A. Additionality is the criteria used to define a carbon offset project. The term comes from describing carbon offset emission reductions as those that occur in addition to business-as-usual.
Q. How do I know if my project is additional?
A. The Climate Trust determines the additionality of a project on a project-by-project basis. The applicant must present their case for a project’s additionality to be assessed by The Climate Trust. In general, a project is additional if it requires carbon funding in order to be implemented. Typically, carbon funds will be used to address barriers to project implementation. See our Additionality & Baseline Guidance page for more info.
Q. Will The Climate Trust purchase credits from existing projects?
The Climate Trust may only use the currently available funds to purchase carbon offsets that occur in the future; therefore measures to mitigate carbon dioxide emissions must be installed or implemented after execution of the carbon offset contact. Expansions of existing projects can be funded, however. Note that these expansions must make the case that carbon funding is required for implementation.
Q. Can a project applicant begin to make investments in project assets and still meet The Climate Trust’s requirement for “future” implementation of the offset project?
A. Most likely yes, but it will also depend on the definition and development stage of the project. For most of The Climate Trust’s offset projects, implementation is defined by the installation of the measures that avoid, sequester, or displace CO 2 emissions. Capital investments made without project groundbreaking are allowable. But note the project must still be able to make the case that Climate Trust funding is essential for project implementation.
This graphic (.pdf) illustrates at which point in the project development cycle it is best to seek offset funding.
Q. Would a project that requires carbon funding to avoid shut down meet The Climate Trust’s additionality criteria?
A. Yes, as long as the project is able to prove imminent shut down and the project meets the Trust’s other offset project criteria.
Q. How do I determine my project baseline?
A. The baseline is the scenario of what would most likely happen to the project without carbon funding. The Climate Trust does not require an exhaustive baseline study be conducted for each project, but we do request that project applicants extensively discuss their rationale for their proposed baseline. Note that a continuation of business-as-usual is not always the default baseline. See our Additionality & Baseline Guidance page for more info.
The Climate Trust’s Process
Q. Why does The Climate Trust require project developers to sign a Standstill Agreement?
A. IMPORTANT NOTICE ON THE STANDSTILL AGREEMENT: The standstill agreement is not required until Phase II of the selection process. It is not required for Phase I applications. A previous version of the 2005 RFP document is incorrect in stating that the standstill agreement is needed for Phase I.
It takes us several months to review project proposals. With the time and financial investment we make during the review process, we ask that applicants agree not to sell the project to other buyers during our review. Applicants not selected for Phase II do not need to sign a standstill agreement. For projects not selected for Phase III of the Trust’s process, the standstill agreement automatically expires and the projects are free to offer their offsets to other buyers.
Q. Will The Climate Trust purchase CO2-e reduction credits?
A. The funding which The Climate Trust is applying to this RFP can only be used to purchase carbon dioxide-based reductions.
Q. My project is requesting less than $1 M in carbon funding. Should I submit it anyway?
A. The Climate Trust has established a priority to place funds under this RFP into projects requesting $1 million or greater so those projects will be our preference. However, if the pool of large-scale projects does not meet our standards for quality and cost-effectiveness, we will have an interest in projects requesting less carbon funding.
Q. Can The Climate Trust purchase offsets from a project that uses state-sponsored public benefits charges or tax incentives?
A. The Climate Trust can purchase offsets from these types of projects if the project meets The Climate Trust’s additionality standards and other criteria. Note that it must be clearly demonstrated that The Climate Trust funds are required for project implementation.
Q. What are The Climate Trust’s monitoring and verification requirements?
A. Each M&V plan is project specific. The Climate Trust does not have any universally applicable monitoring and verification (M&V) protocols and procedures. The Trust does have general requirements for an M&V plan which are detailed in our 2005 RFP document.
Q. Will The Climate Trust consider bundled projects?
A. Bundled projects are a group of smaller project activities mingled together into a single project proposal. Here are some guidelines for bundling projects:
The bundled projects must have a single signatory for the carbon agreement. That can either be a single entity that will be implementing all the carbon offset measures proposed in the project or a single owner of the carbon offsets.
If bundled projects have a variety of offset measures, it increases the burden on the project applicant to demonstrate adequate monitoring and verification protocols, carbon quantification, and baseline establishment.
It is advisable to submit two smaller projects rather than bundle incongruent projects. If the bundled projects are too dissimilar, the Trust may request the projects be disaggregated and submitted separately. If there is insufficient time available in the selection process, the project may be rejected.
Example of bundled projects with a single project implementer: An Energy Savings Company proposes to implement an extensive set of energy efficiency measures with a diverse group of customers. The energy efficiency measures will be the same for all customers. Assuming the Energy Savings Company can obtain ownership of the offsets, they can present this as a single project.
Example of bundled projects with a single owner of the carbon offsets: Company Y proposes to install cogeneration technology at a variety of their plants of operation around the world. The measures will be installed by a variety of contractors. Company Y is the sole owner of the offsets so a single carbon agreement can be put into place.
Q. How do I calculate the offsets generated by my project?
A. First determine your project’s base case (what would happen in the absence of carbon funding, also known as the project baseline), the project case (what happens with the project), and project lifetime. Any reduction of carbon dioxide emissions below this baseline during the lifetime of the project are eligible for sale to The Climate Trust. See our Additionality & Baseline Guidance page for more info.
Q. What happens to the offsets after they are sold The Climate Trust?
A. All offsets purchased using Oregon funds are retired. After the ownership of the offsets is transferred to The Climate Trust, they are retired in perpetuity in our carbon registry.
Q. How are a project’s co-benefits assessed by The Climate Trust?
A. The two primary project assessment criteria are project quality and cost effectiveness. An important secondary criterion is the additional benefits generated by the project. The Climate Trust will look favorably upon strong co-benefits and consider them in relation to risks and price of overall proposals.
Q. Does The Climate Trust provide up-front payment for a project or upon delivery of offsets?
A. The Climate Trust can use either of these payment options as well as others depending upon the needs and risks of the project.
Non U.S. Based Projects
Q. Do international project developers need a US-based partner?
A. Yes. We require that international projects have a US-based partner for negotiation and contracting purposes.
Q. Is host country approval required for non U.S.-based projects?
A. The Climate Trust requires host country approval for all non U.S.-based projects. Host country approval does not have to be secured at the time of submission of the Phase I application. However, a clear indication of how host country approval will be secured must be included in the proposal.
Q. Can The Climate Trust purchase offsets from countries that are part of the Kyoto Protocol?
A. Yes, if the offsets meet The Climate Trust’s criteria. If the offsets are purchased by The Climate Trust, they may not be counted as part of the host country’s carbon registry. Note that there are two general categories of countries under the Kyoto Protocol, those with a reduction commitment (Annex B countries) and those without (eligible under the Clean Development Mechanism (CDM)).
Q. Can The Climate Trust purchase offsets from Clean Development Mechanism (CDM) Projects?
A. Yes, if the offsets meet The Climate Trust’s criteria. The Climate Trust is interested in any high-quality project from a country that is eligible to submit projects to the CDM. While The Climate Trust does not require approval by the CDM Executive Board for these projects, there is a requirement for host country approval. A clear indication of how host country approval will be secured must be included in the project application.
Q. Will The Climate Trust pay for the validation and registration of a CDM project?
A. No. The Climate Trust does not require CDM approval.
Q. Can The Climate Trust purchase offsets from a project based in the European Union?
A. The Climate Trust is able to purchase offsets from anywhere in the world. A carbon offset transaction in Europe does present challenges regarding the treatment of the carbon credit under the E.U.’s carbon trading system. It is advisable that any project offering E. U. based offsets present detailed information regarding ownership of the offset and the path for securing host country approval for the transfer of carbon offset ownership to the Trust.
Q. Can The Climate Trust purchase European Union emission allowances (EUA)?
A. Most likely no. Any EUAs purchased by The Climate Trust would have to be generated by a project activity. It would most likely prove difficult to define a project within the overall greenhouse gas footprint and reduction obligation of an entity within a national allocation plan ( NAP).
Sector Specific Questions
Q. Which project sectors are The Climate Trust not interested in?
A. The Climate Trust will consider any and all project activities that reduce carbon dioxide based emissions so long as they meet the eligibility standards as described in the RFP document. The only exception is projects involving nuclear power as we are prohibited from funding them per the rules of the Oregon Greenhouse Gas Standard. We’re also unable to purchase non-carbon dioxide greenhouse gas benefits from projects, such as: displaced methane (CH4), nitrous oxide (N2O), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), and sulphur hexafluoride (SF6).
Q. Does The Climate Trust purchase indirect carbon offsets?
A. Yes. Indirect offsets are typically defined as activities that result in the reduction of greenhouse gas emissions at a point source other than those controlled by the project implementer. For example, energy efficiency measures in residential homes or commercial space “indirectly” reduce global warming emissions by reducing electricity purchased from the local power utility. The actual emission reduction takes place at the power generation station.
The Climate Trust believes that indirect emission reductions are a vital part of the overall carbon offset market. The Trust has successfully funded indirect emission reduction projects in the past and expects to do so again with this RFP.
Q. What will be the consideration of forestry and land-use based offset projects in the 2005 RFP?
A. While The Climate Trust is a strong supporter of forestry-based offset projects, the Trust will be seeking to add sector diversity to its offset portfolio with this RFP. With the large volume of forestry-based offsets in our existing project portfolio, the Trust has set a goal of placing no more than 25% of available funds into forestry and land-use based projects.
Q. Will the Climate Trust fund projects that reduce deforestation?
A. The Climate Trust will consider such projects, but note it can be very difficult for these projects to meet the additionality requirements. The project applicant must provide clear evidence that the forest stand is facing very near-term risk.
Q. How will The Climate Trust assess and quantify the carbon offsets from projects involving rotation crops (e.g. plantation forestry)?
A. The Climate Trust has not purchased offsets from this sector of projects in the past and would most likely consult with outside experts to determine the best carbon quantification methodology.
Q. Does The Climate Trust fund closed-loop biomass projects (projects that use rotation crop wood fuels)?
A. The Climate Trust has not purchased offsets from this sector of projects in the past and would most likely consult with outside experts to determine the best carbon quantification methodology.
Q. If The Climate Trust can only buy CO2 based offsets, will they consider landfill gas ( LFG ) to energy projects?
A. Yes. Although we cannot purchase the displaced methane emissions that can occur from LFG projects, the Trust is still able to purchase the carbon dioxide offsets that result from displaced grid energy.
