This page last reviewed March 1, 2013

Compliance Offset Program

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Background

ARB offset credits are greenhouse gas (GHG) emission reductions or GHG removal enhancements that meet regulatory criteria and may be used by an entity to meet up to eight percent of its triennial compliance obligation under the Cap-and-Trade Program.  Each ARB offset credit is equal to 1 metric ton of carbon dioxide equivalent (MTCO2e) and can only be quantified using an ARB approved Compliance Offset Protocol. Subarticle 13 of the Cap-and-Trade Regulation details the legal requirements for Compliance Offset Protocols, implementation and verification of offset projects, and issuance of ARB offset credits.  Once an ARB offset credit is issued, it may be used for compliance up to applicable limits with the Cap-and-Trade Program.  Only ARB can issue compliance offset credits for use in the Cap-and-Trade Program.

Compliance Offset Protocols

ARB has adopted four Compliance Offset Protocols that may be used to generate ARB offset credits.

• U.S. Forest Projects Compliance Offset Protocol 
• Urban Forest Projects Compliance Offset Protocol
• Livestock Projects Compliance Offset Protocol
• ODS Compliance Offset Protocol

Note: Additional Compliance Offset Protocols will be considered as part of future rulemaking activities.

Compliance Offset Projects

All compliance offset projects must be developed according to ARB approved Compliance Offset Protocols.  Offset Project Operators must list their offset projects with an approved Offset Project Registry to be eligible for ARB offset credits.  Please see the Compliance Offset Projects web page (coming soon!) for more information on proposed compliance offset projects.

Project Types:

• Forest Projects
• Urban Forest Projects
• Livestock Projects
• Ozone Depleting Substances (ODS) Projects

Early Action Offset Credits

The Cap-and-Trade Regulation allows for the transition of eligible existing offset credits developed under approved voluntary quantification methodologies to ARB offset credits for use in the Cap-and-Trade Program.  Additional information about early action offset credits is available on the Early Action Offset Credit web page. 

Offset Project Registries

The Cap-and-Trade Regulation allows ARB to approve Offset Project Registries to help administer parts of the Compliance Offset Program.  Offset Project Registries must meet specific regulatory criteria to be approved under the regulation.  Offset Project Registries will help facilitate the listing, reporting, and verification of offset projects developed using the Compliance Offset Protocols.  However, only ARB can issue compliance offset credits for use in the Cap-and-Trade Program.  For more information please see the Offset Project Registry web page.

Offset Verification Program

The Cap-and-Trade Regulation requires the third-party verification of all GHG emission reductions or removal enhancements before any ARB offset credits may be issued.  Only ARB-accredited offset verification bodies and offset verifiers may provide offset verification services under the Compliance Offset Program.  More information about offset verification, including a list of approved offset verifiers and verification bodies, may be found on the Offset Verification Program web page.

Offset Project Operators

Offset Project Operators (OPOs) may use Compliance Offset Protocols to develop compliance offset projects under the Cap-and-Trade Program.  The Regulation includes specific requirements that OPOs must meet including listing offset projects, reporting GHG reductions and removal enhancements annually, contracting with an ARB-accredited verification body to conduct offset verification, and submitting attestations to ARB.  More information on specific requirements and compliance offset projects can be found on the Offset Project Operators web page.

 Forms

ARB has developed forms for use in the Compliance Offset Program.  These forms may be used by program participants for submitting information related to listing, reporting, verification, and issuance of ARB offset credits.  These forms can be found on the Compliance Offset Program Forms web page.  In addition, each approved Offset Project Registry will make forms available on its own web page. 

  Offset Program Guidance and Frequently Asked Questions (FAQs)

ARB has developed general guidance on the compliance offset program.  In addition, ARB will develop FAQs that address general questions related to the offsets program.  

• ARB Instructional Guidance Document
• Guidance for CITSS Registration for Offset Project Operators and Authorized Project Designees
• Coming Soon!  Offset Program FAQs