This page last reviewed January 3, 2013

Early Action Offset Credits

Background

The Compliance Offset Program allows some GHG emission reductions and removal enhancements from qualified existing offset projects to become eligible for use in the Cap-and-Trade Program.  Recognizing existing projects supports the requirements of AB 32 to ensure that voluntary reductions receive appropriate credit and helps create an initial supply of offset credits for the Cap-and-Trade Program. 

Section 95990 of the Cap-and-Trade Regulation provides the requirements that early action offset credits must meet to be eligible for compliance use.  ARB will only allow early action offset credits that have not been retired or used to meet another obligation. 

Approved Voluntary Quantification Methodologies

The Cap-and-Trade Regulation includes requirements to allow early action offset credits issued under approved voluntary quantification methodologies to transition to ARB offset credits and be used for compliance in the Cap-and-Trade Program.  Specifically, section 95990(c)(5) includes a current list of approved quantification methodologies that can be used for early action.  The list consists of the following voluntary quantification methodologies:

• Climate Action Reserve U.S. Livestock Project Protocol versions 1.0 through 3.0
• Climate Action Reserve Urban Forest Project Protocol versions 1.0 through 1.1
• Climate Action Reserve U.S. Ozone Depleting Substances Project Protocol version 1.0
• Climate Action Reserve Forest Project Protocol versions 2.1 and 3.0 through 3.2

Early Action Projects

Projects that are being issued voluntary offsets must be listed with ARB to become early action projects.  Early action projects may be issued ARB offset credits if specific requirements in the Cap-and-Trade Regulation are met.  Once a voluntary project submits listing information to ARB, the offset project will be listed on the Early Action Projects web page, with general information about the offset project.

Early Action Offset Programs

Early action offset credits must be issued by Early Action Offset Programs that are approved under the Cap-and-Trade Regulation.  The Regulation includes requirements that a program must meet to act as an Early Action Offset Program.  If the program is already approved as an Offset Project Registry and been issued an Executive Order, it qualifies as an Early Action Offset Program.  If it has not been issued an Executive Order, it must prove that it meets the requirements in section 95990(a).  Currently, two Early Action Offset Programs have been approved:

• American Carbon Registry
• Climate Action Reserve

Regulatory Verification for Early Action

AB 32 requires regulatory verification of all GHG emission reductions and removal enhancements used for compliance purposes; therefore, the Cap-and-Trade Regulation establishes requirements for regulatory verification of early action offset credits.  All GHG emission reductions and removal enhancements achieved by early action offset projects must be verified by an ARB accredited verification body and the verification body must be different than the one that performed the original verification under the Early Action Offset Program. 

Early Action Guidance and Frequently Asked Questions (FAQs)

More information about early action provisions and their implementation is in ARB's Instructional Guidance Document.  ARB will also be providing FAQs on the early action program as they are developed.

• ARB Instructional Guidance Document

• (Coming Soon!) Early Action FAQs
  

Transition to ARB Compliance Offset Protocols

Early action offset credits may only be issued for GHG emission reductions and removal enhancements achieved through 2014.  Beginning in 2015, all offset projects operating under approved voluntary quantification methodologies must transition to ARB’s Compliance Offset Protocols to continue to be eligible for the compliance offset program.  Section 95990(k) of the Cap-and-Trade Regulation includes the requirements for project transition to Compliance Offset Protocols, including baseline transition, registration, listing, and verification requirements.