Canadian Federal Offset Protocol Update

Canada Forest Carbon Offset Protocol v1.1

VERRA: VM0045 IFM Dynamic Matched Baselines v1.1

ACR Methodology (IFM on Non-Federal U.S. Forestlands v2.1)

Baseline

The baseline is based on a 3-step method: regional forest management, project-specific baseline, and the most conservative scenario. Dynamic Baseline optional if chosen has to be updated every 5 years at least.

The baseline is created through dynamic matching of project plots with baseline plots from national inventories and is continuously updated. Dynamic baselines are mandatory, with real-time monitoring and continual adjustments based on matched plots.

The baseline is determined using financial analysis and forest management practices; a dynamic baseline is optional

Quantification Robustness

Combines direct measurement and modeling, requiring regular updates and applying a conservative quantification approach, ensuring accuracy through strict guidelines for updates every five years.

Highly robust due to real-time monitoring and continuous carbon stock measurements using paired project and baseline plots, avoiding reliance on long-term modeling for greater precision

Combines forest inventory data, growth models, and direct carbon stock measurements for robust site-specific quantification, with optional dynamic baseline adjustments for greater accuracy.

Leakage

Requires assessment of activity-shifting leakage (must be zero or deducted from project volume) and applies a regional market leakage factor between 45-75%, depending on the Province or Territory.

Uses real-time monitoring of both activity-shifting and market leakage, with continuous updates and typical leakage rates between 10-70%.

Leakage includes activity-shifting and market leakage, with quantification typically accounting for 5-25% based on market impacts; updates are periodic and flexible.

Uncertainty

The uncertainty associated with the measurement of carbon stocks is calculated via a quadratic addition of the sampling errors of separate carbon pools. The sample error is based on a 90 percent confidence interval for the forest carbon inventory estimate.

The combined error should be less than 20 percent for a project to be able to issue credits. If the combined error is less than 20 percent the uncertainty discount equals the combined error minus 5 percent with a minimum value of zero.

Uncertainty is minimized through real-time measurement, with deductions applied if it exceeds ±10%.

Uncertainty must be quantified, and a deduction is applied if uncertainty exceeds ±10% of estimated carbon reductions or removals.

Permanence

Projects must perform a Reversal Risk Analysis and contribute to the Environmental Integrity Account (buffer pool) to cover non-permanence risks, which include both natural and human factors.

Risks are dynamically assessed through real-time monitoring, with projects required to contribute to a pooled buffer account to safeguard against future reversals updated based on real-time events.

Projects commit to a minimum 40-year term, with risks from both natural and human-driven reversals addressed through a Reversal Risk Analysis. Which is done using a standard tool quantifying natural risk and mitigation measures.

Buffer Pool

Contributions range from 13-27%, based on the assessed risk of the project. This contribution helps address reversals that may occur during or beyond the crediting period.

Buffer pool contributions are typically 10-20%, based on the project’s risk rating, and are applied each issuance.

Contributions to the buffer pool typically range from 10-20% based on assessed risks and are required to cover potential future reversals.

Permanence Monitoring

After the crediting period, the project remains under monitoring to ensure permanence. The Environmental Integrity Account continues to mitigate any potential reversals, and the monitoring typically extends beyond the crediting phase for at least 100 years, ensuring long-term carbon storage.

After the crediting period, the buffer pool covers reversals. Projects may be monitored for an additional period beyond the crediting phase, typically up to 40 years, depending on the risk rating and project commitments.

After the crediting period, the buffer pool continues to cover any reversals, ensuring long-term carbon permanence. The project may remain under monitoring if reversals are suspected, typically covering the 40-year commitment period.