Carbon

PRINCIPLES

1. Additionality

   1. ERS has developed a project-based approach for Developers to demonstrate additionality:
      1. Regulatory Surplus. Developers must demonstrate that there is no enforced legal obligation to restore the Restoration Sites.
      2. Environmental Surplus. Developers must demonstrate that the preceding deforestation drivers and their related degradation did not occur to obtain carbon credits. 
      3. Barrier Analysis. Developers must identify existing barriers that would prevent the desired Project activities from taking place without the revenues from Restoration Units.
   • Financial barriers. These refer to lack of funding, high upfront costs, or difficulty accessing finance can stall or prevent a Project from starting. This includes existing policies and requirements other than legal obligations to lower GHG emissions (e.g. non-mandatory policy incentives and enablers).
   • Technical barriers. These refer to challenges related to technology, methodology, expertise, site-specific conditions, and other technical aspects of the Project. It can involve anything from lack of necessary equipment to difficulties in measuring carbon sequestration.
   • Cultural and social barriers. These refer to challenges in the collective movement of local communities towards implementing, maintaining and monitoring restoration projects due to, for example,  lack of information, threats to the safety of community members, and existing social structures and norms.
   • Regulatory and institutional barriers. These refer to limitations within the regulatory framework and its relevant institution, such as limited staff capacity, lack of necessary skills, local regulations, complex permitting processes, ineffective bureaucratic processes or challenges in meeting specific compliance standards.

2. Permanence

   1. Safeguards. Developers must ensure the permanence of carbon sequestration by developing ecosystem-specific safeguards to avoid reversals and include them in the Restoration Plan. 
      1. Developers must reduce the risk of unintended fires by: 
         • Removing fuel from the Project Area.
         • Installing fire breaks and fire towers in the Project Area.
         • Providing access to fire-fighting equipment to the Project’s on-the-ground team.
      2. Developers must demonstrate that the Project can secure access to its irrigation needs and will not increase pressure on water resources by identifying:
         • Infrastructure for water access in the Project Area.
         • Any potential tensions regarding access to water resources around the Project Area.
      3. Developers must assess whether dangerous activities are carried out in the Project's neighbouring areas and, if so, put safeguards in place to ensure the Project is not negatively affected.
         • Dangerous activities include but are not limited to, chemical processing/treatment, non-organic industrial agriculture or animal farming, waste treatment facilities, and any other activity generating classified dangerous residues.
   2. Reversals. 
      1. All reversal risks must be assessed, monitored and mitigated.
      2. In case of reversals, full compensation must be provided from the Buffer Pool.

💡 Corporate buyers are encouraged to use an Emissions Liability Management approach to carbon accounting. Corporate buyers are encouraged to replace any cancelled credits to ensure the validity of their claims.

3. Leakage

   1. Projects must strive to limit activity-shifting leakage, including: 

• Wood collection (for firewood, charcoal, etc.); 
• Timber harvesting; 
• Agricultural activities (grazing or cultivation); 
• Human settlement.

1. Developers must identify the activities inside the Project Area that will be displaced and define the Displaced Area.
2. Developers must define a leakage mitigation plan to:
   1. Minimise the impact of the displaced activities.
   2. Ensure, to the possible extent, equitable displacement, avoiding higher impact on the most vulnerable community members.
   3. Manage for the potential loss of the non-displaced activities.

METHODS

1. Additionality

The Developer must demonstrate the Project’s additionality in the Additionality Sheet. 

1. Regulatory Surplus. ERS verifies legal additionality by reviewing applicable legislation and agreements in force at the Project’s jurisdiction. Results are made public in the Project Design Document.
   1. For high-income countries, all legal requirements shall be deemed to be enforced.
   2. For countries other than high-income countries, legal requirements shall only be deemed “not enforced” based on legal and verifiable sources relevant to the mitigation activity.
   3. Where a legal obligation to undertake restoration or conservation work applies to the Project Area but not to the Restoration Site(s), the Developer must indicate and prove exactly where it applies. 
   4. Where a legal obligation to restore applies to the Restoration Site(s) but cannot be fulfilled without the Project’s funds or technology, the Developer must prove that said barriers exist to establish the Project's additionality. 
2. Environmental Surplus. ERS verifies environmental surplus using satellite imagery to assess land cover degradation and AGB change over the past ten years preceding the Project’s origination.
   1. If the Restoration Site(s) has undergone significant anthropogenic deforestation in the last ten years, the Developer must prove the deforestation was not done with the intention of benefiting from revenues from the voluntary carbon market. Refer to the Additionality Sheet for the detailed list of accepted documentation. 
   2. Accepted deforestation activities are:
• Timber trading;
• Wood harvest for fuel or charcoal;
• Cattle farming;
• Mining;
• Cellulose production;
• Intensive crop farming;
• Civil construction.
1. If significant natural regeneration is observed on the Restoration Site(s), the Developer must justify that the planned interventions will achieve a higher than business-as-usual scenario. 
3. Barrier Analysis. ERS verifies existing barriers by reviewing documents provided by the Developer. Refer to the Additionality Sheet for the detailed list of accepted documentation. 

💡 ERS only certifies Ecosystem Restoration Projects that do not encompass extractive activities; their financial attractiveness is expected to be close to zero.

2. Permanence

   1. Risk Assessment. ERS uses the Risk Matrix to identify delivery and reversal risks and assess their likelihood and the severity of their consequences. 
      1. Every identified risk must be actively monitored by the Developer. If an increase in likelihood or severity is detected, the Developer must immediately implement a contingency plan and inform ERS. 
      2. According to their risk score, a mitigation plan or corrective action is required prior to certification.
   2. Detection.  ERS continuously monitors loss events using remote sensing throughout the Project’s crediting period and as long as the organisation exists. 
      1. Developers are also required to monitor loss events in the Project Area on an ongoing basis.
      2. If the Developer or ERS identify a loss event inside the Project Area that is 1 hectare or bigger, they must notify one another within thirty (30) calendar days.
      3. Developers are required to report on loss events in the dedicated table in the Annual Report and provide:
   • The description and date of the loss event;
   • A shapefile delimiting the loss event’s total area and location;
   • The nature of the loss event - avoidable or unavoidable, and documentation to back up such claim;
   • The impacts on Project activities.
   3. Quantification & Accounting. ERS quantifies the impact of loss events before each Verification. Refer to the Quantification Methodology for Terrestrial Forest Restoration for more details.
      1. After quantification, ERS will deduct the impact of loss events from the Project’s GHG removals in the Verification Cycle. If the loss event(s) led to net GHG loss, this will be qualified as reversal. 
      2. If reversals occur, VRUs will be compensated through a Buffer Pool mechanism. Refer to the Compensation section in the ERS Programme for more details.

3. Leakage 

   1. Activity Displacement Mapping 
      1. Consultation. Developers must identify land-use activities that will be displaced due to the Project’s interventions during the Livelihoods Community Consultation.  
      2. Zonation. Developers must indicate the Displaced Areas in the Project Zonation in the ERS App. The displacement magnitude will be determined by:
         • Informing the precise location and size of the Hosting Area (where the activities will be displaced) OR
         • Informing the percentage of the activity that will be displaced during the crediting period. 
      3. For Pre-submission Activities, both the Displaced and Hosting Areas must be indicated in the Project Zonation at Certification. 
      4. Developers must provide details regarding the activity's displacement, including the justification of the percentage of displacement in the Leakage Mitigation Template.
         • Pre-submission Activities that resulted in leakage must be detailed in the Pre-submission - Activity Shifting tab.

      5. 💡 Each Leakage Activity will be given an ID/name in the ERS App, which will be used as a reference in the Leakage Mitigation Template.

   2. Mitigation Plan. The Developer must establish a mitigation plan to minimise the scale and impact of activity-shifting using the Leakage Mitigation Template.
      1. The mitigation plan must include mitigation objectives and interventions.
      2. The interventions of the mitigation plan will then be detailed in the Social Additionality Plan, and reported on annually.
   3. Calculation. Refer to the Emissions section in the Quantification Methodology for Terrestrial Forest Restoration for more details.
   4. Leakage Correction. Leakage calculated at Certification will be confirmed or, if necessary, corrected at year two (2) and/or four (4), before Verification. 
      1. Developers must update the information on the displaced activities by: 
         • Updating the Project’s Zonation using the ERS App.
         • Providing details regarding the reinstalment of the activity in the Annual Report.
      2. ERS uses satellite imagery to confirm if the Displaced and Hosting Areas - location(s) and size - matches the Developer’s declaration. This includes comparing the historical deforestation rate of the Leakage Belt with the deforestation rate in the Y0-Y2 and Y2-Y4 periods.

      3. A Certification Agent will cross-check the completion of the Leakage Mitigation Plan to ensure that activities have been displaced as stated at Y0. 

         Leakage is then recalculated using the updated information submitted by the Developer, following the Quantification Methodology for Terrestrial Forest Restoration.

      4. 💡 Leakage emissions are determined at Project start, and thus, are accounted for in the issuance of Projected Restoration Units. Reassessment of Leakage at year 2 and/or 4 that reveals underestimations or overestimations of leakage emissions will not impact the quantity of Projected Restoration Units (PRUs). Instead, these adjustments will exclusively affect the discount factor applied during each issuance, thereby impacting the Verified Restoration Units (VRUs). More details can be found in the Units & Issuance section of the ERS Programme.

   5. Monitoring
      1. Land cover is monitored annually within a five-kilometre-wide transitional or boundary zone along the Project’s perimeter, called the Leakage Belt.

         1. The five-kilometre radius of the Leakage Belt has been determined based on:

            • The likelihood that most of the displacements from the Project Area will not go beyond this five-kilometre radius.
            • Its actionable nature for Developers in case leakage is identified.

      2. ERS employs the Global Forest Watch (GFW) Integrated Deforestation Alerts to trigger alerts about forest cover changes.
      3. ERS must monitor the Hosting Area(s) indicated by the Developer. If its surface grows by more than one (1) hectare, Developers must then provide justification for ERS to determine whether the change is linked to the Project activities or not. If the justification is deemed as unsatisfactory, ERS will estimate the GHG emissions resulting from the Hosting Area's expansion and factor them into the net GHG removals of the Verification Cycle. Monitored Leakage emissions will be reported at each Verification
      4. Developers will be notified of land cover changes in the Leakage Belt that exceed the average observed over the past five (5) years. 
         • Developers must then provide justification for ERS to determine whether the change is linked to the Project activities or not.
         • If the justification is unsatisfactory, ERS reserves the right to require a Verification. 

         1. 💡 The five-kilometre radius of the Leakage Belt has been determined based on:

            • The likelihood that most of the displacements from the Project Area will not go beyond this five-kilometre radius.
            • Its actionable nature for Developers in case leakage is identified.

4. Measurement and Reporting

1. Refer to the MRV Procedures section for more details.