ICROA-endorsed GHG program.
The replacement shall be according to best match method meaning, in terms of sector, type and durability of the replacement.
Any changes to the framework and/or list of “required” and “comparison” attributes shall be documented with appropriate procedures as part of a legally binding contract with the Insured party, and in consultation with ICR.
The Insurer shall demonstrate a suitable mechanism such that financial compensation or in-kind compensation can address equivalent value for carbon credits to be sourced.
A.II.4 Evidence of eligibility
All insurance policies utilized under these insurance eligibility criteria are subject to confirmation from ICR.
If the insurance coverage is terminated, ICR must be notified within 60 days and the project proponent demonstrates replacement or other means of covering risk covered by the policy.
Intergovernmental Panel on Climate Change (IPCC). (2022). "Sixth Assessment Report: Overview of Working Group Contributions". Retrieved from IPCC website.
↑
Intergovernmental Panel on Climate Change (IPCC). (2023). AR6 Synthesis Report: Climate Change 2023. Retrieved from IPCC website. ↑
July 2024. ↑
ISO 14064-2 may be found on International Standards Organizations website. https://www.iso.org/standard/66454.html ↑
Good practice guidance can come from a recognized origin, such as industry practices and
associations, similar projects, benchmarking, GHG program tools, or others that are fit for the purpose ↑
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