ICR Requirement Document v5.0
Last updated
Last updated
Summary
ICR serves as a platform for climate projects of any sizes where environmental integrity is promoted with credibility, consistency and transparency of quantification, monitoring, reporting, validation, and verification.
Version no.
5.0
Date of Version
9. October 2023
Immediate climate action is required 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 April 2022 report by Working Group III's Climate Change 2022: Mitigation of Climate Change[2]. 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. Although the primary focus of governments and corporations must be 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 increasing financial gain and allowing for earlier market penetration. This can enable the maturation and deployment of emerging innovative methods, which can position the solution 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 utilize 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 offsetting mechanisms established on the principles that emerged in initiatives such as the Clean Development Mechanism.
ICR is a Greenhouse Gas (GHG) program and an initiative in Iceland to facilitate financing climate projects while safeguarding environmental integrity and contributing to a sustainable and low-carbon economy. 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 the 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 welcomes GHG projects from the entire world. However, it places 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, project developers, 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.
The objectives of ICR are to:
provide accessible requirements structured around ISO 14064-2, applicable to all types of climate-related mitigation projects, and facilitate and promote transparency by all parties involved in the ICR, both organizations and project proponents;
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 validation/verification bodies submitted to ICR during the project cycle;
promote efficiency, effectiveness, integrity, and transparency of climate projects;
promote the development of emerging technology and climate solutions, facilitating a fast transition to a low-carbon economy.
ICR requirement document is structured to be consistent with principles, requirements, and guidance of:
International Organization for Standardization ISO 14064-2, ISO 14064-3, ISO 14065, and ISO 14066 (ISO).
World Business Council for Sustainable Development (WBCSD) and the World Resources Institute (WRI) - The GHG Protocol for Project Accounting (WBCSD/WRI)
Clean Development Mechanism/Joint Implementation (CDM/JI) emerged during the Kyoto protocol and voluntary GHG programs.
The ISO 14060 family of standards provides clarity and consistency for quantifying, monitoring, reporting, and validating and verifying GHG mitigations to support sustainable development through a low-carbon economy and benefit organizations, project proponents, and interested parties worldwide. 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, 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.
A methodology refers to a systematic approach or set of procedures used to quantify and measure GHG emissions mitigations. These methodologies provide a standardized framework for estimating, monitoring and verifying emission mitigations, allowing for consistent and comparable results across different projects. These methodologies typically prescribe procedures for projects to follow for data collection, quantification, monitoring, and reporting of GHG emissions 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.
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 167 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.
ISO 14064-2 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.
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 this document and impactful climate 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 mitigation.
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 mitigation 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 to contribute to climate actions, to compensating for, and offsetting GHG emissions by organizations.
Climate projects eligible for registration and issuance of International Carbon Credits (ICCs) shall include physical action/implementation or prevents actions that lead to increase in GHG emissions.
Projects may be located in any part of the world. They 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. The application of ISO 14064-2 is indispensable for applying the ICR requirement document.
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 validation and verification body (VVB) following ISO 14064-3 and ICR validation and verification specifications. ICCs may be ex-ante credits or ex-post credits. Ex-ante ICCs represents validated estimation of GHG emission mitigations in the future and ex-post ICCs represents verified impacts. Only ex-post credits can be retired for offsetting emissions.
Projects shall conform to all requirements included herein, the requirements set out in ISO 14064-2[3], and follow the ICR process requirements and other referenced requirements.
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, standardized baselines, methodological tools, guidelines, and other regulatory documents available.
Unless stated otherwise, requirements and principles provided in this document apply both to stand-alone projects and project activities included in a 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 5.
Project proponents shall use the most recent version of ICR templates for readability and consistency.
Project proponents applying to have a project activity registered with the ICR shall prepare a project design description (PDD) using the most recent version of the applicable project design description template and have it validated by an approved VVB.
When completing the project design description, 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 using the most recent version of the ICR monitoring report template and have verified by an approved VVB.
When completing the monitoring report, 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 project.
When completing the project design description or monitoring report, the project proponent shall follow the instructions outlined in the templates. Note, the instructions should not be consider to be exhaustive.
All projects that lead to mitigation of climate change, conforming to requirements herein and ISO 14064-2 are eligible for registration. Projects may follow methodologies, e.g. approved methodologies in order to facilitate implementation, subject to conformity to the requirements herein and ISO 14064-2.
All projects with a start date after 1. January 2013 are eligible for registration with ICR subject to conformity to other requirements. Projects with a start date before 1. January 2020 shall demonstrate historical additionality (section 4.4.1) from its implementation and continuance of additionality at validation.
Projects with a start date before 1. January 2020 shall pre-register the project, have signed a contract with an approved VVB for validation/verification, and start the validation process before 31. December 2023.
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 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 project proponents and approved through the methodology approval process.
Approved methodologies are listed in the ICR approved methodologies document[4] and listed under methodologies on the ICR website. The project proponent may also rely upon other methodologies or establish criteria and procedures for quantification of GHG emission mitigations if their applications demonstrates conformity to the requirements herein and ISO 14064-2. When project proponents apply a methodology, they shall demonstrate their applicability.
Project proponents may propose new methodologies for approval in order to facilitate the implementation of projects and their documentation. For the 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.
The project's start date is the date when operations of the climate project start leading to GHG emission mitigation.
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 or in cash. 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[5]. Ex-post ICCs are ICCs that 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 retirement.
Ex-ante ICCs are replaced by ex-post ICCs when GHG emission mitigation outcomes have been verified. All ICCs have 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 activating ICCs is described in detail the ICR process requirements.
The project crediting start date is the date when activities that result in GHG emission mitigation have been implemented, and the project's operations start.
Crediting period for projects with a start date before 1. January 2021:
Crediting period for project activities is a conservative estimate of the technical lifetime of the installed technologies or implemented measures and associated impacts with a maximum of 10 years with no option of renewing the crediting period. Regarding project activities involving CDR or AFOLU, 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, renewable a maximum of twice.
Crediting period for projects with a start date after 1. January 2021:
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, 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, re-evaluating baseline scenarios using tools and methodologies in effect at the time of renewal, and validation by an approved VVB.
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 2% of issued ICCs to the adjustment account irrespective of sector and project type. When the project proponent cannot compensate for the reversal or performance, ICR cancels ICCs from the adjustment account on a first-in, first-out basis. Project-based non-permanence risk adjustment is discussed in section 4.8.2.
Projects throughout the world 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.
Full and uncontested legal ownership to represent, control and operate projects and any transferrable 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 transferred via the ICR platform, he transfers the legal title to corresponding GHG emission mitigations.
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 for 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 a gap validation. The project shall not issue ICCs for the same monitoring period as issued in the corresponding GHG program or scheme. The ICR process requirements discuss 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 for the project activities for any ICCs retired by another organization for their own GHG reporting. The project proponent shall report the baseline emissions, but may report separately on any instruments issued from the project activities. If the project proponent wants to report publicly actual GHG emissions he shall retire ICCs if they want report and account for the benefit associated with the project implementation.
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 trading), 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.
Requirements for projects to secure a label representing its benefits, are set out in ICR process requirements.
The project proponent should demonstrate how the project activity is consistent with the SDG objectives of the host country.
Projects may disclose information on other environmental and/or social benefits in the project design description. If they intend to have such benefits validated and verified, they shall include criteria for how the contribute to said benefits and include how they are to be monitored in the monitoring plan.
If projects possess other environmental and/or social benefits they may be identified in the documentation. The project proponent shall demonstrate the environmental and/or social benefits and make all documentation available for the VVB for assessment.
Where other environmental and/or social benefits are added as a criteria for verification, relevant monitoring shall be identified in the monitoring report and assessed by the VVB.
Projects that intend to be eligible for international trading shall obtain and submit a letter of assurance and authorization from the national authorized entity of the host country or countries where the emission mitigations occur, for corresponding adjustment. The project proponent shall use, or rely on the ICR letter of assurance template. See further second last paragraph of section 3.8.
Projects may be designed as a single project or as a multiple project activities.
Requirements set out in this section apply to all project activities, including those under a multiple project activities that seeks 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. Project proponents may rely on relevant current good practice guidance tools[6].
If applying an approved methodology, the application shall be according to the requirements provided and application of tools and modules referred to, subject to section 4.12.
Projects may be designed to include more than one project activity or include multiple project activities. When more than one methodology is applied to a project or multiple project activities are included in the project design, the project design description 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, ICR process requirements, and ISO 14064-2 take precedence. Any conflicts shall be addressed in the project design description.
For submitting projects to ICR, the project proponent shall use the ICR project design description template to provide details of the project and its GHG emissions 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 project design description and the estimated GHG emissions mitigations, the project proponent shall have the project re-validated for it to be eligible to issue ex-post ICCs subject to verification.
The project proponent shall provide details on whether the implementation involves reduction in emissions (avoidance or destruction of GHGs), if it removes CO2 (CDR), or is a hybrid project (avoidance and removal) along with the appropriate sector of the project implementation.
The project shall be implemented and operated following, and conforming to the project design description. The project proponent shall indicate any short-term deviations from the project design description, applied methodologies, other applied documents, or permanent changes to the registered project activity. All deviations shall be reported in an updated version of the project design description and validated under subsequent verification.
Project proponents shall identify the project's potential negative environmental and socio-economic impacts and engage with local stakeholders during the project design and implementation of the activities. All projects shall undergo a 30-day public comment period and the project proponent shall implement a process of continuous communication with local stakeholders.. The project proponent shall respond to all comments received and demonstrate actions implemented to the VVB. Stakeholders may continue to submit comments which shall be considered during subsequent verification.
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.
The project shall minimize and, where possible, avoid negative environmental and social impacts. If present, the project proponent shall address all negative environmental and socio-economic impacts arising from the project activities and input received during a consultation with local stakeholders and ongoing communications.
Where applicable, project proponents shall minimize the risk of damage to ecosystems by considering:
not introducing invasive species or allowing an invasive species to thrive through project activities.
the use of non-native species over native species and their potential adverse effects.
the use of fertilizers, chemical pesticides, biological control agents, and other inputs used by the project and their possible adverse effects.
Additional certification standards may be applied to demonstrate social and environmental benefits beyond GHG emission mitigations.
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.
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 establised.
Project proponents should check that the data needed to determine the baseline scenario are 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.
The concept of additionality is a vital consideration for quantifying project-based GHG emissions mitigation. Additionality represents a net environmental benefit and real mitigation of GHG emissions in excess of the baseline scenario. Additionality shall be demonstrated with a positive outcome of a project-specific additionality test. ICR defines additionality as a multilevel principle, ranging from level 1 to level 5, where these levels are laid out as follows:
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 emissions mitigations that are additional to what would occur compared to the determined GHG baseline.
Level 2 – Statutory additionality
Projects shall be additional to statutory requirements or are systematically not enforced if imposed.
Level 2a additionality – Statutory additionality
The project shall implement actions that go beyond statutory requirements. Projects are statutory additional if their implementation and/or operation is not required by any law, statute, or other regulatory framework, agreements, settlements, or other legally binding mandates 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
Projects are non-enforcement additional if their 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.
Projects may be technology, 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.
Level 4a additionality – Financial additionality I
Projects are considered level 4a additional if they face 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 projects or carbon credit revenues important in maintaining the projects' operations' ongoing financial viability post-implementation.
A 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.
Level 4b additionality – Financial additionality II
Projects are considered level 4b additional if they face significant financial limitations that can be 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.
Level 5 additionality – Policy additionality
Projects are considered level 5 additional if their implementation goes beyond its host country's climate objectives and lies outside the scope of the climate action strategy towards the host country's NDCs.
Additionality Test
Project proponents shall demonstrate the project's additionality and, at a minimum, meet level 1, and either 2a or 2b. They, 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.
For additionality testing, project proponents may apply the latest version of: CDM Tool for demonstration and assessment of additionality; Combined tool to identify the baseline scenario and demonstrate additionality; Positive lists of technologies, 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 NDC. Projects are labeled with their additionality levels in the ICR registry platform.
The project proponent shall identify GHG SSRs relevant to the project baseline and its boundary to the extent possible. This means applying conservative assumptions, 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 SSR. Emission factors shall be 100-year global warming potential (GWP) values from the Intergovernmental Panel on Climate Change (IPCC). The project proponent shall use GWP values from the fifth assessment report (AR5) or later unless it can justify the use of earlier GWP values.
Project proponents 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 proponents should consider and follow Annex A.3.2.1 in ISO 14064-2.
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. Project proponents shall follow a methodology to quantify GHG emissions 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 emissions mitigations for selected GHG SSRs separately for:
each relevant GHG for each GHG SSR relevant for the project;
each GHG SSR relevant for the baseline scenario.
Net GHG emissions and/or removals generated by the project activities shall be quantified and reported.
Based on criteria from section 4.7, 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 GHG emissions mitigations 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 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.
Potential sources of leakage (affected GHG SSRs), as identified in section 4.3, 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 shall be monitored. All leakage shall be deducted from the total GHG emission mitigations of the project and subtracted from the number of GHG emission mitigations eligible to be activated.
The project proponent shall define the permanence of the GHG emission mitigations. However the minimum term of permenanence shall be 50 years after the end of the last crediting period.
Project proponent implementing AFOLU projects and CDR subject to a risk of reversal shall deposit non-tradable buffer credits to cover unforeseen losses in carbon stocks.
A proportion of expected GHG emission mitigations shall be transferred to a buffer adjustment account to protect projects from unexpected reductions in carbon stocks or increases in emissions. The project proponent shall establish and apply criteria, procedures, and/or methodologies to assess the risk of a reversal of GHG emission mitigations. A reversal risk assessment shall address the risk of non-permanence, including both general and project-specific risk factors. General risk factors include financial, technical, management, rising land opportunity costs, regulatory and social instability, and natural disturbances. Project-specific risk factors may vary by project type. Project proponents may use a relevant current good practice guidance risk assessment tool[7] or rely on ISO 31000 to assess the non-permanence risk.
The number of credits to be deposited to the AFOLU and CDR pooled buffer adjustment account is determined by the risk assessment.
Irrespective of the risk assessment, the project proponents shall never deposit less than 10% of issued ICCs in the AFOLU buffer adjustment account and 1% in the CDR (non-AFOLU) buffer adjustment account.
Where an event occurs that is likely to result in a reversal event, the project proponent shall notify ICR within 30 days of discovering the likely event. Where instruments have previously been issued, the proponent shall prepare a reversal 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 loss event, the monitoring report shall restate the loss from the loss event and calculate net GHG emission mitigations for the monitoring period in accordance with the quantification procedures provided in the PDD.
The project proponent shall ensure that data and information are maintained securely and retrievably and implement measures to prevent loss of data. The project proponent shall establish and implement quality management procedures to manage data and information.
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 and/or activating already issued ICCs. The monitoring plan shall include parameters, GHG SSR identified and according to section 4.6 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 4.10.
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.
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 emissions mitigations.
The frequency of monitoring and verification for projects that have been validated, registered and issued ex-ante instruments shall be annual. For AFOLU projects, the monitoring and verification frequency may be up to five years.
If monitoring results in lower GHG emission mitigations than estimated in the project design description 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 project design description and have validated.
The project proponent shall continuously document records of evidence of project conformity to applicable requirements and according to ISO 14064-2. 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.
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 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 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.
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 for submitting a grouped project to ICR. The project design description shall provide details of all project activities included in the multiple project activities and its GHG emissions 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.
More than one proposed project activity may be bundled and registered as a single project activity where applying the same methodology and/or technology.
For a bundle of proposed project activities:
The project proponent shall prepare a single PDD covering all project activities in the bundle or separate PDDs, 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 proponents apply sampling approach, then it shall address specificities of different baselines, including the proportionate representative samples of each baseline used;
The project proponents shall prepare a common monitoring plan in the single PDD or separate monitoring plans in the separate PDDs.
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).
Maximum aggregated 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 emissions mitigations.
For registered bundle of project activities the proponents 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 repors each corresponding to each project activity in the bundle if a separate PDD was prepared for the bundled projects.
If the project proponents prepare separate monitoring reports for a registered bundled project activities, 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 monitoring of project activities shall apply the same monitoring period.
Eligibility criteria shall be established for inclusion of new project activities instances post registration of 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. Guidelines for project instances on demonstrating conformity may be established, e.g. additionality.
As part of the grouped project intended for registration, 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 5.3.1.
When describing the project activity, the project proponent shall conform to requirements set out for project design in section 4 for the grouped project design and for all instances of projects included in the grouped project at validation.
A grouped project may involve the application of multiple methodologies as well as multiple sectoral scopes. Each project activity shall be separated in the project design description 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 4.9 and 4.10.
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 project design description shall be updated if the new project instance includes a new proponent.
For registered grouped project activities the proponents shall prepare for each monitoring period a single monitoring report covering all project activities in the grouped project. All monitoring of project activities shall apply the same monitoring period.
Validation and verification are two important concepts in the context of climate projects.
Validation determines the validity and accuracy of the project design document (PDD) submitted for registration and involves an independent third-party review of the PDD to ensure that the project meets the requirements of the ICR and ISO 14064-2 and estimation of GHG emission mitigations from the project activities.
Verification is the process of determining the actual GHG emissions mitigations achieved by the climate project. It involves an independent third-party review of the project's monitoring reports and historic data to ensure that the claimed GHG emissions mitigations are accurate and in line with the project design.
Validation is the process of evaluating the reasonableness of the assumption, limitations, and methods that support the statement of the outcome of the implementation of the project and its activities and a project's conformity to the ICR requirements and ISO 14064-2. All projects are subject to validation.
Validation involves determining the project methodology and a project's eligibility to generate GHG emission mitigation outcomes on an ex-ante basis. Validation shall be conducted according to ISO 14064-3, ISO 14065 and follow the ICR validation and verification specifications. 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 project design description shall be updated accordingly.
Where the project does not fully conform to the applied approved methodology or deviates, the validation/verification body shall determine if it results in non-conformity to ISO 14064-2.
The validation process shall follow the requirements in ISO 14064-3 and follow the ICR validation and verification specifications. The criteria for validation are ISO 14064-2, the requirements herein, and, when applicable, the applied methodology.
If the project deviates from the applied methodology, the validation body shall determine if the deviation is material considering the requirements of ISO 14064-2 and the requirements herein.
Validation and verification of bundled or grouped projects shall assess conformity of the project to requirements for grouped projects under section 5.
Inclusion of additional project activities under a grouped project shall be validated, based on the information reported in the monitoring report, for conformity to the eligibility criteria.
In instances where it is not feasible to conduct an individual assessment of each initial or new additional project activity due to their number, the VVB shall document and explain sampling techniques used for the validation/verification of such instances.
The validation team shall meet the competence requirements in ISO 14065 and ISO 14066.
The validation report shall describe the validation process, any findings raised during validation, actions to react, and the conclusions reached by the validation body. The validation body shall use the validation report template (or validation and verification report template for joint validation and verification) and follow all instructional text in the validation report template. The validation report shall include a validation statement and the opinion of the validation.
The validation statement shall be according to ISO 14065.
Where the project being validated does not meet the validation criteria, the validation/verification body shall produce an adverse validation opinion and provide the validation report to the project proponent and ICR. The project proponent shall inform the ICR of any adverse validation opinion and is ineligible for registration until implementation of corrective actions and the validation/verification body has closed any non-conformities and provided a positive validation opinion.
Verification is the process of evaluating and independently determining if the outcome of the implementation of the project ex-post and its activities and conformity to the ICR requirements and ISO 14064-2 based on historical data and information. All projects are subject to verification of the implementation of projects and GHG emission mitigation outcomes. The same VVB shall be contracted to carry out validation and the first verification unless the VVB does not fulfil the requirements for conducting the verification.
Verification involves determining the project's GHG emissions mitigation outcomes. Verification shall be conducted according to ISO 14064-3, ISO 14065 and follow the ICR validation and verification specifications. The evidence-gathering plan shall be sufficient so the VVB body can provide a reasonable level of assurance. The verification report shall be made public. The first verification can be conducted at the same time as validation.
If project impacts under verification assessment do not meet the verification criteria, the VVB shall produce an adverse verification opinion and provide the verification report to the project proponent. The project proponent shall inform the ICR of any adverse verification opinion and is ineligible for issuance or activation of ICCs until corrective action is taken and the validation/verification body has closed any non-conformities and provided a positive verification opinion.
The verification process shall follow the requirements set out in ISO 14064-3 and follow the ICR validation and verification specifications. The criteria for verification is ISO 14064-2, the requirements herein, and when applicable, the applied methodology.
If the project implementation has deviated from the validated project design description, the VVB body shall conduct a validation of the deviation and determine if the deviation is material.
The verification team shall meet the competence requirements in ISO 14065 and ISO 14066.
The verification report shall describe the verification process, any findings raised during verification, actions to react, and the conclusions reached by the VVB. The VVB shall use the verification report template for the verification report (or validation and verification report template for joint validation and verification) and follow all instructional text contained in the template. The verification report shall include a verification statement and the opinion of the verification.
The verification statement shall state the volume of GHG emission mitigation outcomes generated during the monitoring period and verified with respect to non-permanence risk and leakage eligible to be issued as ICCs.
Validation and verification bodies (VVBs)are eligible to provide validation and verification services under the ICR if they have signed an agreement with ICR and are accredited under an ICR approved GHG program and/or accredited under ISO 14065 by an accreditation body that is a member of the International Accreditation Forum (IAF).
The VVB shall hold such accreditation or approval for validation or verification (as applicable) for the sectoral scope(s) applicable to the project. Where the project falls under more than one sectoral scope, the VVB shall hold accreditation or approval for validation or verification (as applicable) for all relevant sectoral scopes.
VVBs are eligible to conduct validation of methodology under the methodology approval process. The VVB shall hold accreditation for validation for the sectoral scope(s) applicable to the methodology. Where the methodology falls under more than one sectoral scope, the VVB shall hold accreditation for validation for all relevant sectoral scopes.
Version
Date
Comment
4.0
14.10.2022
First version of ICR Requirement Document v.4.0
Enhanced alignment with the structure of ISO 14064-2. Addressing clarification requests from Technical Advisory Board (TAB) of ICAO on ICR submission for approval under CORSIA. Application of specific approved methodologies revised. Additionality benchmarking implemented. Requirements for grouped projects established. Definition on start date and crediting period revised.
5.0
9.10.2023
First version of ICR Requirement Document v.5.0
Clarifications of requirements. Bundling of projects. Double counting and claiming. International trading. Expanding commenting on activities, Reporting on non-performance and reversal events.
IPCC, 2021: Climate Change 2021: The Physical Science Basis. Contribution of Working Group I to the Sixth Assessment Report of the Intergovernmental Panel on Climate Change[Masson-Delmotte, V., P. Zhai, A. Pirani, S.L. Connors, C. Péan, S. Berger, N. Caud, Y. Chen, L. Goldfarb, M.I. Gomis, M. Huang, K. Leitzell, E. Lonnoy, J.B.R. Matthews, T.K. Maycock, T. Waterfield, O. Yelekçi, R. Yu, and B. Zhou (eds.)]. Cambridge University Press, Cambridge, United Kingdom and New York, NY, USA, In press, doi:10.1017/9781009157896. ↑
IPCC, 2022: Climate Change 2022: Mitigation of Climate Change. Contribution of Working Group III to the Sixth Assessment Report of the Intergovernmental Panel on Climate Change [P.R. Shukla, J. Skea, R. Slade, A. Al Khourdajie, R. van Diemen, D. McCollum, M. Pathak, S. Some, P. Vyas, R. Fradera, M. Belkacemi, A. Hasija, G. Lisboa, S. Luz, J. Malley, (eds.)]. Cambridge University Press, Cambridge, UK and New York, NY, USA. doi: 10.1017/9781009157926 ↑
ISO 14064-2 may be found on International Standards Organizations website. https://www.iso.org/standard/66454.html ↑
First verification of mitigation outcomes can coincide with validation resulting in Ex-Post issuance. ↑
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 ↑
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 of risk assessment. ↑